Six strategies agreed for boosting export competitiveness

The Commerce Ministry and three joint private committees yesterday came out with six strategies in a plan to improve export competitiveness and the trading system. The goal is to ensure the Kingdom's exports grow by 12.5 per cent to US$145.2 billion (Bt5.1 trillion) this year.

Amidst many uncertain factors affecting exports, the country's main economic driving force, the ministry held a special meeting with three influential economic bodies - the Board of Trade of Thailand, the Federation of Thai Industries (FTI) and the Thai Bankers Association - at the Queen Sirikit National Conventional Centre. The meeting aimed to draw up plans to boost exports as well as to solve exporters' problems.

After the meeting, Commerce Minister Krirk-krai Jirapaet said the export target should be achieved this year, despite many negative factors.

"The ministry will work closely with the private sector to ease export obstacles, mainly the baht's appreciation," he said, adding that growth in gross domestic product should stand at between 4.5 and 5.5 per cent if the export target is achieved.

The first strategy is capacity-building for small and medium-sized enterprises by creating more connections between government trade promotion agencies and private companies.

The second is close control of the baht's strength to enhance export competitiveness, while the third entails solving non-tariff barriers particularly anti-dumping charges and continuous bonds in major export markets such as the United States. Fourthly, the government should support an outsourcing system to solve raw material shortages, focusing on gems and jewellery products.

Fifthly, an e-logistics system should be urgently implemented to reduce exporters' transportation costs.

Finally, the government should negotiate with the Bank of Thailand to change freight charges from US dollars into baht.

This would reduce currency risks and freight forwarders might as a result drop a 5-per-cent

additional charge for the risk.

However, some exporters were of the view that exports will grow only 10 per cent rather than the ministry's projection of 12.5 per cent.

Krirk-krai also explained details of the amended Foreign Business Act (FBA) to the private sector. He said the ministry would endeavour to increase understanding about the proposed changes among private companies, particularly foreign investors.

The ministry is confident that the amended FBA will not affect foreign investors in the country.

Board of Trade of Thailand chairman Pramon Sutivong said that despite the challenging export target, exporters would try to achieve it.

However, the government should have measures in place to ensure the stability of the baht in line with the currencies of the Kingdom's neighbours.

The unit's value at Bt36 per dollar is too strong for most industries, he said. Exporters want to see the baht at Bt37 to maintain competitiveness in the world'smarket, he said.

FTI chairman Santi Villassak-danont said that if the government can control the baht's appreciation, exports should be on target. He added that the government should accelerate the signing of the Japan-Thailand Economic Cooperation Partner Agreement to boost Thai competitiveness with other countries.

However, some members of the private sector have expressed concern that the Kingdom's export growth may miss the target due to the baht's strengthening against the greenback and the currencies of its neighbours.

Pornsilp Patcharintanakul, secretary-general of the Board of Trade of Thailand, said exports this year would grow only 10 per cent. This would mean economic growth of just 3.5 per cent, because exports account for 60 per cent of overall GDP.

Although the government has tried to control its appreciation, the baht remains stronger than the country's export competitors. The private sector is, therefore, trying to reduce production costs and increase competitiveness to absorb price differences, he said.

The agriculture sector will be hardest hit by the stronger baht as most raw materials are local content.

Commerce Ministry permanent secretary Karun Kittisataporn said Thailand would achieve balance in its trade this year.

In addition, the Foreign Trade Department targets that this year's imports should grow by 11 to 13 per cent to $140 billion.

The ministry also reported yesterday that the Kingdom's trade surplus reached $2.91 billion last year, compared with a deficit of $7.23 billion in 2005. Export value surged 16.9 per cent to $129.74 billion, while the value of imports grew 7.3 per cent to $126.83 billion.

In December alone, export value increased by 16.5 per cent to $10.95 billion, meaning that $10 billion was recorded for eight consecutive months. The monthly trade surplus was $911.5 million.

Karun added that the Commerce Ministry's import-control restrictions were designed to ensure imports at the appropriate level. The measures require the private sector to report their imports, focusing on 10 raw materials and goods: steel and steel products, gold, machinery and parts, farm machinery, computer and computer parts, electrical appliances, electronics, chemicals, gems and jewellery, and textiles.

Steel imports this month are forecast at the same volume as last January. However, the import volume of gold will increase because of the up-cycle before Chinese New Year next month.

Karun said major export goods last year included food products and agro-industrial goods, especially rubber, and tapioca, while vehicles and auto parts, construction raw materials and rubber products were rising export stars.

Petchanet Pratruangkrai

The Nation


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