New Industry Minister will inherit 5 challenges

"Thailand Investment Year 2008-09"

The "Thailand Investment Year 2008-09" campaign was Suwit's first policy aimed at restoring investor confidence and enhancing competitiveness in the industrial sector. It features eight measures, including revision of eligible activities for investment promotion, new tax measures and promotion of new technology.

The Board of Investment (BoI) also set an ambitious target of attracting Bt3 trillion worth of investment by 2011 in the wake of the campaign's launch.

The investment year will be a challenge for the new industry minister, who must try to reach the target amid fierce competition for foreign direct investment from other countries in the region, a global economic slowdown and ongoing domestic political turmoil.

Putting sugar cane on the national agenda

After a sudden Bt5-a-kilogramme rise in the price of sugar, resulting in a record high for the Kingdom, Suwit proposed that the Cabinet announce a national campaign to boost yields and thus solve the problem of insufficient supply for the manufacture of both sugar and ethanol. This would also serve to further Thailand's goal of becoming a production hub for alternative-fuel cars.

Suwit encouraged auto-makers to shift to producing E85-compatible cars like Brazil. He insisted that instead of affecting eco-car production, it would simply be another choice for buyers.

Although the Finance Ministry reduced excise tax on E85 production, it is still considering whether to reduce it on the manufacture of E85-compatible vehicles. Hence, the new minister will also play an important role in setting a clear direction for the Kingdom's automotive industry.

A software park in Khon Kaen

Suwit proposed the establishment of a software park to entice major international firms like Microsoft to invest in the Kingdom. The Industrial Estate Authority of Thailand is responsible for its development, while Khon Kaen University has allocated 500 rai of land for the project.

It is also intended to serve as a model knowledge-based industrial park, one that can promote collaboration between private companies and academic institutes in terms of commercial research and development.

Upstream steel and the Southern Seaboard

The BoI has set guidelines for promoting investment in the manufacture of high-quality upstream steel, and last November the National Economic and Social Development Board was assigned to draw up a blueprint for Southern Seaboard development.

The Southern Seaboard plan is scheduled to be ready this year, so the new industry minister will probably face resistance from local communities of the type that has occurred in the past with similar projects. He will have to work hard to bring this project to fruition, for the support of future expansion in important industries like petrochemicals and steel.

So far, four leading steelmakers, including Arcelor Mittal, Nippon, JFE and Posco, have expressed interest in setting up an upstream blast furnace.

Financial support for small and medium-sized enterprises (SMEs)

As the Bank of Thailand does not provide soft loans, the economic crisis has forced many SMEs out of business.

Suwit tried to team up with the Finance Ministry to come up with new measures to increase financial liquidity among suffering operators, but nothing resulted from the collaboration.