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Welcome Remarks
Draft 29 Jan.
Rolls-Royce Supply Chain Event in South East AsiaThailand
Dr. Atchaka Brimble
Secretary General
Thailand Board of Investment
Royal Thai Government
“Overview of Thai Economic Situation and Investment Policy”
2 February 2009
Bangkok, Thailand
Mr. Szafranck, Mr. Freestone, Distinguished Speakers, RollsRoyce Suppliers, Ladies and Gentlemen:
It is my great pleasure to welcome you this evening and to have the
opportunity to share my thoughts about the Thai economy.
Before I begin my prepared remarks, I would like to thank the good
folks from Rolls-Royce for bringing so many of the company’s
suppliers to Thailand this week. It is particularly gratifying when a
long-term investor such as Rolls-Royce recognizes Thailand’s
industrial capabilities and encourages suppliers to explore investment
opportunities in Thailand.
They understand that Thailand offers cost-effective domestic inputs,
subcontractors who have demonstrated the ability to produce for the
global marketplace, strong supporting industries, and a government
that provides an extremely competitive set of investment promotion
This morning, Khun Ajarin spoke with you about the investment
promotion activities of the Board of Investment and the state of the
aviation industry in Thailand, and shared information about other
sectors of interest.
Therefore, I shall confine the bulk of my prepared remarks to the Thai
economy and the direction of investment policy, and will then open
the floor for Q&A.
Ladies and Gentlemen:
One can hardly pick up a newspaper, anyplace in the world, without
reading about the global economic downturn that began with the subprime mortgage crisis in the US and, to some degree, Europe.
And while we are not decoupled from the global economy and will
suffer from global recession, our economic fundamentals are strong.
Our financial institutions have clean balance sheets, with only
marginal exposure to the “hybrid” financial products that caused the
global financial meltdown.
Despite the onset of the financial crisis and domestic political
instability, in 2008 Thailand recorded GDP growth of 3.9%, in large
part due to record exports of more than US$175 billion.
Thailand has international reserves of more than US$110 billion,
which is equal to more than 6 months of import cover, and both
inflation and interest rates remain quite low. We continue to attract
foreign investment, and the Thai baht continues to trade in a relatively
narrow band around 34-35 to the dollar.
Let me also remind you about some of Thailand’s advantages.
Thailand has resources and infrastructure to support most major
industries. We have abundant food supply, which enable us to not
only feed our people, but also export our surplus to around the world.
In addition, we have a cost-effective work force that is consistently
praised for its trainability and adaptability, and we are continuing to
improve our workplace skills. Our ability to produce for the global
marketplace has never been in question, and Thai manufactured goods
in a variety of sectors have gained acceptance around the world.
Indeed, in 2008, exports grew by 15.5% and, while we are beginning
to see a slowdown in export demand, we still anticipate that exports
will grow by around 3%-6% in 2009.
While our economic fundamentals remain solid, the government
recognizes that it cannot be complacent as the challenges of the global
financial crisis are severe. As no one knows when the global economy
will recover, we have lowered 2009 growth projections to 0-2%.
Prime Minister Abhisit understands the need to increase the
purchasing power of the people, and the government recently
announced a 116 billion baht stimulus package to spur domestic
consumption and lessen the impact of the financial crisis.
The government has also announced a 6-month extension of a series
of measures to reduce consumer costs for public utilities. By lowering
water and electricity costs and offering free rides on buses and on 3rd
class trains nationwide, we are reducing costs for those in the greatest
need and helping them cope with the downturn.
We also introduced Bt40 billion in tax cuts to ease the cost of living,
help SMEs and stimulate the property market and support our export
More stimulus programs are forthcoming, however, the government
understands the need to exercise fiscal prudence and the Prime
Minister has made it clear that additional spending will not breach the
limits of fiscal discipline.
In addition, the government has adopted a series of measures to
stimulate tourism, which is a key source of foreign earnings for
Visa fees will be waived for three months, entrance charges at all
national parks will be reduced, the private sector can claim meeting
and conference tax rebates at double the original rate, and aircraft
landing and parking fees will be discounted at major airports in the
So, I think you can see that the new government, which has been in
office for only a month, is doing as much as it can to stimulate both
domestic consumption and Thai exports.
Ladies and Gentlemen:
For decades, the Thai government has been committed to an open
economy in which all are welcome to participate. This continues to be
the case today.
When he spoke with investors shortly after taking office, Prime
Minister Abhisit was quite clear. Thailand continues to welcome
foreign investors and recognizes the importance of foreign investment
to the country’s ongoing industrial development.
He went on to say that the government is committed to free and fair
competition and will work to ensure that Thailand remains one of the
most desirable investment destinations in Asia by systematically
addressing issues that are of the greatest concern to investors.
To underscore his commitment and to ensure that investment remains
a high priority for his government, the Prime Minister will serve as
chairman of the Board of Investment and will personally lead our
“road shows” to key markets in the EU, Japan, China, and the US, etc.
Ladies and Gentlemen:
The message I want to leave you with is that the Board of Investment
is here to serve as an effective one-stop service center or help desk for
foreign investors.
We will continue to enhance the investment environment, not only
through new or expanded tax measures and services, but by working
with investors to help resolve their problems.
I look forward to having the opportunity to work with all of you in the
near future, and I am certain that by selecting Thailand, you will be
making an investment in your future.