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Thai businesses must learn to navigate global geopolitical tensions, experts say at seminar
MONDAY, JANUARY 23, 2023
Geopolitical tensions are challenges global businesses have to learn to deal with, experts and representatives from the public and private sectors said on Monday.
They exchanged thoughts and ideas, focusing on two key words — positioning and sustainability — to adequately prepare Thailand for the current geopolitical atmosphere.
The event was part of a seminar on “Geopolitics: The Big Challenge for Business”, organised on Monday by Krungthep Turakij newspaper under the Nation Group.
The goal of the seminar was to explore the best ways for Thailand’s economy to continue to grow in the face of tensions between several superpowers, particularly the United States and China.
All eight panelists agreed that geopolitical tensions have become a normal challenge for global businesses to deal with if they want to continue operating and survive.
These tensions have restructured the established world order and would continue to cause uncertainties in global trade and investment for many years to come, they said.
The trade war between the United States and China, the war in Ukraine, the China-Taiwan cross-strait tensions, the imbroglio over the South China Sea, the recovery path in the aftermath of Covid-19, climate change, and digital transformation are all major issues that Thai entrepreneurs must confront along with tactical risk management, the panelists advised.
Vijavat Isarabhakdi, vice minister at Thailand’s Ministry of Foreign Affairs, stated in his keynote speech that as the government agency in charge of international relations, the ministry sees an opportunity for Thailand to position itself as friendly to all parties.
Thailand has obviously taken the position that it would partner any country for mutual benefit, he stated.
He cited the country’s participation in several agreements, including the Indo-Pacific Economic Framework for Prosperity (IPEF) with the US, the Regional Comprehensive Economic Partnership (RCEP), bilateral free trade agreements with the European Union, Asean members, and countries such as India and Saudi Arabia.
Auramon Supthaweethum, director-general of the Ministry of Commerce’s Department of Trade Negotiations, added that in addition to wisely implementing several trade agreements with many countries, Thailand should forge new partnerships while increasing close collaboration with its Southeast Asian neighbours.
Auramon added that Thailand must rapidly improve its business model to include greater responsibilities to the community, people, and the environment.
That means Thailand must have strong and fair labour regulations, use clean energy with green technology, and have credible product traceability to ensure the country’s products are truly eco-friendly.
Arm Tangnirun, director of Chulalongkorn University’s China Study Centre, believes that tensions between the United States and China will never end. The level of tensions, however, would vary, depending on the leaders’ policies and other factors, such as the recent Chip and Science Act or issues related to Taiwan that challenge Beijing’s “One China” policy, Arm said.
He advised Thailand to focus on improving the country’s resilience and adaptability, invest in more human resources, adopt digital technology and innovation, and position itself as the gateway to Asean to assist other countries in trading with the region.
Thitima Chucherd (center)
Thitima Chucherd, director of Economic and Financial Market Research, Economic Intelligence Centre, Siam Commercial Bank, endorsed Arm’s ideas. She stated that in addition to its current markets, Thailand should make new friends outside major economies, such as in Latin America, the Middle East, and South Asia.
She also recommended that Thai entrepreneurs research hard in order to outline their own risk management strategy, focus on their target customers, and transform their business model with advanced technology and skilled labour.
Wisit Limluecha (center)
According to Wisit Limluecha, vice chairman of the Thai Chamber of Commerce, Thai entrepreneurs cannot afford to stay in their comfort zones.
He warned that in the current climate of uncertainty and geopolitical tensions, doing nothing and simply resting in their safe zone would be a recipe for disaster. Entrepreneurs must take calculated risks while determining how to sustain their businesses using the Bio-Circular Green model, clean energy, and digital technology, he advised.
Meanwhile, Rak Vorrakitpokatorn, president of Thailand’s Export-Import Bank, noted that Thai entrepreneurs should improve their skills in order to be smart investors.
He encouraged Thai businesses to invest abroad and bring the profits back home. He also urged the government and the public sector to work together to promote the country’s entire ecosystem and infrastructure in order to attract foreign direct investment to Thailand’s high-value industries.
The president of Thailand’s Electronic and Computer Employers’ Association president, Sampan Silapanad, pointed out that Thailand must accept it is not capable of competing in the field of advanced innovations.
Hence, Thailand should now concentrate on its strengths, like making electronic parts and appliances.
He said geopolitical tension is just another condition of doing business, but Thailand’s real challenges right now are inflation, technological disruption, and climate change. Thai manufacturers and entrepreneurs should consider how to strengthen their position and prepare to adapt to high-tech environments that are more concerned with environmental issues.
That should be enough to keep the country’s economy going for the next few years, Sampan said.
In terms of other challenges, Wisit urged the government to simplify the process of doing business in Thailand, while Sampan advocated deeper and more consistent collaboration among all businesses of all sizes. Rak, meanwhile, advised Thai entrepreneurs to take financial literacy seriously.
Robert F Godec
The seminar also heard a keynote address by Robert F. Godec, US Ambassador to Thailand, on the direction of current geopolitics.
He emphasised that the priority of the United States was to build partnerships for peace and prosperity.
“The United States will work with our partners, friends and allies to tackle shared challenges and seize common opportunities,” he stated.
Although he did not specifically mention China or Russia, Godec stressed that when countries reject international rules, others must band together to promote justice and accountability.
“Our future depends on our willingness to work together and to respect international norms and agreements. Respect for international rules provides businesses with the stability and predictability to invest and grow,” he said.
Meanwhile, he praised the US-Thailand partnership as a model for the Indo-Pacific region. The two countries’ trade relationship is strong and expanding. The US continues to be a major investor in the Thai economy.
He noted that US firms are operating in diverse sectors, such as automobiles, healthcare, and high technology, with mutual collaboration on digital economic development to promote innovation.
He assured that the US was determined to actively collaborate with Thailand and its allies to create a better future.