Bangkok Post (13 December 2007)
New investment should grow 10% in 2008, up from 3.9% this year, thanks to greater market confidence and sentiment following the Dec 23 election, according to Kirida Bhaopichitr, an economist for the World Bank.
New investment should grow 10% in 2008, up from 3.9% this year, thanks to greater market confidence and sentiment following the Dec 23 election, according to Kirida Bhaopichitr, an economist for the World Bank.
She said at an economics conference at the Stock Exchange of Thailand yesterday that 280 billion baht in Board of Investment-approved projects were expected to begin in 2008.
''In 2006, there were projects worth 280 billion baht approved by the BoI. Normally, real investment will start two years after approval, so this should flow in next year,'' Dr Kirida said.
While investor sentiment was expected to improve after the election, the impact on new investment would depend in part on the policy direction of the new government.
''This year we saw fewer direct investment projects from foreign investors, due to uncertainties in government policy,'' Dr Kirida said.
''But I think that investment will pick up after the election thanks to improved sentiment.''
Thanin Pa-Em, a senior official at the National Economic and Social Development Board, said sustainable economic growth would depend on making progress in boosting national competitiveness.
''We know how we can increase competitiveness. But I think Dec 23 will be a turning point for the country and its direction in the future. Without a professional government, our competitiveness will not improve and may even decline,'' he said.
A World Bank survey conducted in 2004-05 showed that regulations, skilled labour shortages and the lack of infrastructure and support services were the major constraints on the country's productivity and investment climate.
Albert Zeufack, a World bank senior economist, said Thailand should move to improve English and IT skills and increase linkages between companies.
The regulatory burden, seen by businesses as the biggest constraint, could be eased more quickly than improvements in skills or infrastructure, he said.
Napatsorn Kitaphanich, a vice-president at Somboon Advance Technology Plc, noted that for the auto sector, productivity growth this year was projected at 7% to 8%, or well behind the 10% to 15% productivity growth posted by Brazil, Russia, India and China.
The appreciation of the baht, rising labour costs and lack of skilled workers were all key constraints.
Mrs Napatsorn said the government should offer more tax incentives for research and development and accelerate new infrastructure investments to help the private sector improve its quality, cost base, engineering and management.
''At the moment, we can compete, so long as there is co-operation between the government and private sector,'' she said.
Chakkaphan Manutsathit, the chief executive officer of Team Precision, said local companies should go abroad to expand their markets and gain intelligence of new consumer trends.
Outsourcing should be increased by Thai companies to boost flexibility and productivity, he said.
''This is a trend that will grow quickly over the next three to five years. If we can't produce our own skilled labour, then we need to go abroad and outsource,'' Mr Chakkaphan said.
Thiraphong Chansiri, the president of Thai Union Frozen Products, said the baht's appreciation was a major constraint on exporters' competitiveness.
Over the past two years, the baht has gained nearly 20% against the US dollar, compared with just 2% for the Vietnamese dong, he said.
''Companies have to be serious about reducing operational costs. If we don't improve, then we simply cannot compete in global markets,'' Mr Thiraphong said.
