Published on January 11, 2006

Prime Minister Thaksin Shinawatra is meeting this morning with top business leaders at Government House, where he will outline his administration’s economic management policy for this year so that they can go back and lay out strategic plans for their firms.

It will be a very exclusive summit because only key CEOs and heads of the Federation of Thai Industries, the Thai Bankers’ Association and the Thai Chamber of Commerce are invited.

“The prime minister would like to tell the business leaders about the economic situation last year and the growth prospects for 2006,” government spokesman Surapong Suebwonglee said yesterday.

“All the Cabinet ministers will be on hand to answer any questions from the business leaders. This will help them draw up their business plans.”

Details of Thaksin’s speech have not been disclosed, but the summit comes at a time when the credibility of his government is shaky.

Already, businessmen have raised concerns about political stability going forward as Thaksin’s ability to push through his economic policies, from the privatisation of Egat Plc to the conclusion of a free trade agreement with the US, have increasingly been challenged. And on Friday, Sondhi Limthongkul, the media maverick, is set to submit a petition to His Majesty the King seeking royal power to initiate a fresh round of constitutional amendments and political reform.

Thailand really needs fresh capital to fuel its economic engine at this juncture as most industries are operating at capacity and the economy is at full employment. Keeping the momentum for expansion going requires new direct investment.

“It’s rather strange that this time around they only invite the chairman of the Federation of Thai Industries and other top business leaders. Nobody else at the FTI has been invited,” said Kiatphong Noijaiboon, vice chairman of the FTI. “I would not like to comment on the government’s policy until we have heard what the prime minister has to say.”

Another FTI executive, who asked not to be named, said the summit is nothing more than a marketing gimmick to boost confidence in the government.

“The government has made several promises but has delivered on very few. I would like to see the government do what it has pledged to do, such as the mega-projects, whose implementation plan is still up in the air,” he said.

Dr Pipat Preedaviphas, chairman of LPN Plate Mill, said the premier should address the staying power of his government.

“Things are beginning to become unsteady. There are squabbles in politics. Investors now are keeping a watch on how the political situation unfolds. We have delayed our plan to go public until the second half of the year until the atmosphere has improved. We would like to see a more stable political situation,” he said.

Wallop Witanakorn, vice president of the Thai Garment Manufacturers Association, said the government should step forward to cement an FTA deal with the US.

“Although the FTA will create an undesirable impact on the country, it will be only in the short term. We should look forward to the Kingdom’s benefits from the FTA in the long run because it will strengthen our competitiveness on the global playing field by enhancing technology and efficiency,” he said.

After the global elimination of textile quotas early last year, Thailand lost its export edge in many garment categories such as jackets.

“Any collapse of the FTA will suspend billions of baht of investment in the garment industry,” he said.

Wallop said the association did not have any proposal for the premier today. Exporters have to hear the government out rather than present ideas like at the previous meeting.

He said that not only the Thai private sector is monitoring Thaksin’s management but also foreign investors. Economic stability is one of the most important factors to convince them open up their wallets.

“It is quite strange that the government has focused on exports to boost GDP rather than on expenditures. Usually, GDP relies mainly on domestic spending,” he pointed out. “It’s the first time that I feel 50:50 on whether Prime Minister Thaksin can manage the country’s economic growth as committed. However, we have no choice now.”

Business Reporters

The Nation

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