Country needs functioning govt for economy's sake: private sector
April 24, 2014 00:00
By PETCHANET PRATRUANGKRAI
THE BOARD OF TRADE of Thailand and the Thai Chamber of Commerce (TCC) hope the country will get a fully functioning government as soon possible in order to drive economic growth, as the current vacuum has left the economy in the doldrums.
The Board of Trade and the TCC, which together form one of the Kingdom’s leading private organisations, do not however expect a government with full authority to be in place in the first half of the year.
The economy is projected to expand by just 2.5 per cent this year, which would be the slowest growth in three years since the devastating flood of late 2011, said Isara Vongkusolkit, chairman of the Board of Trade and the TCC.
“Thailand needs to have a new government to fully administrate the country, and to approve and manage projects. The Kingdom should get a new government within the third quarter to approve the budget for the new fiscal year [starting October 1]. However, in the private sector we [the Board/TCC] don’t know what is an appropriate period for setting up the general election,” he said.
The private-sector bodies pointed out that since the political conflict had intensified and Thailand lacked an authorised government, the economy had slowed considerably.
In the first quarter, the economy is expected to have declined by 1 per cent, while the second quarter will see growth of less than 1 per cent, they predict.
Retail and wholesale sales have dropped 30 per cent due to lower purchasing power, while property and domestic tourism businesses have faced slow growth.
Moreover, the prices of agricultural products have decreased this year, damaging farmers’ incomes.
To promote economic growth amidst a host of negative factors, the chamber believes the promotion of cross-border trade would be one effective way to encourage export growth.
It projects that cross-border trade with Malaysia, Myanmar, Cambodia and Laos will grow by 7-10 per cent this year, higher than the average projection of 5-per-cent expansion for overall export growth.
Last year, border trade was valued Bt924.24 billion, accounting for 70 per cent of the total trade value with the four neighbouring nations.
To promote cross-border trade, the TCC suggests that the government allow the private sector to invest in developing border checkpoints on its own, so that more trade and investment could be seen in the near future.
This would be a quicker way of developing the checkpoints than waiting for the government to do so, said Isara.
About Bt10 billion would be needed to expand the routes leading to border checkpoints from one lane to two, he said, adding that some temporary checkpoints should be upgraded to permanent ones so that the operating hours for trading and the movement of people could be expanded.
The chairman also said that without an authorised government, Thailand would not be able to develop border checkpoints in time for the full implementation of the Asean Economic Community at the end of next year.
To develop the checkpoints, private enterprises would expect to get a return on their investment within seven years, he said.
Niyom Wairatpanij, chairman of the Board of Trade’s Economic Cooperation with Neighbouring Countries Committee, said that if the proposal for private-sector investment were to be approved, the government would still have authority to manage cross-border trade, while the private investors would collect a fee for the trading.
To promote cross-border trade growth and investment in border areas, the Board of Trade and the TCC propose that the government increase the flexibility of rules and regulations for facilitating such commerce, he said.
He added that10 temporary border checkpoints should be upgraded to permanent checkpoints. Thailand currently has only 34 permanent checkpoints.
The operating hours for border checkpoints should also be extended, either to 8pm or midnight, he suggested.
The government has been called upon to foster ties with each neighbouring country under Joint Trade Committee arrangements, so that both sides can closely cooperate in promoting border-trade growth and eliminating non-tariff barriers.