Time to set a coherent economic agenda: SET official

Speaking at a seminar arranged by the Capital Market Research Institute yesterday, Pakorn said around 60 per cent of companies listed on the SET were service-oriented but 60 per cent of the country’s economy was concentrated on manufacturing and agriculture. That means the policies of the private and public sectors were not in alignment.

“How come the essence of listed companies and the economy are not going in the same direction? Is it because of the policies or is it because investors have seen that the winners in the country’s economy are not part of the country’s economic make-up? What is interesting is whether the government will continue on the path of distortion or change the agenda to be going in the same direction as the listed companies,” he said.

“Our manufacturing sector is booming because the government gave importance to the sector in the past via the creation of industrial estates and the promotion of hard-disk-drive production, but since then we have not had any national policy in regards to the economy for 10 years.” 

He said the government should not focus only on improving transport infrastructure but should give importance to the upgrade of the country’s financial infrastructure also, since Thailand is currently lagging behind other countries in Asean in this aspect.

“Thailand’s financial infrastructures such as taxes, and financial regulations regarding mergers and acquisitions, cannot compete or be compared with those of Malaysia and Singapore. Meanwhile Thai companies that have ventured outside the country and want to send back their dividends still have to pay tax, which leads to the problem of double taxation,” he said.

“These regulatory barriers are hampering corporate growth, and if we have good financial structures it would be the same as having good logistics, since it would allow us to expand at a faster rate.” 

He gave the example of PTT wanting to open a treasury centre in Thailand, but it could not do it because of the tax burden it would involve. Moreover, Thailand wants to be a trade centre but at the same time does not allow other countries to use the baht as a means of trade in their jurisdictions. 

Regarding the shortage of labour, Surong Bulakul, PTT’s chief financial officer, recommended that companies create their own skilled workforces instead of importing them, via the setting up and promotion of specialised or vocational schools while finding allies in other countries to import unskilled labour to be trained in Thailand.

“We cannot keep buying labour, we have to build our own. But creating something takes time and requires a lot of patience,” he said.