The ministry aims to push exports to the United States through food diplomacy while also aiming to boost its food and agricultural exports to Cambodia, Laos, Myanmar and Vietnam (CLMV). The export growth target for 2018 has been set at 8 per cent.

“It is undeniable that the US-China trade war has both direct and indirect negative impacts on Thai exports. This has led to a contraction of exports in September by 5.2 per cent year on year to US$20.699 billion. However, there are also indirect benefits to Thailand from the ongoing trade war, which Thailand needs to capitalise on,” the director-general of the Commerce Ministry’s Trade Policy and Strategy Office, Pimchanok Vonkorpon, told a press conference on Monday.

“Many Chinese goods are losing market share in the US because of the imposed tariffs. This has opened up gaps in the market which Thai products can fill,” she said.

“Moreover, to mitigate our risks, Thailand needs to diversify its export markets and start looking beyond China. We need to shift our approach in how we analyse foreign markets and start targeting more niche groups of customers instead of looking at foreign markets in a macro scope,” she said.

“One way Thai businesses can break into the US market is through food diplomacy,” added Banjongjitt Angsusingh, director-general at the ministry’s Department of International Trade Promotion.

Food diplomacy refers to the use of Thailand’s cultural and culinary influence in foreign markets to boost Thai exports, she explained.

For example, there are many Thai restaurants across the US. In supporting these businesses, Thailand can boost its exports of key seasoning ingredients used in Thai food, creating a new way for Thailand to penetrate the US market, Banjongjitt said.

Thailand’s food exports remain strong despite falling from $2.07 billion in August to $1.7 billion in September. From January to September, food exports amounted to $15.99 billion, according to the ministry, a 9.1-per-cent growth year on year.

“Another key region where Thai exports still have potential to grow are CLMV countries,” said Banjongitt.

In the first nine months of the year, Thai exports to CLMV were valued at $21.63 billion, growing 19.4 per cent compared to the same period last year.

“Food and agricultural goods have a strong potential to grow in global markets despite the US-China trade war, especially in CLMV markets,” said Banjongjitt.

“Thai goods perform well in the CLMV region because these countries have high trust in the quality of Thai goods, even more so than Chinese goods,” she added.

“Moreover, the CLMV economies are growing at a very fast rate, leading to an emerging middle class that demand higher-quality products. This presents a very promising opportunity for Thai agricultural goods as Thailand exports high quality fragrant rice as well as other dry fruits,” she explained.

Thai rice exports remain strong despite falling from $485 million in August to $468 million in September. Rice exports in the first nine months amounted to $4.1 billion.

“To expand exports of these goods, Thailand needs to start targeting niche markets. The demand for organic, healthy and environmentally friendly goods is growing in the CLMV region and globally,” Banjongjitt said.

“Hence, Thailand needs to capitalise on this rise in demand. To reduce costs, we also need to develop stronger agricultural logistics, encourage Thai firms to move production bases to CLMV countries and promote the use of e-commerce. This will make Thai goods more competitive in these foreign markets,” she said.

While Thailand and many other countries have adopted an industry 4.0 policy to harness disruptive technologies that will advance their economies, Singapore has been doing it in a systematic way.

“Singapore has strong tri-party cooperation – government, business and trade unions,” said Koh Poh Koon, senior minister of state at Singapore’s Ministry of Trade and Industry.

The concerned parties have participated in extensive consultations on how to move the city-state economy up the value chain of global production, he said.

It is not just the technology and business strategy. Singapore also brings its workers along the industry 4.0 journey, Koon emphasised.

The government is building infrastructure and creating a business environment conducive for businesses to adapt themselves faster.

Usually, 20 per cent of leading corporates move fast on their own while 80 per cent may move at a slower speed, according to Singaporean officials.

Singapore last week launched the so-called Standards Mapping for Singapore Smart Industry Readiness Index. It aims to help businesses to identify relevant standards that can be used to upgrade their industry 4.0 capabilities. The index provides the manufacturing industry with good practices to address key requirements for interoperability, reliability, safety and cybersecurity.

To reskill and upskill workers, Koon said the government is working closely with trade unions.

The leaders of trade unions play a key role in encouraging workers to participate in upskill programmes or training for new jobs.

Singapore is encouraging firms to adopt automation and disruptive technologies by using a carrot-and-stick approach, such as offering grants for adopting new technologies but also imposing levies on firms using cheap labour from other countries, said Koon.

Some basic course training is free, some courses are co-funded by the government and firms which send their employees to attend.

One example is the model factory initiated by the Agency for Science, Technology and Research(A*Star).

The model factory provides a live production environment for companies to learn, experience, and experiment with advanced manufacturing, technologies, such as robotics and automation, manufacturing data analytics and business intelligence capacities, according to the agency.

Its virtual manufacturing lab uses virtual and augmented technologies which help small companies to try virtual factories or machine operations before they build or lease them. The virtual and augmented reality also provides a training course for workers.

Doing this helps firms save cost and choose the best machines suitable for their business or industries, according to Bertil Brandin, strategic development director at the A*Star.

The Singapore government has also long been working with multinational companies. For instance, last week it hosted the Industrial Transformation Asia-Pacific, a trade expo featuring the latest technologies from German and other multinational corporations.

Accenture, one of the global leading professional services companies participating in the expo, demonstrated the potential benefits of blockchain technology and how it could be applied to the shipping industry.

Currently, the company has built a consortium to push for application of blockchain technology in the shipping industry.

The technology is expected to allow concerned parties to track goods back to original producers, simplify data amendments according to the shipping process, streamline the checks required for cargo, and reduce the burden and risk of penalties for compliance levied on customers. It also eliminates a need for printed shipping documents, resulting in huge annual savings for the freight and logistics industry, according to Accenture.

Small and medium enterprises in Singapore have started to apply disruptive technologies such as 3D printing, Internet of Things, and robotics.

Goh Khoon Seng, chief executive officer at Osteopore International Pte, said his company employed 3D printing to customise for bone or skull implanting using bioresorbable polymer, which acts as a scaffold to allow natural tissue regeneration and this advanced material degrades itself. His products are also used for beauty surgery purposes.

He said his products had been approved by the Thai Food and Drug Administration.

Unlike Hong Kong where manufacturing sites have moved to mainland China, Singapore has maintained its manufacturing sector and systematically upgrades it.

It is because manufacturing is crucial for technology transfer and is a source of innovation, according to Singapore’s officials.

The sector contributed about 20 per cent of gross domestic product and generated 13 per cent of total employment in 2017.

Participants emphasised the need to adjust the regulatory framework if they benefit the general image of the banks without significantly affecting the system. They hoped that customers will gain the most benefit from these proposals, the BOT’s executives said.

The BOT received suggestions and insights until October 22 from related parties with regard to measures to regulate home loans.

The BOT plans to consider the suggestions and announce measures by November, which will be effective from January 1, 2019 onwards, Sakkapop Panyanukul, director of financial stability unit at the BOT, said.

“We will consider it as soon as possible. We all know that this is a matter of urgency, as all involved parties need to be prepared for any changes in the measures which the BOT will introduce. I think that this will be beneficial to the overall system and will not significantly affect the lenders. After the recent hearing, we now have a better understanding of all the parties,” he said.

This is the first time the BOT was so open to receiving suggestions. “This is because we understand that this is a significant and delicate issue. We are not sure whether it will be finished by the end of this month,” he said.

Wajeetip Pongpech, assistant governor of the BOT’s Financial Institutions Policy Group, added that there were many questions and issues that may have been misunderstood, especially if the current situation were as serious as the 1997 Asian financial crisis.

She said the BOT would like to emphasise that the current situation was different and there were measures in place to prevent a crisis like 1997 from happening again.

The BOT has said the aim of this measure was to raise the credit standards of financial institutions that had fallen to some extent. The measure will also focus on establishing discipline among customers to have savings before going for a housing loan.

Wajeetip said the BOT would like to clarify some of the issues people may have misconceptions about.

First, the measure will only apply to cases where two house loan instalments are being repaid at the same time and will not affect cases where one house loan instalment has already been repaid and the second house loan is being taken out. In the latter case, it will be accounted as a first contract.

Second, the revision of this rule will not affect low-income buyers who are purchasing a home for the first time. The regulations apply only to residences that cost more than Bt10 million.

Finally, the measure will not affect those who have taken out a home loan before the new criteria come into effect. There will be no retroactive effect for the borrower.

According to the BOT announcement early this month, there are three main areas of home loan regulations that the central bank has disclosed previously. In cases where the home loan is taken out to purchase the first home, the down payment is at 5 to 10 per cent of total value, or no more than 90 to 95 per cent of the loan-to-value (LTV) ratio, but top-up loans must not exceed 100 per cent of the house price.

The remaining two areas are loans for a second home or second contract and houses costing Bt10 million or more. A down payment of 20 per cent and LTV ratio of less than 80 per cent is required.

Kobsak Duangdee, secretary of the Thai Bankers’ Association, said recently that the association is not the central organisation collecting all the information from private banks regarding the recommendation guidelines sent to the BOT. However, the association will consult the BOT to find out how to draft measures or discuss standardised home loan procedures for private banks. This will ensure that private banks comply with the BOT policy and achieve standardised home loans at the same time.

While commercial banks have gradually raised interest rates since the third quarter of this year, home-loan packages have also been revised, focusing more on floating interest rates as opposed to fixed interest rates to cope with increasing costs as a result of interest rates rising up to 6.5 per cent, according to the report by Financial Customer Protection Centre of the BOT. (see graphic)

Bank of Ayudhya’s executive vice president and head of mortgage loan division, Nathapol Luepromchai, said the bank had increased interest rates for mortgages by about 0.10 per cent due to the rising cost.

“We increased our interest rate for mortgage not because of the new BOT measure but because our cost was rising,” he said.

The study released yesterday found that in the midst of ongoing US-China trade tensions, just over half of survey respondents (55 per cent) say they believe that there will be more global trade in five years’ time.

The International Monetary Fund (IMF) recently warned that trade conflicts will cut global growth forecast this year from 3.9 per cent to 3.7 per cent.

In September 2018, Bloomberg conducted a global survey of 2,000 mid- to senior-level business professionals across 20 countries in developed and emerging markets to gauge their views on the opportunities, challenges, concerns and expectations for the future, against the background of the rise in “new economy” nations.

With the rise of new economies, half of global business professionals believe a globalisation model centred on multilateral free trade and open borders could be effective, though they say that the model must be tweaked to allocate the benefits more evenly across wider constituencies.

When asked to predict the top three economic powerhouses a decade from now, the majority selected China (86 per cent), followed by the United States (70 per cent) and Japan (36 per cent).

“The “New Economy” survey provides a barometer into public sentiment towards a world economy in transition, a key theme which we will explore at the New Economy Forum in Singapore next month,” said Justin B Smith, CEO of Bloomberg Media Group.

“The survey reveals vast differences in perceptions for the future and highlights the need to bring together global leaders in business and government to find private-sector led solutions to some of the world’s biggest challenges.”

Global governance (26 per cent) was identified as the most critical global challenge requiring action. This sentiment was especially strong among respondents from India (39 per cent), Philippines (35 per cent), Malaysia (31 per cent) and the Middle East (41 per cent).

Yet despite their lack of confidence in government leadership, three-quarters (75 per cent) of respondents across the globe say they believe that world leaders and governments should be the primary force in driving initiatives to overcome global challenges. Only 10 per cent of respondents think that businesses and the private sector should take the lead to address today’s global challenges.

Smith says the private sector has no choice but to tackle the issues arising from the emerging economic order, because governments are failing to act.

“We think that private-sector businesses must take greater leadership in addressing key global challenges,” he said. “New economies are playing an expanded role across trade and businesses today, and with a changing new world order, there is an urgent need for real dialogue and action on the long-term implications of this transitional moment.”

Perhaps surprisingly, the survey showed there was greater confidence in the trade outlook in developing countries than in the developed world, where protectionist sentiment is rising. More than three in five (63 per cent) business professionals from emerging markets say they believe that there will be more global trade in five years’ time. That view is especially pronounced among respondents from China (66 per cent), Indonesia (74 per cent), Philippines (76 per cent), Thailand (80 per cent) and India (71 per cent). This contrasts with the view of those from developed markets, where just over one-third (36 per cent) expect more global trade in five years.

Tom Orlik, Bloomberg’s Chief Economist said, “One of the striking findings from the survey is the divergence between optimism about the global trade outlook in emerging markets, and pessimism in developed economies.

This suggests that, for emerging markets, the costs of the current slide towards a trade war could be less than expected. If businesses retain that fundamental optimism about the outlook for trade, continued hiring and investment could propel growth forward, even as tariff barriers rise.”

Respondents in emerging markets are also more confident about the future and more motivated to prepare for it than are those in developed markets.

Some 66 per cent of respondents from emerging markets reported that they are learning new technologies compared to 43 per cent in developed markets, and 56 per cent are upskilling and taking additional professional courses compared to 29 per cent in developed markets. They also recognise the need to start new business ventures (35 per cent) and to be more socially conscious about the environment (50 per cent), as compared to respondents from developed countries (10 per cent and 37 per cent, respectively).

Technology in driving seat

While 60 per cent of respondents overall say they are already learning new technologies as they prepare for the future, the rate of technological learning is lower in developed countries (43 per cent), particularly the United States (30 per cent), United Kingdom (33 per cent) and Germany (42 per cent).

Business professionals from emerging markets expressed overt inclination towards artificial intelligence (AI) and believe it presents workers with new job opportunities that will generate a net benefit to economies, especially those from China, India and Vietnam.

Only 5 per cent of respondents from emerging markets say they do not plan to do anything to prepare for the future.

Developed markets on the other hand, recorded a higher-than-average (12 per cent) number of respondents who do not plan to do anything to prepare for the future.

The Bloomberg New Economy Forum aims to develop private sector-led solutions to address some of the world’s greatest challenges, including globalisation and trade, technology, finance and capital markets, climate, urbanisation and inclusion.

The inaugural New Economy Forum will be hosted by Michael R Bloomberg in Singapore on November 6-7, 2018 and will convene a first-ever gathering of 400 pre-eminent leaders to begin seeking private sector-led solutions to challenges created by a world economy in transition.

Alain Dehaze, chief executive officer of Adecco Group, said that Southeast Asia has an advantage in having a large labour force. Demographic dividends also exist in most of the economies. However, there are pockets of skills gaps, especially in the areas of IT and engineering.

“The workforce mobility in Southeast Asia, especially for skilled talents, is lower than in other parts of the world. The human resources industry can sometimes be less sophisticated than in other countries. Labour is unorganised in many economies in the region, such as India and Indonesia,” he said.

Dehaze said that Southeast Asia faces increasing demand but also workforce shortage in many careers, especially in IT, digital, healthcare, analytics, automation and robotics.

“People skills as services have become increasingly important. The shortage of talent is a situation and organisations need to do careful talent planning. When organisations cannot hire full-time employees, they need to consider part-time and temporary solutions to help bridge the gaps. This is the key to keep productivity high.

“The challenge is that HR function will become increasingly important to companies for their overall success. Talent is a real differentiator. Companies will need to manage their human capital as well as their financial capital. They need to embrace diversity and inclusion to tap into a larger talent pool. Older workers and foreign talent are very important,” said Dehaze. “Companies need to adopt progressive HR practices to integrate multi-generations at work, and to leverage workforce flexibility through a mix of contingent, freelance and open-ended contracts. They should take a more data-driven approach to talent management,” Dehaze added.

“Some countries in Southeast Asia, such as Thailand, need greater cooperation between governments, academia and businesses – especially to ensure that the right skills needed in the workplace are being taught by the academic institutions. The countries also need to further enhance ease of intra-region workforce mobility, especially for skilled talents, and the development of common training and recognition frameworks in the region for a wide range of occupations and industries. Such regulatory frameworks also need to be business friendly, and employment policies should combine flexibility and social protection,” he said.

Dehaze said the education systems in the region needed to focus more on employability and continuous learning.

“Vocational education and training is critical – but we know that this will take some time to become popular. Schools also need to teach how to be comfortable with change, how to be resilient since the future world of work will require us to constantly reinvent our careers. They require imparting skills on how to make sense of all the information, how to identify what is important and what is not, ie, critical-thinking and decision-making.”