Deputy Prime Minister and Industry Minister Kosit Panpiemras yesterday promised to address serious shortages of skilled labour and industrial land, to convince big investors to pursue their project proposals.

Following a meeting with 37 mostly foreign companies, including Japan's Honda Motor and computer-makers Fujitsu and Hitachi, Kosit said they expressed concern about enlarging their business here, due to difficulties in recruiting skilled workers and locating available factory lots.

Most of the participants were manufacturers of auto and electronic parts, textiles and agricultural products. They have won tax incentives from the Board of Investment (BoI) for projects worth about Bt130 billion.

"Most of the firms confirmed they would construct their plants in the first half of this year and start importing and installing equipment by the beginning of next year," Kosit told reporters.

The industrial giants complained to him that Thailand had a high worker turnover. One said it had about 6,000 employees but that 4,000 needed to be replaced each year. That means the company must spend more on training, thus driving up its labour costs.

Kosit said he realised the labour shortage was a critical obstacle to keeping the economy purring. "Although it will take several years to solve this problem, we cannot avoid it," he said.

The public sector participants said the areas set aside for industrial development were insufficient. The Southern Seaboard - the proposed new industrial belt - was being prepared only for the petrochemical, gas and oil industries.

Kosit said he would assign the Industrial Estate Authority of Thailand to meet operators and advise them on vacant areas, such as in industrial parks in the Northeast.

The companies also criticised the BoI for not cooperating more with the Customs Department to reduce their redundant procedures or establish a one-stop service window.

"We'll try to find solutions for their problems as soon as possible. If we don't, they hint they might not be interested in expanding their business here in the long run," Kosit said.

BoI secretary-general Satit Chanjavanakul said the investment promotion agency had approved 4,049 projects over the past four years, with about 95 per cent, worth Bt758 billion, already in various stages of development.

The meeting followed Kosit's visit to the Energy Ministry on Wednesday.

He is trying to drum up new investment to ensure that economic growth does not slip further amid the unclear political and economic environment.

The Industry Ministry is also pushing hard for the Finance Ministry to lower the excise tax on small-car production, hoping to draw billions of baht worth of new investment as well as create jobs.

Kosit confirmed an eco-car investment policy would be completed next month.

Former prime minister Anand Panyarachun called for careful consideration of the eco-car policy, so as "not to favour a particular car company".

Anand's administration 15 years ago slashed taxes on automobiles, which set off a big wave of investment into the Kingdom from many auto- and parts-makers.

He said an auto policy was a complex undertaking and that the current government should be prudent and not issue guidelines benefiting a certain marque.

"The eco-car policy should not cause one company to gain an advantage. If we want Thailand to become a [production] hub, we should become a hub for everyone," he said, adding that the government should look at the "overall industry [picture]".

Aside from private investment, Kosit is also closely monitoring progress in disbursing the state budget.

From last October 1 to last Friday, the government spent Bt810 billion, falling 26.36 per cent short of the budgeted Bt1.1 trillion.

While fixed-budget disbursement is 20.76 per cent under target, investment outlays are 49.69 per cent behind.

Kosit earlier said budget disbursement would be accelerated next quarter.

Next Monday, the Economic Steering Committee will announce measures to accelerate Bt6 billion in government spending and encourage investment in the three southernmost provinces.

Kosit said the economic conference yesterday agreed to launch special regulations to promote liquidity in those areas.

Deputy Finance Minister Sommai Phasee was assigned to study the issue and propose an action plan to the Cabinet within two weeks, he added.

Chalida Ekvitthayavechnukul,

Pichaya Changsorn

The Nation