About 50% of FDI for first half of the year comes from single economic partner.
AS A MASSIVE delegation from Japan visits the Kingdom, Thailand expected them to boost investment in infrastructure, particularly for dual-rail, high-speed trains, by next year to steer development in the Eastern Economic Corridor (EEC), Prime Minister Prayut Chan-o-cha said yesterday.
Other infrastructure projects encouraged by Prayut included ports, aviation and digital systems in line with the 10 new industrial groups targeted to become Thailand’s economic growth engines. “The first five years will focus on these developments. I look to Japan as a good example of train development,” Prayut said.
“In the future, there will also be developments in the West, North and the South. We have to integrate all these plans to connect investments and services, not only among regional provinces but also with CLMV countries,” he said, referring to the grouping of Cambodia, Laos, Myanmar and Vietnam.
The Thai government also expected to facilitate development in the EEC by creating fast tracks such as encouraging more “public-private-people” cooperation, he said.
Thailand plans to invest about Bt700 billion to construct and develop infrastructure in the EEC as part of a five-year plan.
The Kingdom also looked forward to new cooperation and exchanges in industry, innovation and technology as well as support for SMEs, the premier said.
With Japanese SMEs contributing greatly to that country’s economy, accounting for more than 90 per cent of businesses in Japan, Prayut said he expected that they and around 3 million Thai SMEs could help to support each other in creating jobs.
Prayut welcomed at Government House yesterday Hiroshige Seko, Japan’s Minister of Economy, Trade and Investment, along with 570 high-level Japanese business people, representatives from economic organisations and SME entrepreneurs who are visiting Thailand from yesterday until tomorrow.
Seko referred to Thailand’s crucial role as Asean’s industrial hub, which Japanese companies have utilised for a long time. “The numbers of Japanese research and development facilities in Thailand is one example,” the minister said. “Our economic-centric cooperation is going to step up as high-level industry development.”
Meanwhile, the Japanese business sector had applied for investment privileges worth Bt65 billion, or about half of all foreign direct investment (FDI) in Thailand during first half of this year, said Hirunya Suchinai, secretary-general of Japan’s Board of Investment.
FDI in the first six months of the year was estimated at about Bt120 billion, from Bt291 billion in overall investment, Hirunya said.
The majority of Japanese businesses focused on petrochemical products, electronics and automotive parts, which are in line with the 10 industrial groups Thailand has prioritised, she said
The visit, and Deputy Prime Minister Somkid Jatusripitak ’s previous visit to Japan this year, marked the 130-year relationship between the two countries. Thailand is reforming the economy in line with Japanese Prime Minister Shinzo Abe’s “Japan 5.0” initiative, in which all aspects of society and industrial production were connected by digital technology, Somkid said.
“When I invited them to visit Thailand, I did not expect the mission would be so large as 500 investors, including executives from Keidanren and Jetro [economic organisations],” Somkid said in an exclusive interview with Thepchai Yong, editor-in-chief of Nation Multimedia Group.
As the Thai economy picks up speed, reaching 3.7-per-cent growth in the second quarter of this year, Japanese investors had more confidence in the economy, he said.
He said the two sides today would sign a memorandum of understanding to cement cooperation in the new “s-curve industries”, EEC investment and human resource development.
Tomorrow, the delegation will visit investment sites in the EEC to mark progress in the economic zone.
“There has never been a Japanese minister visiting investment sites in Thailand, and there is also a deputy governor from Fukuoka joining the trip, suggesting future contact will be not only between central governments but also between local governments on both sides,” said Somkid.
Somkid added that he was confident that the new wave of investment from Japan would ensure that the EEC was not built from scratch, since over the past 40 years Japanese investors had already invested in large projects in the Eastern Seaboard.
However, he conceded that Japanese investors were worried about the shortage of skilled labour.
“It not easy to lead all people into Thailand 4.0 since a large number of labourers are in the agricultural and services sectors,” Somkid said.
The challenge was to balance economic development by promoting tourism and exports, while moving towards a high-value economy driven by higher technology and innovation, according to Somkid.
Asked whether the Japanese mission could adversely affect Thailand’s relationship with China, Somkid said the government would welcome investment missions from China and every other country.
As the global economy shifts to Asia and China, Japan and India are expected to be major production centres, while Thailand is at the centre of the CLMV bloc.