Thailand plans fly 100 tons of rice to earthquake-hit   Haiti   on February 1, with national carrier Thai Airways International providing a freighter plane, media reports and airline sources said Saturday.

The shipment is the first of 20,000 tons of rice pledged by the government to the disaster-struck Caribbean nation.

The aid shipment is to be transported on a Boeing cargo freighter aircraft on a 36-hour flight from Bangkok to the Dominican Republic via Alaska and Miami, THAI president Piyavasti Amranand said.

'Once THAI's humanitarian freighter flight lands at Santo Domingo Airport in the Dominican Republic, UN humanitarian assistance teams will dispatch donated goods to those in need of relief aid in Haiti,' he said.

The cost of the flight was estimated at 632,000 dollars.

Customs

FTA’s to have minor impact, Bangkok Post, Jan 26

Thailand will not gain much from free trade agreements because of minimal exports between the agreeing parties, says Sethaput Suthiwart-narueput, an executive vice-president of Siam Commercial Bank.

The benefits from FTAs taking effect this year are insignificant, particularly for the country's exports, said Dr Sethaput, also chief economist of the SCB Economic Intelligence Center.

About 56% of all types of export goods will receive the common effective preferential tariff (CEPT) rate of zero under the FTAs. But Thailand only exports a narrow range of CEPT goods to counter-parties, equivalent to 8% of export goods to the countries or 2% of Thailand's total supply.

The tariff rate decreased by 1.2% in 2010 compared with a drop of 3.8% the year before.

The FTAs should negatively impact the industries of tobacco, liquor, textiles excluding clothing, electrical goods, coffee and tea. Such industries will face dumping measures from counter-parties, particularly China, South Korea and India. But those sectors are marginal contributors to the country's economy, said Dr Sethaput.

Several business sectors will benefit from the FTAs due to lower raw material import costs and the wide spread between the existing tax rate and the new rate under the agreements.

The FTAs should provide greater opportunities for rubber products exported to China, tyres exported to Malaysia and Indonesia, and jewellery and rice.

Though the Asean Free Trade Area agreement from 2003 led to zero-rate tariffs among several Asian countries, trade among those countries did not change significantly, he said.

In 2008, Thailand's exports to the region were 22.6% of total volume, while imports were 16.6% of the total. In 1998, Thai exports to Asian countries were 18.2%, while imports were 15.1%.

Thailand’s auto industry to benefit hugely from AFTA, The Nation, Jan 25

The 5-per cent tax on automobiles and parts traded among the six founding   Asean  countries -Thailand, Malaysia, Singapore, Brunei, the Philippines and Indonesia - was abolished on January 1, in a move towards turning   Asean  into a single market.

This would help   Asean  nations become more competitive against other Asian giants - particularly China and India.

Despite the global recession last year, auto sales in China reached 13 million units and in India 2.2 million units, while combined sales in Asean  hit 1.8 million units.

Since major markets such as the US, Europe and Japan are saturated and stagnant, due to the financial crisis, any growth in the auto industry would have to take place in the Asian region, analysts say.

Adisak Rohitasune, vice chairman of the Federation of Thai Industries and vice president of Asian Honda Motor, says the liberalisation of the auto and parts trade will not only help   Asean  manufacturers, but also draw investment into the region.

"This will help increase sourcing of raw materials and parts within the region, and expand the automobile market across the region," he said.

With the tariff barrier in   Asean  markets lifted, it would not be surprising to see a particular product being manufactured in one country and exported to other countries within the region, he said.

Finance

BOI support “sustainable investment policy” concept, MCOT, Jan 26

Board of Investment (BoI) Secretary-General Atchaka Sibunruang Brimble on Monday revealed the BoI meeting chaired by Prime Minister Abhisit Vejjajiva supported the “sustainable investment policy” concept, which it believed could contribute to the country’s sustainable economic, social and environmental development.

She said the BoI is assigned to discuss with relevant state agencies ways to study and prepare details of investment promotion measures, which could be used to encourage the sustainable development of the country in various dimensions.

Investment projects to which investment promotions should be granted must help upgrade Thailand’s industrial sector into a higher technology-based one and enhance the country’s economic value.

The investment policy as applied during 2007-2008 must be revised to ensure investment promotion approval is given only to businesses that contribute sustainable investment and are environmentally friendly, she said.

Foreign investors seek clarity, consistency, Bangkok Post, Jan 25

Thailand needs clearer regulations and policies to attract more foreign property investment, says George McKay, managing director of Colliers Corporate Services Asia Pacific Region.

"Rules should be rules. Some regulations are not clear enough - like foreign property ownership. Investors want clarity. It builds confidence. Unclearness will obstruct investment," he said.

As the Thai government aims to make the country a hub for regional offices, Mr McKay suggests the authorities set up long-term plans such as those implemented by Singapore.

"You need to know what type of business you want to attract," he added. "Pharmaceutical and biotech is a good opportunity to tap but key factors to building a regional hub include infrastructure, the tax system and education.

"Thailand should make a big investment in education to create more jobs and improve working skills. For instance, in the Philippines people can speak English and now it is becoming a rival to India in the call centre business."

Infrastructure

Worries grow over Map ta Phut, Bangkok Post, Jan 26

Foreign investors are even more concerned about the environmental deadlock at Map Ta Phut now the Central Administrative Court had rejected petitions requesting that 30 halted projects at the industrial estate be allowed to restart, Federation of Thai Industries (FTI) chairman Santi Vilassakdanont said on Tuesday.

“The private sector is worried about the industrial impasse as it will have an impact on several sectors. If the project operators have to restart the process with environmental and health impact assessments it will take quite a long time,” Mr Santi said.

The private sector was preparing a case to present to the Supreme Administrative Court, asking for permission to go ahead with the suspended industrial projects.

He suggested the government provide information on the working procedures for settling the industrial problem at Map Ta Phut industrial estate. Some of foreign investors were totally ignorant of Thailand’s judicial process.

FTI vice chairman Phayungsak Chartsutthipol said local investors want their projects to be allowed to move forward because they don’t want to change their investment policies.

“The private sector will this afternoon discuss ways to jointly find a solution to the problem,” Mr Phayungsak said, adding that the private sector was ready to comply with the law.

He reiterated that the deadlock at Map Ta Phut had eroded the confidence of foreign investors. They are reviewing their investment plans,” FTI vice chairman said.

The Central Administrative Court last Friday rejected 30 petitions from business operators in Map Ta Phut, whose projects were suspended by court order pending the completion of environmental and health impactment studies required by Section 67 of the 2007 constitution.

Politics

Democrats reject charter changes, Bangkok Post, Jan 26

The executive committee of the Democrat Party on Tuesday decided not to support their government coalition partners in their proposal to amend two key points of the 2007 constitution, Democrat Party spokesman Buranat Samutarak said.

There was only one absentee when the 19-member executive committee began its meeting at 2pm. The absent member was Chinnaworn Boonyakiat.

After about 20 minutes of discussion, the executive committee decided not to join the five other coalition parties - Bhumjaithai, Chart Thai Pattana, Ruam Jai Thai Chart Pattana, Puea Pandin, and Social Action - in signing a charter amendment motion.

The five smaller parties want to amend Section 190, which requires all international agreements to receive prior parliamentary approval, and Section 94, which concerns the electoral system.

They want the multi-MP constituency system currently in use replaced by a single-seat constituency system.  They believe the present system favours the bigger and better financed parties.

Democrat MPs have been deeply divided over the proposed electoral system change and were unable to agree at a party meeting over the weekend.

The executive committee's decision means the five smaller coalition parties will submit the amendment motion on their own.

The Democrat executive did not announce whether their party's MPs would be allowed a free vote on the amendments in parliament.

Party leader Abhisit Vejjajiva, the prime minister, said a meeting of the Democrat MPs later voted to follow the executive committee's decision not to sign the charter amendment motion.

END MEMO

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