Indonesia Foreign Minister Retno LP Marsudi welcomed Thai Foreign Minister Don Pramudwinai’s first Jakarta visit, saying that she and her counterpart had agreed to enhance economic cooperation between ASEAN’s two largest economies, including a potential aircraft purchase from Indonesian aerospace company PT Dirgantara Indonesia (PTDI).

“Our discussions covered trade, investment, tourism, aviation and issues such as the importance of food security, including skilled labor in the food industry,” Retno explained, adding that there needed to be two-way investment between countries.

“On the aircraft industry, we have a history of Thailand purchasing Indonesian aircraft made by PTDI. That is why Indonesia is offering the product of this strategic industry to Thailand.”

According to data from the Trade Ministry, bilateral trade between Indonesia and Thailand hit US$12.55 billion during January-November last year, that figure representing a roughly 13 percent decline from the same period in 2014. Bilateral trade between the two countries has declined gradually since 2012, when it sat at $18.07 billion.

Pramudwinai said that he would like to see some targets set for bilateral trade between the two countries, adding that a stronger economic relationship between them could set an example for the ASEAN community.

“I certainly want to see a good increase, a fast climb to $16 billion and then to $20 billion. […] So that we can show all of our ASEAN friends that economic relations between us work like magic,” he said.

Thailand’s aircraft purchases from PTDI started more than three decades ago, when it bought C-212 aircraft from the company — then PT Nurtanio — in 1978. Foreign Ministry spokesperson Arrmanatha Nasir said that the last purchase by Thailand was of CN235 aircraft in 2014 for use by the country’s police, while the aircraft offered during the recent meeting was the C212400, a rainmaker.

Besides discussing efforts to boost the two countries’ trade figure, Retno said that maritime cooperation and combating transnational organized crime were also key topics during the meeting.

She said that the two countries agreed on the need to expedite their maritime consultations following last year’s meeting in Bangkok to discuss borders and illegal fishing, and had planned to get back to the issue again sooner.

“In February or March, we hope to convene to negotiate again,” she said.

The last issue in the spotlight, Retno added, was cooperation on combating extremism, terrorism, radicalism, drug trafficking, human trafficking and wildlife trafficking.

Retno said that the two founding members of ASEAN had also agreed to support each other’s bids to join the UN Security Council, Thailand for 2017-2018 and Indonesia for 2019-2020.

Indonesia had also invited the Thai monarch to attend the Organisation of Islamic Cooperation (OIC) summit in Jakarta in March as a supervisor.

Some local banks like KBZ and most foreign-exchange counters have suspended dollar buying since Monday. Nearly all LED boards displaying daily exchange rates have been turned off.

To date, the Central Bank of Myanmar (CBM) has not taken any action, leading to uncertainty over when the situation will return to normal after fresh global dumping of dollars yesterday on bets the US Federal Reserve could be done with raising interest rates.

Aung Thein, vice president of the Myanmar Industries Association and managing director of Nibban Electronics, said dollar depreciation had not has a big impact on local industries yet. Exporters know perfectly well how to overcome such obstacles. But he also highlighted the importance of exchange-rate stability in manufacturing and trading.

According to KBZ, one of the top Myanmar banks, the dollar/kyat rate moved down one way this month. The dollar buying and selling rates on February 1 were 1,285 and 1,299. On February 8, the rates were 1,250 and 1,262. On February 10 when the counters were closed, the bank set the buying and selling rates at 1,221 and 1,230, a deviation of 5.35 and 5.5 per cent respectively from the January 11 rates. The situation was in stark contrast to last year, when the dollar spike raised concerns about prices and inflation in Myanmar.

To put this in perspective, the Thai baht strengthened to 35.2 yesterday against the US dollar, gaining 2.1 per cent from the end-2015 level.

“We bought dollars until last Friday,” said Phyo Phyo Wai, a KBZ bank staff member. “But the greenback seemed to weaken further day by day. Now, a dollar is bought with just over 1,210. Can you imagine how much we [would have lost] if we bought a lot of dollars last week?”

KBZ Bank is not the only financial institution suffering. Aya Bank, CB Bank, Asia Green Development Bank, and United Amara Bank also suspended dollar buying. Now, only local banks and authorised moneychangers can buy and sell the US dollar, as well as the euro and Singapore dollar.

The kyat did appreciate against all three currencies in the past few weeks, but the magnitude of appreciation against US dollar was the most.

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Than Lwin, senior consultant to KBZ Bank and former deputy governor of the CBM, attributed the kyat’s rise to excessive expectation that foreign direct investment would surge under the government led by the National League for Democracy (NLD).

“Holding dollars, people in general want to sell them, expecting the dollar to weaken further in the months to come,” he said.

George Soe Win, senior bank and investment consultant at JLC Group of Companies and General Myanmar Group of Companies, noted that this ran against Myanmar’s economic fundamentals, as there is no significant change in trade figures.

“It is all about speculation. It depends largely on failure to strike a balance between supply and demand,” he said, casting doubt that some third-party groups may dump dollars into the market, which could have boosted the dollar supply.

Pe Myint, former managing director of CB Bank, speculated that dollar depreciation could be linked with opium production. In the early months of each year, illegal income generated from opium production can flow into the market. Until this is probed, companies involved in export and import could hold off on transactions.

Maung Aung, senior adviser to the Commerce Ministry, attributed the situation to low demand for dollars. He said the NLD had yet to release economic policies while dollar demand among importers remained low.

All of them urged for urgent actions by the central bank, to ensure foreign-exchange stability. George Soe Win and Maung Aung said unstable rates would hurt exporters whose manufacturing costs remain high.

“The central bank should set clearer policies and take necessary measures to maintain the stability. It needs to handle such a situation tactically. It needs to intervene in the market to stabilise the exchange rate,” Than Lwin said.

TYS, currently under way at Ao Po Grand Marina, will run until February 14 Sunday, with about 40 yachts and at least 14 superyachts on display.

Gracing the waters will be 51-metre traditional Indonesian-style superyacht Dunia Baru; 73-metre M/Y Titania; 50-metre M/Y Northern Sun; 69-metre M/Y Saluzi; 32-metre M/Y Nanou; 41-metre M/Y Ocean Emerald and many more luxury vessels.

The event aims to support the government’s move to promote Thailand as the “Marina Hub of Asean”, as well as to stimulate Thailand’s economy and further develop its marine tourism industry, Tourism and Sports Minister Kobkarn Wattanavrangkul said.

“Most important, Thailand Yacht Show 2016 will be a powerful platform for Thai entrepreneurs to unveil their products and one-stop services to high-end customers, ranging from yachting financial solutions to after-sales services,” Kobkarn said.

“However, many of the benefits and opportunities to the community will flow in after the show, as this is more than just a yacht show. This is Thailand’s grand opening for the marine tourism industry.”

Early in the development of the TYS, there were murmurs within the industry that “just another” boat show in Asia was unnecessary. Quick to agree was Andy Treadwell, the managing director of 3L Events (Thailand) Co and organiser of Thailand Yacht Show 2016, as well as the Singapore Yacht Show. “The region certainly doesn’t need any more boat shows whatsoever – unless they are providing a genuinely international, all-embracing marketing platform for the whole length and breadth of the yachting and boating industry, encompassing all sectors, in a strategically important location. And that is what TYS is going to provide here,” Treadwell said.

He described the TYS, which is surrounded by some of the best cruising grounds in the world, as the perfect sister show for the Singapore Yacht Show, which is known for attracting businesspeople, but not so much as a yachting destination.

“What is different about TYS is that visitors will be able to get on board boats from some of the biggest and best-known brands in the world and take them for a trial sail – even some of the superyachts will be going out on short familiarisation trips.

“The show’s berthing arrangements at Ao Po Grand Marina allow this. It’s a fantastic setting in the middle of Phang Nga Bay and positively entices people to get out on the water.

“At the same time, we will have on-water activities for all the family and water-sports enthusiasts from all ends of the scale – paddle boards and jet-skis, as well as sailboats, motorboats and superyachts – plus the opportunity to try them out.

“Phuket is the first and the most obvious stop-off point for all the big boats coming to Asia from the Mediterranean via the Gulf of Thailand, the Indian Ocean and the Maldives. There are plenty of superyacht marina berths, hotels, refit and repair facilities and supply chain – and most importantly, it is a world-class cruising destination in its own right,” Treadwell said.

“I think there is a genuine desire among Western yacht owners, captains and charter guests to find somewhere new and less crowded than the Caribbean for winter cruising – and here, even though it’s twice as far away, they will find unspoiled and virtually limitless cruising grounds, beautiful beaches and diving spots, as well as great service from friendly, happy people.”

Thailand has become the focal point for the superyacht cruising and yachting industry in Asia, and yet it hasn’t had a show that caters for superyachts until now, he said.

“The government of Thailand has been very receptive to our proposals to change the regulations here and allow foreign superyachts to come here to charter. We believe that is going to change things dramatically here, and will encourage big boats to come here in big numbers and spend big money.

“This is all good news for Thailand and its economy – it will positively affect the whole community. But we need a properly marketed international superyacht show to promote this.”

The long-term success of the government’s push to develop the marine industry and better cater to superyachts will come down to legislation, concurred Transport Minister Arkhom Termpittayapaisith.

“We have recently announced the regulations and requirements for the new superyacht charter licence that will allow foreign-flagged superyachts to stay and operate in Thai waters for one year. So far, three superyachts have been presented with the licence,” he said.

“In addition, we will collaborate with the Immigration Bureau to facilitate extending the length of stay for crew working on board a superyacht to one year, or equal to the yacht’s cruising duration. Meanwhile, the tax issue is being discussed among relevant agencies such as the Revenue Department.

“All these efforts reflect the government’s commitment to show to the world Thailand’s potential to become the ‘Marina Hub of Asean’ and to promote Thailand as an operation base for superyacht charters.”

Despite the progress already made, laws and regulations regarding foreign superyacht visits may need to be reviewed, Arkhom admitted.

“The ministry will discuss the matter with relevant agencies including the Marine Department, the Customs Department, the Revenue Department, and the Immigration Bureau to seek further solutions,” he said.

“This year, the Cabinet approved a fund of Bt15 million to organise this event and assigned the Ministry of Tourism and Sports to take full responsibility to ensure the success of the show and promote the good image of Thailand.”

The push to develop the marine tourism industry in Thailand comes directly from the prime minister, Kobkarn said.

Kobkarn said the promotion of the TYS and the support for the marine industry were not just Thailand catering to high-net-worth individuals, but in fact were a way to bring additional income into the lives of people of many economic backgrounds.

“Promoting yachting businesses will create employment and distribute sustainable income to local people, while providing constant learning for entrepreneurs and labourers to increase their specialised skills,” she said.

The effective excise rate has risen from 87 per cent to 90 per cent with immediate effect, increasing from Bt1 to Bt1.10 per gram of tobacco, the department said.

“Our policy is that we want to reduce [the number of] newcomers consuming tobacco,” Excise Department director-general Somchai Pulsawas said at a press conference.

The agency will also monitor the risk of cigarette smuggling from neighbouring countries now that the price of domestic packs of 20 cigarettes will rise by between Bt5 and Bt10 as a result of the duty hike, he said.

Somchai added that the department had kept the excise increase secret, including among producers, out of concern over hoarding prior to the effective date.

According to an investigation, this had been successful as no manufacturers were found to have hoarded products prior to the announcement, he said.

Meanwhile, in the first four months of this fiscal year – October to January – the Excise Department collected Bt3 billion more in tax from all sources than it had estimated, he added.

Finance Ministry spokesman Krisada Chinavicharana, who is also director-general of the Fiscal Policy Office, said at a press conference yesterday that the Cabinet meeting on Tuesday had approved a measure to promote the jewellery industry by exempting it from the collection of value added tax, and also making |jewellery sales subject to a with|holding tax of just one per cent.

Moreover, income from the sale of jewellery will not be combined with other personal income for the payment of personal income tax.

These measures would cut costs for the industry by about 2 per cent, he said, adding that this tied in with the target of increasing the annual value of Thai jewellery exports to Bt3.9 billion.

The Cabinet also approved extending the Bt15-billion policy-loan programme of the Small and Medium Enterprise Development Bank of Thailand to the end of June, Krisada said.

The original expiry date was the end of last month.

The policy loan for SMEs and start-up businesses offers a special interest rate of 4 per cent for the first three years.

The programme commenced last June and has to date approved loans worth Bt5.44 billion.

To support SMEs and start-ups further, the Cabinet also approved a proposal that the Vayupak Fund and Krungthai Bank jointly set up a joint-venture fund worth Bt3 billion to invest in such businesses.

The fund will be head by the Finance Ministry’s permanent secretary, the spokesman said.

“We believe the economy is now entering recovery mode after the government launched some stimulus packages to boost private consumption and spending,” Wannee Ruttanaphon, chairwoman of the MAAT, said yesterday. Khanokkhan Prajongsangsri, director for investment and knowledge at IPG Mediabrands, also thinks that the government’s spending on advertising – particularly to promote and build public awareness of the Pracha Rath policy – will continue to play a key role in the industry this year, along with infrastructure spending.

Given the prevailing economic situation, the government must take action like it did last year, he said.

“More than half of advertising expenditures from the public sector including the Prime Minister’s Office and the Public Relations Department was used for publicising and promoting ‘Bike for Mom’ in August and ‘Bike for Dad’ in December.

“This public spending was one of the key drivers helping the industry to continue to grow,” he said.

Ranked as a top-five advertiser last year, the government spent more than Bt2.05 billion on advertising, according to Nielsen (Thailand)’s media survey, following the country’s biggest spenders Unilever (Thai) Holdings, True Move, Toyota Motor and Beiersdorf Last year, the advertising industry showed a 4-per-cent uptrend to Bt132.36 billion, mainly driven by continuing growth from the digital terrestrial TV, out-of-home and digital media. Wannee said the industry expected to see a spending increase of about 3-3.5 per cent this year to Bt141 billion in line with economic growth.

Through this year, the fierce competition in the digital TV business is expected to help increase advertising investment in those digital channels offering quality programmes with clear brand positioning.

The six incumbent analog stations as well as cable/satellite operators will suffer from this development.

Ratthkorn Surbsuk, a director of the MAAT and a trading partner at GroupM Thailand, said that as a result of this development, leading digital TV stations would be able to raise their advertising rates by up to 35 per cent, while analog, cable and satellite stations would have to maintain their ad rates to retain clients. Print media such as newspapers and magazines would also have to maintain their ad rates.

Further expansion of the mass transit system, particularly in Greater Bangkok, would help boost outdoor advertising.

The rising penetration of mobile Internet and the full implementation of third- and fourth-generation wireless Internet this year will continue to drive advertising spending via digital media.