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New bridge links Thailand and Cambodia
A new bridge linking Thailand’s eastern province of
Trat and Cambodia’s Koh Kong Province was inaugurated on April 4th and
is expected to help support the development of countries in the Mekong
Sub-region. Prime Minister Hun Sen of Cambodia officially opened the
1,900-meter bridge, the longest in Cambodia.
Thailand extended financial assistance to support the
construction of the Koh Kong Bridge, which crosses the Gulf of Thailand.
The 7.2-million US dollar bridge will help support the
development of countries in the Mekong Sub-region, including Cambodia,
Laos, Vietnam, Thailand, and Yunnan in the South of China. It is also
believed to help reduce the gap between old and new members of the
Association of Southeast Asian Nations (ASEAN). ASEAN now groups Brunei,
Indonesia, Malaysia, the Philippines, Singapore, Thailand, Cambodia, Laos,
Myanmar, and Vietnam, the latter four of which are new members.
Koh Kong province is 271 kilometers southwest of the
Cambodian capital of Phnom Penh. Without the bridge, people have to rely
on ferries for transport and communication. (TNA)
Concession fees key deterrent to merger of TOT and CAT
Concession fees are a key deterrent to the merger and
privatization of the Telephone Organization of Thailand and the
Communications Authority of Thailand, according to an executive of a
leading brokerage-house.
Korn Chatikavanich, president of J.P. Morgan Securities
Co, suggested the government exclude the fees from TOT’s revenue if it
wanted to see the agency merge with CAT for a privatization purpose in an
easier manner. The approach would also enable the privatization process to
go ahead without political interest involvement. He said TOT’s revenue
earned from concession fees should be transferred to other agencies or a
new agency should be set up to oversee the fees to ensure they would be
used for the interest of the public.
“A long delay in the merger and privatization of TOT
and CAT is attributed to concession fees. In fact, TOT will suffer losses
immediately if the fees are excluded. That can affect prices of shares to
be offered. Still, the matter should not be of concern if TOT manages to
merge with CAT because the latter is a high-profit agency and state-owned
monopoly,” Korn said.
He added that the government should also establish its
own advisor to give suggestions on a TOT-CAT merger in an impartial
manner. Currently, each state enterprise on the list for privatization
sets up its own advisor on the matter. This has resulted in its
privatization plan failing to satisfy all parties concerned. (TNA)
Thailand wants off USA watch list
The government is pushing for the establishment of the
Thai-U.S. Free Trade Area and the withdrawal of Thailand from
Washington’s watch-list. The Thai government raised the issue during a
U.S.-Thai bilateral meeting held here on April 4th. It was the first
U.S.-Thai bilateral meeting in 13 years.
Thailand wants to be removed from the watch list so
that Thai exporters can continue to enjoy trade privileges under the
Generalized System of Preference (GSP), granted by the U.S. government.
Thailand also hosted a joint meeting of USTR and
Economic Ministers of the Association of Southeast Asian Nations (ASEAN),
called AEM-USTR Consultations, on April 5.
At the AEM-USTR Consultations, Washington was asked to
invest more in ASEAN, and to open its market for more farm and electronic
products from ASEAN.
At the forum USTR raised such issues as protection of
intellectual properties, as well as proposed improvement on customs
procedures and telecommunication liberalization. (TNA)
US-ASEAN meeting on free trade very successful, says MOC
After the US-ASEAN meeting, Commerce Minister Adisai
Bodharamil announced that the United States is willing to forge ahead with
its cooperation in trade liberalization with ASEAN in many areas. Speaking
after a meeting between ASEAN economic ministers and US representatives,
he said the meeting, which was initiated by Thailand, produced successful
results.
The two sides agreed to expand their cooperation in
various areas including trade and investment, agriculture, human resources
development, enhancement of competitiveness in intellectual property,
product standard, information technology and communications, customs,
small and medium-size enterprises and bio-technology.
He reported that an action plan for each area would be
jointly worked out in the near future. “US trade representatives are
happy with the result of the joint discussion. ASEAN wants the US to help
develop the region concretely in both personnel and information. The US
promises to give support to ASEAN in all areas because it considers the
region a major market and its population of more than 500 million is
suitable for the opening of free trade,” he said.
The joint discussion is considered a good beginning for
the development of ASEAN free trade area in the future and it was agreed
that the two sides will hold a follow-up meeting every year to ensure and
monitor progress. Dr. Adisai added that the US is ready to facilitate the
entry of ASEAN members into the World Trade Organization. (TNA)
Expected US Fed rate hike won’t affect local interest policy
The expected interest rate hike by the United States’
Federal Reserve will not hinder the low interest policy being adopted by
the Bank of Thailand, according to Thai Farmers Research Center. US Fed
Fund rates were projected to continue to increase this year.
However, the upward trend will not affect the BOT’s
efforts to keep interest rates low. Local economic factors will carry more
weight than the direction taken by the interest rate policy-making
direction.
If the economy grows around 2-3% this year as most
analysts expect, the BOT sees no need to push the 14-day repurchase rate
down further. Instead they will keep the rate unchanged at 2% until the
end of this year.
Under the circumstances, commercial banks are likely to
maintain 3-month fixed deposit rates at 2% and minimum lending rates at
7-7.25%.
Still, the central bank might need to further ease
interest rates to stimulate the economy if growth is slower than expected.
Under this scenario, commercial banks would gain limited revenue from the
settlement of non-performing loan problems and lending growth. To keep
their performance stable, they might need to cut depositing and lending
rates by 0.25-0.5% to accelerate addressing NPLs and stimulate lending. (TNA)
Bahrain-Thailand to jointly study proposed free trade area
A feasibility study will be conducted by Bahrain and
Thailand on a joint free trade area. Prime Minister Thaksin Shinawatra
proposed that a panel be set up by the two countries to jointly conduct a
study on the pros and cons of a new free trade area between the two
nations. Foreign Minister Surakiart Sathiratha recently announced that
Bahrain has agreed to join the study.
“I discussed the issue with Bahrain’s prime
minister and other cabinet members when I visited the country March 31 to
April 1,” Surakiart said.
Bahrain has invited deputy prime minister and finance
minister Somkid Jatusripitak to attend a conference on investment in the
Gulf, in which the issue of a matching fund scheme will be discussed. In
addition, the Gulf country expressed its interest in joining hands with
Thailand to set up an Islamic bank which would include help in training
Bank of Thailand’s personnel and with operations and supervision of the
Islamic bank. (TNA)
No room for complacency warns DPM
Deputy Prime Minister Somkid Jatusripitak has warned
that there is no room for complacency even though the country’s economy
appears to be on the path to recovery. He said many indicators show the
economy has already picked up. The National Economic and Social
Development Board’s projection of an economic growth of 2-3% this year
was one of the key indicators.
In his view, the economy began to turn around in the
fourth quarter of last year and is expected to continue to grow in the
first quarter of this year. Still, the government is not completely
satisfied with its successful efforts toward economic recovery. What it
really wants to achieve is sustainable growth for the next decade.
Dr Somkid, who is also finance minister, said the
present economic recovery is just the first step. The next step is to
implement economic reform. “We are happy to see the economy recover now,
but we can’t afford to be complacent,” he said.
The deputy premier referred to the latest report by the
International Monetary Fund saying that the Thai economy remained weak due
to the lack of concrete reform and higher public debts. He agreed that the
comment was justified but assured that the current government is in a
position to manage the mounting public debts and will practice fiscal
discipline. (TNA)
Export slump not critical
The country’s exports in the first two months of this
year had not worsened to a critical level as many feared, said Banpot
Hongthong, director-general of the Export Promotion Department. He said
the official full figures showed the export value in the January-February
period was US$9.73 billion, a decline of 7.27% from that of the same
period the previous year.
The export value in January decreased by 6.11% to $4.87
billion and that in February dropped by 8.4% to $4.86 billion, partly
because major export destinations were still experiencing an economic
slowdown. The figures revealed the import value in the first two months of
this year was $9.36 billion, a fall of 13.02% from that of the
corresponding period the year before.
The import value in January dropped by 9.98% to $5.002
billion and that in February fell by 16.27% to $4.35 billion. The country
enjoyed a trade surplus of $373.2 million, a rise of 240.56% from the same
period last year. Banpot said exports to all major destinations including
the United States, Japan, European Union, and Taiwan, had declined. The
fall was mainly attributed to the slowdown in electronics exports,
particularly electricity-circuit boards.
Normally, he said, exports of consumer goods,
especially foods, recover first. He believes the electronics exports will
pick up in the second quarter of this year, which will contribute to the
export growth. (TNA)
Upward revision of growth won’t boost lending, says economist
Although the National Economic and Social Development
Board revised the projected economic growth upwards to 2-3%, commercial
banks remain reluctant to lend, according to a leading economist. Nimitr
Nonthapantawat said he believed the banks will not be willing to lend more
until the country’s economy was back to growing at a rate of 5-7% of
gross domestic product. He said the capital base of many banks had
significantly dropped during the economic crisis. If they want to lend,
they need to raise capital.
Current circumstances make it difficult for banks,
particularly those in the private sector, to increase capital. State banks
are in a better position to increase capital because the government is
ready to help.
Nimitr said local financial institutions are still
experiencing many problems. The liquidity in the banking system remains in
excess. The quality loan applicants are inferior and the prices of assets
pledged as collateral are volatile. Also, many institutions need to be
reorganized. “Banks have centralized their operations during the
economic crisis. When the economy improves, they need time to
decentralize. Bank officers are reluctant to exercise their given
power,” he said.
He believes the spread between lending and deposit
rates will narrow only when the risk banks have to take from customers of
inferior quality has eased. (TNA)
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