The government has also continued to strengthen the grassroots economy and this move will be become more apparent at the end of this year, Deputy Prime Minister Somkid Jatusripitak said yesterday on the topic of the direction of public and private partnerships to drive Thailand this year.

He was speaking during the FTI Outlook 2016 event hosted in Bangkok yesterday by the Federation of Thai Industries.

This year, Thais would see more help from the private sector in conjunction with the government in driving the economy, such as the “One Tambon, One Agricultural SME” and “One Tambon, One Shopping Walking Street” schemes.

The One Tambon, One Agricultural SME project will be backed by a loan package with an interest rate of 0.01 per cent.

The Cabinet was expected today to consider a fund of up to Bt35 billion to boost the grass-roots economy via the “Village Fund” scheme under the grassroots assistance policy.

Each of the country’s 70,000 villages would be allocated up to Bt500,000.

After the meeting with government officials earlier on the day, Somkid told reporters that the government would make an effort to get going on its mega-projects this first quarter, or by no later than midyear.

This will help investment money spread into the economic system by the second half, he said.

“Now there is a sign of a pick-up in investment activities, in both the public and private sectors.

“We expect to disburse a total of Bt66.8 billion from the investment budget this year,” he said.

The captains of industry expressed optimism at the same event that the economy would show forward progress this year, driven by the massive government spending on mega infrastructure projects and the Pracha Rat policies.

Kan Trakulhoon, a board member of SCG, said he is hopeful that the infrastructure projects by the government would help stimulate the economy this year.

They will also help boost local demand for construction services and building materials to offset declining demand in China.

Prasert Bunsumpun, chairman of PTT Global Chemical, said the global oil price in the next two to three years is expected to find its equilibrium by running from the present US$30-40 per barrel up to $60 per barrel, but this is based on the global economy continuing to expand.

If this happens, it is unlikely to significantly affect the local oil retail price. A global oil price of $60 per barrel would make the local retail price of diesel soar to only Bt25-Bt26 per litre.

However, businesses should make adjustments to use energy more efficiently.

The demand for energy in Thailand this year is expected to expand 2 per cent against forecast GDP growth of 3 per cent.

The global oil price is estimated to hover around $30 per barrel, given the glut in the world market.

But some petroleum companies are likely to be struggling amid the low oil price situation, which might open the way for mergers and acquisitions in the industry.

The market capitalisation of PTT and PTT Exploration and Production dropped by Bt500 billion combined over the past year.

“The government should also continue to pursue an overall energy price reform,” he said.

The technologies that are tending to influence the oil industry more include advanced energy storage and advanced oil and gas exploration, which will make it easier to discover oil and gas, he added.

Boonchai Chokwatana, chairman of Saha Pathanapibul, the trading arm of Saha Group, said he wants to propose to the government to use populist policies to help low-income people.

 

The JFCCT believes joining the pact would ensure the country’s competitiveness and access to the markets of the United States |and other TPP members, as well |as attracting foreign investment here.

After meeting with Commerce Minister Apiradi Tantraporn yesterday, JFCCT chairman Stanley Kang said Thailand should take steps to join the TPP during its second stage of negotiation after the country missed the opportunity to join the pact in the first stage.

“The TPP includes the US, which is one of the biggest markets for Thai exports. As investors and manufacturers in the country, foreign [interests] would like the Thai government to announce clearly [its intention on] the TPP, as well as proceeding on other free-trade agreements,” Kang said.

He said that despite foreseeing gloomy global economic growth this year, Thailand and other Aseancountries were still major targets for foreigners’ investment.

To facilitate more foreign investment here, the JFCCT urged the government to allow the country to capitalise on trade and investment in Asean by streamlining complicated laws and regulations, and facilitate the free movement of goods and people in Asean, in particular across borders.

Moreover, in this era of globalisation, the government should focus on a policy of openness, such as reducing red tape to facilitate more trade and investment in the country.

The government should further relax the Foreign Business Act after it has released some businesses from the protection list, he added.

Apiradi said the government was considering joining the TPP, but needed to be sure about its impacts and find remedial measures for all involved.

To promote Thailand as a centre of foreign investment, the government is also amending laws and adjusting some regulations to facilitate investment in the country.

The JFCCT has also urged Thailand to streamline the trading system in the border provinces.

The JFCCT currently has |33 members from various |foreign chambers of commerce in Thailand.

SEVERAL SECTORS have voiced support for Thailand entering the Trans-Pacific Partnership (TPP), saying it would benefit the economy, but some issues would need to be carefully considered where Thailand would have a small competitive edge. The Commerce Ministry approached many sectors on the issue this month.

Vice Commerce Minister Winichai Chaemcheang, as chairman of a subcommittee studying the TPP, said that as the ministry heard from the public, academics, business, and the agriculture and livestock sectors, most agreed that Thailand should join the TPP.

However, some voiced concerns that the US-led trade pact would also bring many challenges, so the government and the private sector should prepare before jumping into the deal.

To get more feedback about such concerns, the ministry will continue to conduct hearings with all sectors nationwide. Beginning next month, it will hear from people in Tak, Nakhon Si Thammarat, Ubon Ratchathani, Chanthaburi, Chiang Mai and Khon Kaen provinces before gathering all the information for analysis for final consideration, Winichai said. Key topics for the hearings are market access, rules of origin, trade measures, biological-varieties protection, intellectual-property rights, patent protection, geographical indication, dispute settlement between government and investors, labour protection, and the environment.

The Thailand Development and Research Institute, Thai Network of People Living with HIV/Aids, FTAWatch Group, Alternative Farming, Thai Pharmaceutical Manufacturers Association, and Action on Smoking and Health Foundation Thailand suggested that the government carefully study the details of the TPP and estimate the impacts and benefits to all sectors in all dimensions – economic, social, environmental and health.

They also suggested that government agencies involved in the agricultural sector educate farmers about impacts they would experience and how they should prepare for the TPP, as well as seeking remedy measures.

In the business sector, the Board of Trade, the Federation of Thai Industries and other trade associations supported joining the TPP, claiming most sectors would benefit.

Those enterprises are in various industries such as rice, sugar, frozen shrimp, canned tuna, tapioca flour, textiles and garments, gems and jewellery, pharmaceuticals, air transport, health-related tourism, and direct sales.

However, the livestock sector – swine, cattle, dairy and poultry – said Thailand was not ready to compete in the feedmeal industry because of high production costs compared with the United States and Australia.

They said the government should help find remedy measures for farmers and help increase the efficiency of local farmers.

Last, government agencies told the ministry that Thailand needed to amend some laws and regulations, and increase law enforcement. Agencies should increase human resources and set up a fund to support research and development in some particular sectors, such as farming.

BY 2025, Asean wants to be seen as a quality tourism destination offering a unique, diverse regional experience. It also wants the sector to be committed to sustainability, and for operators to be promoting new creative products and more intra-travel in the region.

The preliminary figures indicate that Asean members received about 98 million international visitors last year, up 7.3 per cent on 2014. Intra-Asean travel maintained its position as the major share of tourists, making up 42 per cent of total arrivals in 2015.

In line with the establishment of the Asean Community at the start of 2016, tourism ministers from 10 nations last week drafted the Asean Tourism Strategic Plan for 2016-25.

They also agreed to develop the “Visit Asean@50”, a tourism campaign to jointly promote and showcase the region as a single tourism destination.

Visit Asean@50 will feature up to 600 iconic tourism products, events and experiences, particularly those reflecting the richness of the region’s cultures, heritage and natural environment, as well as the warm hospitality extended by the people of Asean.

The target markets are intra-regional travellers, the Asia Pacific, the Middle East and Europe.

They will be targeted through tourism packages for activities carried out by Asean members at international and national levels.

In a bid to attract more quality tourists, a regional secretariat was established to oversee last month’s implementation of the Asean Mutual Recognition Arrangement for Tourism Professionals. The secretariat is designed to support the MRA-TP’s operations and management and provide recommendations on necessary mechanisms to enable its smooth implementation.

The Asean Tourism Professionals Registration System (ATPRS) was set up to facilitate the registration of tourism professionals and related stakeholders, and to serve as a matchmaking mechanism between tourism professionals and their potential employers.

Australia will continue to support the establishment of the MRA-TP’s infrastructure through the Asean-Australia Development Cooperation Programmes.

Furthermore, the Asean-China Centre, the Asean-Japan Centre and the Asean-Korea Centre will continue to promote tourism in the region, while the World Tourism Organisation will continue to assist with the development of on River Based Tourism Development.

This year, 89 hotels in the region complied with the new Asean Green Hotel Standard as part of a sustainable tourism push.

The first Asean Homestay Award ceremony was held last week in Manila in a bid to encourage community-based tourism.

However, the move to have an open-sky policy in the region – where production networks were integrated and there was enhance regional trade by allowing airlines from Asean member states to fly freely throughout the region -has not really occurred yet.

An academic from Singapore, Alan Tan, said that Indonesia had not yet opened its second cities to the policy while Laos and the Philippines had not done for their capitals.

Private sector gains

In Manila, the SMX Convention Centre is undergoing a major renovation as the eight-year old venue positions itself to capture a larger slice of the region’s meetings, incentives, conventions and exhibitions (MICE) market. Also, new hotels, entertainment complexes and a casino will soon be open to shake up tourism in the Philippines.

Bangkok’s rebranded Central Hospitality International has moved to better tap the segment by launching the Centara Q Resort in Rayong on the east coast of Thailand.hile four provinces in Laos – Saravan, Xekong, Attapeu and Champasak – are set to pro

mote themselves to international markets this year under the theme “Southern Laos Charming by Nature”.

The Thai-Cambodia joint-venture hotel, Tara Angkor, hopes to see a spike in business as a result of the implementation of the Asean Tourism Strategic Plan.

The 206-room property has an average room rate of US$120 (Bt4,320).

“About 70 per cent of our customers are from Europe, 10 per cent from Japan, and the rest from other nations,” said sales manager Pattakwan Tanapongdecha.

Other hotel chains with a presence in Thailand, as well as Bangkok hospital also had a presence in Angkor, she said.

Meanwhile, Cambodia’s first premium airport lounge has opened at Phnom Penh Airport.

The lounge can be used by anyone regardless of the airline they are travelling on or their seating class, and is priced from $35 (Bt1,050) to $50 for two to five hours.

Sai Khan Hlaing, managing director of Air Tour Myanmar, said outbound tourism numbers rose 30 per cent last year with neighbouring countries, particularly Thailand, the chief beneficiaries.

Calling out enterprising start-ups with an eye on the Asean market, the Malaysian government-funded MaGIC accelerator programme returns for a second cohort after a successful inaugural run with 30 home-grown and 20 overseas start-ups last year. About 30 per cent of them found investors during the four-month incubation that ended in November.

“The programme does not take equity from participants,” Michelle Tan, accelerator director of MAP, told a roadshow programme held in Asean on Saturday.

The accelerator is aimed at coaching start-ups with a marketable product to find their market niche, develop outcome-driven metrics, complete an Asean expansion plan and look for funding. The accelerator, modelled after Startup Chile, is an initiative under the Malaysian Global Innovation and Creativity Centre, a government agency launched in 2014 to build the start-up ecosystem in Malaysia and the region. The accelerator consists of weekly “platoon” sessions for peer-to-peer learning, weekly pitching opportunities, check-ins with account managers, business development opportunities with market partners and social outreach activities.

Participants will also gain access to big-name mentors such as Mark Chang, founder of Jobstreet; Anthony Tan, CEO and co-founder of GrabTaxi; Hans-Peter Ressel, managing director of Lazada Group; and Azran Osman Rani, CEO of iflix.

Regional investors appraising the start-ups on demo day include venture capital firms such as 500 Startups and Monk’s Hill.

The accelerator accepts one to three members from each start-up. Each member will receive a monthly stipend of 1,500 ringgit (Bt12,650), free accommodation, round-trip reimbursable flight allowance and a six-month visa while based in Cyberjaya, Malaysia throughout the four-month programme.

“Participants do not necessarily have to be Asean citizens. Applications are open to start-ups from all over the world focusing their market on Southeast Asia,” she said.

The overseas start-ups under the first track came from Thailand, Vietnam, the Philippines, Singapore, Cambodia, Indonesia, Uruguay, Czech Republic and the United States.

Kavin Mickey Asavant, CEO of matchmaking app Noonswoon, said he did not take up the offer for the first cohort. “I am interested in joining the programme again this time as I feel ready to take the product to Singapore and Taiwan” he said.

Home to over 600 million people, Southeast Asia is a burgeoning market for start-ups in the era of the Asean Economic Community.

One of the region’s most successful start-ups, GrabTaxi, was founded in Malaysia.

THE COMMERCE Ministry will submit the draft amendment of the Trade Competition Act for Cabinet consideration within the next two weeks, with the changes aimed at creating a more competitive landscape.

The bill will expand the act to cover all state enterprises and their subsidiaries involved in business activities.

A new independent body free of political intervention will also be set up to handle complaints related to competition, said Wiboonlasana Ruamraksa, director-general of the Internal Trade Department.

The current law, enforced by the Commerce Ministry, does not apply to state-owned enterprises, only covering private companies.

The ministry’s Trade Competition Committee currently handles complaints under the act.

The draft amendment has been undertaken under the broad plan of Prime Minister General PrayutChan-o-cha and the National Council for Peace and Order to create a better business environment, reduce market dominance, and ensure a fair and level playing field for enterprises to do business based on international standards.

“Under the act, 85 cases of unfair trade competition have been filed and considered by the Commerce Ministry during the more than 10 years it has been in force. However, not a single case has made it to legal judgement, as it is an inefficient law,” Wiboonlasana said.

After amendment, the Trade Competition Act should be a more efficient instrument that is able to create a fair business environment and punish enterprises that operate unfairly, she said.

It will also shorten the investigation period for suspected violation of the rules. Under the current law, a subcommittee has to be set up to investigate each case, which is a time-consuming procedure, but the new law will allow officials to work on a case immediately.

Officials assigned to investigate a case will have full authority to summon witnesses or ask for documentation. The proposed new committee will also be empowered to order enterprises found to be conducting an unfair practice to cease and desist, and to punish wrongdoers, she explained.

The draft amendment has gone through the public-hearing process, and has since been approved by Commerce Minister Apiradi Tantraporn and Deputy Prime Minister Somkid Jatusripitak.

It will be proposed to the Cabinet this month or early in February, and then passed on to the National Legislative Assembly. The amendment should be in force by the end of this year, Wiboonlasana said.

The draft had originally been scheduled for completion last June.

But to achieve that ambition, the country needs to start building a favourable landscape now, with world-class laboratory facilities, massive funding from both the state and private sectors, and top researchers, plus attractive incentives from the government to make all this happen.

“Our long-term goal is to make Thailand the Asean educational hub. We have to begin by defining which research areas are important to the future of the world. The researches that are important to the world future are biotechnology, digital technology, robotic technology, or nano-technology,” the True chief executive officer said in an interview with The Nation.

He said Thailand had good fundamentals for doing research in the biotech, digital and robotic arenas. The country needs to set up open and world-class lab facilities to conduct research in these areas.

Suitable universities should be selected to host each of these labs, while the state and private sectors step in to provide support and incentives. The labs will also enlist top local and international academics to strengthen their work.

Suphachai estimated that setting up one lab would require funding of US$1 billion, so focusing on three areas would mean an investment of $3 billion (Bt108 billion). The government could allocate this funding from the annual education budget of Bt500 billion. If it did so, there is a chance that the three universities hosting the labs would see their rankings move up.

If all of the above could be realised, parents from all over Asean would send their children to enrol in these universities, which would make Thailand the centre for producing competent human resources in the region, said Suphachai, who also serves as vice chairman of Charoen Pokphand Group.

But this is the long-term plan. For now, his working panel is focusing on the immediate plan of reforming the country’s basic education.

He said that to reform education, four areas had to be improved: transparency in the educational system, evaluation processes, learning methods, and the human resources that could help lead the changes, including school principals.

He said citizens and private companies could donate money to help schools, as they were eligible for tax deductions, but they might feel hesitant to do so, as they could not easily check how schools spend their donations and how they were performing. Once people could be confident about schools’ transparency, he believed a massive number of people would be happy to provide financial help to them.

He added that school principals had to be evaluated and at the same time rewarded, according to their performance. The parents in each school’s area should also be encouraged to take part in this evaluation to create engagement between schools and communities.

He suggested that recruitment of foreign principals would help boost the education system. If the country wants Thais well versed in foreign languages, it must be willing to spend on hiring foreign teachers.

Moreover, teaching and learning methods should be changed from one-way communication to two-way, moving away from urging children to memorise text towards encouraging them to ask questions.

Students should be encouraged to engage in debate among themselves, while teachers assume the roles of facilitators and encourage the students to build up their potential. In Suphachai’s opinion, the learning process should be child-centric.

“When children ask ‘why’, they will then go on to do research or Google, and that is a life-long perspective of the entire learning process,” he said.

To accelerate these changes, he said the private sector could play a major role by becoming what he calls “dedicated sponsors” of their preferred schools and provide them with mentors to see what these schools really need. The mentors would also work closely with the principals to improve school performance.

The working panel has passed its plans on to Deputy Prime Minister Somkid Jatusripitak and Education Minister Dapong Ratanasuwan. Dapong chairs the team in the working panel from the state sector, while Suphachai chairs the private-sector team.

Among the top executives in Suphachai’s team are Isara Vongkusolkit, chairman of Board of Trade and Thai Chamber of Commerce, and Kan Trakulhoon of Siam Cement Group. The panel is working out more details of the plans before submitting them to Somkid in the next couple of weeks.

Suphachai said that when the immediate plan is approved, the government would deploy it in a large number of schools.

The working group on education is one of 12 joint public-private-sector working groups appointed by the government last month to help it steer the economy.

Maple Trading Co, which has more than 800 employees, has gained significantly from joining the project when it started in 2013.

“In the past, the sewing department needed to re-cut fabric by hand. Smart Myanmar team advised us to make the cutting department [operated by machines] strictly follow the orders. The result was unbelievable. There is no longer re-cutting in the sewing department. It saved us approximately US$3,600 (Bt13,000) a year: 65.4 per cent on material costs and 34.6 per cent on labour costs,” said Thet Su Zin Win, director of the factory.

She said that the company’s operation has improved significantly. Through workshops, the company learnt more about occupational health and safety standards, human resource practices, implementation of clear policies and procedures, communication with the workers, and raw material savings.

“Before joining it, a European client cancelled his order, saying our products did not meet international standards. Now the trend has changed. We are receiving orders from Japan, Germany, and the Netherlands,” she said.

Thanks to the project, Myanmar Synergy Garment Co also won orders from the Netherlands, the United Kingdom, France, and South Korea.

“I joined a study mission to Europe. We visited relevant trade fairs and gathered information about the EU market. The trip gave me insights on what European clients want and how we should produce quality products,” said Min Gaung Oo, managing director.

In the past three years, the project team paid 12 consultation visits to his factory. In the team, garment and social compliance experts shared tips how to improve the working conditions and environment. Knowledge on child protection policy, energy, safety issues, and human resources management was also shared.

The executives of both companies appeared last week at the event to officially kick off the second phase of the Smart Myanmar project. Dozens of local garment factories joined the first phase, which resulted in the creation of more than 300,000 jobs for female workers.

To run for four years, the new phase will expand and accelerate some of its previous activities – such as assistance to factories on social compliance and human resources management – as well as introduce new activities related to promoting sustainable production and transparency in procurement practices. Both phases require funding of 4.8 million euros.

The project is warmly welcomed by Myanmar Garment Manufacturers Association, which lauds the tips in increasing productivity and saving the environment. Myint Soe, chairman of the association, noted that enhancement in workforce capacity is a must given that Myanmar wants to increase garment exports to Europe.

Garment exports to Europe enjoy low tariffs under the generalised system of preferences.

Myint Soe noted that a great benefit of the scheme is that it reduces employer-employee conflicts.

“Smart Myanmar not only works with employers but also with the management, supervisors and workers to share best practices. Employers came to know how to work under labour laws and this leads to zero strikes at all factories (joining the scheme),” he added.

Simone Lehmann, project director, noted that the garment sector has quickly become Myanmar’s main export sector after oil and gas. The value of exports has more than doubled in less than two years and will continue to grow almost exponentially for the next several years. She expects the growth rate to rise by 300 per cent in three years if the industry meets international standards. Exports to Germany will be doubled in five years.

Her concern is on limited access to finance to support the momentum, adding that many donors and stakeholders are working on the issue together with the central bank and Myanmar Banks Association.

“The EU supported the project for three main reasons. First, garments are one of the star sectors of Myanmar’s economy. It can generate a lot of revenues and foreign currencies for the country as well as create job opportunities and uplift the people’s living standards. Secondly, we are willing to support the garment sector to ensure all the production is sustainable. EU is keen not only on increasing the number of jobs but also quality of the products to ensure Myanmar products can meet the EU standards. Thirdly, EU also emphasises heavily on protecting the environment,” said EU Ambassador Roland Kobia.

Sunanta Kangvalkulkij, deputy director-general of the Commerce Ministry’s Trade Negotiations Department, said she would lead the Thai negotiating team to Islamabad next week.

The negotiations will emphasise tariff reductions, customs procedures, cooperation in many sectors such as sanitary standards, trade remedy measures, trade facilitation, and technical barriers and laws that should be eliminated to promote trade growth.

The first round of negotiations started last year, and the second round is set for next Monday to Wednesday. Sunanta said that during the second round, officials would discuss limiting the time frame for each topic, so that the FTA can be concluded within the target of mid-2017.

She said the Pakistani-Thai FTA would be beneficial to both countries and significantly increase bilateral trade and investment.

Moreover, the FTA would enable Thailand to expand its exports into South Asia as well as other Muslim nations in the surrounding region. On the other side, Thailand will be a gateway for Pakistan to penetrate the Asean Economic Community.

The agreement should also eliminate both tariff and non-tariff barriers as well as increase investment opportunities for both countries.

Some large Thai companies have already invested in Pakistan. More Thai firms, including small and medium-sized enterprises, should be able to penetrate this market after the FTA comes into force.

In 2014, Thailand enjoyed a trade surplus of US$734 million with Pakistan, and similar trade surpluses have been registered by the Kingdom since 2010.

Bilateral trade reached $1.01 billion in 2014, with Thailand’s exports to Pakistan was worth $874 million.

Pakistan is Thailand’s second-largest trading partner in South Asia after India, and No 46 globally.

Major export products from Thailand to Pakistan are fabrics, textiles, vehicles and parts, air-conditioners and parts, plastics, and chemical goods.

Imports are machinery and parts, musical instruments, processed and semi-processed fishery products, ore, and steel.