Export target set at 3%

The Commerce Ministry has revised its 2009 export-growth target to 3 per cent, for a total of US$184.7 billion (Bt6.43 trillion). It is banking on the effectiveness of five newly launched measures to drive the sector.

The previous target was for growth of 0-5 per cent.

Speaking after a meeting with 150 representatives of the private sector yesterday, Commerce Minister Pornthiva Nakasai said the ministry would ask for Bt3 billion in funding from the Bt100-billion supplementary budget to promote exports through marketing activities and roadshows. It will seek another Bt9 billion to stimulate domestic spending.

The five measures will focus on export promotion, business liquidity, marketing, image and advertising and supplementary measures to abate falling orders.

"As these measures are drawn up in cooperation with the private sector, we're confident we can achieve the 3-per-cent growth target," she said.

It is estimated that exports last year grew by 18 per cent to $179.6 billion, accounting for 70 per cent of gross domestic product.

As GDP is expected to expand by only 0-2 per cent this year - leaving up to 1 million unemployed - the Council of Economic Ministers yesterday approved the economic-stimulus framework.

Besides extending free electricity, water and bus schemes for another six months, the council approved the end of the excise duty on oil.

The ministers also approved the spending of the Bt100-billion supplementary budget, with nine programmes aimed at assisting workers in general, low-income workers, salaried workers, the elderly, farmers, private companies, students and state agencies, plus an image-rehabilitation scheme.

"Still, the government does not plan to lower value-added tax or corporate taxes," said Deputy Prime Minister Korbsak Sabhavasu. "All measures will be executed gradually but no later than April 1."

The government also plans to extend the agricultural-products pledging programme to cover rubber and palm oil, under the Bt110-billion budget approved by the previous government.

The previous government offered pledging programmes for rice, corn and tapioca. About Bt60 billion of the original Bt110 billion is now left.

The government will also set aside about Bt30 billion to sponsor a 15-year free-tuition programme, targeting 13 million students. A financial package to aid hard-hit companies was also considered, but no decision was announced.

Representatives of the Thai Chamber of Commerce, the Federation of Thai Industries, the Thai Bankers Association, the National Thai Shippers Association and various industry associations agreed to the five measures put forward by the Commerce Ministry.

Meanwhile, the "Siam Service Supreme" campaign will be kicked off with help from a to-be-established research-and-development centre for each service segment, to boost the sector's revenue by 10 per cent this year from Bt900 billion.

To increase liquidity, the Export-Import Bank of Thailand will provide additional credits of Bt10 billion to exporters and another Bt5 billion in export guarantees.

The government will also help seek new sources of raw materials and, under the "Thailand Best Friends" project, look for new markets for exporters. Roadshows are planned in targeted markets abroad, while Thais will be encouraged to use more "Made in Thailand" products.

Rachane Potjanasuntorn, director-general of the Department of Export Promotion, said taken together, the measures should drive this year's exports.

Private companies do not necessarily share this view, however.

Pornsilp Patcharintanakul, deputy secretary-general to the Board of Trade of Thailand and the Thai Chamber of Commerce, said exports this year would definitely face a drop of 8-10 per cent to only $167 billion, due to slumping global demand. He suggested more trade missions, as well as cooperation between the government and modern trade operators in putting more Thai products in global outlets.

Katiya Greigarn, chairman of the Federation of Thai Industries' Electrical, Elec-tronics and Allied Industries Club, urged the government

to find measures to promote more locally sourced raw materials, as annual imports in the sector total Bt1.1 trillion. A cut in company contributions to the Social Security Fund would also help, Katiya said.

Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said the government must stabilise the exchange rate, in order to boost export competitiveness. The baht should trade at 35-37 to the US dollar, he said.