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Somkid lays out broad outline of measures to support shift to domestic-led economy

Jan 06. 2016
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The deputy prime minister in charge of economic affairs, Somkid Jatusripitak, has laid out a general outline of the stimulus measures which will be used this year to support the shift from an export-led economy to a domestic-led one.
The measures include extra Board of Investment (BoI) privileges and tax incentives from the Finance Ministry.
State banks will become the “tip of the spear” in aiding small and medium-sized enterprises (SMEs) and the agricultural sector to create innovative and value-added products that will support their move to higher up the value chain.
“The economy in the fourth quarter [of 2015] will definitely be better than in the third quarter and we have to maintain this momentum, while all economic engines will fully move forward this year,” Somkid said during his keynote speech yesterday at a seminar arranged by the Economic Reporters Association. 
“For example, how can exports be sitting in the back seat when the sector accounted for 70 per cent of GDP [gross domestic product]? I have instructed the Commerce Ministry that exports have to expand by 5 per cent this year, and I will discuss with the ministry how to make that happen,” he said.
The deputy premier also said he had instructed the BoI that he wanted to see more investments at the local level, such as small agricultural-processing factories, by providing extra privileges for private-sector businesses that were willing to invest with cooperatives and other farmers’ groups.
The Bank for Agriculture and Agricultural Cooperatives (BAAC) and the Government Savings Bank (GSB), meanwhile, will play a vital role in providing financial and other support for farmers and SMEs to use as a means to increase the level of local innovation and the quality of their output, he added.
The BAAC is also in charge of encouraging the production of higher-value crops and support for the Smart Farmers initiative. 
Moreover, the promotion of local tourism will support the sales of these value-added products, similar to the role played by roadside stations in Japan, and the Tourism and Sports Ministry has been instructed to draw up a special budget specifically to invest in this idea, he told the forum.
Tourism and Sports Minister Kobkarn Wattanavrangkul told reporters that details of the special budget would be released in the next two to three weeks, with the source of funding most likely being the ministry’s budget – and possibly some contribution from the central budget.
The ministry is also planning to promote night tourism in Thailand with the aim of providing more options for tourists and encouraging foreign visitors to stay in the Kingdom a day or two longer than the usual nine days, while the main goal of the tourism sector this year is to increase the quality of tourists instead of their numbers, she said. 
Somkid said that investment in local infrastructure via the Village Fund would definitely increase this year to support the creation of value-added local products and tourism.
Meanwhile, the Information and Communications Technology Ministry will push for the National Broadband strategy to add at least 10,000 broadband-access points throughout the country, in order to support e-commerce devolvement as the new market channel for processed agriculture and other local and SME products.
Some of the state income of around Bt200 billion gained from the fourth-generation (4G) spectrum auctions will be used to support the National Broadband strategy, he added.
Village Fund committees around the country are due to submit their investment plans to the National Village and Urban Community Fund Office for compilation on January 20, after which they will be presented to the Cabinet and the public, the deputy PM said.
In another initiative, large corporates will be lured via Finance Ministry tax incentives to be given to enterprises that are willing to create corporate ventures with start-ups, while the GSB and the Small and Medium Enterprise Development Bank will be in charge of providing financial support for start-ups, he told the seminar.
The Finance Ministry is also drafting a law amendment to allow Thai investors putting their money outside the country to repatriate dividends more easily, in order to support the expansion of Thai SMEs into neighbouring countries, he said.
Somkid also told the forum that he would be meeting the BAAC, the GSB and the National Village and Urban Community Fund Office tomorrow on the push towards higher-value local products and investments in local infrastructure.

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