Top Story of the Week: Thailand Seeks 'Concrete Progress' on Dawei Port
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Defense & Security
The United States is ready to provide technical assistance including training for Thai army personnel, according to a top US Army officer.
US Army Chief of Staff Gen Raymond T. Odierno made the offer while meeting with Thai Army Chief Gen Prayuth Chan-ocha. He also praised the Thai military’s vision for closely monitoring border security and tackling the unrest in the country’s southern border region.
Deputy Defense Secretary Ashton B. Carter traveled here today for meetings with U.S. and Thai officials.
Carter’s decision to visit Thailand was based on the importance U.S. government and defense officials place on the two nations’ alliance, and on the need to further strengthen and deepen senior-level engagement, according to a senior official traveling with Carter and speaking on background.
The official said the deputy secretary visited the Thai Ministry of Defense and thanked Air Chief Marshall Sukumpol Suwannathat and other military officials for hosting the multilateral exercise Cobra Gold, which Carter noted during the meeting has been key to enhancing cooperation in the region.
Thailand signs up for two more Black Hawks, UPI, July 19
Thailand has agreed to buy two Sikorsky UH-60M Black Hawk helicopters under the U.S. government's foreign military sales program. The agreement, made by the Thai army in a letter of offer and acceptance, will make Thailand the first member of the Association of Southeast Asian Nations to fly the latest version of the Black Hawk, a statement by Sikorsky said.
Disaster & Flood Recovery
The Water and Flood Management Commission will take six months to select bidders to run the Bt300 billion worth of flood and water management projects.
The names of the winning bidders will be announced next January 31. Companies with strong construction and design experience that propose reasonable budgets, timing and technology for the projects will be prioritised in the selection process.
All documents and contracts for proposals must be in Thai, while money transactions will be made in baht for the winning bidders, said Science Minister Plodprasob Surassawadee, who chairs the government-appointed commission tasked with water and flood management.
Green and hi-tech industries are in. Sunset industries are out. Thailand’s Board of Investment is preparing to change its investment policies with the aim of promoting high technology and environmentally friendly businesses rather than those that simply locate in less-developed parts of the country.
The policy shift is intended to accelerate Thailand’s ongoing transition from a regional hub for labor-intensive manufacturing to a center for more higher-value-added and advanced industries. Minister of Industry Pongsvas Svasti said that a policy review that would result in these changes should be completed by the end of this year.
The Bt300 minimumwage policy has failed to elevate workers' quality of life, according to the results of a survey released yesterday by the Thai Labour Reconciliation Committee (TLRC), which urged the Labour Ministry to review its role and do more to protect workers' rights.
The minimumwage policy, in effect in seven provinces since April 1, hasn't forced many establishments to raise their minimum wages and most companies are including their welfare allowance with the wage in order to meet the policy requirement, TLRC chairman Chalee Loysung said.
Manufacturers and exporters in Thailand are increasingly encouraged than ever to legalize their software assets as new US trade laws will result in penalties on companies that use illegal IT in making products bound for US markets.
The message was echoed at the panel discussion on July 18, hosted by the Economic Crime Division (ECD). The discussion focused on the US's Unfair Competition Act (UCA), which requires manufacturers and exporters anywhere in the world to use only legitimate IT, both hardware and software, in carrying out all manufacturing and commercial activities from offices to factories.
"Business leaders in Thailand can do well by their shareholders, their employees and their national competitiveness by simply adhering to the nation's copyright laws protecting software copyrights, which is adequate for safeguarding their trades with the US," said ECD's Deputy Commander Chainarong Charoenchainao.
As the Indonesia story seems to be souring, countries like Thailand and the Philippines are soaring.
Not long ago, Southeast Asia’s largest economy – Indonesia – was considered to be the golden boy of the region, with investors pouring money into the country to capitalize on its recent consumer and commodity-led boom. More recently, investors have been taking some of their money out because they’re worried that rising inflation, falling commodity prices and policies seen by foreigners as protectionist could knock the wind out of the archipelago’s sails. Foreigners have pulled some $2 billion out of the government bond market and have helped push the Indonesian rupiah down.
The World Bank projects that the Thai economy will grow more slowly than many organisations expect this year, expanding by just 4.5 per cent because of the seriousness of the global economic slowdown.
This is despite the Thai manufacturing sector recovering fully in the second half, the institution said. At yesterday's "Looking at Thailand and the Global Economy in the Second Half with Economic Gurus" seminar, panelists warned that both Thai gross domestic product and the world economy would experience slower growth in the next several years. They advised Thai enterprises to adapt their marketing plans urgently to focus more on new potential markets and increase productivity and competitiveness, as demand from traditional markets would continue to shrink.
The rising e-commerce trend has encouraged more enterprises to set up online businesses in the Kingdom, with June alone seeing a month-on-month rise of 228 per cent in the number of registrations.
The Business Development Department reported yesterday that the number of newly registered e-commerce websites totalled 457 in the first half of the year.
The value of foreign applications for Board of Investment privileges in the first half surged 66.5 per cent to Bt278 billion.
"We are confident that this trend will continue, which will bring the total value of foreign direct investments promoted by the BOI to Bt630 billion for the full year as targeted," Atchaka Sibunruang, secretary-general of the BOI, said yesterday.
Twelve Thai produced goods still enjoy trade benefits under the United States' Generalised System of Preferences (GSP), Commerce Minister Boonsong Teriyapirom said.
The announcement was made on June 30 by the United States Trade Representative (USTR) Office, and took effect the day after Thailand’s Foreign Trade Department and the Royal Thai Embassy’s Commercial Affairs Office in Washington, DC submitted the request. The 12 granted GSP items are two items in the Competitive Need Limit (CNL) Waivers list while the other 10 are under the De Minimis Waivers group.
In the worst case scenario, the impact of the eurozone debt crisis would trim Thailand's economic growth by between 0.5 and 1.0 per cent, Fiscal Policy Office director general Somchai Sujjapongse said on Tuesday.
Previously, the FPO projected the gross domestic product growth for the year at 5.7 per cent. There was a strong likelihood it would take five to 10 years to settle the financial crisis in Europe. This is because it is an economic structural problem, involving financial institutions, public debt, labour markets and politics, which would take a long time to resolve, Mr Somchai said.
EnergyPTT trying to promote E20 gasohol to drive demand, The Nation, July 25Although a large number of car buyers purchase vehicles that are compatible with E20 gasohol, many of them aren't filling up their tanks with this type of fuel. Since 2008, the Thai government has been offering a low excise duty rate of 25 per cent for E20 vehicles in order to support its ethanol promotion, and most major auto-makers offer models that are compatible, resulting in lower retail prices.
Kasikornbank is appointed the financial advisor for the infrastructure fund, which will raise Bt5 billion for 7 solar farms of SPCG Plc.
Krisada Lamsam, a senior executive vice president at KBank, said that the Solar Power infrastructure fund is likely to receive a warm welcome from investors due mainly to its solar farms' high business potential with good locations, a secure revenue source under the long-term contract with the Provincial Electricity Authority, low operating costs and project aim that is in line with the government's policy of renewable energy promotion. Kasikorn Asset Management will act as the manager of the fund, while the fund's dividend to be paid to unitholders will be tax-free.
The price of liquefied petroleum gas in the transport sector is almost certain to rise after August 15, which is the expiry date for the government's measure capping LPG prices for three months to help ease the cost of living.
The floating of LPG prices remains government policy to be proceeded with in accordance with the market mechanism ahead of full liberalisation under the Asean Economic Community in 2015, Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said yesterday.
Thailand’s central bank signaled it has room to cut interest rates to protect the economy from a global slowdown as it lowered the country’s growth and inflation forecasts after keeping borrowing costs unchanged. The Bank of Thailand is ready to do more to support growth if risks escalate, Assistant Governor Paiboon Kittisrikangwan said today, after the monetary authority held its benchmark one- day bond repurchase rate at 3 percent as predicted by all 14 economists in a Bloomberg News survey. It cut its growth forecast for the year to 5.7 percent from 6 percent.
Thailand and the Philippines will probably refrain from cutting interest rates this week as the Southeast Asian economies withstand a global growth slowdown that spurred policy easing from Brazil to China.
The Bank of Thailand will keep its benchmark unchanged at 3 percent for a fourth straight meeting tomorrow, according to all 13 economists in a Bloomberg News survey. Eleven of the 14 analysts in a separate survey forecast the Philippines will hold rates at 4 percent the next day, even as more predicted a reduction this month than for the June meeting.
The Stock Exchange of Thailand (SET) is adjusting the ceiling and floor price, improving the calculation of opening and closing prices, increasing categories of market orders.
In a statement, it said that the trading rules are amended to comply with practices of leading international stock exchanges in order to boost trading choices and prepare the exchange for trading innovations, new products, and regional connections.The SET completed the public hearing on the improvements and its brokerage members are ready for them. The revised rules will be implemented together with the new IT trading platform in the third quarter of this year.
Food & AgricultureRice subsidy weighs on govt's economic record, The Nation, July 25Although the government's overall performance in implementing its economic policies has received pass marks from leading economists, they warn as much as Bt100 billion in taxpayers' money could be lost as a result of the rice-subsidy scheme this year.
Organic rice farmers in the Northeast are seeking help from the government, as farming has been affected by the government's rice-pledging scheme. The high prices offered under the pledging programme launched last October have led some farmers to sell organic paddy to millers, which help the government store rice under the the scheme. The trend has eventually harm the quality of organic rice.
The cabinet on Tuesday approved a 15 billion baht budget to shore up rubber prices, Deputy Agriculture and Cooperatives Minister Nattawut Saikuar said. Of the total budget, 10 billion baht will come from the state Rubber Estate Organisation and the remaining five billion baht will be an extra allocation, he said after the weekly cabinet meeting.
Myanmar President Thein Sein has met the heads of Thai business conglomerates which have established a presence in Myanmar to discuss cooperation and expansion.
Thein Sein held private one-on-one meetings with energy giant PTT, Siam Cement Group and Charoen Pokphand Foods (CPF) yesterday as part of his official visit to meet members of the government and the local business community.
Top executives from the three conglomerates expressed confidence in the Myanmar's business potential and future cooperation with its government following the meetings.
Thailand's Prime Minister Yingluck Shinawatra and Myanmar President Thien Sein today signed three memoranda of understanding, including one dedicated for the joint development of Dawei Special Economic Zone and its related project areas.
At the press conference after the signing, Yingluck said that Thailand is committed to materialise the deep-sea port project in Dawei. Both see the mutual benefits of linking the ports in Dawei and Laem Chabang in Thailand. Thien Sein was in Laem Chabang yesteday.
Under another MoU on the development cooperation in Myanmar, Thailand has offered Myanmar assistance in four key areas - human capital, preparation as Myanmar will be Asean’s chair in 2014, economic reform, and infrastructure development. While Thailand will participate in the Joint Committee to be hosted by Myanmar, there was a proposal for the establishment of the Myanmar-Thia Friendship Association which will work hand in hand with the Thai-Myanmar Friendship Association. Both also agreed to a ministerial working committee, which will start the first meeting in August to push through their agreements.
Thai and Myanmar leaders on Monday offered a much-needed lift to the multi-billion dollar Dawei port and industrial zone in southern Myanmar that has been struggling to find private investors.
Thai Prime Minister Yingluck Shinawatra and Myanmar President Thein Sein told a joint news conference they had agreed to connect the strategically located Dawei Economic Zone with industrial areas along Thailand's eastern seaboard, including the Laem Chabang deep sea port. But they gave few details except to say ministers from both sides would start regular meetings from August.
Thai Prime Minister Yingluck Shinawatra said her government was committed to seeing “concrete progress” in the development of the $8.6 billion Dawei port and industrial zone in neighboring Myanmar.
Thailand and Myanmar agreed to hold ministerial-level meetings starting next month to push forward with the project, Yingluck told reporters in a joint briefing with Myanmar President Thein Sein today in Bangkok.
Prime Minister Yingluck Shinawatra will leave Bangkok this afternoon for an official visit to Germany and France today through Sunday to strengthen ties between Thailand and the two European countries.
Ms Yingluck begins her European tour in Germany from July 17 to 19 as a guest of Chancellor Angela Merkel. The visit is significant as it is her first official visit to a European country since taking office and marks the 150th Anniversary of the establishment of diplomatic relations between Thailand and Germany.
Health & Life Sciences
The US Food and Drug Administration recently approved the use of the anti-retroviral drug Truvada as a measure to prevent HIV infections, a Chiang Mai-based academic said yesterday. "The approval came after a big-scale trial in 16 countries showed a 42 per cent reduction of HIV acquisition risk among those taking Truvada," said Assoc Prof Suwat Chariyalertsak, head of the Chiang Mai University Research Institute for Health Sciences.
Studies show that risks of HIV infection are reduced even further if people have taken the drug regularly, he said. Truvada, manufactured by US-based Gilead Sciences, is available in Thailand, but it has only been prescribed in the treatment of patients who already have HIV.
Five key government agencies have joined forces to contain the outbreak of hand, foot and mouth disease (HFMD), says Public Health Minister Witthaya Buranasiri, and expect to see the situation improve by next month.
After a meeting yesterday, the Education Ministry agreed to conduct a sixpoint campaign at primary schools across the country, while the Culture Ministry, which regulates Internet cafes, will oversee sanitary measures at all outlets. The Bangkok Metropolitan Administration will handle public health measures and an awareness campaign at the schools it runs in the capital, while the Public Health Ministry will supervise and implement overall health and medical operations.
Thailand’s transition to a more advanced economy won’t rely solely on foreign investment and exchanges, as the government is aiming to nearly triple the number of Thai researchers working in science and technology-based industries over the next decade.
By 2021, Thailand hopes to have 25 researchers for every 10,000 citizens, compared to just nine today, according to Pichet Durongkaveroj, the secretary-general of the National Science and Technology Innovation Policy Office (STI). The government is taking several steps to achieve this goal, including increasing investment in research and development (R&D) and human capital, changing perceptions about technical professions, and forging arrangements with universities to allow science and technology researches to work full-time in private industry for a number of years without losing their academic positions. The various measures were outlined in the National STI Policy and Plan 2012-21, endorsed by the cabinet of Prime Minister Yingluck Shinawatra in April.
IBM Thailand, the US-based technology firm, is expanding its presence in the booming industrial areas of the Eastern Seaboard ahead of the Asean Economic Community in 2015.
The local operating unit received the green light from its parent for Thailand to serve as its Asean innovation centre for business analytics. To this end, IBM has set up a new branch office in Chon Buri province, its fourth location in Thailand.
The Thai government has approved a 1.6 billion baht budget to help the Lao government extend the railway service from Tha Na Laeng to Vientiane. The service will be the second phase of the Nong Khai-Tha Na Laeng service, which has linked Thailand and Laos since 2008, according to Acksiri Buranasiri, president of the Neighbouring Countries Economic Development Cooperation Agency (Neda), a public agency under the Ministry of Finance.
About 30% of the budget (495 million baht) will be financial aid, while the rest will be a loan. The extension will add 7.75km to the existing rail system and will also include a train station and office in Vientiane.
Cross-border trade between Malaysia and Thailand will be enhanced with the opening of a new border checkpoint in Sadao district of Songkhla province, Thai News Agency (TNA) reported.
Finance Minister Kittirat Na-Ranong confirmed the plan on Sunday, saying that the government will spend 650 million baht (US$20.47 million) on rebuilding the existing Sadao customs office, in an effort to ease traffic bottlenecks on an area of 661 rai
The Cabinet today approved another 1-month extension in the diesel excise tax waive, as oil prices spike again.
The tax waive will end on August 31. Government Spokesperson Sansanee Nakphong said that the ministers approved the extension to ease the cost of living, which is set to rise on higher oil prices.
The Excise Department is prepared to revive the telecom excise tax, initially at 3 per cent of revenue which remains under the 10 per cent ceiling.
Benja Luicharoen, director-general of the Excise Department, said that the department would soon discuss this approach with the Finance minister and the prime minister. "The department is of the view that we should impose the telecom excise tax, but the tax rate would be kept low," she said, adding that the rate should not severely negatively affect telecom companies and consumers.
The Business Development Department will next month announce six new guidelines for inspecting 27,000 companies in Thailand that are at risk of breaching the Foreign Business Act.
The department aims to prevent foreigners, and nominees for offshore entities, operating businesses where that is forbidden under the FBA. Director-general Banyong Lim-prayoonwongse said yesterday that his department would soon announce clearer guidelines for inspecting firms that have foreign shareholders.
The Finance Ministry will seek to extend the first-car buyer scheme until mid-2013 in response to manufacturers' requests, giving participants an extra six months to ask for a tax rebate.
Benja Louichareon, director-general of the Excise Department, said many people persuaded by the government scheme to buy their first car cannot receive their tax rebate due to delivery delays. At present, rebate eligibility depends on both buying a car and becoming its legal owner by the end of this year. The Finance Ministry will seek approval at tomorrow's cabinet meeting for the scheme's extension in a bid to solve this problem.
The Thai Industries Sentiment Index (TISI) for June was down from 106.0 reported in May to 102.7, the first decline in six months, Supharat Sirisuwannangkul, vice chairman of the Federation of Thai Industries (FTI), said on Thursday.
However, automobile manufacturers reported setting records in both production and exports. Mr Supharat attributed the drop in industry confidence to a decline in many orders, sales volume, output and poor performance of manufacturers.
Thailand is ready to work with all partners on disaster preparedness and relief, and on strengthening regional economic and food security, Foreign Minister Surapong Tovichakchaikul said at the conclusion of the 19th ASEAN Regional Forum and the 2nd East Asia Summit of Foreign Ministers held in Phnom Penh, Cambodia.
Asia and the Pacific is the region most prone to natural disasters, and next year Thailand and the Republic of Korea will co-host the ASEAN Regional Forum Disaster Relief Exercise (DiRex). This year’s ARF DiRex had over 3,000 participants from 23 countries, including the European Union. The Foreign Minister said the region needs to be well prepared, and that Thailand is ready to work closely with all nations on disaster preparedness and relief.
Princess Maha Chakri Sirindhorn presided over celebrations marking the Peace Corp’s 50th anniversary in Thailand, delivering remarks that recognized the contributions of those who have served, and strengthened the long-standing friendship between Thailand and the United States at a ceremony at the Ministry of Foreign Affairs on July 12.
Back in 1962, Thailand became one of the first countries to host volunteers from the new program founded by President John F. Kennedy - the Peace Corps. A distant outpost from the United States, Thailand in those days was a poor and pre-industrial nation of farmers and small villages where development had yet to truly take root. Today, Thailand is a modern, upper-middle-class income nation and manufacturing powerhouse. But as with any land, there are still those in need. And so, half a century since those first volunteers arrived, more than 100 members of the Peace Corps are still working in Thailand, building better lives and communities and strengthening the relationship between America and its oldest treaty ally in Asia.
PTT Plc has announced plans to develop what it bills as the country's first research and development university over the next three years in Rayong's Map Ta Phut area. Chief executive Pailin Chuchottaworn said the Rayong Institute of Science and Technology (RIST) will stand on 200 rai belonging to subsidiary IRPC Plc.
He was speaking after yesterday's Dr Sippanondha Ketudat Award ceremony for student achievement. "We're studying details of the university project, with plans to use an economic development model from South Korea," said Dr Pailin.
As the violence-plagued provinces of southern Thailand continue to struggle with a shadowy insurgency, the restive region is battling a new enemy: a drug cocktail made from a local leaf that is seducing the young.
The drug, kratom, is far less debilitating than the methamphetamines and heroin that are trafficked through the area. But its rampant use is enough of a problem that it has caught the attention of the Thai government, and led to increased attempts to stop the trafficking.
From August 2, all shopping complexes, large hotels, hospitals and other businesses must start compiling their waste water treatment records and report the results to relevant authorities every month.
Failure to do so will result in a maximum fine of Bt100,000 and/or up to a year in jail. Pollution Control Department (PCD) director general Wichien Jungrungruang said that since many businesses had deliberately turned off their wastewatertreatment systems, his department had to call on the Natural Resource and Environment Ministry to enforce these extra measures.
Thailand - Cambodia Relations
Cambodia and Thailand withdrew their army troops Wednesday from a disputed border area near an ancient temple, as the Southeast Asian neighbors try to defuse a decades-long dispute that has turned deadly in recent years.
Some 485 Cambodian troops and an undisclosed number of Thai forces pulled back from a demilitarized zone near the 11th-century Preah Vihear temple, complying with a ruling last year by the International Court of Justice.
Two hundred border patrol police have begun replacing soldiers along the Thai-Cambodian border in the disputed area around Preah Vihear temple in Kantharalak district of Si Sa Ket province, police spokesman Piya Uthayo said on Wednesday.
Pol Maj-Gen Piya said the withdrawal of troops was in response to the order by the International Court of Justice.