Private sector urges govt to prop up local economy

It is also proposes that the government re-examine the possibility of establishing an export development committee to tackle the country’s trade difficulties.

The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), which comprises the Federation of Thai Industries, the Thai Chamber of Commerce and the Thai Bankers’ Association, met recently to discuss June’s economic situation, which saw year-on-year export contraction of 7.9 per cent and a 4.7-per-cent fall in shipments for the first half of the year.

Thai exports in June shrank by a larger amount than the May figures, the JSCCIB said, expressing concern over the whole year’s exports, which could now see a contraction for the third year in a row despite the weakening baht.

The Kingdom’s falling exports are in line with the performance in other regional exporting countries, following the economic slowdown in China and Asean, it added.

In June, the Thai economy was driven mainly by tourism, with a 53.1-per-cent rise in the number of foreign visitors, and accelerated disbursement of the government budget.

Private spending started improving – albeit remaining at a low level – given an expansion of spending on non-durable goods.

However, consistent drops have been seen in the consumption of durable goods, due to lower farm income on the back of low prices of agricultural products, the drought and low consumer confidence, said the JSCCIB.

Meanwhile, most private investment in June was made for equipment repair and improvement of production efficiency.

The joint committee said the government may have to drive the economy consistently with support from all sectors in order to strengthen the domestic economic recovery.

This would help alleviate impacts from the export sector, which is signalling weaker-than-expected performance.

The JSCCIB is also urging the government to reconsider a proposal for the establishment of an export development committee, which could be the key to solving obstacles to trade and accelerating exports in key product groups.

One such obstacle involves the ease of doing business, with examples of how this can be achieved being a value-added-tax exemption on imports of raw materials and a tax waiver on income remitted from operators that invest abroad, the committee said.

To help facilitate trade and investment in the Asia-Pacific Economic Cooperation area, the committee is extending the Apec Business Travel Card’s (ABTC) validity period from three years to five years for Thai businessmen submitting an application from the beginning of next month.

Applications for the ABTC, whose holders will spend less time on immigration procedures, incur reduced visa costs in some countries, and be able to get multiple visas with 60-90 days per stay, will be available online from the beginning of next year.

The JSCCIB also supports Thai negotiations for free-trade agreements with Turkey and Pakistan, which are targeted to be finalised in 2016 and 2017, respectively.

Meanwhile, at the July 22 meeting of the Thailand-Myanmar border business development committee in Bangkok, both sides agreed to propose that their governments open a Yangon-Mae Sot route and accelerate negotiations between the countries’ central banks for a direct exchange-rate system.

Others measures include speeding up construction of the second Friendship Bridge crossing the Moei River and acceleration of the countries’ negotiations on opening routes for public buses and transportation trucks under the memorandum of understanding on the Initial Implementation of the Greater Mekong Sub-region Cross-Border Transport Agreement.