Bangkok--Mar 8--SET
The Minister of Finance revealed the government’s new economic policy during the “Top Executives’ Networking Forum 2005” organized by the Federation of Thai Capital Market Organizations on March 4 in Phuket. The Minister said that the country’s success has been mainly derived from the advances in the business sector. So, the announcement of the “Phuket Declaration”, by 4 core organizations, i.e., the Board of Trade, Thai Federation of Industries, Thai Bankers Association, and Federation of Thai Capital Market Organizations, was truly admirable and another milestone in Thai history.
Dr. Somkid Jatustripitak said that the topics in this seminar have all focused on significant goals, such as the clarification as to why state enterprises are privatizing, which was clearly for their future development. The clearer it was made as to their reasons for privatization; the better the public would understand and support their plans.
The Minister praised new financial tools as the future finish line for the capital market, saying that the introduction of the SET100 conveyed a more important message to the world than it first seems. The SET100’s introduction was not only a means to boast about what the country could do, but was more of a way of illuminating the quality of Thai companies that have demonstrated strong corporate governance. There would be an annual revision of the companies on the SET100, and if any company failed to show improvements in corporate governance, it would automatically be removed from the SET100. Consequently, only the best companies would remain listed. This will help announce to the world that there is a diversified range of quality companies in Thailand, both large and small.
Dr. Somkid said that his speech during the seminar was being delivered ahead of the revealing of the new cabinet lineup and covered both negative and positive views on the policy. On a positive note, Thailand will go on to be a driving engine for Asia. His speech will stress to the world that Thailand certainly has the potential to do so, and that hard work, by both the public and the private sectors, during the past 4 years have yielded their fruits.
On a negative note, Thailand does possess a weak economic structure, which has resulted in a current account deficit. An account deficit is not considered unusual for a country. But if this is not corrected, Thailand will be at a considerable disadvantage.
Because the country’s economy mainly depends on foreign capital inflow, Thailand has to rely heavily on imports. To revive the economy, exports had to be increased. However, becoming an export-based economy is not always the safest avenue to take because when exports are down, the country still needs to import raw materials to feed its production lines, resulting in higher imports and lower exports. This scenario unavoidably leads to a trade deficit. However, the public should not panic. If all parties better understand the real roots of the problems and agree to help fix them when needed, the next 4 years will definitely become a period of restructuring for Thailand, changing from “reform” to “transform”. The restructuring will be a challenge but not a cause to be alarmed.
If Thailand is to cut down its dependence on export market, it has to strengthen its local market. A strong local economy can only be attained if the economic conditions in each individual community improve. We have to eradicate poverty by enabling people to earn more. If the Thai people pull together over the next 4 years, this scenario will certainly be achieved.
Regarding economic restructuring, if a weak spot is identified, it has to be strengthened, and the government cannot do everything. Thailand’s economic conditions are in the hands of the private sector. The collaboration by these 4 organizations is certainly a good sign that during the next 4 years, Thailand will see a realistic economic restructuring.
As far as improving Thailand’s competitive edge goes, education is probably the most important factor. Free education that is worthless cannot be considered a restructuring of our educational system. A better educated population will be paramount if Thailand is to address the urgent need to develop both software and hardware here.
“Within 2 years, all schools will be equipped with computers. And if more software is developed, education at provincial schools will be instantly linked to databases and new academic curriculums, leading to an overall restructuring of our educational system in the end.
“In 2 years, there will be an acquisition of 300,000 computers for schools across the country. A part of the budget will be funded by the government while the other part will be raised within the private sector. Any participating company will be offered double tax incentives for taking part”, the Minister said.
He went on, “Still another task to be undertaken during the next 4 years will involve restructuring the government’s bureaucracy. There will be a major overhaul of state regulations. At present, more than 60 state enterprises, which are non-financial units, have joined the plan. After the restructuring, if any state enterprise wants to be listed on the stock exchange, it will be welcomed, but this is not mandatory. And after this, all state enterprise directors are to make statements to the public so as to make better communication.
“‘Transformation’ involved a number of conditions and needs strong determination to hold the course without taking any shortcuts. Therefore, all CEOs must work together to help make the transformation of the Thai economy a reality. They must all believe and have faith in the government. All must join forces and must possess trust and confidence and not just sit back and wait for others to do their part. If all parties are determined, then the 1,000-point level on The Stock Exchange of Thailand will not be only a hope but a reality and a 5 or 6, or even a 7% growth in GDP will be achievable” he went on.
The Minister hopes to see progress from this collaboration. He wishes to see all 4 organizations seriously join forces in this mission and expressed his gratitude to all participating parties. He honored all the relevant parties that have come to write a new chapter in Thai history. The Minister ended by saying he is looking forward to seeing the results of this collaboration at the end of the next 4-year period.
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