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BOT still uncertain about projected economic growth of 4%
The Bank of Thailand remained uncertain about whether
the country’s economic growth this year would reach 4% as predicted by
the finance minister because it must wait to consider economic figures in
the fourth quarter of last year first, governor M.R. Pridiyathorn said.
Somkid Jatusripitak, who is also deputy premier,
projected last week the Thai economy would grow more than 2-4% of gross
domestic products this year if the government’s economic stimulus
package bore fruit. The BOT chief said the bank could not yet determine
the economic growth rate in 2002 as it had to first assess the economic
figures in the last quarter of 2001, which will be released by the
National Economic and Social Development Board in March. However, the bank
held on to an earlier projection that the economy would expand 1-3% this
year.
He said the economy remains sluggish at present due to
a slowdown in spending both locally and overseas. This could be witnessed
by the declined inflation rates in many countries around the world, he
said. Because of this, the government needs to take additional measures to
ease the possible impact from the situation.
“Given economic figures in the fourth quarter, the economy should
outgrow that of the third quarter, which expanded 1.5%. It fails to
significantly improve when compared with the economic growth in 2000. So,
what the government should do is to try to support the production and
export sectors so the economy could grow as projected. But whether it
could expand at the rate of 4% as expected by the finance minister remains
unpredictable,” he said. (TNA)
MOI confident of giving full support to SMEs this year
Industry Minister Suriya Juengrungreungkit voiced
confidence that the ministry would be able to forge ahead with its full
support to small and medium-sized enterprises for this year. He conceded
the ministry failed to give full assistance to SMEs last year because of
budget constraints.
For this year, the MOI will be able to help because the
budget has already been set aside. The ministry will stress a policy to
encourage the establishment of new SMEs because they could easily grow
under the current economic situation.
He said many giant companies in the United States
currently in operation originated from small firms set up when the country
experienced an economic crisis. Suriya admitted state financial
institutions had not yet provided loans to SMEs in an amount that met the
target. Deputy Prime Minister Somkid Jatusripitak, who is also finance
minister, is trying to press the institutions to lend more.
A source at the Ministry said six state financial
institutions, including the Bank of Thailand, Industrial Finance
Corporation of Thailand, Export and Import Bank, Small Industrial Finance
Corporation, Bank for Agriculture and Agricultural Cooperative, and
Government Saving Bank, failed to lend to SMEs to the target amount in the
past 10 months of last year.
They managed to provide combined loans of 33.76 billion baht or 66.86%
of the annual target of 50.5 billion baht. However, the Small Industrial
Credit Guarantee Corporation did lend a guaranteed amount of 1.96 billion
baht as of October last year. It represented 122.5% of the targeted
guarantee amount of 1.6 billion baht. (TNA)
Government to decide on Thai-Malaysian gas pipeline project within three months
The government will decide within three months whether
it will go ahead with the Thai-Malaysian gas pipeline project, according
to a T.V. news report. Government spokesman Yongyudh Tiyapairat told
reporters that Prime Minister Thaksin Shinawatra last week listened to
both supporters and opponents of the gas project and gathered information
from them, said the iTV news report.
The premier will consider the two sides’ information,
and the government will make a decision as soon as possible, expected
within three months, whether the transnational gas pipeline project will
be carried on, he stated.
Opponents of the gas project, most of whom are
villagers of Chana districts where a key part of the project will be put
on share, and non-governmental organizations (NGOs), voiced concern that
the project could have adverse effects on the environment and local
people’s ways of life.
The supporters of the project, including Boonchuay
Changsiriwatanathamrong, advisor to the chairman of the Chamber of
Commerce of Songkhla Province, and senior members of the Business Council
of the Southern Provinces, said that if the project was discarded, it
would damage the country’s image, as it is a transnational energy
project worth Bt40 billion, according to TNA reporter.
The supporters also pointed out that when under construction, the
project would create a number of jobs and provide revenue for local people
and businesses in the southern provinces. “The government’s final
decision on the gas pipeline project will be based on careful
consideration and discretion of its implications in all aspects, including
effects on the environment and local people’s ways of life,” the
government spokesman said. (TNA)
Government to implement strategies to attract foreign investment
The government will implement strategies and offer
incentives to attract more foreign investment, according to deputy prime
minister and defense minister Gen. Chavalit Yongchaiyudh.
Gen. Chavalit told TNA, after chairing a meeting of a
task force in charge of studying incentives and strategies to attract more
foreign investors into the country, that measures to help boost the
country’s foreign reserves as much as possible, including those
attracting more foreign investment, were discussed and reviewed at the
meeting.
“The proposed measures include the government’s
investment in properties, permission for foreigners to reside and run
businesses in the kingdom, and special issuance of visas for foreigners,
the latter two of which are expected to help boost foreign investment in
the kingdom,” he said.
Details of the measures will be discussed further, and
will then be reported to Prime Minister Thaksin Shinawatra on January 23,
he said. The meeting was aimed at seeking appropriate measures and
strategies to help develop the Thai economy, he said.
Meanwhile, Foreign Minister Surakiart Sathirathai told
TNA that the meeting discussed ways to attract more foreign business
persons to help develop the Thai economy in many areas, including tourism
and other industries. Incentives would be introduced, including special
issuance of visas for potential investors, to help achieve the goal, he
said. “The potential investors include those from China, India, and
Russia,” he said.
The meeting one of the steps taken by the government to increase the
country’s foreign exchange revenues as initially discussed at the
special cabinet meeting on December 26, with five strategies being
proposed to achieve the objective, he said. They include strategies on
measures and incentives to attract more foreigners to help develop the
Thai economy, on promotion and development of the software industry, on
development of the tourism industry, on poverty eradication, and on
rehabilitation of the property sector, Surakiart said. (TNA)
PM brushes aside graft allegations against government
Prime Minister Thaksin Shinawatra last week repeatedly
denied his government had been involved in corrupt practices, particularly
in the Public Health Ministry where efforts to implement the 30-baht
universal healthcare program are being stepped up.
His denial came after leading opposition Democrat
members of parliament insisted the party would go ahead with a censure
debate with the government’s failed economic management and corruption
topping the agenda. The premier said it was common for the opposition to
come up with allegations against the government before it moves for a
no-confidence debate.
“It is the opposition’s rights that we have to
respect. Should it have information or evidence of any irregularities,
please show me.” However, he said, based on news and information he had
received so far, no corrupt practices or irregularities were witnessed in
his government.
On the possible move by the opposition to raise
conflicts in the Public Health Ministry at the no-confidence debate,
Thaksin said he had closely monitored the performance of the ministry and
found no problems or scandals existed. What he witnessed was the tireless
efforts by the ministry to effect the 30-baht healthcare program, which
experienced some obstacles as it involved a major change in the system.
Asked to comment on mounting criticisms on the government by foreign
media, the premier said they were based on information obtained through
local news sources. The standard of news coverage by some media had
significantly deteriorated. So, the government would definitely file a
lawsuit if their criticisms were against the law, he said. (TNA)
TFB suggests exporting options for textile markets
The Thai Farmers Bank’s Research Center recently
suggested improvement options for Thailand’s ready-to-wear products
exported to the US. Results of the research from the center said that
although Thailand has developed its exported clothing styles in favor of
the US markets, they are still bombarded by cheaper products from other
countries.
Products to the USA from other countries have an
advantage over Thailand’s because of less investment, such as in wages,
transportation and lower import-tax. The lower-import taxes, the
researchers continued, resulted from trading agreements, such as the NAFTA,
between several countries and the US.
To compete in the US markets, Thai textile exporters
would have to seriously control their product’s quality and price, the
center suggested. Moreover, their designs would also have to go along with
what the markets prefer, it added.
Both the government and private sectors must reduce
their investment ground by moving production plants to provinces that have
cheaper wages. Provinces along the country’s borders are choices the
research suggested since investors have more choice of cheaper labor
wages.
The government should also allow the use of foreign labor so that Thai
investors can invest less and compete in an international market.
Investors should also be supported with low-interest loans so that they
can improve their products’ quality, the research added. (TNA)
Commercial banks given green light to become insurance brokers
The Bank of Thailand last week gave the green light to
local commercial banks to diversify into brokering insurance businesses,
according to a senior BOT official.
Prangthip Busayasiri, chief of BOT’s Financial
Institutions Policy Group, told TNA that the central bank now allows local
commercial banks to be brokers of insurance businesses, including life
insurance. Local commercial banks must, however, strictly follow rules
imposed by agencies concerned, and must have appropriate internal control
systems with well-conducted account and database arrangements, which will
be ready for BOT’s inspection at all times, she stated.
Earlier, local commercial banks were not allowed to run insurance
brokerage businesses, she said. They were just recently allowed to
introduce or suggest insurance companies to their clients who voluntarily
requested the assistance, she said. “The new move was aimed at promoting
local commercial banks to run full-circled banking businesses,”
Prangthip said. (TNA)
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