BUSINESS NEWS
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DEP to organize more training courses

Thais told to prepare for increased Chinese investment

New land assessment price will benefit economy

Export offensive plan goes to MOC

Foreign debt repaid from excess reserves

DEP to organize more training courses

The Department of Export Promotion (DEP) is expecting more businesses will be trading internationally within three years.

Benchawan Rattanaprayoon, deputy director-general of DEP said that the Thai government is promoting and developing businessmen, especially exporters, to promote Thai exports abroad, particularly the OTOP products.

In Thailand, there are about 3,000 inter traders, divided into groups. Group A have export volumes of 100 million baht up, Group B is up to 10 million baht and Group C which is up to 500,000 baht, and Group D covers those who have not yet done international trading before.

For Group D, the DEP will join with the Department of Business Development, to help upgrade those businessmen to be savvy enough for international trades.

She said this project started in August last year and will run for three years, and many of the business people will be supervised and supported by consultants on export procedures.


Thais told to prepare for increased Chinese investment

The Chinese government has hinted that Thailand could be the recipient of a portion of US$10 billion-worth of investment by Chinese companies, according to the KASIKORN Research Center, which in a recently published report called on Thailand to use its close relationship with China to attract Chinese business and industrial partnerships.

The Chinese government’s policy of promoting foreign investment could provide a boon for Thailand, which enjoys a close relationship with its near neighbor. As a result, Thailand is likely to see an influx of Chinese companies and state enterprises eager to invest in the Kingdom.

Various economic cooperation projects between the two countries, notably the opening up of free trade in fruit and vegetables, will encourage Chinese businesspeople to look for channels to enter into joint investment projects with their Thai counterparts. This will be particularly apparent in the agro-industrial sector and related downstream industries, resulting in a rise in exports of these products to other countries.

The report also noted that the development of transport links between Thailand and other countries in the Mekong sub-region - Laos, Myanmar, Vietnam, Cambodia and China’s Yunnan Province - was also likely to facilitate Chinese investment. These communications routes would also provide transport links with other countries in the wider region, including India, with Thailand acting as a transport and communications hub. These transport links, whether by land, air or river, would serve to boost trade, investment and tourism by collapsing journey times.

The research center report said that economic cooperation among members of the Greater Mekong Sub-region was set to boost Chinese interest in investing in Thailand, noting that businesses from China’s Yunnan Province were already placing their money in projects in the northern Thai province of Chiang Rai. The Thai government’s development of the northern border region as a special economic zone was already resulting in bilateral projects, whether in terms of transportation or tourism.

At the same time, the two countries are likely to engage in exchanges of technology and joint research and development (R&D) projects, thus promoting economic development in both countries and in the wider Asian region. (TNA)


New land assessment price will benefit economy

An increase in the land assessment price by 14.44% will benefit Thailand’s economy, rather than having negative effects, according to the Finance Ministry.

Kitti Limsakul, assistant to the finance minister, conceded that the new assessment price set by the Treasury Department would more or less increase land prices. But it would help reflect the actual cost of the economy, he stated.

He said, however, that the general public would definitely bear higher costs of house ownership; still, the overall economy would be balanced.

“Before the crisis, property prices were excessively inflated without any mechanism to put a brake on them. The new assessment price will also definitely affect entrepreneurs, but it should help reduce speculation, which could help enhance the stability of the economy. I believed it will also prompt commercial banks to accelerate coping with non-performing assets (NPLs). The banks can take this opportunity to place the assets on sale in the market, as interest rates remain low, and the economy is still picking up,” Kitti said.

Somchai Sajjapong, Deputy Finance Ministry spokesman, said that the new assessment price would help facilitate the debt-restructuring process because prices which collateral debtors had pledged with the banks would rise.

Non-performance loans (NPLs) now stand at more than 15% of total loans in the banking system. The new assessment price should help increase revenue earned by local administrative organizations from various tax and fee collections. It would also enable the business sector to assess business costs more accurately. (TNA)


Export offensive plan goes to MOC

The Department of Export Promotion has drawn up a marketing offensive designed to boost exports by 10-12 percent, according to department director Chantra Buronrik. Chantra said that the plan, which is hoped allow Thailand to achieve its 2004 export target, would now be proposed to the Ministry of Commerce (MOC).

On 11 January Deputy Prime Minister Somkid Jatusripitak is due to chair an integrated meeting to brainstorm ideas from various agencies involved with foreign trade, namely the Ministry of Industry, the Ministry of Agriculture and Cooperatives, the Board of Investment, the Ministry of Commerce and the Ministry of Foreign Affairs.

The private sector will be represented by the Thai Chamber of Commerce, the Federation of Thai Industries and the Council of Shipping Exporters. (TNA)


Foreign debt repaid from excess reserves

Prime Minister Thaksin Shinawatra recently stated that he has ordered government agencies to study the feasibility of using Thailand’s huge volume of capital reserves to repay the nation’s foreign debts.

The prime minister noted that Thailand’s capital reserves were now at the extremely high level of US$42 billion. Thaksin told government agencies to determine the most suitable volume of capital reserves for Thailand’s economic situation, and to study the possibility to using an excess capital to make foreign debt repayments.

“In practice, capital reserves should be around two times higher than short-term debts. When debts and capital reserves are calculated according to this formula, I expect that we will have an excess of around 300 billion baht,” he said. “I have given related agencies the policy of using this excess to make debt repayments, which will reduce government debts to zero. Thailand will become an extremely strong nation. I believe that none of this is too difficult, and will take around 3-4 years to implement,” he said. (TNA)