Risk management tops priorities
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Global woes, AEC, politics call for right strategies: Ex-BOT chief
Former Bank of Thailand governor Tarisa Watanagase stressed risk management while urging companies to draw up the right strategies for competitive positioning amid the global economic uncertainties, the upcoming Asean Economic Community (AEC) and domestic political situations.
Speaking at a seminar organised by Bank of Tokyo-Mitsubishi UFJ yesterday, Tarisa said: “Risk management is essential. Do not overdo yourself. Don’t over-borrow.”
Many Thai companies with debt-to-equity ratios of two to three times learned harsh lessons
during the 1997 Asian financial crisis. Currently, corporate debts average about 70-80 per cent of equities.
This year’s economic volatility could be higher than last year, with the global economic uncertainties, particularly in the euro zone, Tarisa said, noting the AEC will also come into effect in the next three years.
Some political risks remain with a plan to legislate amendments to the Constitution, and this may need to be monitored, she said.
In the face of these challenges, companies may need to rethink their strategies.
“We need to study what impacts will follow from the AEC and make adjustments in time,” she added.
The country also needs to reassure the private sector, particularly insurers, regarding flood prevention and crisis management.
“Businesses can go on with confidence to manage risks [from floods]. Companies may have their own prevention measures at certain levels. However, they need assurance” from the relevant authorities, Tarisa said.
The government may need to be careful on the sustainability of its fiscal position in the long term, which could mean reforming how it acquires revenue. “Expenditures may need to consider efficiency and worthiness,” Tarisa noted.
