The Krungthai Macro Research team has forecast that the Thai economy will grow at 4.1 per cent in 2019, down from 4.3 per cent in 2018.

The key growth engine for 2019 will be investments from both the public and private sectors.

Exports and tourism, the growth drivers in 2018, have withered under the weight of global uncertainties, said Phacharaphot Nuntramas, senior vice president of the Global Business Development and Strategy Group under Krungthai Bank.

Private investment in 2019 is expected to grow by 5.5 per cent, while public investment is predicted at 7.2 per cent, he told reporters at a press conference yesterday.

“However, the level of investment in 2019 will depend on the election process as well as the post-election stability,” he explained. “Investors are holding off their investments to see whether the political situation in Thailand will be stable after the election.”

“This has led us to expect GDP growth in the first two quarters of this year to be under 4 per cent, with growth picking up in the last two quarters,” he said.

Date up in the air

Usually, investors will wait for different parties to unveil their economic policies in the lead-up to the election, according to Phacharaphot.

However, with the date of the election still up in the air, there is a level of uncertainty, which may threaten the Kingdom’s growth prospects, he said.

“As investment will be the key growth driver in 2019, and the election is a key determinant of investment trends, the level of political stability leading up to and after the election will have a significant impact on the Thai economy,” he said. However, if the current government’s infrastructure investment plans are continued throughout the year, public investment will still drive Thailand’s economic growth, Phacharaphot said.

For example, the infrastructure development plan in the Eastern Economic Corridor through Public Private Partnership projects has attracted up to Bt650 billion in total investment, with 32 per cent coming from the private sector and 68 per cent from the public sector.

“The development of the EEC will be beneficial to Thailand’s economic growth in 2019, as the bidding processes for various projects have already been completed and capital is expected to flow into the region in 2019,” he said.

Meanwhile, the research team has predicted that the Bank of Thailand is likely to hike the interest rate only once in the first half of 2019, by 0.25 percentage point – from 1.75 per cent to 2 per cent.

This modest increase is not expected to have a drastic impact on consumer spending.

Min Htike Aung, managing director of New World Financial Group, said the firm is planning to establish a derivatives market in Myanmar in cooperation with the Finance Ministry, the regulator Securities and Exchange Commission of Myanmar (SECM), YSX and international partners including Cambodia Derivatives Exchange (CDX) and Hong Kong-based First Asia Merchants Bullion Ltd (also known as First Gold). The derivatives market will involve commercial activities in forex, commodities, real estate and gold markets, among others.

“We will make efforts in all possible ways to make it happen. If we are able to make it, the forex market will definitely boom here in line with international standards, and thereby gold and commodities markets will substantially grow,” he said.

“To this end, we are tirelessly cooperating with our partners and relevant authorities. We will further strengthen our cooperation with the line ministry to work on setting regulations for this market.”

 According to Min Htike Aung, the market itself will create thousands of new jobs for Myanmar citizens, playing an active role in the nation’s sustained growth.

In an effort to develop the derivatives exchange and financial market in Myanmar, the firm started talks with CDX and First Gold six months ago, and will sign a memorandum of understanding with the counterparts today.

Setting the rules

“We are getting ready to set the rules and regulations in Myanmar [to establish the market]. Without specific rules and regulations in place, it is too risky for investors to be involved in derivatives trading. We will be making changes soon,” he said.

He stressed that it is time to establish such an important market in Myanmar in order to catch up with other Asean countries.

“We can see derivative markets everywhere in Asean, except our country. It is very encouraging to see the success of a derivatives market in Cambodia, where there are much less population and lower gross domestic product than in our country. So, it should not take too long to establish this market here,” he said.

Lawrence Kook, director of CDX and managing director of First Gold, pledged to provide any possible assistance to make it a reality.

“We are here to introduce and promote the derivatives market in Myanmar, to discuss with the regulators and industry players in this market,” he said.

Kook stressed the importance of exploring possibilities to set regulations on derivatives trading in Myanmar.

“The derivatives market has a lot of benefits, and is easy to understand. If you learn how to use this investment tool (derivatives trading), it will definitely help Myanmar grow further by bringing more foreign direct investments,” he said.

Kook said derivatives trading would boost Myanmar’s trade with foreign countries. He urged that the country prepare well for risk management.

“For the risk management, it is super important for us to understand the risks of every single organisation. Be prepared for long-, short- and mid-term strategies,” he said.

“The risk tolerance level should be different according to age. Low risks, low returns. High risks, high returns. If there is anybody who promises you high returns with low risks, do not believe it because it does not make sense,” he added.

“In the financial market, traders often oversee risks. If you use this market as a way of gambling in the casino style, it is not healthy and does not promote the economy,” said Kook.

That is a pity. After all, this fast-growing region is worth a serious look as a location in which to manufacture, source from, and sell to.

Sheer size is part of the story, and it’s often not fully recognised by observers outside Asia. Taken together, the 10 members of the Association of Southeast Asian Nations (Asean) form an economic powerhouse. If Asean were a single economy, it would rank sixth globally, after only the US, China, Japan, Germany and the Eurozone, while its 650 million people outnumber the population of the US by 2:1.

But it’s what’s going on beneath those headline numbers that is turning Southeast Asia into a bright spot on the global economic stage.

The downturn in emerging markets over the past few months obscures, for now, how far the region has come since the 1997-1998 Asian Financial Crisis, or even the “Taper Tantrum” of 2013.

Its constituent economies, broadly speaking, are now more resilient to external financial shocks. Foreign exchange reserves have risen. External debt levels have come down. Current account balances have improved.

The region’s manufacturing capabilities, meanwhile, play an integral role in global trade and supply chains – and, as in China, businesses are going high-tech. Look across the region, and you will find factories that produce anything from high-end fabrics to hard drives and semiconductors. What’s more, many companies, both established and startups, now have the experience and clout to serve international markets and attract sizeable investments from abroad.

On the consumption front, urbanisation and improving infrastructure have put millions within reach of higher-paying jobs and better education, healthcare and financial services opportunities. For many Vietnamese, Filipinos or Thais, a flight to London, a new car or a life-insurance policy are no longer financial impossibilities.

No wonder that a survey by the EU-Asean Business Council last year found 99 per cent of European businesses in the region expect to maintain or expand their trade and investment there over the next five years. Meanwhile, HSBC’s recent Navigator survey of companies around the world found respondents in Southeast Asia to be the most upbeat on the global trading environment.

True, doing business in this sprawling and breathtakingly diverse region is not without challenges. Swings in commodity prices and global investor sentiment still have the capacity to hurt individual economies to different degrees. And while tariffs on goods traded between Asean members have effectively been eliminated, and global trade tensions may actually see production and supply chains move towards the region, that does not mean that policymakers and companies can afford to stand still.

More needs to be done to remove obstacles to the flow in services and labour, lower cross-border financial transaction costs, and erode non-tariff barriers, for example, and continued investment in education and productivity growth is key.

Then there are the momentous changes that will come with technological advances (robotics, 3-D printing, AI, the Internet of Things) and climate change (to which much of Southeast Asia, including Thailand, is particularly vulnerable). Addressing these will require national policymakers increasingly to think and act beyond election cycles and domestic political dynamics.

At the end of the day, Asean is not the EU: integration does not aim to reach into the realms of politics.

Nevertheless, the direction of travel is clear and is unlikely be derailed by global trade tensions and periodic emerging-market nervousness. The coming years are set to bring more economic and financial cohesion and intra-regional trade. Domestic and intra-Asian infrastructure initiatives will improve physical connectivity. And consumption and innovation will pick up speed as urbanisation and increasing Internet and smartphone penetration transform the way 650 million people shop, bank and exchange information.

Anyone who is even remotely interested in Asia needs to have this part of the continent firmly on their radar – or risk missing out on one of the world’s most dynamic growth stories.

Contributed by MATTHEW LOBNER, head of International and head of Strategy & Planning, Asia-Pacific, HSBC.

Thailand’s aim is to drive the region forward by laying emphasis on the development of industry 4.0 under the main theme of “advancing partnership for sustainability”, said Commerce Minister Sontirat Sontijirawong, who will chair the meeting of Asean’s economic ministers in April.

Sontirat was speaking yesterday at the “Special Session on the 4th Industrial Revolution (4IR)” seminar in Bangkok, organised by the ministry’s Department of Trade Negotiations.

“The Asean region had a combined GDP at almost $2.7 trillion in 2017, four times the value in 2000. The GDP growth in the Asean region has clocked an average rate of 5.3 per cent since 2000,” said Asean secretary-general Lim Jock Hoi. “At this rate, Asean is set to be the world’s fourth largest economy by 2030.”

Asean members will need to capitalise on the opportunities presented by 4th industrial revolution (4IR) technologies to maintain this fast rate of growth, he said.

“Thailand has carefully chosen our priority economic deliverables for the Asean chairmanship, Recognising the importance of the 4IR, this topic features prominently in our priority economic deliverables with five out of 12 deliverables focusing on this issue alone,” Sontirat said during his keynote speech.

Top of the five 4IR deliverables is an Asean Declaration on Industrial Transformation to Industry 4.0. Second is the development of an Asean Digital Integration Framework Action Plan (DIFAP). The Asean DIFAP aims to develop a concrete plan for Asean to advance an agenda of digital integration over the next 12-18 months.

The action plan will tackle the following issues: facilitating seamless trade, protecting data while supporting digital trade and innovation, enabling seamless digital payments, broadening the digital talent base, fostering entrepreneurship and coordinating actions.

The third deliverable is the development of an Asean innovation road map, to be called “Partnering for Innovative Community.” It will lay out plans to promote the adoption of innovation as a tool in driving Asean forward from 2019 to 2025.

Fourth is to release guidelines on development of skilled labour to address the challenges of 4IR. Finally, Thailand will develop policy guidelines to promote Asean-based microenterprises and to push for their digitisation.

This is to enable Asean microenterprises to penetrate the wider international market through the use of digital technology.

Meanwhile, Thailand hosted the Asean Trade Facilitation Joint Consultative Committee (AFT-JCC) meeting over the past weekend. One of the key issues discussed was the reduction of non-tariff measures (NTMs) between Asean members.

“We came to an agreement to continue to implement the guidelines for eligible NTMs which have been negotiated by Asean’s economic ministers in 2018,” Auramon Supthaweethum, director-general of the Department of Trade negotiations, told reporters on the sidelines of the event. This includes requiring transparency of all NTMs between Asean members, and that they be implemented only when necessary. For example, governments should display their NTMs on their websites in English.

Furthermore, affected parties must be informed before an NTM is implemented so that they are able to express their concerns, she said.

Most importantly, the type of NTMs must comply with the standards of the World Trade Organisation.

“Through implementing the guidelines for NTMs, we aim to reduce the trade transaction cost for Asean members by 10 per cent by 2020 and double the trade value between Asean members by 2025,” Auramon explained.

Currently, the Economic Research Institute for Asean and East Asia (ERIA) is conducting research in the Asean region to assess the total cost of trade transactions. The results are expected by the end of this year, according to the DTN director-general.

“From the research result, we can determine our policy direction and achieve our goal of reducing trade transaction costs,” she said.

This year’s conference in Bangkok gathers more than 100 nuclear science and technology researchers from around the world for both paper and oral presentations, together with an exhibition of Thailand’s nuclear research and awards for two outstanding nuclear scientists.

The conference’s grand opening will be graciously presided over by Her Royal Highness Princess Maha Chakri Sirindhorn.

Associate Professor Dr Thawatchai Onjun, TINT’s deputy director and conference committee chairman, said on Monday: “The 3rd International Nuclear Science and Technology Conference will be held to promote and share the research and development on nuclear science and technology of the country. TINT organises the conference every two years, with the aim to exchange knowledge and experiences on all aspects of nuclear science and technology.

“We hope that the conference will be an important platform for knowledge sharing on nuclear science and technology and create networking among scientists and research institutes, both domestic and international, for the wider use of nuclear technology.

“Besides, this year’s conference is even more special than its previous editions as awards are presented to outstanding scientists and rising scientists who have excellence in nuclear sciences, in order recognise and honour them for their hard work in the Thai nuclear sector. To ensure impartiality for the candidates, TINT has invited experts from the Nuclear Society of Thailand to be judges.”

This year’s conference will be held from February 4 to 6 under the theme of “Nuclear for Better Life.”

It includes quality research papers and lectures given by outstanding scientists from various fields.

They include Prof Hendrik Heijnis, who will give a lecture on solving environmental issues in the 21st century through nuclear technology; Vichai Puripanyavanich, a nuclear science expert, who will speak on applying nuclear technology knowledge on plant breeding and agricultural development; and Dr Najet Mahmoudi, who will deliver a lecture on neutron scattering for biological sciences.

Aside from over 100 research papers presented by participants, there will be exhibitions to showcase Thailand’s advancement and future development in nuclear science and technology.

This year’s recipient of the “Outstanding Nuclear Scientist” award is Dr Narongchai Autsavapromporn, an instructor in the Division of Therapeutic Radiology and Oncology Department of the Faculty of Medicine at Chiang Mai University.

The “Young Scientist Award” has gone to Dr Kampanart Silva, a nuclear scientist from TINT.

The winners will each receive an award certificate from HRH Princess Sirindhorn on February 4.