THAILAND’S COMMERCE Ministry is targeting Cambodia, Laos, Myanmar, and Vietnam (CLMV) countries as part of its plan to promote Thai goods and services in 16 cities.

Malee Choklumlerd, director-general at the International Trade Promotion Department, said CLMV is becoming Thailand’s key export markets.

“The selected 16 markets are highlighted under the export promotion plan, as they have strong power to emerge as the trading centre of each of these countries, besides being tourist attractions, and cross-border cities,” Malee said.

She added that the focus on these new markets, besides the capital city of each country, should help expand export growth from Thailand to CLMV.

Among the 16 chosen cities are: Mandalay, Myawwady, Myiek, Haiphong, Can Tho, Krong Preah Sihanouk, Koh Kong, Siem Riep, Savannakhet, Champasak, and Luang Prabang.

Under the plan to promote exports to these markets, the department will promote the Thai brand, as the CLMV markets have high trust in the quality of Thai goods and services. Thai enterprises will also be matched with CLMV enterprises so that they could be trading partners. The department will conduct a roadshow to lead Thai enterprises to the targeted cities. The department will also invite importers, merchants, wholesalers, and retailers, and department stores from CLMV countries for business matching with Thai manufacturers and to encourage them to organise in-store promotions of Thai goods.

The Commerce Ministry will also cooperate with the Foreign Ministry, the Board of Investment of Thailand, and the Tourism Authority of Thailand to organise Thai trade exhibitions such as “Top Thai Brand”, “Thailand Week” or “Mini Thailand Week” in each city to promote Thai goods and services as well as to improve local consumer recognition of the Thai brand.

The event will also aim to draw more tourists and investment to Thailand.

To resolve the issue of trade barriers, the ministry will appoint a delegation to meet with high-level officials of each country to convince them into removing the hurdles.

As part of trade and economic cooperation activities among CLMV and Thailand, the ministry will organise the CLMVT Forum on “Towards Shared Prosperity” from June 16-18 in Bangkok. The event will be chaired by Prime Minister Prayut Chan-o-cha.

High-level officials from CLMV countries will also join the event. At the forum, many activities will be organised, including seminars on trade, service, and investment under the topic “CLMVT Link in the Global Value Chain”.

Rear Admiral Worapol Tongpricha, the airport’s director, said additional expansion plans were set for this year and next year. The airport will spend Bt600 million this year and the balance Bt400 million next year.

“The new investment will improve the aviation communication system, navigation aids system, runway and taxi way as well as other facilities in the airport,” he said. The airport also aimed to improve the airport’s safety and security in order to meet international aviation standards, particularly ICAO’s standard.

‘Logistics hub’

“To make the airport an international logistics hub, we are forwarding our future investment plans and progress of our current plans to the Department of Civil Aviation for initial auditing. The ICAO, meanwhile, is scheduled to visit the airport within the second quarter of 2017 to oversee the overall operation,” he said.

The government earlier granted a budget of Bt800 million to build a new passenger terminal at U-tapao Airport in order to meet aviation demand and increasing tourism to the east coast of Thailand. The construction of the new terminal is underway and is scheduled to open in August this year.

The airport currently accommodates 4,000 passengers per day or a maximum capacity of 800,000 passengers per year. Once the terminal is completed, it should serve up to 3 million passengers per year. Meanwhile, the airline will able to increase flight capacity to 60,000 per year.

According to Worapol, eight airlines are operating to U-Tapao Airport. They include six scheduled airlines – Bangkok Airways, Thai AirAsia, AirAsia (Malaysia), R Airlines, Kan Air and China Southern – with a combined 12 flights per day and carrying 4,000 passengers per day. There are also 2 charter airliners – Ika and North Wing – from Russia.

“Some airlines from the Middle East and elsewhere are interested in operating flights to the airport to serve tourists,” Worapol added. It is reported that Emirates and Lion Air will soon finalise their operation plans.

The number of passengers disembarking at U-tapao Airport has been surging from 140,000 in 2015 to 150,000 in only the first three months this year. The number is expected to jump during the Songkran Festival set from Wednesday to Friday this week.

This year, the airport will begin to invite investors to bid for duty-free shops following the opening of a new terminal. He said that at least four groups – South Korea’s Lotte, King Power Group, Central, and Paragon/The Mall – have expressed interest to run duty-free shops. The airport is also set to be the base for a maintenance centre, training centre, and private jet service in the long term.

U-tapao Airport earned income of Bt30 million from service and management last year. Revenue is expected to increase to Bt120 million this year.

Last week, the Ministry of Finance announced it would offer more incentives to boost foreign and local investment on the Eastern coast, including at U-tapao Airport. Although the government has been pushing many mega-projects over the past few months, government investment in the region accounts for only 10 per cent of all the investment. Hence it will seek new investment particularly from the private sector in provinces along the Eastern coast, which is the country’s largest economic zone.

In a report on the Philippines published on Tuesday, UK-based Capital Economics said “there are good reasons to think that [Aquino’s] achievements will outlast his presidency”, hence it remains “optimistic that the Philippines will continue to grow strongly over the coming years”.

In a statement on Thursday, the Philippine government’s Investor Relations Office (IRO) said the almost US$300-billion economy was expected to grow by 6-7 per cent in the medium to long term despite a change in administration by midyear, citing Capital Economics’ forecast.

The government has projected that gross domestic product will grow by 6.6-8 per cent in each of the next four years.

On Aquino’s watch, the Philippine economy expanded by an average of 6.2 per cent a year – the fastest average rate since the late 1970s. According to the IRO, Capital Economics noted the Philippines’ solid macroeconomic fundamentals, especially its current-account surplus as well as manageable debt burden, which “will help ensure the Philippines avoids crisis situations in the face of global economic challenges”. “Low levels of government debt and a current-account surplus mean that even if investor sentiment did take a sudden turn for the worse after the election, a crisis is unlikely,” Capital Economics said.

Last year, the Philippines posted a current-account surplus of $8.4 billion, sustaining a surplus for 13 straight years. The share of general government debt to GDP, meanwhile, slid to 36.8 per cent as of September last year from 59.2 per cent a decade ago, the IRO noted.

The office said Capital Economics “also recognised efforts to boost the manufacturing sector, which economists say has bigger multiplier effects on growth compared with the services sector”.

The manufacturing sector expanded by 5.7 per cent last year, bringing the average growth to 7.6 per cent during the 2010-15 period.

Finance Minister Apisak Tantivorawong said yesterday that despite the government having pushed forward many mega-projects in recent months, state investment in the region accounted for only 10 per cent of overall investment.

The ministry hopes, therefore, to see more investment, particularly from the private sector, in provinces on the Eastern seaboard, which is the Kingdom’s largest economic zone, he said.

“During the first two months, total investment declined from the same period last year. To boost investment, the government will continue organising roadshows overseas, offering more investment incentives,” he said.

Some countries, including neighbouring nations, offer a wider range of incentives and privileges to investors than Thailand has in its armoury, he said.

“The ministry may, however, soon offer more tax breaks, a new industrial zone or other privileges to investors,” he added.

The minister also said some investment laws and regulations needed to be revised in order to attract and facilitate investors from overseas, as well as domestic investors.

“For domestic investment, investors in the Eastern region are our main targets for this year,” he explained.

The ministry held a mobile “Chief Change Officer-Ministry of Finance (CCO-MoF)” meeting in Chon Buri over the past two days, aimed at engaging and stimulating the private and public sectors for future investment.

A second CCO-MoF meeting will be held in the latter half of the year.

Apisak said other Finance Ministry agendas for this year included promoting more assistance between stakeholders, with big players being asked to help small operators – something which he described as a “typically Thai” business approach that could not be found in Western countries.

The ministry also plans to help struggling businesses and those involved in small and medium-sized business, in particular.

The government, meanwhile, will press ahead with its mega-infrastructure project programme, which would help revive the economy, he said.

“In the second half, the ministry will monitor the newly approved Yellow and Pink line [mass-transit rail] projects, as well as motorway projects. It will also push for smaller-scale projects from private sector in order to boost the economy,” he said.

Moreover, the Finance Ministry will improve the e-payment system by working with other state units.

A working group on e-payments has been established and Apisak said he expected to see some positive action this year.

The system will link all transactions, payments and the tax department in a single online portal.

The ministry plans to utilise 4G technology in all departments, in order to prevent the type of corruption that can occur in traditional contract negotiations, he said.

“With a single account, all companies will be linked, from the bidding procedure to purchasing, delivery, the Customs Depart-ment, and import/export. This system is expected to help cut the cost of the bidding process by up to Bt30 billion per year,” Apisak added.

“The ministry will improve the Customs Department in order to facilitate the private sector, as well as contractors,” he added.

Prayut said the government had asked all 7,000 sub-districts or tambon across the country to look for new tourism attractions or create activities in their areas in order to draw visitors and generate income for their communities.

He met yesterday with local administration officers from every province, asking them to help drive the government’s Pracha Rath Project aimed at reviving the economy.

The government has been focusing on tourism as part of the Pracha Rath Project, along with other key sectors including investment, real estate and retail.

“Local people will be the key persons helping drive Pracha Rath. They can develop tourist attractions and also prepare themselves to cope with tourism,” Prayut said.

Potential attractions

The government hopes that every tambon will propose development plans for potential attractions including historic sites, culture, and the environment.

However, many tambon may need tourism guidelines and oversight in order to build unique products and reputations as well as differentiate themselves from other areas. Local people will be required to understand management and related issues such as tourist safety and security, and high service standards.

The Tourism Authority of Thailand and Japan External Trade Organisation, Bangkok Office, signed a memorandum of cooperation last November to exchange tourism development and management, especially to develop community-based tourism.

They both plan to kick off investment industrial and agricultural tourism to strengthen locally based tourism in Thailand. Japan will provide know-how to Thai operators and government bodies.

However, spending would grow even more, by 5.7 per cent, if not for the drought affecting water-splashing festivities, Thanavath Phonvichai, director of the university’s Economic and Business Forecasting Centre, said yesterday.

He said the long holiday should result in a lot of spending but worries about the drought causing shortages of water had affected people’s spending sentiment.

Based on a survey of 1,226 respondents last week, 65.2 per cent planned to travel either domestically or overseas during the festive period, while 14.1 per cent will go back to their home towns but not travel around, and about 20.6 per cent will not go anywhere.

Among the 65.2 per cent who said they would travel, 90.6 per cent will do so within the country and 9.4 per cent will go abroad. Average spending by domestic travellers will be Bt4,601 per person, and Bt57,653 each by those going abroad.

“Most people will spend only on a necessary things such as travel expenses, food and making merit. The government’s tax-deduction measure to stimulate spending and travel will only increase expenditure a little because people are quite concerned about the economy and their future incomes,” Thanavath said.

Because of the persistent drought, people are also very worried that they will have to pay more for water with which to celebrate the water festival. Thus some Thais this year will not go anywhere, instead joining in Songkran festivities at places that are set up for people to splash water.

However, some respondents said they would join in celebrations while also going along with the government’s campaign to use small amounts of water.

Thanavath estimated that the government’s Songkran stimulus would create about Bt15 billion to Bt25 billion in spending, which would edge up economic growth by 0.05 percentage point.

Based on the 3.35 million Thais who have to pay income tax, people will be able to save about Bt3.5 billion to Bt4.5 billion in tax. This will help offset lower spending due to the drought.

Given the positive and negative measures affecting this year’s festival, Thanavath suggested that merchants carefully manage their goods orders and stocks as consumers might spend less than expected.

The survey indicated that sources of funds for people to spend during Songkran would be mostly their salaries, followed by special incomes, bonuses, and savings.