Cabinet to increase ease of business, approves cluster plan

Thailand’s cabinet approved a plan last week to set up six industrial “super clusters” in nine provinces in order to boost the Kingdom’s competitiveness, and after meetings with the private sector, economic ministers resolved to increase the ease of doing business in the Kingdom.

The six clusters are automobile and parts; electronics, appliances and telecommunications; petrochemicals and other environmental friendly chemical products; digital; garments and clothing, and processed food. The first super cluster will be at Map Ta Phut on the Eastern Seaboard, while the others will be in Ayutthaya, Pathum Thani, Chon Buri, Rayong, Chachoengsao, Prachin Buri, Nakhon Ratchasima Chiang Mai and Phuket.

The initiative will be spearheaded by Somkid Jatusripitak, deputy prime minister in charge of the economy, who said the new incentives to invest in the super clusters would rival the best incentives offered by competing countries. The Industry Ministry, which will establish and oversee the super clusters, will work with the Board of Investment (BoI), which will provide tax and non-tax incentives for targeted industries within the clusters.

“The concept of increasing production and industrial competitiveness is based not just on foreigners coming here to produce and sell their products. It involves the whole value chain, including the presence of raw materials, which eventually led to the cluster idea,” Somkid said, adding that clusters and incentives would be geared to encouraging foreign firms to transfer knowledge and technology.

On ease of doing business, the ministers said they would take measures to make it easier to establish a new business, apply for a work permit, pay customs fees and acquire a license for construction in provincial areas.

“The relevant ministries will take two weeks to discuss [the matter] further with the private sector before they come up with solutions, which will be compiled and presented to the prime minister a month later,” around November, Somkid said.

Measures that do not require changes to the law would be addressed first. Those that require legal changes will require more time to resolve, said Somkid, who expects things to move more quickly because progress reports will now be made directly to the prime minister.

According to the World Bank, it currently takes just over 27 days on average to start a business in Thailand. The Kingdom is ranked at 26th out of 189 countries on the World Bank’s Ease of Doing Business Index. Thailand was ranked 28 in 2014, while Singapore is currently in the top spot and Malaysia is ranked at 18.

 

 

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Thailand Focus September 28, 2015
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