TPSO director-general Pimchanok Vonkorpon said that the trade war is partly responsible for causing a slowdown in the global economy and trade.

In 2019, exports of countries around the world have been affected directly or indirectly, with most experiencing slides in exports. About 60 out of 95 countries have witnessed export contraction.

However, some Asian countries, including India and Bangladesh are experiencing continuing strong export of their products. But small economies in Africa and Europe extending from Morocco, Mauritius, and Cyprus to Azerbaijan are also seeing a slowdown.

Despite the drop from last year, Thai exports remain somewhat more resilient to trade tensions between the two world powers when compared to other regional countries.

In the first quarter of this year, Thai exports contracted 1.6 per cent, led by a 9.2 per cent drop in Thai shipments to China. However, shipments to the US surged 32.2 per cent.

Meanwhile, amidst the trade dispute, shipments of some products actually increased. For example, shipments of radio/television receivers and parts soared 21 per cent, followed by an 8 per cent rise in shipments of motorcycles and parts, and a 7.6 per cent bump in shipments of rubber products. Shipments of trucks and food climbed 7 per cent each. Increased shipments of food included canned tuna, fresh, frozen, canned and processed fruit and vegetables, and fresh, frozen and processed chicken.

Pimchanok said that after the US tariff measures against China came into force from the last quarter of 2018 to the first quarter of this year, income from shipments of Thai products directly affected by the US measures fell, but not by a large amount. These products included solar cells and washing machines. Shipments of steel and aluminium continue to expand.

Shipments of Thai products in China’s supply chains have been affected, with a decline in exports of vehicles and parts, computer parts and circuit boards, electrical appliances and parts, machines, tools and components, and office/home supply.

Meanwhile, the US is bound to import more from Thailand, particularly of products that will be substitutes for Chinese goods on which the US has raised tariffs.

This could partly offset a decline in products exported to China, including automobiles and parts, electrical appliances and parts, machines, tools and parts, chemical products and pellets, garments, jewellery and cosmetics, and office/home supply to China. Thai exports continue to have opportunities amidst the impacts from the ongoing trade spat.

Thailand’s Commerce Ministry is continuing to closely monitor the situation, and will proceed with its planned trade promotion activities both offline and online throughout the year, Pimchanok said.

Such plans extend from market penetration by city/province; acceleration of negotiations to open markets especially through the Rcep agreement, which includes 16 countries – Asean nations, Australia, China, India, Japan, New Zealand and South Korea – within this year; solutions to trade problems and obstacles; creation of strategic partnerships with potential trading partner countries; and promotion of border trade.

Technological changes have made products in some industries outdated. The Thai government has responded with a policy to attract foreign direct investment in modern industries as a means to encourage technology transfer and innovations.

That policy and related measures are a part of the government’s attempt to stimulate and promote Thai exports, while strengthening the Thai economy in the short and longer terms, said Pimchanok.

Deputy Prime Minister and Minister of Finance, Somdy Duangdy, last week presided over a forum for stakeholders to discuss preparations for the third agriculture census, which is expected to take place this year.

According to a media release from the meeting organiser, participants discussed key issues related to the preparations, namely an action plan, stages of the census, and a budget for its operation.

Prime Minister Thongloun Sisoulith issued a decree in 2017 appointing Somdy to head a national committee in charge of the third agriculture census.

The committee must carry out the census between 2018 and 2020, according to the decree.

The census is considered to be of major importance. Its findings will determine the government’s policy on agricultural and social development, bearing in mind that agriculture is the mainstay of the economy.

The government regards the census as essential. The Statistics Law and the national statistics development strategy state that it is compulsory and should be carried out every five years.

According to the media release, the findings of the survey would be used as an important reference for policy-makers in evaluating the success of the five-year national socio-economic development plan.

In addition, the findings would provide an important input for the next five-year socio-economic development plan, which will be implemented from 2020 to 2025.

The government views agriculture as an important pillar of the economy. Although the sector’s contribution to the economy is shrinking, it still employs the majority of the Lao population.

An upgrade of agricultural production and the modernisation of this sector has the potential to raise millions of Lao people above the poverty line. It is the government’s policy to encourage farmers to produce clean products for domestic consumption and export.

At present, the service and industry sectors form the country’s main economic base, with mining and hydropower being the driving force of industrial growth.

According to the meeting organiser, in addition to preparing the agriculture census, Laos is planning to conduct a new economic census, with the findings also to be used as a reference for the next national socio-economic development plan.

The city-state is a major producer of products ranging from aircraft engines to medical equipment and oil rigs, and top firms such as Rolls-Royce and German industrial conglomerate Siemens have operations there.

British appliance pioneer Dyson will open its first electric car plant in the city-state, with vehicles set to roll off the production line from 2021, and this year announced plans to move its global headquarters to Singapore.

But a potential shortage of more specialised skills as firms shift into fields such as robotics and 3D printing, as well as moves to make it more difficult to hire foreigners in the space-starved country, may make it less attractive to set up shop in Singapore in the future.

Authorities work closely with businesses to help them set up and find workers, as well as giving them incentives such as tax breaks, but rapid technological changes in many industries makes it tougher for a government used to planning well ahead.

“Ten years ago, policymakers could plan with greater certainty,” Song Seng Wun, a regional economist with CIMB Private Banking, told AFP.

“The age of disruptive technology is creating a lot more uncertainty,” he added.

In a recent report, the ministry of manpower said that one in three job openings in 2018 was left unfilled for at least six months and among the reasons employers gave was “lack of candidates with the necessary specialised skills”.

Singapore has traditionally welcomed foreign workers in sectors ranging from construction to investment banking to plug skills shortages and do jobs that locals shun, and 40 per cent of its 5.6 million inhabitants are from overseas.

But in recent years unease has been growing at the large number of foreigners in the city – which is just half the size of Los Angeles – with local residents blaming them for overcrowding and pushing up living costs.

The government has responded by making it more difficult to hire in certain sectors and making companies prioritise local recruitment. This includes moves such as accepting applications for certain higher-skilled jobs only from Singaporeans for a set period before opening them up to foreigners.

At a forum on Singapore’s labour challenges, participants raised concerns that “certain policies such as increasing foreign worker levies and blanket foreign worker quotas have seemingly constrained growth for many companies,” wrote Mooris Tjioe, from Singaporean think-tank the Institute of Policy Studies.

“Participants agreed that, for now, Singaporeans appear to have accepted a trade-off of lower economic growth for a restrictive foreign labour policy, in favour of social considerations,” he wrote.

Still, a large number of high-tech manufacturers view Singapore as the best place to set up their Asian headquarters and plants due to proximity to booming regional markets, ease of doing business and political stability, despite the relatively high costs.

The city-state makes half the world’s top 10 drugs, 70 per cent of its oil rigs and is the fifth biggest source of refined oil.

Rolls-Royce produces its “Trent” engines for Boeing’s 787 Dreamliner as well as the Airbus A380 and A330neo at its Singapore plant, and believes that cooperation between companies, the government and educational institutions is a major advantage.

In a race to woo voters with populist policies ahead of the March 24 poll, major parties, including Palang Pracharat and Pheu Thai, dangled the promise of raising the minimum daily wage by up to 26.5 per cent to Bt400, from an average of Bt315.97.

In a survey of 1,160 workers on the issue in Bangkok and its neighbouring provinces, the Bangkok University Research Centre found that 49.5 per cent admit to being influenced by the prospects of a rise in daily wage when casting their ballot while 50.5 per cent said otherwise.

In regard to the timeframe, 43 per cent hoped for an immediate hike to a flat-rate of Bt400 daily, 15.3 per cent said it should be gradually raised within 1-2 years while 3.4 per cent hoped it would be implemented in a three-year span. Of those polled, 38.3 per cent did not suggest a timeframe.

“As prices have been rising, there should also be an increase in wage,” said Pimchanok Vonkorpon, director-general of the Commerce Ministry’s Trade Policy and Strategy Office.

However, instead of a hike to a flat rate of Bt400, as pledged by the political parties, it should vary, taking into consideration the labour markets in each region of the country, she said.

“Nowadays, less Thai workers rely on the minimum wage for their livelihood, as opposed to the large number of immigrant labourers residing in the country,” she added.

Tim Leelahaphan, an economist for Standard Chartered Bank concurred with the director-general, saying: “If the minimum wage is hiked as promised by the political parties, the real winners in this scenario will be the immigrant workers as most of them still rely on the minimum wage.”

Furthermore, the operation costs for businesses, particularly small and medium-sized enterprises, would rise significantly. They would struggle to survive and grow, the economist said.

A substantial rise in labour cost would likely lead to manufacturers striving to lower operational expenses. Workers may be made redundant, as companies look to replace them with automation, he cautioned.

The Federation of Thai Industries (FTI) has also expressed concerns about the possibility of a rise in minimum daily wage when the next government take office.

“Increasing the minimum wage will increase the cost for businesses, making them less competitive,” said FTI vice chairman Kriengkrai Thiennukul.

It may trigger a mass relocation of Thai-based manufacturers to the CLMV (Cambodia, Laos, Myanmar, Vietnam) region for lower cost, while unemployment in the country will rise as companies replace workers with technology. As such, low-income earners meant to benefit from the populist policy, may actually end up losing, Kriengkrai said.

The private sector has instead, suggested that the government promote the upskilling of Thai workers. The process will create more value to the economy, make workers more productive, and increase their income.

“The government could encourage private businesses to ‘pay by skill’, which will prevent layoffs and allow some workers to be paid well above the minimum wage,” suggested FTI chairman Supant Mongkolsuthree.

The best way to boost workers’ income could be achieved through value-addition to a company’s products and higher efficiency of the workforce, said Yunyong Thaicharoen, first executive vice president and head of Siam Commercial Bank’s Economic Intelligence Centre.

“This will take some time. However, I believe it is the most effective way to increase the income of Thai workers and develop the capabilities of Thai businesses in the long-term,” he stated.

Yunyong called for a holistic and detailed action plan by the new government in support of small and medium enterprises and develop the skills of Thai workforce. The action plan should be seriously implemented with its effectiveness properly assessed, he said.