FTI wants Industrial Bank set up

FTI chairmen from all 76 provinces voiced concern at a meeting in Bangkok yesterday about the shortfall in loans to the industrial sector, estimated at more than Bt100 billion.

"We discussed the matter and agreed the government must establish an Industrial Bank of Thailand, which would be similar to the Bank for Agriculture and Agricultural Coopera-tives. We've actually raised this idea several times, but we'll take action on it this time around," said deputy secretary-general Sommat Khunset.

He referred to the Small and Medium Enterprise Development Bank, saying loan demand from SMEs was Bt4 billion, while the bank had approved only three projects worth a combined Bt62 million since March.

"The government has a clear policy of helping boost SMEs' financial liquidity, but certain laws and regulations do not allow a response to that policy at the operational level," Sommat said.

The meeting also discussed unemployment, which is continuing at a slower pace, while some industries whose short-term orders have been returning have started hiring more staff.

Nonetheless, they expressed concern that unemployment might increase if SMEs continued to be unable to access loans and had too little capital with which to conduct business.

Thaveekij Jaturajarernkul, chairman of the FTI's labour committee, said out of 3 million manufacturing workers, 10 per cent were jobless.

He believes the manufacturing situation in the second half of the year will remain gloomy, because the economies in the main destinations of the United States, Europe and Japan have not yet recovered.

"We've started to see more employment in large firms, but rarely in SMEs. We can say the unemployment situation has improved gradually, because half of the 3 million workers are recruited by large firms and the rest by SMEs," he said.

Demand for workers has bounced back in some heavy industries, such as electronics, autos and petrochemicals, while those tending to reduce their workforce are sugar plants and furniture firms, a survey showed.

FTI members said in the meeting the Northeast needed 10,000 employees for the manufacture of garments and fishing equipment, including nets and seines, while electronic plants in Ayutthaya province wanted to hire 4,000-5,000 workers to serve demand in a recovering global market.

Darat Vibhatakalasa, chairman of the FTI for the northern region, said industries in the North needed another Bt10 billion to Bt20 billion in financial liquidity.

"Banks list textile and ceramic manufacturers as sunset industries when they apply for a loan, but in reality they still have orders and need more working capital to run their business," she said.

Darat added that the Finance Ministry should consider extending incentives for another year for businesses restructuring their debts, until the overall economy had improved.