Japan may urge freer remittances

"The government has not allowed foreign investors to remit 100 per cent of their money back to their motherland," Munenori Yamada, president of the Japan External Trade Organisation (Jetro) in Bangkok, said yesterday.

The Bank of Thailand caps money transfers for lending purposes by foreign companies operating here to their affiliates back home at US$100 million (Bt3.4 billion). They can seek permission for larger transfers from the central bank on a case-by-case basis.

However profits after tax from investment in Thailand can be 100 per cent repatriated.

With more flexible regulations, more Japanese companies would shift their regional headquarters from Singapore to Thailand, he said. Some have gradually moved here but still keep their financial departments there, he said.

Japanese investors also called for equal treatment. For instance, Japanese firms big or small can get only a 0.4-per-cent bank guarantee from the Small Business Credit Guarantee Corp compared with 100 per cent for Thai firms.

"We encourage free trade like we offer to foreign investors on an equal basis both for trade and investment," he said.

SMEs in Japan, both foreign and local, can get 40-per-cent bank guarantees, he said.

The Export-Import Bank of Thailand has joined with Nippon Export and Investment Insurance (Nexi) to provide international trade risk coverage to Japanese firms.

Exim Bank will render an export-credit insurance service to Japanese-affiliated and Thai-Japanese joint ventures exporting to countries except Japan. Nexi will be a reinsurer.

The deal will also promote job creation, technology transfer and long-term development of export-oriented production.

It is a quick reaction from the government after three Japanese ministers made a case for it.

The Japanese Chambers of Commerce in Asean (JCCA) will hold a meeting with the Asean Secretariat in Jakarta on Monday, Yamada said.

Jetro will play a supporting role, during which Jetro president Yoishi Kato together with the heads of JCCA will meet with Asean secretary-general Surin Pitsuwan to exchange views and carry their message to Asean members.

Top issues to be raised during the meeting are accelerating the implementation of the Asean Economic Community blueprint and developing infrastructure in Asean to facilitate and promote trade and investment between Asean and Japan through free and fair trade by reducing any barriers.

Japan will provide official development assistance and other financial organisations will provide funding support for infrastructure development.

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