BUSINESS NEWS
HEADLINES [click on headline to view story]:

New financial institution and deposit insurance acts considered

Thailand set to boost electricity imports from Laos

BOT to force better corporate governance

SET postpones net settlement rule

FTAs won’t hinder Thailand

‘Smart cards’ to be in use by 2006

OTOP center to supply goods overseas

New industry personnel to be developed

Worried public drops February consumer confidence index

New financial institution and deposit insurance acts considered

Bank of Thailand (BOT) Governor M.R. Pridiyathorn Devakula recently stated he would raise the issuance of new financial institution and deposit insurance institute acts for discussion with newly-appointed Finance Minister Somkid Jatusripitak.

The BOT chief said the discussion would focus on a way to push for the issuance of the two new acts, projecting that the deposit insurance act would be put into effect soon.

“What we will discuss with the new finance minister is how to develop the financial sector in the future. We will also discuss what we have yet to do with the development plan made earlier. We believe we can work together with the minister without any problem,” said M.R. Pridiyathorn.

It was previously reported the Finance Ministry saw no need to accelerate deliberating the deposit insurance act or forwarding it to the cabinet for consideration. As for the financial institution act, it was in the process of going before the parliament. (TNA)


Thailand set to boost electricity imports from Laos

Thailand is negotiating with Laos over the purchase of an additional 2,000 megawatts of electricity, according to Energy Minister Prommin Lertsuridej. Dr. Prommin said that the Thai proposal formed a key part of the recent joint Thai-Lao Cabinet meeting.

Thailand hopes to purchase 608 megawatts from the Hong Salik project, 553 megawatts from the Nam Nguen 2 project, 430 megawatts from the Nam Nguen 3 project and 600 megawatts from the Nam Then-Hin Boon project, as well as importing electricity from the new Nam Ngiep project.

The energy minister said that the two governments also discussed the use of the Mekong River, which currently falls under the cooperative framework of the six countries forming part of the Greater Mekong Sub-regional grouping. The agenda included discussions on the construction of electricity lines through Laos to enable Thailand to purchase electricity from China. Thailand has proposed the construction of dams across the river to generate electricity and to provide water for agriculture and to relieve water disputes. (TNA)


BOT to force better corporate governance

Bank of Thailand (BOT) Governor Pridiyathorn Devakula expressed satisfaction at the rise of good corporate governance among Thailand’s financial institutions, but said that future central bank efforts to increase good corporate practices would be centered on the issuance of orders rather than relying on institutions to make the improvements.

Speaking during an award ceremony for institutions exhibiting outstanding good governance, the central bank governor observed that countries across the world were emphasizing profits and quantity at the expense of quality and stability. This inevitably led to an explosion, and was the cause of economic crises throughout the globe.

“Executives following the practices enshrined in the idea of good governance should think of the benefits of their customers, staff and communities, producing high quality products and taking care of their workforce in terms of fair wages and benefits. At the same time, they should minimize their adverse impact on the environment and local communities, while returning a proportion of their profits to society. Businesses following such practices would be successful, stable and well-received,” said MR Pridiyathorn.

The BOT chief added, “However, the Bank of Thailand intends to be stricter in its adherence to good governance practices, ordering firms to make changes rather than waiting for them to make changes of their own accord.” (TNA)


SET postpones net settlement rule

The Stock Exchange of Thailand (SET) has indefinitely postponed a requirement for securities brokers to seek a minimum deposit of 10% of any cash account from customers who want to trade on net settlement.

SET’s President Kittirat Na Ranong said that the net settlement rule, which is scheduled to take effect on April 1, needed to be postponed because the computer system of many brokerage houses were not in place for the change. He said the latest survey found that some brokers were still unable to install the computer system for the purpose in time. They had no intention to delay the process, he added.

“We have to accept that each brokerage house is not equally well-equipped in terms of the computer system and information technology personnel. Some need to take some time to develop their system and personnel to comply with the rule”, Kittirat said.

Kittirat said that he believed the postponement of the net settlement rule would not affect the investment sentiment in the stock market because investors had already absorbed the news. (TNA)


FTAs won’t hinder Thailand

Commerce Minister Watana Muangsook has affirmed Thailand will not be put at a disadvantage following the opening of the free trade areas (FTAs) with trade partners. He said that the country had strong selling points, particularly in term of goods under the One Tambon One Product (OTOP) scheme and food products, which could be a key magnet in foreign markets.

Thailand has planned to reach FTA agreements with eight countries, including Bahrain, India, China, Japan, the United States, Australia, Peru, and the BIMST-EC group, comprising of Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan, and Nepal.

The commerce minister said that these countries had a combined population of more than 3 billion. The adoption of the FTA agreement with them would help boost the country’s export, he noted.

“With the FTA pact, we believe that obstacles to bilateral and multilateral trade will ease, and expect that the National Economic and Social Development Board’s and the Commerce Ministry’s target to see the export expand 17% and 15-20% this year respectively will be met,” said Watana. (TNA)


‘Smart cards’ to be in use by 2006

Information and Communications Technology (ICT) Minister Surapong Suebwonglee has stated that all Thai citizens should be using electronic ‘smart cards’ in place of conventional ID cards by the year 2006, with the first cards issued as early as this April.

Surapong said that the ministry was now ready to issue the first batch of 10,000 smart cards on 15 April, with 12 million cards at a cost of 1.44 billion baht to be issued by the end of the year. By the end of 2006, conventional ID cards will be obsolete, with all Thai citizens using smart cards, instead.

The first 10,000 cards are ones that were purchased by the Interior Ministry prior to a cabinet resolution making the ICT Ministry responsible for the smart card scheme. Recipients of this first batch will include people on the government’s poverty register, residents of the three southern border provinces of Yala, Narathiwat, and Pattani, residents of ICT City, and people with expired ID cards. (TNA)


OTOP center to supply goods overseas

The Thai Chamber of Commerce (TCC) should mobilize products from its networks nationwide, and use the distribution center under the government’s One Tambon One-Product (OTOP) scheme to supply the goods into the world market, according to Deputy Prime Minister Somkid Jatusripitak.

While presiding over the opening of the OTOP distribution center by the TCC, Somkid said, “The country’s economy has continued to expand despite a series of untoward incidents. The government’s efforts to bail out and revamp the ailing economy are on the right track. Economy-related ministries have managed to work together efficiently over the past three years. The latest economic figure released by the National Economic and Social Development Board (NESDB) show that the economy is enjoying a better-than-expected growth, and this is clear evidence that the government can solve economic problems efficiently.”

The deputy premier said the establishment of the OTOP distribution center has drawn full cooperation from the private sector. He explained that OTOP products had originated under a small program but continued to expand over the past two years and that last year, the sale of OTOP goods totaled more than 30 billion baht, with growing demand for the products overseas.

Somkid stressed that since the government had planned to develop and upgrade one- and two-star class products into the three- and four-star level this year, the OTOP distribution center should serve as a key channel to market the products overseas. More importantly, he pointed out, the TCC could mobilize products from provinces into the center so they would be distributed both locally and abroad. (TNA)


New industry personnel to be developed

Prime Minister Thaksin Shinawatra has ordered the Ministry of Education to push through with the development of more skilled personnel to feed into Thailand’s industrial sector, warning that the nation’s rapid industrial expansion was being compromised by a lack of skilled workers.

The prime minister’s pronouncement followed the disclosure by Industry Minister Pinij Jarusombat during the March 9th cabinet meeting that in the final quarter of 2003, Thailand’s industrial sector grew by 10.7 percent, with particularly high expansion rates recorded in the automobile and electronic sectors.

Pinij predicted that the industrial sector would heat up further this year due to the expansion of production by several factories and an increase in foreign investment. However, he warned that this meant that the industrial sector now lacked over 10,000 skilled personnel, particularly engineers, and said that the prime minister had ordered the Ministry of Education to create more skilled workers to cope with this expansion.

Pinij warned that unless more skilled personnel were developed as a matter of urgency, foreign investors could turn to other countries such as India and China, adding that the Ministry of Education was coordinating with King Mongkut’s Institute of Technology to produce automobile engineers to fill 4,000 positions. At the same time, the ministry is collaborating with an electronic company, Seagate, to develop another 1,000 industry personnel. (TNA)


Worried public drops February consumer confidence index

Thai consumer confidence in February fell due to public concerns about the bird flu outbreak, the unrest in the south and the ongoing dispute over the privatization of the Electricity Generating Authority of Thailand.

A report issued by the Center for Economics and Business Forecasting of the Thai Chamber of Commerce University said the confidence index fell two consecutive months this year, to 105.2 points in February from 107.5 points in the previous month, which fell from 110.9 points in December last year.

The report said, “The index remains above the significant 100-point benchmark, which indicates that consumers still have confidence in the overall situation. The eroding consumer confidence is probably just a short-term reaction.”

The survey also showed that the confidence index for job opportunities declined to 100.0 in January from 102.9 in the previous month, while the confidence index for future income went down to 118.6 in February from 121.0 in the previous month and from 123.3 in December last year.

In a more positive light, the Finance Ministry has adjusted its growth projection for this year upwards to 7.7-8.1 percent, from 7.5 percent originally. Main factors booting growth include private sector investment and domestic consumption. Other contributors to the economy include a rise in Thai stock prices and exports and low interest rates. (TNA)