Kulaya Tantitemit, the Finance Ministry’s inspector-general, yesterday said that the ministry had revised its economic growth forecast from 4.2 per cent, with the 4.5 per cent estimate sitting midway in a range of 4.2 to 4.8 per cent.

After the economy grew 3.9 per cent last year, the momentum has been maintained with further expansion in exports, benefiting from the economic expansion in the country’s trading partners.

As a range of positive data comes in, a consensus in the financial markets is emerging for economic growth of more than 4 per cent for 2018.

Public spending in the 2018 fiscal year has also contributed to the continued growth in gross domestic product (GDP). The government put in place a mid-year supplementary budget worth Bt150 billion, Kulaya said.

Investment in infrastructure projects, the development of special economic zones and public-private partnership investments are expected to boost investor confidence and lead to more private investment this year, Kulaya said.

Household consumption is showing sign of continued expansion as the incomes of non-farm workers have increased in line with export growth.

Kulaya said farmers’ incomes had also started to pick up in recent months and government welfare spending is expected to boost consumption among these groups,

On the economic stability front, the Finance Ministry predicts the inflation rate will be 1.2 per cent this year, thank to higher oil prices.

The current account surplus remains high, estimated at US$44.3 billion – the equivalent of 8.8 per cent of GDP.

Downside risks include the unfolding trade war among major economies, including the United States, China, Europe, Canada and Mexico, and volatility in the global financial markets. These risks will need to be closely monitor, Kulaya said.

She said Thai Regional Economic Sentiment Index (RSI), which measures confidence in the next six months, suggests an upbeat mood is taking hold across the country – led by the Central, Eastern and Northeastern regions.

Business mood brightens

The index in July for the Central region stood at 91.3, supported by more investment, expansion of industrial production and more purchasing orders. Construction of new roads and expressways in the region also boosted confidence among business communities. The index for the Eastern region came in at 87.9, boosted by investment in the Eastern Economic Corridor (EEC) initiative and the tourism industry.

The index for the Northeast is 86.5, reflecting manufacturers’ optimism on the outlook for industrial production and new factories being set up in Kalasin, Bueng Kan and Surin provinces. Tourism also is expected to spur economic growth in the second half of the year.

The Western region is expected to gain from agricultural production, as the region has sufficient water supplies. The Southern part of the country expects to see more tourist arrivals in the peak season later this year.

Economic indicators for June and the second quarter of this year suggested an expansion in private investment and consumption. Car sales in June rose 26.2 per cent year on year – an 18-month winning streak – and this led to a 23.6 per cent gain year on year in the second quarter.

Real incomes of farmers increased 3.2 per cent in June, rising for a fourth consecutive month, and 4.9 per cent for the second quarter. Tax revenue from value-added tax – a consumption indicator – expanded 6.9 per cent in June and 6 per cent in the second quarter. Sales of commercial cars in June rose 25.6 per cent and 28.2 per cent for the second quarter.

Myo Thet, vice president of the Union of Myanmar Federation of Commerce and Industry (UMFCCI), said the agreements would help boost bilateral economic ties, reflecting Taiwan’s pledge to support Myanmar with capacity building and technical assistance in core sectors including textile and food processing.

The agreements were signed at the event on Tuesday with the Chinese National Federation of Industries.

“Taiwan is very well-known for their advanced technology in agro-based food products. By using the latest technology, they manage to produce a wide range of value-added products. So, we are happy to cooperate with them,” Myo Thet.

He said technology transfer from Taiwanese counterparts is the main priority, as Myanmar plans to expand its manufacturing capacity in export-oriented sectors like garments and textiles.

Cheng-Wai Yu, deputy director general at Taiwan’s Industrial development Bureau, considers it is the right time for Taiwanese businesses to trade with Myanmar. He believes in the future of Myanmar, though it is now facing international pressures on the government’s handling of conflicts in some ethnic areas.

Chun-Fu Chang, a representative of the Taipei Economic and Cultural Office in Myanmar, said both chambers have agreed to prioritise two sectors: textiles and food processing. He said the cooperation would be strengthened through a number of training programmes in the pipeline.

“We do have a very long history of cooperation. As we enter the digital era, we need to strengthen our industrial collaboration for mutual benefits. Taiwanese investors’ interest in Myanmar is also on the rise, so we need more efforts to make sure the bilateral cooperation reaches a new height,” he said.

Chau-Chyun Chang, deputy general director at the Industrial Technology Research Institute’s industrial economics and knowledge centre, said vegetables and textile products were the top two categories that Taiwan imported from Myanmar last year. Mostly, Myanmar imported machinery, mechanical and electrical products from Taiwan.

According to Myanmar’s Ministry of Commerce, the bilateral trade volume has increased five-fold over the past three years. In the 2015-16 fiscal year, the total trade volume was only US$34.1 million. It rose to $81.7 million in fiscal 2016-17, and to $189.1 million in fiscal 2017-18, ending in March.

As of June 30, 17 Taiwanese firms have been approved to invest US$42.2 million in Myanmar, according to the Directorate of Investment and Company Administration.

“We are looking to a broader cooperation with Myanmar. It will not only stimulate the industrial upgrading of Myanmar but also extend the market for Taiwan’s industry, achieving mutual benefits on a win-win basis,” said Chang.

According to Chang, Taiwan has successfully transformed itself from an agricultural society into an industrial one with incessant efforts by both the public and private sectors.

“The experience accumulated has allowed us to build up our unique industrial capacity, which we are happy to share with Myanmar,” he said.

Myint Soe, chairman of Myanmar Garment Manufacturers Association, said the nation’s garment industry could yield tangible benefits from the training programmes for workers, supervisors and technical staff at factories across the country.

Than Lwin, senior consultant at KBZ Bank Ltd and a former deputy governor of the Central Bank of Myanmar, also welcomed the move. He foresees more successful talks between the two sides. He expects the cooperation agreements will help Myanmar to draft a carefully crafted industrial strategy.

5G initiatives in Korea, Europe and Australia all demonstrate that 5G is much more than just good intentions and sporadic use cases. Its implementation calls for a thorough regulatory overhaul, a clear spectrum roadmap and a deep collaboration between all industry players.

If Thailand does not correct its trajectory, we will be late to 5G the same way we were late to 3G and 4G. The Australian government estimates that 5G could add A$1,300-2,000 (Bt32,000-49,000) in its gross domestic product per person after the first decade of the rollout. The EU has similarly predicted between two to four per cent of GDP growth thanks to 5G alone. And in Thailand, The National Broadcasting and Telecommunications Commission (NBTC) estimates failure to implement 5G by 2030 could cost the country Bt 2.3 trillion.

Indeed, delays to 5G may be much longer than those that plagued 3G and 4G. Compared to the previous decade, 5G comes at a time in telecommunications history when consumer spending has flattened. Moreover, 5G requires a much higher density of sites than 3G and 4G do. Given that Total Access Communication (DTAC) estimates that a 5G rollout would cost Bt100-200 billion in the next 3-5 years, the economic model that powered the network rollouts of 3G and 4G can in no way support this investment.

Instead, the industry will need to reinvent itself to achieve the efficiencies 5G requires. In South Korea, for example, local governments and infrastructure agencies are facilitating the installation of network systems in street lights and transportation structures. And the top cellular carriers are also collaborating on a single 5G infrastructure. Similarly, Telenor has been appointed to lead the European Union’s 5G project, with trials spanning six countries and 23 partners. Can Thailand really afford to ignore the comprehensive 5G strategies being implemented in these markets?

The telecom operator Telenor’s experience teaches us to look well beyond one-off trials and think big picture instead. The 5G Verticals Innovation Infrastructure initiative that Telenor is spearheading for the EU is a 20-million-euro project to build several interworking 5G sites, develop vertical use cases demonstrating 5G capabilities, and demonstrate the value of 5G solutions to a wide range of stakeholders.

Its crowning jewel is the town of Kongsberg, in Norway, where Telenor is supporting the roll out of a wide range of 5G services, from ultra-reliable drones to low-latency remote health services. It is the kind of far-reaching initiative Thailand needs, and dtac is willing to lead such a project.

Moreover, DTAC is already pioneering foundational 5G technology. Much of the network equipment we are currently rolling out is so advanced, it would require a simple software upgrade to switch to 5G. We are the first, for example, to use a virtual core network for 100 percent of our data. And will be the first to deploy massive MIMO antennas for commercial use. In these fields, it is in fact dtac who is leading the way for the Telenor Group.

DTAC therefore welcomes the Thai government’s and the NBTC’s plan to prepare for the adoption of 5G by 2020. We are committed to working closely together with the public and private sector to make 5G happen in Thailand and help accelarate the Thailand 4.0 vision. Although the road ahead is long, Thailand’s 5G journey begins with simply realising that 5G will require a level of collaboration hitherto unseen in the Thai telecoms industry. Then, we can work together on removing the practical barriers that stand between Thailand and its 5G future.

Contributed by RAJIV BAWA, |Chief Corporate Affairs and Business Development Officer, Total Access Communication.

This was a result of increasingly digital lifestyles, said ETDA chief executive officer Surangkana Wayuparb.

Social media, such as Facebook, Instagram, Twitter and Pantip, is used for as long as 3 hours and 30 minutes per day. Users also stream videos through YouTube or Line TV for an average of 2 hours and 35 minutes per day, according to the Thailand Internet User Profile 2018.

Chat applications, such as Messenger and Line, averages at 2 hours, playing online games at 1 hour and 51 minutes, and reading articles or books online takes up 1 hour and 31 minutes per day.

The five most popular activities are sending messages at 94.5 per cent, hotel bookings 89.2 per cent, ticket bookings 87 per cent, payment for goods and services 82.8 per cent and consuming movies and music 78.5 per cent.

The survey warned that they were at risk of data violations: 43 per cent do not change their passwords every three months; 45 per cent reveal their real birthdays on social media, 44 per cent neglect to check whether a website address starts with “https://” when making payments; 43 per cent open emails or click on links that are of an unknown origin; and 36 per cent upload pictures and videos onto social media immediately after taking them.

ETDA is planning to work with Digital Asia Hub Hong Kong, a non-profit research centre, to establish the “Digital Asia Hub Thailand”.

It will be dedicated to creating networks and fostering cooperation on digital technology, economics and society, which will be open to all stakeholders.

Professor Urs Gasser of the Berkman Klein Centre for Internet and Society at Harvard Law School said the establishment of the hub in Thailand was to create a digital revolution in Asean.

The United States is one of Thailand’s biggest investment partners. Two-way trade volume between the two countries last year totalled Bt1.4 trillion, behind China (Bt2.5 trillion) and Japan (Bt1.8 trillion). Thailand’s exports to the US last year were valued at Bt898.8 billion, following China (Bt997.9 billion), according to the Ministry of Commerce.

Economic relations between Thailand and the US have been strengthened since the Treaty of Amity and Commerce signed in 1833. During the post-second world war and the Cold War eras, Thailand got economic aid from the US.

As the world has developed, Thailand has diversified its economy and now China is Thailand’s largest export market.

While China has a geographically closer trade link with Thailand, the Kingdom has a close connection with the US politically and militarily, said Teerana Bhongmakapat, economics professor and former dean of Chulalongkorn University’s Economics Faculty.

Against a backdrop of rising economic power, Thailand and the US have pursued different trade policies.

Thailand has embraced multilateralism under the World Trade Organisation (WTO) while the US has moved away from the WTO and is moving towards bilateralism, especially under President Donald Trump who has asserted “America First”.

“Thailand still believes that we will benefit from the WTO, while the US does not think so,” said Teerana.

Even before Trump took office nearly two years ago, former President Barack Obama stayed away from the WTO and initiated the Trans-Pacific Partnership (TPP), a regional trade bloc that did not include China.

Trump abandoned TPP – which has subsequently changed its name to the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP) – as he chose a bilateralist approach to renegotiate with trade partners, in particular those having large trade surpluses with the US.

Thailand had a trade surplus worth $20.2 billion (Bt675.2 billion) last year, ranked 11th among various countries, according to the United States Census Bureau.

On the surface, the trade policies implemented by Trump and Obama look different, but the underlying substance of their approaches is the same, Teerana said.

Thailand and other developing countries demand that advanced countries, including the US, open farm markets while advanced countries demand more intellectual property protection and service liberalisation in developing markets. The conflict has stalled trade negotiations under the WTO for many years.

Many have expected that trade tensions will increase as Trump has opened disputes with China, Europe, Canada, Mexico and other Asian countries.

“Unfortunately, Trump sees alliances as competitors, he interprets countries as companies that are competing against each other,” Teerana said.

The impact on Thailand remains to be seen.

“Thailand is not the main target of the US for trade disputes, so the impact is almost nothing,” said Soraphol Tulayasathien, director of the economic stability analysis division at the Finance Ministry’s Fiscal Policy Office.

The International Monetary Fund has warned that a trade war could slash world economic growth by 0.5 percentage points by 2020. Soraphol said the impact on Thailand may be only 0.01 percentage points.

The affect is less because most of Thailand’s exports to China, about 70 per cent, are for domestic consumption, while only 30 per cent is in supply chains. The US is targeting products that originate in China, he said.

A trade war is unlikely to affect the tourism industry, which accounts for 14 per cent of Thailand’s GDP, Soraphol said.

The US may import more from Thailand or some investors may shift their production base to Thailand to avoid a trade war, he said, adding that it would be unlikely that some US investors in Thailand would relocate their factories back to their home country.

Sompop Manarungsan, president of the Panyapiwat Institute of Management, believed that competition for economic and political influence between the US and China will definitely affect Thailand.

He said the US will also pay more attention to Asean as the region is on the South China Sea, which is a strategic point for both China and the US.

“Thailand has to be very careful. We don’t know what will happen, but we still need to have trade and investment relations with the two giants,” he added.

The minister, Pichet Durongkaveroj, said that among these plans are the development of a test bed for 5G mobile applications and, to support technology startups more broadly, a cyber port initiative.

Pichet made the remarks yesterday at an event, “Future Economy and Internet Governance: Big Change to Big Chance”, hosted by the Electronic Transactions Development Agency (Public Organisation) (ETDA) at the Siam Paragon shopping complex. The three-day event kicked off yesterday.

He said that the ministry would set up the 5G mobile application test bed lab at Digital Park in Si Racha. The move will help equip Thailand for the country’s transition from the current 4G telecommunications landscape to the incoming 5G era, the minister said.

Pichet said the National Broadcasting and Telecommunications Commission (NBTC) is considering allocating some spectrum bands for the 5G testing at the planned test bed.

Once the plan has made progress, the ministry will invite related state and private parties to support the development of the test bed. Any of the state and private agencies will be able to use the facility.

Pichet said that he would finish formulating the entire concept of the cyber port within two months. He wants to get it off the ground before the end of this year. The cyber port could be set up in Si Racha or any other suitable location.

It will be a centre where startups can get support on a one-stop basis, ranging from coaching and funding to their participation in a connected ecosystem.

The ministry has reportedly sought collaboration with Hong Kong Cyberport for help on establishing a version of the technology-promoting concept in Thailand.

Hong Kong Cyberport has been developed as an innovative digital community that now hosts 1,000 digital tech companies. It is committed to incubating the proposals of young people, startups and entrepreneurs in order to advance their growth in the digital industry.

In a related matter, Surangkana Wayuparb, executive director and CEO of the ETDA, said that the event now under way has received a high level of cooperation from the public and private sectors, both nationally and internationally. More than 5,000 visitors are expected over the three days, drawn to exhibitions, showcases and seminars.

Thailand has a target for the digital economy to account for 25 per cent of gross domestic product (GDP) in 2018, according to Surangkana.

According to the Asean Economic Community Strategy Centre of the University of the Thai Chamber of Commerce, the digital economy was expected to account for 16.6 per cent of the Bt13 trillion national GDP in 2017.