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Bahrain - Thailand to become close economic partners
Prime Minister Thaksin Shinawatra announced that
Bahrain and Thailand plan to sign an agreement on economic cooperation,
making the two countries closer economic partners.
While meeting with the Thai community in Bahrain on
June 12, the Thai leader said that he discussed the issue with his Bahrain
counterpart. The bilateral agreement on economic cooperation will lead to
the establishment of the Bahraini - Thai Free Trade Area and the opening
of the Thai Trade Center in Bahrain to facilitate the expansion of Thai
exports into the Bahraini market.
With the agreed economic cooperation, Bahrain could
also become Thailand’s gateway to expand the country’s trade and
investment into other member countries in the Gulf Cooperation Council (GCC)
and the Middle East. The six GCC members include Bahrain, Kuwait, Oman,
Qatar, Saudi Arabia and the United Arab Emirates.
During the two-day official visit, Thaksin also
discussed bilateral cooperation in political, security, and other economic
affairs with his Bahrain counterpart. Discussions also touched on expanded
cooperation between Bahrain and Thailand in finance, investment,
construction and tourism.
“As Bahrain is a member of the six-nation Gulf
Cooperation Council (GCC), whose agreed economic union, similar to that of
the European Union (EU) will take effect in January 2003, and Thailand has
good relations with countries in the Middle East, the establishment of the
Bahraini-Thai Free Trade Area will greatly benefit the Thai economy.
Manama can be a gateway for Thai exports and laborers to the GCC and the
Middle East,” Thaksin said.
Thaksin added that the Bahraini-Thai Free Trade Area
Agreement will cover as many products as possible, including food,
agricultural, industrial and manufactured products. “I’ll try to
negotiate for the inclusion of as many products as possible,” he said.
Bahrain is a financial, tourism and service center in
the GCC and the Middle East, which will create opportunities for Thailand
to expand its business and investment into the region. There are about
2,000 Thais in Bahrain, most of whom are skilled laborers. (TNA)
Thailand losing millions from India - Pakistan standoff
The recent standoff between military rivals India and
Pakistan is costing Thailand a huge amount of lost revenue from trade,
investment and tourism, according to a report published recently by a
leading economic think-tank.
The report, published by the Thai Farmers Research
Center, said that despite the unlikelihood of the tensions between the two
nations blowing up into all-out nuclear war, the escalation of the dispute
to its current level is having a huge impact on economies throughout the
world, including Thailand’s.
With India and Pakistan, Thailand’s first and second
largest export markets respectively in the South Asian region, the
tensions are dealing a particularly severe blow to Thai trade. Since the
beginning of the year trade to this region has plummeted due to domestic
turmoil in Nepal, Afghanistan, Bangladesh and Sri Lanka, and the latest
standoff between India and Pakistan only serves to exacerbate this
situation.
On June 4 the Ministry of Foreign Affairs cautioned
Thai citizens to refrain from traveling to India or Pakistan unless
strictly necessary, while the Thai embassies in both nations have prepared
evacuation plans should the two countries go to war.
At the same time, Thai investors are become
increasingly wary about investing in either nation, while the number of
Indian and Pakistani tourists visiting Thailand is taking a nosedive. (TNA)
Commercial banks may not be out of the woods yet
Some analysts think some of Thailand’s commercial
banks are not out of the woods yet since they remain engulfed in huge
non-performing loans. Those banks may not be able to count on the economic
recovery, which is still fragile, according to an industry executive who
preferred not to be identified.
Although operating performances in the banking system
turned positive, that did not mean the banks had been already pulled out
of crisis since they still experienced many difficulties, said the
executive.
Banks are under the process of restructuring debts
totaling 600 billion baht as they are in the middle of placing for sale
assets worth 152 billion baht or one-fourth of total non-performing loans
in the system. In addition, accumulated losses of almost 500 billion in
the banking system need to be settled.
He conceded the overall picture of the country’s
economy had improved. But given the amount of lending by commercial banks,
it is infinitesimal when compared with excessive liquidity, which stands
around 500 billion baht in the system now.
The loan-to-deposit ratio also remains low at present
as it stays at 70% compared with the normal level of 90%.
Meanwhile, Chulakorn Singhakowin, president of Bank of
Asia, said commercial banks are likely to further cut lending and deposit
rates since the liquidity in the banking system remains excessive. (TNA)
Startup Thai Solar Cell manufacturer “raises the bar” for corporate social responsibility
Thai Photovoltaics Ltd. (TPV) investors have taken a
bold step in their plan to bring solar electric power to those who need it
most. One of TPV’s four primary goals is to help improve the quality of
life and the environment in developing nations. As an integral part of the
company’s business plan, its investors have agreed that TPV will donate
five percent (5.0%) of the solar electric modules it produces to qualified
charities toward this goal. At full production this will be over 800
kW/year - enough to supply about 30 rural schools per month.
An additional 5.0% of TPV’s production will be
set-aside for qualified NGO’s on a “cost plus” basis to supplement
TPV’s substantial planned charity contributions. The company’s
investors, advisors and employees are pleased to be in a position to take
such a strong action, and hope it serves as an effective example of
corporate social responsibility.
Thailand Senator Meechai Viravaidya (a recipient of the
United Nations Gold Peace Medal and chairman of the Population and
Community Development Association, Thailand’s largest and most
diversified NGO) is on TPV’s board of advisors. He noted that, “The
company’s social responsibility program is admirable. I am honored to be
connected to such an entity.”
The company plans to begin initial commercial
production in the first half of 2003, with a target of producing 20
megawatts/year of electricity-producing solar modules by the end of 2005.
TPV recently opened Phase II of its direct private equity placement in
which the company intends to sell an additional thirty percent (30.0%) of
its equity for US$5,064,000.
This phase of the offering is targeted towards
accredited investors, with a minimum investment of US$42,200 for 10,000
shares. This direct private equity placement is one of only a handful of
“pure play” solar power investment opportunities in the world;
allowing accredited investors the ability to focus a portion of their
investment funds towards a very well defined target area. In addition to
the potential for venture capital level returns, this investment offers
accredited investors a unique opportunity to participate in a very
promising solar energy company with measurable socially responsible goals
and objectives.
The respected international financier Arthur Lipper III
(previously the editor and publisher of Venture magazine) recently wrote
that, “The business plan is simply awesome. Thai Photovoltaics Ltd. is
one of the best conceived and well documented business investment
opportunities I have encountered.”
An overview of the TPV project and schedule,
information on the company’s management and advisors, a summary of the
investment details, compiled financial projections, and a PowerPoint
project presentation for accredited investors and other project funding
sources are available on the company’s website at
www.thaiphotovoltaics.com
Footwear exporters call for government support
The government should accelerate lending footwear
exporters a full range of support before the country loses its market
share to Vietnam, India and China, an industry executive said. Surasak
Pongthaveevirat, president of the Thai Footwear Association, said although
footwear exports did not drop in the first four months of this year,
prospects look uncertain due to stiffer competition from key rivals.
Vietnam has recently announced it would try to increase
its annual footwear export value to 80 billion baht. India has been
assisted by international organizations including the United Nations
Conference on Trade and Development (UNCTAD) in terms of production
technology and sale promotion. China is another remarkable competitor
because the labor cost is much lower than that of Thailand.
To boost the country’s competitiveness, Surasak said,
the government must give footwear exporters wide-ranging support. It
should encourage the use of local content for production in place of
importing raw materials, provide education support to increase the number
of engineers and designers, and boost production of footwear parts.
He said the industry is always in flux. Footwear
fashion changes every five months. The government must be prepared for
these rapid changes if it wants to increase export value.
Industry Minister Suriya Jungrungreangkit said he has
had discussions with representatives of the association in order to
develop local footwear and leather industries to boost competitiveness of
the products in the world market. To compete with foreign rivals, he said,
Thailand should develop products tailored for specific groups and of good
quality, thereby giving the country a chance to become a regional hub in
this industry.
Currently, Thailand’s exports of footwear and leather
goods amount to 80 billion baht with the United States, Europe, and Japan
primary destinations. (TNA)
Hopes look up for Southern exports
Increased exports look promising from the southern
region, with the export growth rate in April the highest in nine months,
according to the senior director of the Bank of Thailand’s southern
region office.
Phairot Hengsakul said that the first four months of
the year had seen the value of international trade in the southern region
shoot up to B1.55 billion, with the export growth rate in April the
highest in nine months.
The export market was driven by 10 main items, namely
smoked rubber sheeting, rubber rods, crude oil, frozen seafood, canned
food, rubber gloves, concentrated rubber sap, prawns, electrical goods and
equipment, and natural gas.
Imports, meanwhile, were beginning to decrease,
pointing to a more favorable balance of trade in the future. However,
Phairot cautioned that authorities concerned would have to be extra
careful in preventing smuggling, which would cause an unnecessary outflow
of cash. (TNA)
World Cup fever boosts sale of T.V. sets
The current World Cup 2002 fever among local football
fans has helped boost sales of electrical products, particularly T.V.
sets, over the past weeks. Sales have increased since some weeks before
the World Cup 2002 started up on May 31. Sales of T.V. sets in the
domestic market increased by 13% just weeks before the World Cup 2002
started.
Sale volumes of other electric products such as radio
sets, amplifiers, and loud speakers have also reportedly increased.
The one-month World Cup 2002 is also causing an
underground circulation of a large amount of cash through gambling.
Analysts warned that the circulation was neither productive nor useful for
the economy since it does lead to production. (TNA)
Thailand signs investment pact with Belgium
Prime Minister Thaksin Shinawatra put his name to a
pact promoting and protecting investment between Belgium and Thailand,
while also signing a deal promoting and protecting reciprocal trade with
the Belgo- Luxembourg grouping, in a bid to boost the confidence of
Belgian investors in Thailand.
On June 13th, the first day of his Belgian tour, the
prime minister met his Belgian counterpart Guy Verhofstadt in his official
residence, where they signed two major pacts, the first concerning the
promotion and protection of investment between the two countries, and the
second concerning the promotion and protection of reciprocal investment
between Thailand and the Belgo-Luxembourg grouping.
Both agreements are aimed at boosting the confidence of
foreign investors coming to Thailand, offering a guarantee that their
capital will be protected, and at encouraging more direct investment from
abroad.
Prime Minister’s Office spokesman Yongyuth
Tiyaphairat said that the prime minister’s four-day visit was aimed at
defining the respective roles of Belgium and Thailand as hubs of the
European Union and the Association of Southeast Asian Nations. By turning
both nations into industrial partners, he said, investment and the
economies of both countries would become more efficient. (TNA)
Profitable state enterprises to go corporate next year
State enterprises which have the ability to produce a
reasonable profit margin will become limited companies next year and will
be listed on the Stock Exchange of Thailand (SET), according to Prime
Minister Thaksin Shinawatra. Thaksin told a meeting of government
officials about guidelines his administration’s policies will set in
order to accomplish this. The newly set up limited companies must then be
listed in the SET within six months.
For state enterprises which suffer losses, internal
adjustment and restructuring will be required to turn themselves into
profitable ones, according to the premier.
“There are two main reasons for state enterprises
suffering losses. One is inefficiency, and the other is gaining less
income due to lower service charges to assist or subsidize the public. The
first reason is unacceptable, and the enterprises’ boards and executives
will be responsible for turning this situation around. The second one is
acceptable and they will be supported and assisted by the government,”
Thaksin said.
The premier said that he, himself, will step in and
access each enterprise which is losing money and address them
case-by-case. Those which are viewed as hopeless and cannot be rescued
will be closed down.
The Thai leader, on the other hand, expressed his
satisfaction with what he mentioned “positive change” over the past
year among senior government officials. He said he was pleased to see that
senior government officials have changed their mindsets to strategic
thinking. They are more active and ready to address problems, rather than
the traditional way by which they perform their duties passively within
the bureaucratic red-tape system.
“I believe that the new attitude of government
officials will bear fruits with more work efficiency to serve the public
over the next two or three years,” the Thai leader projected. (TNA)
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