That proposal was floated by Export-Import (Exim) Bank of Thailand’s newly appointed president Pisit Serewiwattana. During an interview last week, he said Thai agencies could not go on performing their tasks separately as they have been doing, given the fragile demand in conventional export markets.

“We are selling rice to Mozambique and several small countries. If those countries’ central banks issue letters of credit that say the payment would be completed in 20 years, Exim is ready to guarantee the payments, but it is the Commerce Ministry’s decision whether or not to say yes to this deal. This process could be faster if we had something like a one-stop shop to deal with it,” he said.

“We will need to clinch more deals like this. We cannot follow the conventional means” of doing business with just established buyers.

Thailand’s export value grew by 6.9 per cent per year on average from 2008 to 2012, when revenue hit US$229.5 billion. For the past three years, the sector has been contracting, and revenue fell to $210.9 billion in 2015.

This year’s outlook is not bright either. The Finance Ministry’s Fiscal Policy Office (FPO) last week forecast 2016 export value to slip by 1.9 per cent from last year. Research houses agreed.

The export sector contributes about 70 per cent of gross domestic product. As exports nosedive while demand from key markets like Europe and China falls, |stimulus measures and public investment are needed for Thailand to achieve GDP growth rate of 3.3 per cent as forecast by the FPO.

Pisit’s idea is that at least the Commerce Ministry, the Board of Investment and Exim Bank should jointly establish a “Thailand Team” as a one-stop shop. This could be completed in close consultation with the private sector. In this regard, Thailand should seriously consider Japan’s model, particularly as that country is penetrating “new frontier” markets where most Thai exporters still fear to do business, he said.

The Japan External Trade Organisation (Jetro), part of the Ministry of Economy, Trade and Industry, has been used for years as the spearhead in boosting Japan’s exports, particularly in Asia. The agency explores opportunities and risks in target destinations and the information is shared with other agencies. This model supported successful Japanese investment in Thailand, and it is being replicated in Myanmar. The Japan International Cooperation Agency (JICA) is now active in Myanmar, carrying out a number of development projects in the country to further goodwill there.

In Thailand, the Commerce Ministry and the BOI could be the spearheads, to gauge demand for Thai products and investment. These investment projects would indirectly boost Thai exports, in the same way that Japan has witnessed. At the end, Exim Bank stands ready to guarantee payments with the government’s consent to help replenish financial losses. For exports to conventional markets, Exim will cover 85 per cent of losses incurred from foreign buyers’ payment defaults, but in the new frontiers, the coverage might be 70 per cent.

Pisit said this practice had been successfully executed not only by Japan but also by the United States and China. He believes it must also be adopted by Thailand, which desperately needs to explore new markets.

The Thailand Team would make Thai exporters more confident to tread into new frontier markets.

He said Russia and many countries in southern Africa were promising new frontiers, but information on potential buyers in those markets remains opaque, along with the CLMV (Cambodia, Laos, Myanmar and Vietnam) subregion. Exim Bank is setting up its first representative office in Myanmar, through which it seeks to build good relationships and strengthen its ability to provide export credit and investment insurance to Thai exporters.

“Reaching these countries when they remain small will create a positive impression,” Pisit concluded.

Tomorrow: Exim Bank seeks a new business model.