By SUCHEERA PINIJPARAKARN
THAILAND SHOULD consider joining the Trans-Pacific Partnership because it will create collaboration among Asean countries, a banker says.
On Monday, 12 countries reached an agreement on trade liberalisation. Four of them are in the Asean region.
Deja Tulananda, vice executive chairman of Bangkok Bank, said yesterday that the TPP would offer more advantages than disadvantages to Thailand.
The country should enter this bloc because the TPP will help strengthen countries and foster collaboration in Asean, he claimed.
Thailand is export-dependent and the global economic slowdown has dragged down its export sector. This pact would help reinforce Thailand’s exports, Deja said.
Bangkok Bank is worried about exports because this sector is important to the economy.
The bank believes the export sector can improve if the government speeds up the release of its stocks from the rice-pledging scheme. The programme warped the price of rice and crippled exports, Deja claimed.
Several of the bank’s corporate customers are in the export sector, but they can maintain their businesses despite the export sluggishness, he said.
Siam Commercial Bank’s Economic Intelligence Centre said in a research note that the TPP would open up opportunities for its 12 members to expand their overseas markets. It will encourage investment and also strengthen those economies.
For example, Malaysia can increase sales of key products such as electronic equipment, rubber and palm under the agreement. The TPP is one way to attract foreign direct investment to the partnership’s members, the research house said.
Deja said Thailand’s export slump continued to brake economic growth.
Bangkok Bank expects gross domestic product next year to grow at a similar rate to this year. The bank’s loan-growth projection of 4 per cent next year is also similar to this year’s.
The enterprise sector will remain the key driver of the bank’s loan growth next year. If the government can disburse infrastructure-project budgets quickly, it will boost the confidence of corporations to indulge in business activities.
“Now, customers have toned down business-expansion plans because they want to wait and see where the domestic economy is going,” Deja said.
“However, the bank has seen that some Thai companies have expanded their businesses in neighbouring countries, such as garments. Thai manufacturers in this industry have set up plants in several countries in Asean including Vietnam to reduce operating costs.”
Bangkok Bank has established a footprint in every Asean country except Brunei. The move of Thai companies abroad is good for the bank’s branch network in Asean.
However, the loan-growth target of 4 per cent next year will be driven by both domestic and international activities, he said.