Somchai Jitsuchon, research director at Thailand Development Research Institute (TDRI), said the government’s spending benefits the rich more than the poor. He also urged the government to cut spending on security matters.

The government’s investment in high-speed rail will benefit high-income groups, and education spending mostly benefits those studying at university level while poor children get less support, he said yesterday at the Thammasat Economic Focus forum.

He urged the government to spend more on helping poor children. Currently, the annual budget allocated to them is merely Bt2 billion, he said.

“Actually every newborn to three-year kid could get financial support at an estimated cost of just Bt15 billion,” said Somchai.

He also urged the government to cut spending on security issues.

“I don’t understand why the defence department plans to draft 104,000 young men to serve mandatory military service,” he said.

Drafting more young men means more spending for the Defence Ministry when there is no war, he said.

The government should instead increase spending on social protection with the local administration responsible for allocating social welfare spending. Lack of people participation in government policy is one of the reasons income inequality persists, he said.

He also suggested the government increase value added tax to 10 per cent from 7 per cent, saying that the current rate is too low and it mostly benefits the rich.

He said VAT revenue largely comes from tax collection on the rich, or about 80 per cent of the total each year.

“The fiscal policy is highly political as many misunderstood that the poor will be hit hardest if the VAT rate is hiked, “ added Somchai.

Duangmanee Laovakul, economics lecturer at Thammasat University, shared a similar view with Somchai, saying that taxation does not play a big enough role in income redistribution.

She suggested that the government end tax allowances for investment in long term equity fund (LTF) which mostly benefits high income group. By doing so, the government could reallocate tax savings of about Bt 9 billion annually for other purposes.

Duangmanee suggested the National Legislative Assembly (NLA) impose high tax rate on land and property owners with high wealth.

The NLA currently scrutinises land and property bill which is criticised for offering excessive tax allowances to property owners. Property ownership is a potential for a new taxation base as currently the government levy is far tow low.

She pointed out the fact that the richest group owns 61 per cent of the land, an indication of the widening income gap.

The tourism and export sectors will continue to be the main growth drivers of the economy this year thanks to strong fundamentals of the global economy.

Exports of goods are projected to expand at 5 per cent YOY and and the number of tourists at 8 per cent.

Sustained growth in exports has led to an increase in capacity utilisation, lending support to private investment.

Moreover, private investment has an additional stimulus from the government’s infrastructure investment, particularly following the greater clarity in the Eastern Economic Corridor (EEC) project.

This project has high potential to attract both domestic and foreign investment.

In addition, concern over shortage of migrant labour has subsided after the government postponed enforcement of new regulations on undocumented foreign workers and eased terms of punishment.

Falls in output, new orders and input inventories weighed on the company’s Purchasing Managers Index (PMI).

Factory job numbers fell further, while pressure on supply chains eased.

For the first time in the survey’s history, business confidence was negative.

On the price front, inflationary pressures softened in March.

The seasonally adjusted PMI fell from 50.9 in February to 49.1 in March, marking the first deterioration in the health of the sector for five months.

The latest reading was also the lowest since November 2016, although the rate of decline was marginal overall.

Moreover, the average PMI reading for the first quarter was the highest for a year.

The PMI is a composite indicator derived from survey questions on new orders, output, employment, inventories and suppliers’ delivery times, providing a quick snapshot of the current state of the manufacturing economy.

With no direction from Europe or Wall Street — both closed for Easter holidays at the end of last week — Japan’s benchmark Nikkei 225 index opened in slight negative territory but soon moved into the green.

The Nikkei 225 Index added 0.23 percent or 50.41 points to 21,504.71 in early trade, slightly outperforming the broader Topix index, which was up 0.17 percent or 2.92 points at 1,719.22.

Volumes in Asia trade were light however, with financial markets in Australia, New Zealand and Hong Kong all closed for public holidays.

In China, Shanghai stocks opened flat as the yuan strengthened and investors digested new tariffs on US imports.

The government in Beijing imposed new tariffs on 128 US imports worth $3 billion, including fruits and pork, in retaliation for US duties on steel and aluminium, fanning fears of a trade war.

The benchmark Shanghai Composite Index inched up 0.03 percent, or 0.88 points, to 3,169.78.

Meanwhile, the Shenzhen Composite Index, which tracks stocks on China’s second exchange, climbed 0.25 percent, or 4.71 points, to 1,858.43.

In Seoul, the Kospi index also nudged slightly higher, gaining 0.56 percent to stand at 2,459.54 in mid-morning trade.

Japanese traders shrugged off a dip in the closely watched Tankan business confidence report, which showed a print of 24 in March, compared to 26 in the December report.

However, analysts said the fall was due mainly to a stronger yen and they did not expect the trend to continue.

“The yen’s appreciation dented corporate confidence temporarily,” said UBS economist Takuji Aida.

“But the underlying sentiment is solid, as seen in their plans to accelerate spending on plants and equipment,” he said.

“Looking forward, we do not see a deterioration,” agreed Katsunori Kitakura, lead strategist at Sumitomo Mitsui Trust.

“Business sentiment may see some downward pressure until Q2 2018, but should recover towards year-end” as the global economy grows, he said in a commentary ahead of the release of the latest Tankan.

Key figures around 0230 GMT

Tokyo – Nikkei 225: UP 0.2 percent at 21,504.71

Hong Kong – CLOSED

Shanghai – Composite: UP 0.03 percent at 3,169.78

Dollar/yen: DOWN at 106.35 yen from 106.16 yen on Friday

Euro/dollar: UP at $1.2326 from $1.2320 on Friday

Pound/dollar: UP at $1.4054 from $1.4044 on Friday

Oil – West Texas Intermediate: UP 30 cents from $64.91 per barrel on Friday

Oil – Brent North Sea: UP 35 cents from $69.35 on Friday (new contract)

New York – Dow: UP 1.1 percent at 24,103.11 (close)

London – FTSE 100: UP 0.2 percent at 7,056.61 (close)

The move comes as the Tourism Authority of Thailand forecasts the number of tourists expected to visit the country will grow by more than 8 per cent this year from last year’s 35 million.

All aviation firms are also targeting double-digit sales revenue growth over last year.

With Thailand aiming to be the aviation hub for the Asean region, Kasikorn Research Centre has forecast Thai aviation industry’s total revenue will hit Bt300 billion by the end of this year.

Four Thai aviation firms listed on the Stock Exchange of Thailand have reported total revenue of Bt276.67 billion for the end of year 2017 or up 6.84 per cent |from Bt258.95 billion in 2016.

Thai Airways International (THAI) is predicting a cabin factor of around 80 per cent this year, and is targeting total revenue growth in the double digits from the launch of its new route to Vienna, Austria, and a planned new route to Okinawa, Japan, said Viroj Sirihorachai, THAI vice president for the revenue management |and commercial services department.

Nok Airlines Plc is projecting a 10 per cent rise in income this year with plans to launch additional new routes, both domestic and overseas, along with a programme of cost reductions and improvements in ticket pricing management, CEO Piya Yodmani said recently.

In 2018, Nok Air’s passenger volume is estimated to rise to 8.4 million while its cabin factor will likely stay at 86 per cent.

The airline’s yield is expected to increase by at least 5 per cent, Piya said.

Meanwhile, Nok Scoot Airline, a Nok subsidiary, will this year begin service to South Korea and Japan, with Nok Air expected to hand over more of its passengers to Nok Scoot Airline.

Thai AirAsia is also targeting double-digit growth year on year, with plans to launch more new routes. It last week began direct daily flights from Bangkok to Chumphon.

New aircraft

Thai AirAsia’s CEO Tassapon Bijleveld spoke recently of the carrier’s plans to acquire seven aircraft to bring its fleet to 63 planes.

This is in addition to the company’s aims to add more routes to the Indian and Asean markets while maintaining its customer base in the Chinese market. TAA is confident it can end the year with a load factor average of 87 per cent and with a target of 23.2 million passengers served.

In 2017, TAA received five aircraft, bringing their year-end total to 56 aircraft.

Meanwhile, Thai AirAsia X has set a revenue target of Bt13 billion for 2018. The airline is targeting 2.2 million passengers served and a load-factor average of 86 per cent. It is planning for another four new Airbus A330s to reinforce its position as the leader for flights to North Asia, Japan and South Korea, said CEO Nadda Buranasiri.

The airline also added the northern Japanese city of Sapporo to its list of destinations early this year, he added.

Bangkok Airways Plc will receive two Airbus A319 aircraft and increase the number of code-share partners under a plan to boost revenue growth by up to 10 per cent this year, company president Puttipong Prasarttong-Osoth said recently.

The carrier also aimed to increase passenger numbers by up to 7 per cent this year from last year, with a projected passenger-load factor of 70 per cent.

The airline also is planning to launch more new routes serving the Asean bloc, including a Chiang Mai-Hanoi run, which was scheduled to start last week, and a Phuket-Yangon flight planned for a launch in the fourth quarter of 2018, Puttipong said.

The route expansion was made possible by the International Civil Aviation Organisation’s (ICAO) decision to lift a “red flag” freeze, creating a significant turning point for Thailand in the last quarter of last year.

The challenge remains for Thai Aviation firms to expand into new domestic and overseas routes that are also being eyed by other aviation firms, including low-cost airlines from Vietnam, China, Japan, Indonesia, Malaysia, Singapore, South Korea, Taiwan and Hong Kong.

Those airlines are boosting their frequencies to Bangkok as well as other popular tourism destinations, including Phuket and Chiang Mai. In December last year, Qatar Airways launched a direct non-stop service from Doha to Chiang Mai, the Tourism Authority of Thailand reported.

With more new airlines in the market, the outlook is for higher competition and cut-rate pricing as carriers fight for customer numbers. But for the first half of this year, when airlines have already added their new routes and destinations, the market price will remain stable, said Nadda.

“I believe that in the final analysis, all airlines will compete based on their services and adding new destinations to serve their customers’ demand,” he said.

Controversy has followed as major retailers struggle to increase sales and market share, including by violating consumer’s lives in search of insight into their lifestyles.

Kiatanantha Lounkaew, a lecturer at the Faculty of Economics, Thammasat University, said that the 4.0 era wave is sweeping through the retail business landscape in Thailand. He pointed to two recent notable examples – Big C’s experimental mobile retail truck and the takeover of tarad.com by TCC Group, a parent company of Thai Beverage (ThaiBev) and also owner of Big C Supercenter.

“What underlies strategic moves of these two players is what I call “Walton 4.0”. While both of them seem to have different business moves, they possess the same strategic motive, which is what I call “Walton 4.0”. Sam Walton created Walmart based on three essential pillars. The first pillar is integrated logistics, which integrated small towns into one big market for Walmart. Such integration allows Walmart to enjoy greater negotiating power over product suppliers. The second pillar is store-level timely records of sales and inventory which are stored centrally. The last pillar is the use of purchase and inventory information to centrally plan its logistics routes nationwide so as to minimise cost and to maximise sales. But these were things taking place some 60 years ago.”

Kiatanantha said that what is seen today is the upgraded version of Sam’s brainchild. Big C’s retail truck benefits from the company’s formidable market power over its suppliers. Thus, products can be offered to meet local demands at a lower cost. In addition, the integrated digital back office permits the use of sales data to make predictive analysis on what kind of products should be offered at each locality. This is where “Big Data” comes in handy. With Big C megastores serving as distribution nodes, logistics costs can be minimised.

Thus, in a world where consumers increasingly do their shopping virtually, Big C’s move to this market is not only logical, it is inevitable, said Kiatanantha. Offering products door-to-door is the only way to compete with the convenience offered by online shopping. This is exactly what Sam Walton would to do to his Walmart stores if he were still the CEO.

Kiatanantha said that strategic reorientation of tarad.com is of a similar spirit. Its 6E strategy is comprised of:

lE-commerce, which encourages its customers to expand their business to other online platforms and make use of Big Data to optimise its business opportunities in a timely fashion;

lE-marketplace, which uses its website as the point of sales;

lE-marketing, which uses social media platforms;

lE-payment through its partners;

lE-Logistics and warehousing to minimise delivery time and costs; and

lE-knowledge, which serves as a virtual training house for its customers.

By and large, the 6E is another version of Walmart 4.0.

“Over the next three years, competition in retail business will intensify significantly,” predicted Kiatanantha. “Big players will utilise digital prowess to gain advantage in terms of sales customisation and cost reduction. It doesn’t mean that smaller players are facing extinction. In contrast, digital technology can equip smaller players with greater agility and such agility enables them to avoid head-on fights with big ones. Those who will be crushed are the ones who believe in doing business as usual.”

Punyapon Tepprasit, chief executive of MVP Consultant, said that 2018’s trends of retail competition feature rapid change as the digital world impacts customer behaviour. Retailers must undergo a digital transformation as soon as possible. Today’s retailers are seeking the critical tools needed to support data collection and analysis at the customer and market levels.

Punyapon said that the solution with the best fit is “video analytics”. This technology captures a customer’s individual face and tracks their behaviour – or customer journey – by sharing between an organisation’s database and an online database in search of data insight that answers the question “who is he or she?”

The result from video analytics will surface patters of customer behaviour that can be applied to strategic decision-making.

It will also categorise look-alike customers into persona groups or targets. As more retailers conduct more in-depth analysis, they will better understand the customer pain point, which will in turn enable retailers to create value offers targeting individual customers.

“In conclusion, the competitive landscape of retail businesses is focused on deepening customer insights that lead to competitive advantage,” said Punyapon. “The next step is they will invest in technology infrastructure and analytic tools for generating the data to ‘value’ information.”

Aung Naing Oo, secretary of Myanmar Investment Commission and director-general at the Directorate of Investment and Company Administration, said Thai investments would grow from this year on, thanks to closer cooperation between the countries in both public and private sectors.

“Thai investments in Myanmar fluctuate wildly from year to year. In 2016-17 fiscal year, we approved $423 million in Thai investments. But we could not get more than one-third of that amount last year. Now it is time to grow further,” he said.

Statistics also show the fluctuation. Myanmar received $236 million from Thai investments in 2015-16 fiscal year while it approved only $166 million in 2014-15 fiscal year.

“We believe we will receive much more Thai investments this year, thanks to the efforts by the Royal Thai Embassy and the Thai business community here,” said Aung Naing Oo. “At DICA, we usually receive Thai investors every week. Most of them have obviously shown their trust on our economy.”

According to the official, Thai businesses are mostly interested in manufacturing and food processing. Myanmar has planned to attract more Thai investors by holding business seminars in the neighbouring country.

“Last year, Deputy Minister Sett Aung and I went to Bangkok to discuss the opportunities in Myanmar with Thai businesses. This year, we have been invited again to share updates on Myanmar’s business environment, and we are taking this invitation under serious consideration,” he said.

Unlike investment figures, statistics on bilateral trade have remained stable over the past seven years and beyond the military dictatorship in Myanmar. Since 2011-12 fiscal year, bilateral trade has exceeded $4.5 billion annually, except in 2016-17 fiscal year when it totalled nearly $4.3 billion. According to the Commerce Ministry, bilateral trade reached over $5.7 billion in 2014-15 fiscal year.

Thai businesses are interested in investing beyond the major cities of Yangon, Mandalay and Nay Pyi Taw, including seeking opportunities in the less-developed Tanintharyi Region that borders Kanchanaburi Province. They have closely cooperated with local businesses in Dawei, Myeik and Kawthaung.

Tun Tun Win, vice president of Myeik District Chamber of Commerce and Industry (and chairman of Pho La Min Trading Co), said the Chamber had received more than 50 business trips from different Thai delegations since 2012. In turn, the organisation has gone on 20 business trips to Thailand.

A 25-member Thai business delegation visited Yangon and Myeik from March 28 to 31. The delegation included representatives from Siam Thai Steel Co, Siam Thai Metal and Machinery Co, Z-Pun Thailand, NIM Express, Thanapat Serene Place Co, CI Group Public Co, Please Square Co, Sheet Lookphorkhoon Co, Studio 17 Co, Merck Auto Co, Prakob Beef Products Co, Chokthavorn Plastic Ltd, Chocolate Activation Co, Me-Idea Studio Co, and Thailand Institute of Scientific and Technological Research.

Both sides discussed real estate, hotels and tourism, agriculture, fisheries, cosmetics, construction machinery and food industries.

“We introduced them to our 26 sister organisations based in Myeik,” said Tun Tun Win. “We had a fruitful discussion as we saw much room for cooperation in livestock and fisheries, tourism and agriculture. Moreover, they became fully aware that Myeik has a high potential for tourism growth thanks to our wonderful archipelago.”

He also foresees growth in logistics, fisheries and rubber production, as opportunities arise to trade consumer goods between Myeik and Bangkok through the Mawtaung border trade point. Se believes many businesses in the district are eager to cooperate with Thai peers in rubber production and ecotourism.

“A number of businesses here are involved in the livestock and fisheries sector. But we are eyeing expansion of our rubber business. We are more than willing to increase our rubber plantation with Thai technology,” he said.

Vorapong Changchit of SME SEE Asean, which led the Thai business delegation, stressed the need for more engagement between the two business communities.

He expects to see many joint ventures between Thai and Myanmar businesses through closer collaboration and exchange experiences.

“We hope to do many things in Myanmar, as we understand economic growth and business opportunities here. We can see many things are close to Thailand. We feel like we came back to our hometown again,” he said.

Vorapong said building mutual understanding of each other between Thai and Myanmar business people would lead to a number of business deals in the near future.

Maung Maung Lay, vice president of Union of Myanmar Federation of Chamber of Commerce and Industry, said Myanmar businesses are eager to grow in parallel with their Thai peers.

“Our lands are linked, and the people are connected. We share common goals, similar aspirations, identical features, etc. We can grow together, sharing values and prosperity,” he said.

“Due to the isolation for over 50 years, we are far behind the international context. Thailand is a friend in our need. Whenever we need a friend, Thailand is always there.”