New Zealand concerned over Thai vulnerability
NEW ZEALAND businesses are concerned about Thailand's economic vulnerability due to the political uncertainty and its attractiveness for manufacturing in its path of returning to democracy.
“It is very complicated for Thailand. From the business point of view, after the military regime is in place, the country is still mindful and not disruptive for business. However, what we are concerned about today is your economy slowing down,” Tony Nowell, chairman of the Asean New Zealand Business Council, said last week.
On June 10, the Bank of Thailand will likely downgrade its gross domestic product growth forecast for this year from 3.8 per cent. It has noted that the country was facing a “slow and fragile” economic recovery in April because the private sector and households continued to be cautious with their spending.
Nowell said Thailand would become less attractive to manufacturers because of the political uncertainty.
“We expect the issue to be democracy. So businesses cautiously watch this development. Ultimately, businesses want to see a democratic Thailand once again.
“We are also seeing some issues |arise related to the fishery industry. There is a warning issued to the Thai government to solve the problems of illegal and unidentified [industry workers].
“Our businesses are also concern-|ed about that issue as those businesses are really involved with that supply chain. They are sourcing products or providing packaging in that supply chain,” said Nowell, who also serves as the private sector co-chairman for the Apec Policy Partnership on Food Security.
Asean countries, including Thailand, are part of the global value chain and it is also important for the New Zealand economy, he added.
Stephen Harris, director for South and Southeast Asia at New Zealand’s Foreign Affairs and Trade Ministry, said the relationship between New Zealand and the Asean region was “comprehensive”.
“With about a 700 million population, the region offers a huge potential market in the near future, not just for today,” he said.
This market is mainly driven by consumers’ needs.
New Zealand has green technology, which could improve efficiency in managing costs and prices in value and supply chains in the region, he said.
Among the 10 Asean countries, Thailand ranks third with Bt60.37 billion after Malaysia (Bt77.17 billion) and Singapore (Bt71.75 billion). Of New Zealand’s exports, the Asean market takes more than 10 per cent. Last year, two-way-trade had grown to NZ$12.8 billion (Bt321.85 billion).
Thailand is New Zealand’s tenth largest trading partner. Merchandise still dominates trade but some services like education, health, security and information technology are considerably promising.
