Customs

AFTA tariff cuts to reduce revenue of Thai Customs department, Bernama, Jan 15

Thailand's Customs Department expects revenue from import and export duties will decline by Bt3-4 billon (RM305.25 million) in the wake of the Asean-Free Trade Agreement (AFTA) cuts which became effective on January 1, with the department adjusting its role from tariff collector to facilitator, Thai News Agency (TNA) reported quoting a senior customs official as saying Friday.

Customs Department Director-General Somchai Sujjapongse said the number of Thai entrepreneurs initially seeking to benefit from tariff elimination under AFTA, has increased by 15 per cent, causing the Customs Department to lose income of about three to four billion baht.

However, he said it is too soon to evaluate how much the tariff collections will drop as more exporters are likely to use their right to benefit from AFTA from February onwards.

Put in effect on January 1, AFTA automatically caused falling tariff collections. However, the department expects to achieve its income target of about Bt78 billion in 2010 as the overall economy has improved.

Finance

Thai Exports rise most in 17 months as demand falls, Bloomberg, Jan 19

Thailand’s   exports  rose the most in 17 months in December as demand for rice, electronics and auto parts climbed, supporting the nation’s economic recovery.

Shipments gained 26.1 percent from a year earlier to $14.6 billion, Commerce Minister   Porntiva Nakasai  said in Nonthaburi province on the outskirts of Bangkok today. The median estimate of 10 economists in a Bloomberg News survey  was for a 19.2 percent increase. Overseas sales fell 14.2 percent in 2009 to $152.5 billion.

Thailand joins neighbors from Singapore to the Philippines in reporting a pickup in exports as the region leads a recovery from the deepest global slump since World War II. The Southeast Asian nation’s $261 billion   economy  probably ended its yearlong recession in the last three months of 2009, Finance Minister Korn Chatikavanij  said yesterday.

“Exports are expected to rebound this year,” said   Julia Goh, an economist at CIMB Investment Bank Bhd. in Kuala Lumpur. “This is on the back of the U.S. continuing to recover into the second half and also supported by demand coming from Asia.”

Imports  rose 28.2 percent in December, the first gain in 13 months. The   trade surplus  narrowed to $204 million from $1.06 billion in November. The median forecast of 10 economists surveyed by Bloomberg was for imports to rise 13.8 percent.

Food & Agriculture

Thailand to export 1 million tons of rice to the Philippines, Phil Star, Jan 19

Thailand is offering to export as much as one million tons of rice to the Philippines under a government-to-government deal, a senior Philippine agriculture official said Tuesday.

Philippine Agriculture Secretary Arthur Yap told reporters that the Thai government's offer is on top of the Philippine proposal to buy 370,000 tons of duty-free rice annually from Thailand.

The proposed 370,000 tons import is part of the Country Specific Quotas (CSQ) for rice which the Philippines has committed to bring in as a member of the World   Trade  Organization.

Thailand to open bid for rice sales from stockpiles, Bloomberg, Jan 18

Thailand, the world’s biggest rice exporter, will open bids Jan. 21 to sell grains from stockpiles to benefit from prices that have surged on growing demand from countries like the Philippines.

The country plans to sell 300,000 tons of white rice and 75,000 tons of glutinous rice, Vichak Visetnoi, director general of the   Department of Foreign Trade,   told reporters. Reserves will fall to 5.125 million tons after the sales, he added.

Rough rice has risen 22 percent on the Chicago Board of Trade from last year’s low as the Philippines advanced imports after storms wiped out 1.3 million tons of the nation’s crops and on concern India may become a net importer after a drought pared harvests last year.

“The timing is right at the moment, with increased demand from many countries,” Vichak said in Bangkok. “Prices are also attractive.”

Infrastructure

Thailand to restart petrochemical projects, Financial Times, Jan 18

A committee of representatives from the government, industry and the local environmental groups that brought the initial case has reached an agreement on the scope of the health and environmental assessments, and for a procedure of legal challenges.

A temporary 19-member committee will be formed to advise the government on health and environment issues until a permanent body can be formed. Once that is in place, the companies involved, which include PTT Group, Siam Cement Group, BlueScope Steel,   Bayer   and Aditya Birla Chemical, should be able to carry out the necessary assessments and re-apply for their operating licences. The government estimates the process should take between six and nine months before the projects are up and running again.

PTT, Thailand’s largest energy company and owner of 18 suspended projects worth Bt100bn, estimates that the ruling could cut net profits for this year by as much as 5 per cent.

Although a higher court subsequently allowed 14 projects to go ahead, the decision to halt work at Map Ta Phut sent shockwaves through the domestic and international investor community. They were worried that it added a new layer of regulatory uncertainty to an investment environment already struggling with a political risk premium.

Map Ta Phut has been operating since the mid-1990s, and the original case was bought by local groups, which were already upset by the high levels of pollution created by existing plants and were keen to ensure it was not exacerbated by the new projects.

The government has moved fast to try and limit the damage, appointing Anand Panyarachun, a former prime minister, to try to broker a deal. On a visit to the area on Saturday, Abhisit Vejjajiva, the prime minister said the cabinet had approved Bt800m to improve medical care for local residents.

Prime Minister vows to end Map Ta Phut impasse, Bangkok Post, Jan 17

Prime Minister Abhisit Vejjajiva insisted on Sunday that the government will urgently solve the Map Ta Phut impasse and help affected residents there.

Last month, the Supreme Administrative Court affirmed the suspension of 64 out of 76 industrial projects in Map Ta Phut for failure to comply with constitutional requirements on the need for environmental and health impact assessments.

Mr Abhisit, who visited Map Ta Phut on Saturday, said the problems in the country's largest industrial estate, such as ineffective waste management, waterworks expansion and public health system, were accumulated over a period of time.

He said the cabinet had approved a budget of 800 million baht to provide medical assistance to people working in Rayong's Map Ta Phut Industrial Estate. A provincial occupational medicine and environmental medicine centre will also be set up to tackle the problems.  

The government wanted to declare Map Ta Phut as a pollution control zone, he said.

Map Ta Phut Medical Center opens, Bangkok Post, Jan 17

The government yesterday opened Thailand's first occupational and environmental health hazard medical centre, costing 225 million baht, in a direct response to industrial pollution at Map Ta Phut in Rayong.

Attending the ceremony, Prime Minister Abhisit Vejjajiva vowed to improve health care and use lessons learned from the Map Ta Phut pollution problems to better deal with detrimental impacts due to industrial development.

"The Map Ta Phut case is an important lesson. In the past, we were only concerned about economic growth without paying attention to the environment and people's health," Mr Abhisit said during his first visit to the pollution-hit area since the Map Ta Phut dispute flared up last year. "From now on, we have to balance investment with environmental and health protection."

Mr Abhisit has told officials to set up an information centre to answer queries about procedures under the new Natural Resources and Environment Ministry's ministerial regulation on environmental and health impacts assessment study and the ongoing public hearing.

He added the cabinet would appoint a 19-member coordinating committee next week.

Politics

King of Thailand approves Cabinet Reshuffle, Bangkok Post, Jan 16

His Majesty the King yesterday endorsed the new cabinet line-up which will involve five ministerial changes, Prime Minister Abhisit Vejjajiva says.

The five new ministers and deputy ministers will take an oath of allegiance before His Majesty at Siriraj Hospital on Monday at 5.30pm.

Mr Abhisit yesterday said the cabinet line-up was submitted to the King for endorsement as soon as it had been scrutinised by the Cabinet Secretariat.

The reshuffle affected five cabinet positions with the latest change involving the post of deputy transport minister held by the Bhumjaithai Party, he said.

Mr Abhisit said Deputy Transport Minister Prajak Klaewklaharn tendered his resignation on Thursday night and that Bhumjaithai nominated Suchart Chokechaiwattanakorn to succeed him.

Mr Prajak had reportedly promised to step down from the post and give the job to Mr Suchart after a year in office.

Mr Abhisit said a major reshuffle could be on the cards after the opposition's planned no-confidence debate.

The government would have to evaluate the situation once the debate had taken place. Any decision regarding another reshuffle would have to wait until then, he said.

Mr Abhisit said he would have to reconsider the government's policy and strategy if a fresh shake-up was necessary.

The new cabinet line-up will see Democrat Trairong Suwannakhiri replace Korbsak Sabhavasu, also a Democrat, as deputy prime minister in charge of economic affairs.

Mr Korbsak tendered his resignation as deputy prime minister on Monday. He was appointed as PM's secretary-general on Tuesday.

Mr Korbsak previously oversaw economic affairs and the Community Sufficiency Economy project, before Democrats who were saddled with graft charges relating to the project were replaced.

Government chief whip Chinnaworn Boonyakiat was named education minister, succeeding Jurin Laksanawisit who will replace Witthaya Kaewparadai as health minister.

Mr Witthaya resigned on Dec 29 last year over alleged irregularities in budget management relating to health projects under the Thai Khem Khaeng - "Thailand: Investing from Strength to Strength" - economic stimulus programme.

5 New Thai Minister, Straits Times, Jan 18

FIVE new Thai cabinet ministers are to be sworn in on Monday following a minor reshuffle that may be a prelude to a bigger shake-up aimed at prolonging the life of Prime Minister Abhisit Vejjajiva's fragile coalition government.

The reshuffle followed the resignation of the health minister and his deputy after a scandal over spending on programmes in the government's economic stimulus package.

Mr Abhisit has said a major reshuffle could be on the cards after a no-confidence motion that the opposition Puea Thai Party, which backs exiled former premier Thaksin Shinawatra, plans to launch in parliament in February.

If the motion is passed, the government falls. While that is unlikely, the opposition hopes the televised parliamentary debate could discredit Mr Abhisit's administration and widen the cracks within the six-party coalition, led by his Democrat Party.

'This reshuffle and a future one would allow the Democrats to tap potential talent in a bid to salvage the government's popularity,' said Sombat Thamrongtanyawong, a political scientist at the National Institute of Development Administration. 'Meanwhile, talk of more changes would take some pressure off and keep political factions within the coalition happy. What the government needs is guaranteed support during parliamentary voting after the debate,' he added.

END MEMO

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