Finance

Investment Growth tops Thailand's Agenda, CNBC, Jan 21

Thailand's economy is projected to pick up steam this year on the back of strong export growth, but the main challenge for the country is whether it can boost private sector investment, said Korn Chatikavanij, the Finance Minister of Thailand.
"The top priority of the government at the moment is to find ways to encourage the private sector to invest in the economy," he said on CNBC's Asia Squawk Box.

"The government, in particular, is moving towards easing regulations, which will allow (the) private sector to co-invest with the government in infrastructure projects," Korn said, citing the country's Public Private Partnership (PPP) program.
The Thai economy is expected to pick up steam this year however, certain economic risk factors still remain, a spokesman from the Ministry of Finance said. The comments came a day before the World Bank's warning that global growth could lose steam as governments start to mop-up excess liquidity.

"So far, we've injected probably no more than about two percent (equivalent of GDP) into the economy... We have another 5.5 percent or so of fiscal stimulus that is all lined up for this current year 2010. So I'm anticipating that government influence on economic growth will certainly be significant," Korn noted.

Investment requests in Thailand surged in 2009, Reuters, Jan 21

The value of investment applications in Thailand soared to a 40-year high of 723.4 billion baht ($22 billion) in 2009, showing confidence in the country despite its problems, the Board of Investment (BOI) said on Wednesday.
The figure was 80 percent above the BOI's target and 67.4 percent higher than in 2008, its secretary-general, Atchaka Sibunruang, said in a statement.

The value of foreign investment applications alone increased 18 percent from 2008 to 351 billion baht ($10.7 billion), BOI data showed.
"The unexpected surge in potential investment value last year is considered a reassurance that Thailand remains an interesting investment destination in the eyes of foreign investors, despite internal and external hurdles, such as the Map Ta Phut impasse and the global economic slowdown," Atchaka said.

A court has suspended 64 operations at Map Ta Phut, Thailand's largest industrial estate, because of environmental concerns.. Some of Thailand's biggest firms and several foreign companies have been caught up in the affair.

The government is working to resolve the problem and Prime Minister Abhisit Vejjajiva has said a way out should become clearer in the first half of this year.

Atchaka said the four most attractive sectors to foreign investors last year were services and public utilities, electronics and electrical appliances, agriculture and agricultural products, and automobiles and parts.

Finance Ministry sets 17 goals, Bangkok Post, Jan 19

Finance Minister Korn Chatikavanij, speaking on the ministry's 2010 policies, said it was time to focus on strengthening the country's fundamentals and pave the way for long-term growth as the global economic crisis was receding.

The 17 policy initiatives highlighted by Mr Korn for action this year are primarily policies that were approved by the cabinet in 2009, including helping 1 million people across the country refinance underground debt worth 100 billion baht; establishing a new national savings fund with contributions starting at 100 baht per month; and creating a new public-private partnership framework to help finance new investment in infrastructure and public services.

Microfinancing programmes will be established to provide alternative funding sources in rural areas and for low-earners who are often forced to rely on loan-sharks. The Government Savings Bank and the Bank for Agriculture and Agricultural Co-operatives is currently studying the concept, but authorities say a new agency could be established in the future to manage the programme.

The ministry also hopes to pass a new land and buildings asset tax this year, expand insurance coverage and improve transparency and governance in public operations.

Mr Korn, speaking separately on governance at the Sasin Graduate Institute of Business Administration, said the government will this year review the possibility of introducing a corporate tax incentive for businesses with corporate social responsibility schemes.

Mr Korn said the government, state enterprises and the private sector should discuss developing joint CSR projects that respond to what society most needs.

Exporters worry strong Baht will mar good year, The Nation, Jan 19

Following a record-high trade surplus of US$18.7 billion (Bt615 billion) last year, exporters are now concerned about the stronger baht, which runs the risk of eroding their competitiveness this year.

Barclays Capital research shows the Bank of Thailand may let the baht strenghten to 31.50 per dollar this year thanks to the export recovery. The investment bank expects the baht to move toward 32 in the next six months and to 31.50 by the end of the year.

The Commerce Ministry yesterday reported that exports shrank by 14.2 per cent to $152.5 billion last year, while imports were down by 25.3 per cent to $133.79 billion, leaving the highest trade surplus in the country's history.

Exports in December alone rose by 26.1 per cent year on year, the biggest jump in a year, to $14.62 billion due to clear signs of economic recovery.

Health & Life Sciences

Thailand to boost medical tourism in 2010, IMTJ, Jan 21

The Tourism Authority of Thailand (TAT) will boost medical tourism in earnest in 2010. Thailand has high potential and marketing opportunities for medical tourism, and most foreign visitors using the service are those with high purchasing power. One reason for the new campaign is that latest estimates for visitor numbers have dropped to 1.2 million for 2009, from 1.3 million in 2008, and signs of falling numbers. This makes TAT's target of 2 million medical tourists in 2010, and 10 million by 2015, very ambitious. The majority of Thailand's medical tourist business now comes from Middle East countries

TAT is in the process of gathering information relating to health service providers, accommodation, rehabilitation facilities and tourism programs for companions, to be displayed on its website. Road shows will be later scheduled to target countries, as part of the marketing strategy, and the countries will include Vietnam. The Ministry of Tourism and Sports (MOTS) has been meeting businesses involved in medical tourism to discuss the business potential and cooperation for the best absolute outcome. The ministry is seeking approval for a visa fee waiver for medical tourists until the end of 2010 to help the industry.

Leading private hospital chains playing a key role in boosting Thailand as a medical-care service destination remain cautious over new investment this year, despite the authorities' assurance of a better outlook. The chains saw declining business in 2009 due to the global economic crisis, the airport shutdown and type-A (H1N1) influenza.

Information & Communications Tech

3G auction on hold until board is filled, Bangkok Post, Jan 21

The current National Telecommunications Commission (NTC) board will perform its duties as usual but will suspend its plan to auction 3G licenses indefinitely until four new nominees to the seven-member board receive royal endorsement.

Gen Choochart Promprasit, the NTC chairman, made the comment yesterday after the Bureau of the Royal Household returned for further review the names of the four new members to the Cabinet Secretariat.

Authorities have been asked to double- check the qualifications of the nominees. Col Natee Sukolrat, one of the nominees, is currently under investigation by the National Anti-Corruption Commission.

But the NTC board will not take any action on the potentially contentious 3G auction or on authorisation and new regulations, although all necessary procedures including public hearings, drafting 3G auction rules and information memoranda have been completed.

Meanwhile, NTC vice-secretary Thakorn Tantasith said a petition to the Bureau of the Royal Household claimed the selection process for NTC members had broken the law. The Cabinet Secretariat has to double-check all related government agencies and organisations, he said.

The Royal Household Bureau refused to forward the names of the four members earlier appointed by the Senate to His Majesty the King after a former executive of CAT Telecom, Thamnoon Julamaneechoti, submitted a petition to the Administrative Court and the Royal Household Bureau relating to the NACC investigation.

Infrastructure

Thailand's December Industrial sentiment index highest in four years, MCOT, Jan 21

The Thai Industries Sentiment Index (TISI) in December 2009 stood at 113.6, the highest level in four years, rising from 104.7 in the previous month, Federation of Thai Industries (FTI) Chairman Santi Vilassakdanont said.

The survey was conducted among 1,132 samples, covering 39 industrial groups.

The industrial index in December exceeded the 100 level for the third consecutive month since October, higher than expected but in accordance with a 24 per cent increase of exports in December, the highest figure in the year 2009.

The FTI believed that exports in 2010 will grow by 15 per cent as targeted by the commerce ministry.

Entrepreneurs are worried about increased capital cost due to higher costs of raw materials, oil prices and increased minimum wages. The appreciation of the baht is looming and the Expectation Index for the next three months registered in December dropped to 111.5 from 118.3 in November.

Thailand to construct Science City, Bernama, Jan 21

Thailand's government plans to construct the country's first ever science city, Minister of Science and Technology Dr. Kanlaya Sophonphanit disclosed Thursday.

The ministry and the private sector will jointly develop the science city's project, which will cost approximately 5.0 billion baht (some US$151.7 million), Thai News Agency quoted Dr. Kanlaya as saying.

The planned science city, which will be located at Amata Nakorn Industrial Estate in an eastern province of Chonburi, will be constructed with an international standard, she said.

The science city will be the country's center of science and technology education as it will also support the national-level research and development on science and technology, she said.

The ministry is going to appoint an advisor, who will help make a draft proposal on state policies and suitable industries in relation to the science city's capacity and potential, she said.

Politics

UDD to hold rally before asset ruling, MPs' debate, Bangkok Post, Jan 21

The United Front for Democracy against Dictatorship will hold a large rally in Bangkok next month, shortly before the opposition's censure debate against the government.

UDD joint leader and Puea Thai Party MP Jatuporn Prompan yesterday said he had spoken to Chalerm Yubamrung, the head of his party's MPs, and they agreed the rally should be held before Feb 26.

Key member Arisman Pongruengrong said the group was expected to go ahead with what he insists would be a peaceful gathering next week.
The UDD said it would picket on the main road leading to the airport but would not stage a blockade.

The movement wanted to press the government to speed up prosecution of People's Alliance for Democracy members who blockaded Suvarnabhumi and Don Mueang airports in late 2008.

Yesterday, Prime Minister Abhisit Vejjajiva expressed concerns over the planned protest outside the airport.
The UDD supporters would also visit the homes of privy councillors to ask what they thought about the alleged illegal possession of land by their fellow councillor, Surayud Chulanont.

Security officers will guard the residences if necessary.

END MEMO

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