Seminar hears benefits of border trade

The private sector wants the government to boost border trade to shore up economic growth accordingly, according to the Federation of Thai Industries.

FTI vice chairman Jane Namchaisiri said that in terms of value, border trade last year accounted for 71 per cent of trade between Thailand and its neighbours, or Bt900 billion. If the government put more effort into promoting border trade, its value could grow, which would boost economic growth accordingly. 

He made the remark during a discussion of Thailand’s preparations for entering the Asean Economic Community (AEC) in terms of fiscal, monetary, and trade policies at a seminar held by the National Economic and Social Development Board (NESDB) yesterday.

Among the obstacles to border trade are a lack of checkpoints, smuggling, and the difficulty of processing imports, he added.

Sutapa Amornvivat, chief economist at Siam Commercial Bank’s Economic Intelligence Centre, said strong promotion of border trade would help the economies of the provinces as well.

She added that  the government should also improve the regulations, infrastructure and payment systems related to border trade.

Porametee Vimolsiri, deputy secretary-general of the NESDB, said the full realisation of AEC would challenge fiscal and monetary policies. For example, Thailand has higher average tax rates than other AEC members. If the country decides to reduce taxes to align them with neighbours’, this will affect the country’s revenue. Therefore the government should pursue overall tax reform to maintain the country’s fiscal status at the appropriate level.

Speaking to the annual NESDB conference on the topic “Thailand’s Routes to the Asean Economic Community”, Prime Minister Yingluck Shinawatra conceded that Thailand faced challenges ahead of the AEC after changing situations in the world’s leading economic powers, consumers’ behaviour, technology and population. 

She said the United States, Japan and the European Union had adopted quantitative easing to solve their prolonged economic problems, prompting an influx of foreign capital into Thailand in the first and second quarters of this year, appreciation of the baht and adverse impacts on Thai exports.

 

Balanced economy

The government has put efforts into balancing the economy to depend less on exports, which contribute about 70 per cent of gross domestic product, she said. 

Yingluck added that consumers across the world now were consuming more health products, specific products for each age range and technology-related products for more convenience.

Technological advancement brought about rapid changes in business and industrial development and Thailand needs to focus on upgrading its manufacturing sector and on becoming the owner of technology to take a lead it Asean manufacturing, she said.

Yingluck said that the government had put efforts into strengthening the economy, from rehabilitation after the 2011 floods to long-term policies on social and economic development. 

On the regional front, Asean cooperation will be forged among the 10 member countries and other nations.