Made in ASEAN initiative on the cards

Made in Asean initiative on the cards

Thailand is set to team up with the Japan External Trade Organization (Jetro) and Asean members to push forward the Made in Asean initiative, making certain products to the same quality standards.

Commerce Minister Apiradi Tantraporn said holding products to the same quality standards would facilitate production connectivity throughout the supply chain, cutting production costs for regional manufacturers.

“Under this initiative, manufacturers in Asean could make products for different brands, but those produced at joint manufacturing bases would be labelled Made in Asean for re-export in the world market,” she said after a meeting with Jetro president Masayasu Hosumi.

Jetro has pleddged to coordinate development of production skills of manufacturers in neighbouring countries and upgrade their management skills to meet international standards.

Lat month, Jetro agreed to cooperate with the Commerce Ministry to upgrade small and medium-sized enterprises, particularly under the One Tambon One Product scheme, starting with crockery in Lampang province.

Jetro also pledged to help promote and support the expansion of Thai service businesses in Japan.

The assistance stemmed from an agreement reached during an official visit to Japan by Deputy Prime Minister Somkid Jatusripitak last November.

Mrs Apiradi said potential products that could be made under the Made in Asean initiative included electronics, electrical appliances, garments, furniture and cosmetics.

Thailand will propose the initiative at a meeting of ministers from Cambodia, Laos, Myanmar and Vietnam to be held in Bangkok in February or March.

The Thai tourism and sports, culture and industry ministers will attend.

The forum will also try to underline trade and investment cooperation in the region, she said.

In a related development, Mrs Apiradi quoted Mr Hosumi as saying Jetro was now preparing policy suggestions for the government, based on a survey of Japanese firms in Thailand.

From Bangkok Post

Foreign investment plummets 78% in junta-ruled Thailand

Thailand’s Prime Minister Prayuth Chan-o-cha addressing the nation in Bangkok, Thailand, on Dec 23, 2015.PHOTO: REUTERS

BANGKOK (AFP) – Foreign investment in Thailand plummeted last year, official data showed, the latest sign that the kingdom’s once-vibrant economy continues to falter under prolonged military rule.

Total investment applied for by foreign companies between January and November 2015 plunged 78 per cent from a year earlier to 93.8 billion baht (S$3.71 billion), according to figures from Thailand’s state-run Board of Investment (BoI) sent to AFP late Tuesday.

The figures will do little to cheer junta leader Prayut Chan-o-cha, who seized power in a May 2014 coup vowing to restore stability but who has struggled to kickstart the country’s lacklustre economy.

After years of impressive growth, Thailand’s economy is struggling, mired in high household debt, stuttering exports and low consumer confidence.

It also faces stiff competition from increasingly attractive neighbours like Vietnam, Cambodia and Myanmar.

Particularly worrying for Prime Minister Prayut is a significant drop off in investment from Japan – historically the largest investor in Thailand by far – which slumped 81 per cent.

EU investment also plunged from 86.7 billion baht in 2014 to just 2 billion baht last year. Investment from the United States was also heavily down, while Chinese investment was only down slightly.

Krystal Tan, an Asia economist with Capital Economics, said the trend was indicative of deeper fissures within the Thai economy, which was among the slowest growing in the region last year.

“The 2015 (FDI) figures are very weak, indicating foreign investor confidence in the economy remains fragile,” she told AFP.

“More broadly, Thailand’s economic competitiveness is on the decline,” she added. “The country continues to face significant challenges on the political front that have negative repercussions for business and investor confidence.”

But Somprawin Manprasert, an economics professor at Chulalongkorn University, said the drop-off was down to new investment incentives, which became effective in 2015, favouring high-tech industries.

“The current flow of FDI represents ‘quality’ investment rather than ‘quantity,'” he told AFP. “All in all, this policy should help propel Thailand to the next stage of development.”

Thailand has historically been a top choice for investors in South-east Asia, offering liberal economic policies, a skilled workforce and a strategic location as the gateway to the greater Mekong region.

But analysts say years of political instability, including two military coups, have hampered the country’s economic potential – often referred to locally as the “lost decade”.

Earlier this month the World Bank forecast that Thailand’s GDP growth rate would slip from 2.5 per cent in 2015 to just 2 per cent this year, by far the gloomiest regional prediction.

Nearby Vietnam, on the other hand, reported a record number of foreign investment in 2015 and the fastest growth rate in five years at 6.68 per cent.

By The Straits Times, Singapore