He said the Commerce Ministry should propose the results of the Panyapiwat Institute study to the economic committee chaired by the prime minister so it could be announced that Thailand would join the TPP.

“As many traders and investors are looking forward to Thailand’s move on whether to join the TPP, the government will make a clear decision soon,” he said.

The committee is scheduled to meet on April 29.

Somkid said that despite the fact that Thailand would get great benefits from joining the TPP overall, it would result in negative impacts on some sectors.

He called on the Commerce Ministry and relevant government agencies to create an understanding among those groups.

He said that should include the setting up of a working committee to talk with those sectors, such as agriculture and non-government organisations, about things like the trading of farm products and intellectual-property rights for medicines while seeking measures to counter the TPP’s negative impacts.

He urged the ministry to invite experts including former government officials to help consider the pact.

Meanwhile, some business leaders in three industries have cut their projections for the country’s export expansion this year, because of concerns over the slowing global economic recovery. But the Joint Standing Committee on Commerce, Industry and Banking has maintained its forecast for growth in gross domestic policy at 3-3.5 per cent, thanks to mega-project investments, the government’s stimulus package, and rising tourism growth.

Supant Mongkolsuthree, chairman of the committee, said that although exports had returned to positive growth in February, there was no guarantee of that continuing in the remaining months of the year.

Exports rise in February

“Exports increased in February for a special reason, not because of higher demand in the market. Exports have still been challenged by unclear global economic growth and the slowing down of trading,” he said.

To promote export growth, the committee called on the government to increase the competitiveness of the export sector for the long term amid the changing global trading structure.

The committee expects the country’s inflation rate to remain low at zero or 1 per cent this year.

It proposed that the government encourage the Board of Investment to launch a measure to encourage Thai enterprises to invest overseas and increase the competitiveness of investors on the global stage.

It also wants the government to offer Thai investors tax privileges to encourage them to bring money back to the Kingdom.

Songkran has never failed to deliver joy to tourists and can generate about Bt110 billion in expenditures each year. The benefit spreads to the service sector such as hotels, restaurants and transport.

However, things seem to be different this time.

The water shortage in Thailand is particularly severe. The available water in all reservoirs is only half of the level in normal years. The drought devastates agricultural production, and that reduces farmers’ income.

Since agriculture employs more than 30 per cent of Thailand’s labour force, the government has launched many water-management schemes including a campaign for Songkran celebrators to save water.

Apparently, splashing water during Songkran is now considered wasteful behaviour and a lack of sympathy towards Thai farmers. This immediately triggers my curiosity. What has really been the most wasteful way of using water in Thailand? After doing some simple research, my preliminary conclusion is agricultural activity.

Agriculture accounts for more than 65 per cent of overall water usage, while tourism uses only 0.5 per cent. Yet according to statistical data for 2014, agriculture generates only Bt1.34 trillion in income, while tourism generates about Bt549.63 billion.

In other words, given the same amount of water usage, tourism raises 53.2 times as much income as agriculture does.

The reason is partly the inefficiency of Thai farming. Rice farming is a good example. Last year, Thailand ranked No 8 in Asean in productivity of rice farming. On average, we produced only 481 kilograms of rice per rai (3,000kg per hectare), as compared with Vietnam’s 894kg per rai.

This significant difference can be explained by both the stubbornness of Thai farmers to follow correct farming methods and the undeveloped irrigation system in many agricultural areas.

Decades have passed, but this inefficiency problem has remained unsolved. Perhaps it may not even be worth solving.

In my opinion, Thailand should greatly reduce the size of its agriculture sector. As I mentioned earlier, I think agriculture provides small economic value-added compared with other sectors and is an inefficient sector for us to spend our resources on.

On top of the water-shortage problem, the recent decrease in world energy prices supports my perspective over agriculture. As we know, the development of shale gas and shale oil has pushed the oil price down from about US$110 per barrel during 2011-14 to about $25-$45 per barrel now.

The abundant supply of oil is a structural break that, in my view, changes the long-term trend of oil prices to a low level with gradual growth. As it’s a matter of fact that rubber prices positively correlate with oil prices, this “new normal” of energy prices leads to a permanent decline in the price of rubber.

As a result, the government should again think about how to reduce the number of rubber farmers, since persistent subsidy against the price mechanism is not a wise option.

Ultimately, I want to see Thailand change from an agriculture-based towards a more industry- or service-based country. However, I do not mean to banish agriculture totally from Thailand. Our tropical fruits and jasmine rice have a bright future, as they are highly demanded by the Chinese market.

Thailand should strategically perceive neighbouring countries, which are mostly agriculture-based, as friends that provide us access to goods and labour for us to build a more advanced economy – not foes that we have to compete with.

Whether the Asean Economic Community is an opportunity or a threat depends on our own choice.

Athakrit Thepmongkol is a lecturer at the School of Development Economics of the National Institute of Development Administration.

A global airline body has flagged this as a problem in a region that faces serious infrastructure constraints and an ever-increasing number of air travellers.

Getting travellers to do things themselves allows airports to process people faster and increase handling capacity, Vinoop Goel, the International Air Transport Association’s (Iata) regional director for airports, passengers, cargo and security, told The Straits Times.

Globally, three in 10 travellers are able to access self-service options that include check-in and bag tagging, aircraft boarding, document checks and flight rebooking in case of disruptions or cancellations. With the exception of Africa and Central/South America, the penetration level in Asia lags behind those of all other regions.

In North America, self-service options are available to 46 per cent of travellers, the highest for any region.

If airports in Asia do not move faster, travellers will suffer, Goel warned. “We are looking at flight delays and cancellations, lots of waiting at airports and circling in the skies,” he said. “It would be the worst passenger experience. This could also have a knock-on impact on tourism, which, in turn, would have an impact on jobs and other economic variables.”

Many of the airports in the region have already exceeded their capacity or will reach their limit in the next five to seven years, he said.

Though some airports like Singapore’s Changi and Hong Kong have definite plans to expand infrastructure, many others – including those in major hubs such as Bangkok, Manila and Jakarta – have not come up with a definite masterplan, he added.

Goel said: “What we are saying is, develop a masterplan and, in the meantime, from your existing capacity, try and improve throughput with the implementation of self-service technologies.”

A major stumbling block is a reluctance among governments to go high-tech, which, in some cases, requires regulations to be amended and mindsets changed.

Goel said: “For example, the rule may say a boarding pass has to be stamped but how do you stamp a mobile boarding pass? You can’t and so it’s not accepted. Regulators are essentially risk-averse and don’t like change.”

For the team at Iata, the challenge is to work with regulators to make them understand that the use of biometrics, for example, is more secure than manual checks, he said.

While it is a slow process, he said, the pace is picking up in countries such as Singapore, Japan, South Korea, Australia and New Zealand.

Changi Airport’s Terminal 4, which opens next year, will rely mainly on self-service kiosks to process travellers from check-in to aircraft boarding.

Iata aims to have self-service options available to eight out of 10 travellers by 2020. This would not only benefit travellers but could also potentially save the industry more than US$2 billion (S$2.7 billion) a year, Goel said.

Jetstar Asia, a self-service pioneer at Changi Airport, said the response from travellers has been positive.

Head of ground operations Peter Choo said more than one in two passengers use the airline’s self-service options. He said: “A key result of our self-service initiatives is the increase in productivity for our teams on the ground, with better deployment of resources, especially in manpower-scarce Singapore.”

Thapana’s mission is to promote higher incomes and better living conditions for people in rural communities, he said

He said that the private sector would help farmers and small business entrepreneurs in rural areas through enhanced production and management, as well as marketing know-how and communication methods to build awareness.

“It makes the cogwheels roll and move on,” he said.

“Meanwhile, the government will be responsible for granting and executing the policies that are set to promote better incomes and living conditions in the rural economy, as well as related stimulus measures.”

Thapana, who leads one of the 12 public-private steering committees under the Pracha Rath project, said that his committee’s mission was to increase the income of the rural communities throughout the Kingdom. As a result, people will be happier based on having better living conditions, he said.

“To achieve our mission, we will focus on enhancing the development of three strategic pillars, which are agriculture, product processing by small and medium-sized entrepreneurs, and community tourism,” said Thapana, adding that the aim is to develop farmers and micro entrepreneurs to become SMEs.

Thapana said that the launch of the social enterprise endeavour would be the nucleus for mobilising cooperation between the government and private sectors to develop the rural economy.

He said that the social enterprises would work as legal business entities but not for the benefit of their shareholders, with all profits returned to the community.

He said that enterprises would be enhanced by good governance and would operate without government subsidies or donations from charities.

The first social enterprise, Pracharath Rak Samakkee Phuket, was launched last week with Bt5 million in primary investment capital, raised from a grant of 5,000 shares for Bt1,000 each.

ThaiBev has allocated Bt1 million as a seeding fund for the company and more than Bt1 million has been raised by local businesses.

Thapana said that the social enterprises would have executive boards made up of members of the government and private sector, and each would have a managing director who was a well-known person working in civil society in the respective provinces.

He said the enterprises would have advisory boards made up of representatives from relevant ministries and government agencies, including the Ministry of Agriculture and Cooperatives, the Ministry of Commerce, and the Prime Minister’s Office.

“Phuket has a high level of readiness. The province is currently a world [tourism] destination and has strong potential for further development both in community and global levels,” said Thapana.

He added that for Phuket four agricultural products would be promoted – pineapple, lobster, goat milk, and organic vegetables.

Batik would be focused on as a strategic value-added product, with branding done under the product-processing sector. For community tourism, the province would develop a year-round tourism calendar.

In addition to Phuket, he said the committee would set up social enterprises in four other provinces in the first phase, which would run until the end of this month. They are at Phetchaburi, Udon Thani,Chiang Mai and Buri Ram.

They will be the first strategic provinces and cover the different regions of the Kingdom. The selection of strategic provinces is based on the readiness of local business communities including their infrastructure.

Thapana said that all 18 strategic provinces, representing the 76 provinces of Thailand (excluding Bangkok), will be selected by the end of this year for the setting up of local social enterprises, with one holding company in charge of the transfer of overall policies and business visions.

“The success factor of rural economic development will be not only from the perfect combination between the government sector and major private companies, but also small and micro community enterprises,” said Thapana.

“I myself cannot set any medium or long-term target for the social enterprises on what they will be in the future. Those social enterprises do not belong to me but to all small and micro enterprises in the community.”

While it is clear that no small company will be taking part in the bidding besides the three incumbent private telecom operators, it remains to be seen how many of them will join the fray.

The NBTC’s telecom committee has reportedly been worried that the Big Three will shun the auction, mainly because of the lofty minimum starting bid of Bt75.65 billion.

The telecom committee approved the minimum price last week. It was the bid Jas Mobile Broadband (JASMBB) had made to win the licence in the previous auction late last year. Jas’s failure to make the initial payment of the upfront licence fee prompted the regulator to call a new auction for June 24.

Last week, NBTC secretary-general Takorn Tantasith said that if no one joined the auction, he would wait to see how the government wanted the commission to |proceed.

As it stands now, the NBTC intends to keep the band for one year if no one enters the auction. If there is only one bidder, it will automatically win the licence.

Takorn hinted that if the starting bid of Bt75.65 billion has to be changed, it should be one of two alternatives. The first is Bt70.18 billion, the last amount unsuccessful bidder Total Access Communication (DTAC) offered in the previous auction.

The second alternative is Bt73.72 billion, the last bid True Corp made in the previous auction for Slot 1 of the licence package before it switched to compete for Slot 2 and won by bidding Bt76.3 billion.

True Corp chief executive officer Suphachai Chearavanont has kept mum on whether True will take part in the new round of bidding after already winning one 900MHz licence in the previous auction.

He has said that if the final bid in the new round is lower than Jas’ winning price in the previous auction, the NBTC should find a way to permit it to pay less. This proposal is also supported by Advanced Info Service (AIS) CEO Somchai Lertsutiwong.

A telecom-industry source said the NBTC might ask the government to look into this matter.

A telecom analyst said: “From 2011 to this year, True raised funds three times, totalling more than Bt138 billion.

If True wants to acquire another licence, it will have no other choice but to raise funds again to pay the upfront fee.”

If True does win another licence, it will be the only telecom operator holding bandwidth on the 900MHz spectrum, totalling 20MHz (10MHz under the licence it won last year and another 10MHz under the new one).

The low-frequency band is technically suitable for providing cellular service upcountry.

DTAC operates a service on 10MHz of another low band, the 850MHz spectrum, under a CAT Telecom concession that will expire in 2018.

The NBTC intends to assign this band for communications in the future high-speed trains. However, a future government might decide to utilise the band for telecom service.

DTAC has said that if the NBTC decides to go ahead with the starting bid of Bt75.65 billion in this new auction round, “it is very unlikely that DTAC will participate”.

The telecom analyst said DTAC might decide to wait for 2018 when its 1,800MHz and 850MHz spectrum concessions expire and bid for those bands at that time.

The cash-rich market leader AIS will have no trouble being able to afford to take part in the new auction after losing out in the previous bid.

Somchai has said AIS is eager to bid for all available spectra but the final decision depends on the company’s board.

AIS has signed a memorandum of understanding with TOT to provide third-generation wireless service on a non-commercial and trial basis on the state agency’s 15MHz of the 2.1-gigahertz spectrum. They are scheduled to sign five partnership deals on a commercial joint service soon.

Somchai has said that even with the TOT partnership, AIS is still keen to bid for the 900MHz licence.

In his capacity as a member of the junta’s committee tasked with a legal overhaul, he explained that several laws were not actively enforced but posed obstacles to business activities.

Notably, there are 1,544 licences in Thailand that businesses need to apply for if they want to invest in respective regulated areas. In the real-estate sector alone, a developer needs to win 17 licences to develop a project.

“As we all know, the process to obtain licences takes time and opens opportunities for bribery,” he said while joining a discussion at a Thailand Development Research Institute conference last week.

According to the TDRI, 191 royal acts were enacted from 2011 to 2015, boosting the total number to about 900. During that period, 661 ministerial regulations were announced in the Royal Gazette, boosting the total to nearly 18,000.

In the past five years, more than 620 royal executive decrees were issued, along with 1,015 announcements and other kinds of written rules. It is estimated that more than 100,000 of them are in existence, putting control on all aspects of activities.

“It is time to use the regulatory guillotine, like what South Korea did years ago,” Banyong said. “This is institutional reform to unlock the system.”

Sorachon Boonsong, a partner at the law firm Baker & McKenzie Thailand, supported the review. Some penalties should be raised, for example, as the rates set decades ago are not applicable to the present conditions and encourage companies to breach laws.

However, he said the focus should be on enforcement and dissemination of information to foreign investors, if foreign investment is the goal of this move.

Referring to conversations with his peers in Asean, all countries are abolishing all barriers except those for the sectors vital to national security, like telecommunications and broadcasting. In Thailand, the main stumbling block is the Foreign Business Act’s foreign-ownership clause.

“Foreign investors fear that one day nominee investigation may be launched against them under the law,” Sorachon said.

Elsewhere, the authorities open the gates and ensure that once foreign investors are involved in the domestic market, they do not embark on any activities that would take advantage of other business players or consumers, he said.

“In contrast, our Anti-Competition Act has been on the books for 16 years but it has rarely been enforced,” he said.

Meanwhile, Thailand lacks an effective one-stop shop to answer questions on Thai laws.

“A foreign company contacted us, saying that a few years’ talks to set up a super-yacht port with a government unit yielded no success. Indeed, Thailand supports the investment through incentives by the BOI,” or Board of Investment, he said.

Ease control

Axing regulatory complexities is being highlighted after success stories in other countries.

According to TDRI research, South Korea embarked on the painful task after the financial crisis that slashed its gross domestic product by 16 per cent in one year. In the process, of 11,125 rules and regulations, about 5,000 or 48.8 per cent were abolished, with 21.7 per cent revised and only 29.5 per cent were left intact. The number of licences was also cut from 800 to 280.

Opening its doors to foreign investment, Vietnam also axed 8.8 per cent of 5,500 laws and revised 77 per cent, leaving only 14.2 per cent unchanged.

Duenden Nikomborirak, TDRI research director, said Thailand suffered from an overwhelming number of laws because of poor regulatory-impact assessment.

“The government should avoid enacting unnecessary rules to broaden its power, particularly when no regulatory-impact assessment is thoroughly carried out prior to that,” she said.

In an article on Thaipublica.org, Banyong said that on September 8, 2015, a Royal Decree was enacted demanding that ministers review laws in their respective areas every five years. He acknowledged that this would not immediately change things but would serve as a good beginning.

He also urged the public to monitor progress, to ensure the effectiveness of regulatory-impact assessment.

Banyong said a legal review was necessary as some rules were enacted with good intent, but they may be obsolete or too costly. Some state enterprises try to boost efficiency but in vain, given regulatory stumbling blocks.

Yet despite foreseeable advantages, this review will encounter resistance.

“There are always losers. In this case, they are people and some businesses that have benefited from bad regulations. Success depends on public understanding and the determination of those in power,” he said.

“Inflation in April and the second quarter should return to positive territory from negative growth over the past 15 months, due to increasing oil prices, while the price of farm crops, especially vegetables, will rise as a result of lower production caused by the drought,” Somkiat Triratpan, inspector-general of the ministry and director of its Policies and Trade Strategies Bureau, said yesterday.

The ministry predicts year-on-year inflation in the current quarter will be 0.3 per cent, while quarter-on-quarter inflation is forecast to come in at 0.85 per cent.

With this expected return to positive inflation growth, the ministry has maintained its full-year inflation projection at between zero and 1 per cent.

This is based on the assumption of an average Dubai oil price of US$30-$40 (Bt1,053-Bt1,404) per barrel, the average exchange rate of the baht to the US dollar being in the Bt36-Bt38 range, and Thai economic growth of between 2.8 per cent and 3.8 per cent this year.

The ministry will, however, revise the full-year inflation projection in May, in light of the positive trend of rising inflation, Somkiat said.

The government’s stimulus package to encourage consumer spending, plus travel and spending during the upcoming Songkran Festival, should promote slightly higher inflation in the short term, he added.

The ministry reported that the Consumer Price Index (CPI) had weakened again in March, by 0.46 per cent year on year – the 15th consecutive month of decline.

The month-on-month CPI rose 0.21 per cent, due to rising domestic retail oil prices.

he CPI in the first quarter was 0.5 per cent lower than in the same period last year.

Last month, core inflation – excluding volatile fuel and food prices – rose 0.75 per cent year on year, and 0.01 per cent month on month.

Core inflation in the first quarter was 0.67 per cent, year on year.

Bank of Thailand Governor Veerathai Santiprabhob said yesterday that although inflation had again been negative in March, the central bank would continue to manage the economy by using inflation targeting because the recent trend had been due to the fall in oil prices, which would have only a short-term impact.

“When we manage [the economy], our inflation forecasts are for the next 12 to 24 months,” he said.

Veerathai added that although inflation was still in negative territory, the economy in the first two months of the year had showed signs of a gradual recovery, and the country had not experienced deflation.

The Bank of Thailand is maintaining its 2016 inflation target at 2.5 per cent, plus or minus 1.5 percentage points.

Big Brother is a new scheme under the Pracha Rath policy of collaboration between the public and private sectors to drive the country’s economic growth.

Finance Minister Apisak Tantivorawong said yesterday that big corporates that support SMEs by assisting with marketing, technology, financial guarantees, and so on should be granted a tax deduction of 200 per cent of their expenditure. This will be proposed to the Cabinet this month.

Big Brother is the fourth Pracha Rath measure to support SMEs. The Cabinet last September 8 approved the first three. Those measures called for setting up a joint-venture fund worth Bt2 billion by the state-owned Government Savings Bank, Krungthai Bank, and Small and Medium Enterprise Development Bank, tax reductions for SMEs, and tax exemptions for new start-up businesses.

“Listed companies that are members of SET100 have the ability to support SMEs and rural people, if they spend their corporate-social-responsibility budgets to support the community and SMEs and are strong enough financially to stand by themselves for the long term,” Deputy Prime Minister Somkid Jatusripitak said.

He said that during the remainder of the military-led regime’s term, it would put in place measures to support private-sector investment both for themselves and to support SMEs for sustainable long-term growth.

Top executives of the SET100 large-cap companies and those in the financial and capital markets and government gathered yesterday at a seminar to exchange viewpoints.

Stock Exchange of Thailand president Kesara Manchusree said that in line with the government’s economic policies, the SET was committed to supporting and strengthening the capabilities of SMEs, start-ups and social enterprises to utilise the capital market as the source of funds to accelerate business growth.

She said the SET encouraged listed companies to support the SMEs involved in their supply chains. The bourse also enhances knowledge so that companies can operate successfully and sustainably, while the exchange itself has set up a “social-impact portal” to promote social enterprises directly.

Kan Trakulhoon, head of Pracha Rath’s research-and-development and legal-reform working groups from the private sector, said at the seminar that this was a good time for the private sector to invest because of the government’s incentives.

He said the legal-reform working group was looking into revisions to business law that would facilitate the appointment of professionals to draw up operational plans for ease of doing business. This will focus on the customs system, foods and drugs, immigration, environmental impact assessments and environment health impact assessments, and city planning.

Insisting that the Thai economy is stable, BOT Governor Veerathai Santiprabhob said it was hardly possible that Thailand would face massive economic bubbles like what happened in 1997. However, he said bubbles were feared in some segments, as individuals moved money from bank accounts to instruments that offer higher returns, or invest in high-risk funds or some real-estate sectors.

Small bubbles have been witnessed in these segments and it would take some time to see if they pose economic trouble.

“They contain risks and could have a long-term impact on the economy as a whole,” he said.

At 1.50 per cent, the BOT’s policy interest rate is near its historical low of 1.25 per cent in 2003. Thai banks now offer only 1.3-1.9 per cent per annum for 12-month fixed deposits.

Veerathai acknowledged that there was some speculation in the property sector, but said the economy as a whole was in a much better position than in 1997. The current-account surplus at US$35 billion is now at 9 per cent of gross domestic product, while foreign short-term debts are low and public debt remains at only 44 per cent of GDP.

Bankers and property developers took note of the central bank’s stern warning.

Property Perfect chief executive officer Chainid Adhyanasakul admitted that there was some speculation in the condominium market. Some units were booked and resold before they were ready for transfer to buyers.

However, he estimated that speculation accounted for only 10 per cent of total purchases, way below the pre-crisis level. Moreover, speculators focus on units priced over Bt5 million.

Bank of Ayudhya executive vice president Nathapol Luepromchai said the central bank apparently wanted to send a warning to developers who plan to build a number of condominiums along extended mass-transit routes, regardless of real demand.

He noted that in that context, a supply glut was possible in some areas as existing projects are facing slow sales. Several potential buyers have delayed their decisions because of low confidence in the economic outlook.

Adisorn Sermchaiwong, senior executive vice president of CIMB Thai Bank, said it was a good idea to monitor individuals’ investments, as some investment assets may not fit some people’s risk appetite.

Recently, CIMBT opened a subscription for TPI Polene debentures and retail investors scooped up Bt5 billion worth within a week, he said.

Adisorn is of the opinion that when deposit protection is slashed, many will be more encouraged to move their money from bank deposits to real estate investment trusts (REITs). In August, maximum deposit protection per account per bank will be cut from Bt25 million to Bt1 million.

“This will further encourage wealthy investors to channel money somewhere else,” he said.

Noting that monitoring is a normal operation of the central bank, Chansak Fuangfu, Bangkok Bank director and senior executive vice president, said a bubble in the property sector was unlikely given low domestic demand amid economic sluggishness.