Voice of the business community

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Trade and business in Thailand are represented by the Thai Chamber of Commerce and the attached Board of Trade of Thailand. It delivers services and business guidance to its members and is also monitoring the strategies for Thailand’s integration into the Asean Economic Community.

After the severe floods in Thailand, the country now needs to create new confidence for investors that it is capable of managing the water masses in the future, says the Chairman of Thailand’s Chamber of Commerce, Phongsak Assakul. Export has been affected, but is likely to recover in 2012. Thailand’s people also need more enlightenment with regard to the Asean trade bloc, he reckons.

Q: The floods in Thailand had quite a huge impact on the economy with about 400 billion baht of damage. What do you think are the effects of the floods, and what could be the potential for investors?

A: At this moment, we are quite wary about what we hear about the flood damage, and it’s difficult to talk about investors. People are worried, and if investors are coming or if they are staying, that is the question. The effect of the floods was huge, we never had such an extent of flooded area, some 20 million people have been hit, in Bangkok about 1 million. We have to evaluate what really happened [to houses, businesses and infrastructure], which will take up to six months, and the government will have to answer the question of how this will not be repeated in the future.

Q: The Minister of Finance was mentioning that the government will spend a lot of money for managing the water. He was talking about big projects of constructing new water ways which would also be a good opportunity for investors to participate. Do you agree?

A: What we first have to think is to give aid to the people. Lots of them have lost their homes, they have lost their livelihood, and their income from farming is gone for this year, which needs to be compensated by the government. Many food cultures are destroyed, and it takes up to six years to renew them. These are the calamities that came with the floods. When the water comes, we need to drain it, not try to block it. And the damage on the roads is terrible. It is an immense task for the government to find a way out of this. Currently, it needs to provide food and electricity for the people. What’s left is that the image of Thailand has been suffering among investors.

Q: What is your message then to foreign chambers of commerce?

A: They all ask the same questions, if I go and invest in Thailand, and put the money in, will there be a risk that the same thing happens again? Of course we must have a better water management. We knew it two months before that the rain was coming, but there is no complete water management. What happens are just ad-hoc measures, day-by-day. At this moment, we still have to buy pumps, for example. The water management has to be much better next year. Here at the Chamber of Commerce and the Board of Trade of Thailand we have a committee working towards long-term solutions for water management in Thailand, to avoid floods. This may take five to ten years. We must find some way to get rid of the water that we expect every year, depending on the rain. But at all times we must be ready to manage it. There are a lot of experts coming here to look at the situation, and the government should listen to them. Water will be the most sought-after resource in the near future, and we really need to manage it. Just take a look at Singapore. They are transforming a lake into a fresh water reservoir, and they have the most modern water sourcing plant for drinking water from seawater. If you want people come to invest in Thailand, we have to proof to them that we can manage the water problem. We really have to.

Q: Let’s change topics and look at the import-export figures. So far, Thailand has had an international trade surplus of $12.9 billion in 2010. Analysts say that this surplus is likely to shrink due to higher demand for imported goods. What is the outlook for the import-export business, where do you see it going?

A: I think that there will be more need to import machinery to replace the old stock. There is also more need for construction material. However, if we look at the figures we have had an export share [of GDP] of over 50 per cent, and one month back [October 2011] it was only 10 per cent due to the floods. Now we have to see how fast we can recover. So the import this year will be much higher, thus export much less, but I think we can recover by the second or third quarter of 2012. We will slowly come to the old figures, if assistance will be given by the government. Large corporations will be able to get the funding.

Q: The international electronics market has been quite affected by the Thailand floods.

A: Yes, this was the result of a chain of events. The factories could not be reached by their suppliers, and they could not ship the goods to customers, because the roads were flooded. Many factories were not flooded, but they had no parts. In fact, it is ridiculous what happened.  The government really needs to rethink what it will do to upkeep the confidence of existing investors and show new investors that it can manage a crisis like this in a professional way. There were too many agencies handling this, the Water Committee being only one out of four. There should be somebody high up in charge.

Q: What do you think will be the effect of the creation of the Asean Economic Community on the economy of Thailand?

A: We really have to look at that. We have been warning the people before, we told them you have to look at the big picture, you have to be competitive in this new 600 million people market. Years ago, we got the shock of our lives in the Chamber of Commerce when we made a survey, and 78 per cent of the people said they don’t know anything about this. And we went out and told the people that Asean is coming and they may be affected. We have opened missions in four countries around, Laos, Cambodia, Myanmar and Vietnam, to give and collect information and try to expand the knowledge and scope of this.

Q: Could you elaborate on the economic relationship that Thailand has with the Middle East?

A: We have missions ongoing, and we have contacts to the chambers of commerce there. We see that people are interested in information and participation. But the trade value is not too high. We export rice to the Middle East, air conditioners, textiles, and rubber products. We import mainly crude oil and natural gas.

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Reading Time: 5 minutes

Trade and business in Thailand are represented by the Thai Chamber of Commerce and the attached Board of Trade of Thailand. It delivers services and business guidance to its members and is also monitoring the strategies for Thailand’s integration into the Asean Economic Community.

Reading Time: 5 minutes

Trade and business in Thailand are represented by the Thai Chamber of Commerce and the attached Board of Trade of Thailand. It delivers services and business guidance to its members and is also monitoring the strategies for Thailand’s integration into the Asean Economic Community.

After the severe floods in Thailand, the country now needs to create new confidence for investors that it is capable of managing the water masses in the future, says the Chairman of Thailand’s Chamber of Commerce, Phongsak Assakul. Export has been affected, but is likely to recover in 2012. Thailand’s people also need more enlightenment with regard to the Asean trade bloc, he reckons.

Q: The floods in Thailand had quite a huge impact on the economy with about 400 billion baht of damage. What do you think are the effects of the floods, and what could be the potential for investors?

A: At this moment, we are quite wary about what we hear about the flood damage, and it’s difficult to talk about investors. People are worried, and if investors are coming or if they are staying, that is the question. The effect of the floods was huge, we never had such an extent of flooded area, some 20 million people have been hit, in Bangkok about 1 million. We have to evaluate what really happened [to houses, businesses and infrastructure], which will take up to six months, and the government will have to answer the question of how this will not be repeated in the future.

Q: The Minister of Finance was mentioning that the government will spend a lot of money for managing the water. He was talking about big projects of constructing new water ways which would also be a good opportunity for investors to participate. Do you agree?

A: What we first have to think is to give aid to the people. Lots of them have lost their homes, they have lost their livelihood, and their income from farming is gone for this year, which needs to be compensated by the government. Many food cultures are destroyed, and it takes up to six years to renew them. These are the calamities that came with the floods. When the water comes, we need to drain it, not try to block it. And the damage on the roads is terrible. It is an immense task for the government to find a way out of this. Currently, it needs to provide food and electricity for the people. What’s left is that the image of Thailand has been suffering among investors.

Q: What is your message then to foreign chambers of commerce?

A: They all ask the same questions, if I go and invest in Thailand, and put the money in, will there be a risk that the same thing happens again? Of course we must have a better water management. We knew it two months before that the rain was coming, but there is no complete water management. What happens are just ad-hoc measures, day-by-day. At this moment, we still have to buy pumps, for example. The water management has to be much better next year. Here at the Chamber of Commerce and the Board of Trade of Thailand we have a committee working towards long-term solutions for water management in Thailand, to avoid floods. This may take five to ten years. We must find some way to get rid of the water that we expect every year, depending on the rain. But at all times we must be ready to manage it. There are a lot of experts coming here to look at the situation, and the government should listen to them. Water will be the most sought-after resource in the near future, and we really need to manage it. Just take a look at Singapore. They are transforming a lake into a fresh water reservoir, and they have the most modern water sourcing plant for drinking water from seawater. If you want people come to invest in Thailand, we have to proof to them that we can manage the water problem. We really have to.

Q: Let’s change topics and look at the import-export figures. So far, Thailand has had an international trade surplus of $12.9 billion in 2010. Analysts say that this surplus is likely to shrink due to higher demand for imported goods. What is the outlook for the import-export business, where do you see it going?

A: I think that there will be more need to import machinery to replace the old stock. There is also more need for construction material. However, if we look at the figures we have had an export share [of GDP] of over 50 per cent, and one month back [October 2011] it was only 10 per cent due to the floods. Now we have to see how fast we can recover. So the import this year will be much higher, thus export much less, but I think we can recover by the second or third quarter of 2012. We will slowly come to the old figures, if assistance will be given by the government. Large corporations will be able to get the funding.

Q: The international electronics market has been quite affected by the Thailand floods.

A: Yes, this was the result of a chain of events. The factories could not be reached by their suppliers, and they could not ship the goods to customers, because the roads were flooded. Many factories were not flooded, but they had no parts. In fact, it is ridiculous what happened.  The government really needs to rethink what it will do to upkeep the confidence of existing investors and show new investors that it can manage a crisis like this in a professional way. There were too many agencies handling this, the Water Committee being only one out of four. There should be somebody high up in charge.

Q: What do you think will be the effect of the creation of the Asean Economic Community on the economy of Thailand?

A: We really have to look at that. We have been warning the people before, we told them you have to look at the big picture, you have to be competitive in this new 600 million people market. Years ago, we got the shock of our lives in the Chamber of Commerce when we made a survey, and 78 per cent of the people said they don’t know anything about this. And we went out and told the people that Asean is coming and they may be affected. We have opened missions in four countries around, Laos, Cambodia, Myanmar and Vietnam, to give and collect information and try to expand the knowledge and scope of this.

Q: Could you elaborate on the economic relationship that Thailand has with the Middle East?

A: We have missions ongoing, and we have contacts to the chambers of commerce there. We see that people are interested in information and participation. But the trade value is not too high. We export rice to the Middle East, air conditioners, textiles, and rubber products. We import mainly crude oil and natural gas.

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