June 16--Newly elected board members of the Federation of Thai Industries (FTI) are calling for an expanded role for the Board of Investment (BoI) and enhanced access to loans for small and medium-sized enterprises (SMEs).
Thailand is already an attractive investment destination that offers many investment privileges, said Supant Mongkolsuthree, who became FTI chairman in April.
In the region, Indonesia offers no privileges to foreign investors, he said during an interview with the Bangkok Post and Post Today.
Instead, the BoI should facilitate Thai businesses venturing abroad. It is estimated that Thai companies operating overseas account for 40% of the country's export earnings.
However, there are no organisations to help Thai investors overseas similar to the Japanese External Trade Organization (Jetro) and the Japanese Chamber of Commerce.
Allowing foreign subsidiaries of Thai companies to transfer profits back to Thailand without double taxation would encourage more expansion outside the homebase. But this will requires changes in the law that will take time.
FTI secretary-general Kitti Tangjitrmaneesakda said the BoI must also be selective in granting investment promotion. The country still needs investments that allow technology transfer, not just those that generate employment. In fact, Thailand is experiencing a labour shortage.
He said hundreds of Japanese companies in various sectors are coming to Thailand as a result of the Japanese government's stimulation programme.
This could present additional risks to Thai industry as it puts more pressure on the labour market.
At the same time, many SMEs lacks access to low-interest loans from commercial banks due to overly complicated procedures and liquidity issues so they can only get loans from specialised banks, which charge higher rates, said Mr Supant.
The FTI plans to step in to help SMEs by streamlining the process with the Thai Credit Guarantee Corporation acting as guarantor. The move means banks can approve loans straight away.
The focus will initially be on FTI members because they have a Ror Ngor 4 factory permit, he said. Eventually, it will be expanded to non-members as well.
In a related development, the FTI will be one of the centres where companies can process requests for factory permits. This will be the next step to facilitate investment after the Industry Ministry vowed to shorten the approval period from 45 to 30 days.
The approval process has been a source of contention for the industry as it could be arbitrarily delayed, creating room for corruption.
Mr Supant is certain, after alleged internal factionalism, that the FTI could push its policies through as the organisation is more united than ever.
When asked who would be the ideal candidate in charge of the country's industrial development under the National Council for Peace and Order, Mr Supant said that he would have to have industrial experience and know how the sector operates.
In the short term, payments to farmers under the rice-pledging scheme would have a positive impact on the local economy as more money would be circulated and boost domestic consumption, he said.
But he suggested that the salary of civil servants should be raised to increase their purchasing power while corruption should be reduced.
Regarding longer term economic policies, Mr Kitti said the FTI is concerned that negotiations regarding the Generalised System of Preferences are likely to be stalled until an elected government is formed as some export-oriented industries will be affected.
The FTI has met with foreign chambers of commerce as well as Jetro and they have affirmed that they remain confident about business here.
"At the moment, it's business as usual for many foreign businesses here as import and export activities have yet to be affected," said Prasert Maekwatana, FTI vice-chairman for economics logistics.
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