‘War room’ advises on external policy

Thailand needs to restructure the export, import and investment sectors to guard against mounting external risks, particularly from the ongoing trade war, the Brexit impasse and the mounting international geopolitical situation, says Boonyarit Kalayanamit, permanent commerce secretary.

Yesterday Mr Boonyarit chaired a war room meeting, which noted the stronger baht means the country should work to benefit from the scenario, such as importing more raw materials as they are cheaper.

Regulations to promote the import of raw materials need to be amended, while measures or incentives to lure more foreign direct investments, particularly in high technology and innovations, should be introduced, the meeting concluded.

Mr Boonyarit said the meeting will submit the proposal to the Joint Public and Private Sector Consultative Committee on Commerce’s meeting, chaired by Commerce Minister Jurin Laksanawisit.

He said Thailand should also revive long-delayed free trade agreement (FTA) negotiations with the EU to retain the country’s export competitiveness. The European bloc pursued FTA negotiations with other Asean nations, signing pacts with Singapore and Vietnam.

FTA negotiations between Thailand and the EU have been on hold since the 2014 coup and subsequent military rule. The EU protested the suspension of democracy.

Mr Boonyarit said Thailand needs to settle trade talks as soon as possible, including the Regional Comprehensive Economic Partnership and bilateral pacts with Turkey, Sri Lanka and Pakistan.

Kriengkrai Thiennukul, vicechairman of the Federation of Thai Industries, said the ongoing trade war between China and the US, the Brexit impasse, and Hong Kong protests have affected trade, finance and investment confidence worldwide.

Weaker confidence has sent Thai manufacturing, exports and global demand into a tailspin, he said.

“With GDP heavily reliant on the export sector, Thailand needs to focus more on how to raise domestic consumption,” said Mr Kriengkrai. “Domestic consumption should rise to 40% of GDP from 30%, with exports falling to 60% from 70% to reduce risk from external factors, which are uncontrollable.”

He said the risk of dependence on exports is evident from the first eight months this year.

“The private sector forecasts the exports the rest of this year and next year as worrisome. This year’s exports are highly likely to contract by 2%, and possibly 3% next year if the situation does not change,” said Mr Kriengkrai.

The government is being urged to support domestic industries and Thai products, with clearer policies to promote public consumption of Thai brands.

“Thai producers are ready to produce standardised and quality products,” he said.