In the heart of George Town’s heritage enclave, Chew Seng San, 60, sells durian puffs on Chew Jetty, the largest of the Chinese clan jetties along Weld

Quay. Chew was once a stevedore. “When I was young, I would go out with my fibreglass boat and ferry ship cargo ashore or carry supplies to them,” he said.

After the 1980s, Penang Port created a deepwater wharf and about 15 years later completed the North Butterworth Container Terminal. Chew’s job had been rendered obsolete. Chew Jetty is now a tourist attraction, and little do the visitors know that the large fibreglass boat – still shipshape and sparkling clean – moored beside Chew’s durian puff shop is his.

More recently, inhabitants of another coastal area in Penang are facing the kind of changes that Chew and his clansmen survived. Using 3.6 metre to 4.2m skiffs and 40 horsepower outboard motors, a few hundred inshore fishermen search for prawns and fish along the southern coast of Penang Island. They are spread over several fishing villages.

To fund the Penang Transport Master Plan (PTMP), there are plans to reclaim two islands – 930 hectares and 566 hectares – off the south of the island, affecting part of the fishing grounds of the inshore fishermen.

The state government came up with the PTMP, estimated to cost over 27 billion ringgit (Bt233 billion), to solve one of the state’s biggest problems – traffic congestion – with plans to introduce new highways, a bus rapid transit system, trams, a light rail transit system, monorails, catamarans and even water taxis.

“We object to the reclamation plan. How can we not? It will be right on top of our fishing grounds,” said fisherman Soza Syahrimy Zainol, 41.

Assoc Prof Dr Chin Yee Whah, an economic sociologist from Universiti Sains Malaysia in Penang, understands Soza Syahrimy’s sentiments.

In 1996, Chin was part of a team commissioned to study the social impact of Singapore-Johor Baru’s Second Link on the area’s fishermen and said their fears were all the same.

“Change is necessary. But it is the government’s duty to ease that change for groups like fishermen in sea reclamation projects,” Chin said.

Chin said the state government must take pains to identify the fishermen that were wholly dependent on the sea.

When asked what the government had in mind for the fishermen, state Welfare, Caring Society and Environment Committee chairman Phee Boon Poh said: “The geopolitics of the island has been lopsided since Captain Francis Light founded it in 1786. “All economic growth was centred in George Town from the sea to the hill, tourism was kept to the north in Batu Ferringhi and so on, industrial growth was in the southeast and everywhere else on the island was ignored.”

The absence of balanced statewide planning, Phee said, had left rural areas like Teluk Kumbar behind.

But he stressed that the urbanisation potential with the reclamation of the two islands did not mean wiping out what Teluk Kumbar was popular for today.

“If George Town’s heritage value is a state asset, then so is the village setting of the south. We not only plan to preserve the setting, we want to restore it and capitalise on its value as rustic holiday attractions,” he said.

He said just as there were five-star hotels in George Town on the same streets as rows of pre-war houses made into boutique hotels, Teluk Kumbar could look forward to such a synergy.

The planned reclamation will take about seven years to complete and embedded into it are about 1,100 jobs. The work ranges from marine jobs to construction duties such as divers, sea safety marshals, boat skippers, junior surveyors, welders and fitters.

Priority for the job vacancies will be given to the local fishermen and their families, and Phee said that was just the beginning.

When told of this vision, Soza Syahrimy admits to being torn between the love for his carefree lifestyle at sea and the chance to see unprecedented growth take place at his home.

“I think they are going to reclaim this sea no matter how we object. I heard the PTMP will include a chance for us to become water taxi skippers. That sounds exciting. But I still can’t see how the future will be for us. I am willing to look for new opportunities, but if possible I want to keep my life at sea,” he said.

Fitch said the margins of naphtha-based chemical producers had improved as a result of the low oil prices while most gas-based operators’ margins had narrowed because gas prices had not fallen as much as oil and naphtha prices.

As a result, petrochemical product prices are still largely linked to naphtha prices, it said.

Naphtha prices dropped 43 per cent in 2015 but Thailand’s average pooled-gas price declined only 13 per cent.

Prices of olefins and polyolefin products fell 20 to 40 per cent and 20 to 25 per cent, respectively, following the drop in naphtha costs.

The earnings before interest, tax, depreciation and amortisation (EBIT) margin of the chemical business of Siam Cement Public Co Ltd, the largest naphtha-based producer in Thailand, increased to about 20 per cent in 2015 from about 8 per cent in 2014.

In contrast, the olefins and derivative business of PTT Global Chemical Public Co Ltd, the largest gas-based producer in Thailand, dropped to about 24 per cent from about 26 per cent.

Fitch expects polyolefin spreads to naphtha to remain strong for Thai producers in 2016. Although new capacity coming on-stream will likely put some pressure on the spreads, especially for polypropylene, it said.

Indian trend

The trend is similar in India with the two predominantly naphtha-based petrochemical operators – Reliance Industries Ltd and Indian Oil Corporation Ltd – benefiting from the lower feedstock prices and strong polymer spreads to naphtha despite falling product prices.

RIL’s EBIT margins for its petrochemical business improved to 12.2 per cent during the first nine months of the financial year ending March from 8.4 per cent for the same period last year. Similarly, the EBIT margins for IOCL’s petrochemical business improved to 29.1 per cent for the same period from 9.1 per cent a year earlier.

Margins for GAIL (India) Ltd’s petrochemical business, which uses gas as feedstock, have weakened. It suffered EBIT losses of INR6.9 billion (Bt3.6 billion) in the first nine months of the financial year ending March compared with an EBIT profit of INR2.9 billion a year earlier.

Fitch expects the company’s 2016 full-year profitability to remain weaker than 2015, although it expects some margin improvement from its successful re-negotiation of prices for certain long-term gas-purchase agreements in December 2015.

The profitability of South Korea-based SK Innovation Co Ltd’s naphtha-based petrochemical business also improved in 2015.

Fitch expects SKI’s petrochemical business to benefit from robust product spreads to naphtha in 2016.

EABC president Rolf-Dieter Daniel told The Nation that although the global economy had not fully recovered, emerging countries in Southeast Asia and beyond had entered into a race for free-trade agreements (FTAs) – with all of them aiming to be important foreign investment destinations.

Singapore and Vietnam have already signed FTAs with the European Union, while the Philippines has made significant progress in bilateral trade negotiations with the EU over the last year.

Daniel said that only Thailand had not been able to further its trade prospects with the EU in this way despite pushing hard, as both sides had paused the talks. He said the Thai government should however consider what was needed to secure long-term investments, and should improve the country’s competitiveness.

“First, the government should improve transparency on government procurement projects, also in most service sectors. Foreigners can invest no more than 49 per cent [in a Thai business]. In the current economic environment, the service industry is the key driver of economic growth and Thailand could gain from this trend if it liberalised the service sector,” he suggested. The EABC strongly urges the government to relax some laws to make investments easier for new companies, he added. Meanwhile, European companies are eager to bid for the government’s current projects, such as for trains and railroads, information and communications technology, and the Internet and telecommunications.

“There are many innovative European companies that can supply products according to certified European standards, like railroad and infrastructure companies. They are interconnecting the entire Europe region. If Thailand works according to European standards, it can become a regional hub, offer better standards and interlink with the Asean rail network,” Daniel said.

The European business sector also urges the government to simplify work-permit and immigration procedures and pursue customs reforms, in order to attract more foreign investors.

Moreover, private Thai companies are urged to work with European firms to improve production systems, increase product standards, and reduce production costs, he said, adding that using European equipment and machinery could help operators expand their markets globally.

“The vibrancy of Thailand and its intellectual and friendly workforce draws partners from around the world. Being open to investments entails more than temporary trade promotion; [it means] safeguarding and ensuring that existing industry will expand the Thai economy further,” the association president said. The EABC is scheduled to launch its “2016 Business Position Paper” on March 30, with the paper comprising recommendations and suggestions on FTA negotiations, strengthening EU-Thai economic relations, European long-term investment, and the overall improvement of 10 sectors.

“Part of the paper states that Thailand and the EABC must engage in closer dialogue and commit to joint effort and collaboration in both political will and at the economic level to help improve Thai-EU economic relations,” Daniel said.

Thailand will benefit from foreign business partners in the areas of technology, engineering and life sciences, where many industries and companies are required, he added.

At the regional scale, the EU is Asean’s second-largest trading partner and largest source of foreign direct investment (FDI).

Last year, Asean-EU two-way trade stood at €201 billion (Bt8.2 trillion), an 11-per- cent increase year on year, based on EU statistics. In 2014, FDI inflows from the EU increased by 31.5 per cent to US$29.3 billion (around Bt1 trillion), accounting for 21.5 per cent of the total FDI inflows into Asean.

Thailand is the EU’s third-largest trading partner and, despite the country’s internal challenges, total trade exceeded €30 billion in 2014. The EU imported goods from Thailand valued at €18.5 billion, while EU exports to the Kingdom were valued at €12.4 billion, resulting in a positive trade balance for Thailand of more than €6 billion.

The EU is also the second-largest source of FDI for Thailand.

Daniel added that the EU wanted to intensify its relationship with Asean and help those in the region support the further development of several FTAs, besides reaffirming its commitment to deepening economic relations between the two regions.

Asean economic ministers and the EU trade commissioner met in Chiang Mai early this month.

The campaign is led by the Economic Crime Division (ECD), the Department of Intellectual Property (DIP) and the Association of the Thai Software Industry. Together, these organisations seek to gain greater cooperation from the public and private sectors to enhance security. Police will crack down on corporate users and sellers of illegal software.

“Using legal software is one of the first steps in improving cybersecurity,” said ECD deputy commander Pol Colonel Kittisak Plathong. “And in addition to this there must be awareness about how to improve security. There must be training and information for people to protect themselves.”

For years, the government has increased its efforts to reduce the use of illegal and unlicensed software among the business community and consumers. The decline of unlicensed software in Thailand has been among the fastest in the Asean region over the past decade. However, about 71 per cent of the software installed in personal computers in Thailand is still not properly licensed.

“We need greater reductions in the use of illegal and unlicensed software. The rate of 71 per cent is still well above the Asia-Pacific average of 62 per cent,” Kittisak said.

“High levels of pirated software in Thailand also threaten national security and the stability of commerce. We must crack down on companies that use pirated software and businesses that sell it.”

Education is a critical part of “Safe Software, Safe Nation”. Under the campaign, practical advice and international best practices will be provided on how to use and manage software to protect the business community and the general public against malware attacks and other risks.

This campaign will invoke the nation’s shared responsibility in creating a legal and safe cyber environment.

“We fully support the campaign and will coordinate our work to promote the use of legal and licensed software,” said Thosapone Dansuputra, deputy director general of DIP. “The campaign will also strengthen the protection of intellectual-property rights, which is a serious matter for the credibility of Thailand, as well as promoting innovation and creativity.”

Pichpajee Saichuae, managing director of the Thai unit of the global advisory, brokering and solution firm, said yesterday that amid the shortage of skilled employees that is expected to be seen in the next few years, employee turnover rates in key industries would continue to rise as growing businesses offered the best benefits to attract skilled workers.

The firm last November conducted a “rewards survey” in Thailand involving 226 companies in key industrial and service sectors, including power and energy, electronics, high technology, asset management, financial services and insurance. It found the industry that had experienced the highest employee turnover was life insurance with 20 per cent, followed by asset management with 17 per cent and high technology with 15 per cent.

To cope with this challenge, Pichpajee suggested that both management and the human-resources department at each company should realise the importance of the “HR engineering process”, improving and reinforcing the roles of HR as a partner both of management and of employees.

“Using technology to engage with employees is another key factor to make this happen. I recommend that HR staff should be well equipped with knowledge and analytical skills to manage the various data collected from individual employees,” she said.

Companies should design an HR management system that is compatible with mobile devices to help employees manage and select their own benefits, leave, vacations, healthcare packages and training activities from their personal device. This would help the company get closer to its employees.

According to another survey conducted last year by Willis Tower Watson, “Q1 Flash Survey: HR Trends and Challenging Issues for General Industry”, building employee engagement was ranked by the companies as the No 1 HR challenge. Other highlighted trends were retention of talent and the importance of leadership.

Pichpajee said that apart from base pay and career opportunities, supervision or leadership in the company was ranked as the key cause of employees’ resignations.

Willis Tower Watson expects that the average salary increase this year will be 5-7 per cent depending on sector, with the lowest increase in general insurance and the highest in power and energy. This finding was based on its November survey.

Some 200 participants are expected at the event, a part of the Hong Kong International Film and TV Market (FILMART), from 10am to 12 noon. The event is co-hosted by the Hong Kong Trade Development Council.

China’s film industry grossed more than 40 billion yuan last year, with more than 60 per cent coming from domestic production for the first time. The 2016 Chinese New Year period saw a record increase in box-office takings to 287 million yuan (Bt1.55 billion).

China’s box-office takings are expected to reach 100 billion yuan in 2020, surpassing North America to become the world’s largest film market.

The rapid globalisation of China’s film industry has encouraged several strategic moves and saw co-investments taking place with Hollywood, Britain, India, Japan and South Korea on content, intellectual property, talent, capital, technology and distribution channels.

The panellists include :

Dr Wilfred Wong Ying-wai, chairman of the Hong Kong International Film Festival Society, chairman of the Asian Film Awards Academy and deputy chairman of the Hong Kong Film Development Council. Michael C Ellis, president and managing director of the Asia-Pacific Region Motion Picture Association. Keun-tae Park, CEO and president of CJ Korea Express and CJ Group China Headquarters. Amy Liu, member of the organising committee office of the Beijing International Film Festival and co-founder and senior vice president of EntGroup. Jeane Huang, former director of the Taipei Film Festival and member of the juries of the ninth Asian Film Awards and the 28th Tokyo International Film Festival. Kriengsak ‘Victor’ Silakong, director of the World Film Festival of Bangkok. Li Yansong, president of iQIYI Motion Pictures and vice president of iQIYI.com. and Hao Bin, executive director and chairman of the board, SMI Culture Group.

They are access to social services, reducing rural poverty, private-sector competitiveness, financial inclusion, access to energy, and public-sector governance.

“We are committed to supporting the people of Myanmar through the new administration,” World Bank country manager Abdoulaye Seck said at a press conference recently.

“Myanmar has the potential to follow a similar path of inclusive growth as other Asian countries that enjoyed long periods of rapid income growth. The country faces a long road ahead in addressing continued challenges to close disparities across Myanmar’s geography, ethnic communities and income groups. We will continue supporting Myanmar people to overcome these challenges.”

Seck said the six areas were interconnected, and the government needed to be transparent and engage with citizens in sending out accurate information in a timely and transparent manner.

He said sustaining a strong pace of growth through a diversified economy was critical to achieve this, with policies that could enable a structural shift to more productive and labour-intensive activities.

He added that the WBG would also emphasise such things as natural-resources management.

Axel van Trotsenburg, World Bank vice president for East Asia and Pacific, last week met with National League for Democracy chairwoman Aung San Suu Kyi.

“It is one of a few meetings we had over the past few weeks. The meeting ended very positively, and we are very much encouraged to see how we can cooperate to ensure inclusive growth in Myanmar. We will be engaging more with the new administration. There will be many more discussions,” he said.

The World Bank last year completed its first full country strategy, the “Country Partnership Framework”, for Myanmar. The three-year framework outlines support for Myanmar and its people in transforming the country, reducing extreme poverty and boosting shared prosperity.

The Bank is convinced that Myanmar’s economy has huge growth potential, with an anticipated economic-growth rate of 8 per cent per annum over the next five years. With the right policy choices, a growing economy can provide more jobs and higher incomes for Myanmar people.

According to Habib Rab, World Bank senior country economist, the bank is looking at ways to increase Myanmar’s fiscal efficiency, by helping prioritise government projects as well as boosting government revenue through improvements in tax administration.

Public debt is also on the agenda, to ensure that government borrowing will not create unnecessary costs and risks to its sustainable growth.

As foreign investment remains crucial for future development, Charles Schneider, World Bank senior operations officer, said Myanmar had a lot to do. In the latest “Doing Business” report, Myanmar ranked 167 out of 189 economies around the world.

Schneider said there had been only a few small changes for Myanmar since its debut on the list three years ago. In the last three years, Myanmar ranked 187, 182 and 167 respectively.

Schneider said commercial arbitration, regulatory reforms such as financial-structure reforms – part of which was formation of the credit bureau, which is under way – and efforts to enact the new company law were the areas Myanmar need to emphasise in the short term.

He acknowledged there were concerns that people’s spending under the stimulus schemes might add to the high level of household debt, and could also affect their repayment ability.

However, data for household debt in the third quarter of last year showed an 11 consecutive quarter of slowdown to Bt10.84 trillion, or 80.8 per cent of gross domestic product, he said.

While mortgage, credit-card lending and non-bank personal loans in the period showed year-on-year growth of 9.2 per cent, 6.5 per cent and 3.8 per cent, respectively, auto loans fell 4.5 per cent.

The high level of household debt built up in the past mainly as a result of the massive flooding in late 2011, when people had to borrow from the banks fix their homes, and from the first-car scheme of 2012, he said.

These factors caused household debt to climb to Bt9.85 trillion, representing 76.3 per cent of GDP, up from Bt7.48 trillion – or 66.2 per cent of GDP – in 2011.

However, most debt is secured lending and low risk, Krisda said, and should be compared to the levels of debt in countries such as Malaysia and Singapore, whose debt-to-GDP positions stand at 88 per cent and 75 per cent, respectively.

Nuntawat Chotvijit, director of Aeon Thana Sinsap (Thailand), said that amidst the economic slowdown and gloomy export outlook, Aeon was closely monitoring non-performing loans for both personal loans and credit cards.

It is determined to cap NPLs for both forms of lending at 2.3 per cent, he said.

The company is more cautious about lending to employees of companies in industries that have exposure to exports, because the export slowdown has impacted on the overtime revenue of such workers.

Factory employees account for 20-30 per cent of Aeon’s personal-loan portfolio of Bt40 billion.

The company will focus more on expanding its credit-card customer base, especially among those with monthly income of at least Bt30,000, as the economic slowdown has not affected this segment as much as people with monthly income of Bt15,000, he explained.

“We plan to drive our credit-card customer base among people with monthly income of Bt30,000 to reach 15-20 per cent this year, from 10 per cent currently… Aeon will join hands with business partners who also capture this segment,” he added.

Last year, Ranong recorded bilateral border trade with Myanmar worth Bt21 billion, with Bt19 billion of the total being Thai exports passing through Marid and Koh Song, and Bt2 billion arriving from Myanmar.

This was 10 per cent higher than the level achieved in 2014.

This year, the province targets trade with Myanmar reaching Bt30 billion thanks to strong demand for Thai consumer products in the neighbouring market, Suriyan said at a seminar titled “Ranong as a Medical Tourism City: Thailand’s Advantage in Border Trade”, held at the Tinidee Hotel @ Ranong.

“We are also promoting shipments from Rayong to BIMSTEC countries, for which the logistics take between three and five days by sea, compared with more than 12 days from Laem Chabang port. We are doing this by promoting the private sector to expand their shipping routes from Ranong to BIMSTEC nations,” he said.

The governor added that although the plan to build Kor Kod Kra port was still on hold, Ranong’s deep-sea port could serve marine logistics in the BIMSTEC region.

Meanwhile, the coming into effect of the Asean Economic Community this year has |resulted in Myanmar investors expanding their interest in Ranong, especially in regard to the import of Thai consumer products for distribution in Myanmar, Chaiyajet Jan-uksorn from Ranong’s commerce office told the seminar.

“We see more Myanmar investors expanding their investment in Ranong to serve growing demand for Thai consumer products, and also for construction materials,” he said.

Investors from both Thailand and Myanmar also are interested in expanding their investment to develop hospitality business in the two countries, in order to serve the growing number of tourists visiting both areas, said Wiriya Kaenkaew, director of the Tourism Authority of Thailand.

Last year, the overall number of tourists visiting Ranong was 789,666, up 8.22 per cent from the 2014 level.

Around 70 per cent of the visitors were from Thailand, with the bulk of the remainder coming from Europe, and from Germany and the UK in particular.

Tourist business generated income worth Bt10 billion for the province last year, she said, adding that the number of visitors is expected to grow by 9 per cent this year.

“Most of the foreign tourists stay in Ranong and Koh Phayam for an average of one month per trip, while Thai tourists stay about four days. Their spending averages Bt1,500 per day per head,” Wiriya said.

Many of these visitors also transfer to Koh Song in Myanmar, she said.

Given the rising number of visitors to the province, MBK Hotel and Tourism has set aside Bt20 million to develop an 80-room hotel on Koh Phayam this year.

This follows the successful opening of its 138-room Tinidee Hotel @ Ranong, which has been running at an occupancy rate of about 55 per cent, the company’s deputy managing director for finance and administration, Arthorn Vanasantakul, said.

“We see business opportunity in Ranong province for hospitality business,” she added.