Prime Minister Prayut reassures US investors, new industries get Washington spotlight
Prime Minister Prayut Chan-o-cha has assured US investors that the government’s financial measures will help spur Thailand’s economic growth, benefiting economic integration both in the region and globally.
Gen. Prayut was speaking of the progress made by his government’s economic strategies and the country’s reform measures at a working dinner on Wednesday ahead of the 2016 Nuclear Security Summit in Washington. The dinner, co-hosted by the U.S. Chamber of Commerce (USCC) and the U.S. – ASEAN Business Council (USABC), was also attended by USABC President and CEO Alex Feldman, USCC Senior Vice-President for Asia Tami Overby, Executives from leading US companies, US government officials and diplomats.
According to Deputy Government Spokesman Werachon Sukhondhapatipak, Gen. Prayut reassured US investors of Thailand’s economic growth as the government’s financial strategies steer the country towards sustainable economic prosperity. Topics discussed at the event included boosting the country’s prosperity by minimising laws and trade barriers as well as promoting economic growth through industrial investment and a digital economy based on “people, public, private, partnership”.
The government has focused on three key areas: Special Economic Zones (SEZs), the digital economy and intellectual property rights, Gen Prayut said. As for the SEZs, Gen Prayut said the government aimed to boost two industrial sectors: Existing potential industry (First S-Curve) and future industry (New S-Curve). The First S-Curve comprises five industrial clusters: Next-generation automotive, smart electronics, qualitative tourism and tourism targeting high-spending tourists, agriculture and biotechnology, and food processing. The New S-Curve consists of five other clusters: Robotics, aviation and logistics, biofuels and biochemicals, digital economy, and medical hub.
For the digital economy, Gen. Prayut said services will be developed based on information technology (IT). IT network and data centres will be installed nationwide to facilitate business transactions for both Thai and foreign investors and their clients. The Ministry of Information and Communications Technology (ICT) proposed eight draft bills related to the digital economy to the National Legislative Assembly for its consideration last month. The ICT is also drafting the National Economic and Social Development Plan for the 2016-2020 period, which will pave the way for the US private sector to invest in Thai digital businesses.
Regarding intellectual property rights, Gen. Prayut said the government is currently working on a plan to reform intellectual property rights legislation focusing on four aspects: Creativity, protection, commercial use and suppression. In February, the National Intellectual Property Policy Committee, chaired by the prime minister, vowed to strictly prosecute all intellectual property violations, including internet-related violations.
Gen. Prayut said the Thai government has also expedited efforts to standardize measures to protect intellectual property to meet international expectations. He added that last year Thailand was able to weather the global economic downturn thanks to high international reserves, a low unemployment rate and a skilled workforce. The US is ranked as Thailand’s third-largest trade partner, generating an estimated 39.8 billion baht a year for the Thai economy. More than 100 US-based firms have also invested in Thailand in various industries.
Source : Bangkokpost.com
Date of event: 30 March 2016
Prepared speech :
Remarks by H.E. General Prayut Chan-o-cha, Prime Minister of the Kingdom of Thailand
at the Dinner hosted by the U.S. Chamber of Commerce and U.S.-ASEAN Business Council
30 March 2016, 18:30 – 21:00 hours
Four Seasons Hotel, Washington, D.C.
President and CEO of USABC,
Senior Vice President for Asia of USCC,
Assistant Secretary of Commerce,
Admiral James Alexander Winnefeld,
We have met on many occasions – in Bangkok, New York – and again today in Washington,D.C. . I would like to thank the US Chamber of Commerce and the US-ASEAN Business Council for co-hosting this dinner. It is an honour for me and the Thai delegation to be here. I would like to thank Mr. Alex Feldman, President and CEO of the USABC, and Ms. Tami Overby, Senior Vice President for Asia of the USCC, for their warm welcome.
Tonight’s dinner demonstrates the importance that the USABC and the USCC give to Thailand, and the importance of Thailand for the US private sector. Every opportunity to shake hands and meet with representatives from your companies is reassurance of our friendship and partnership; and I hope that our meeting today will help continue and strengthen the partnership between Thailand and the U.S.’ private sector as well as strengthen the 183-year bilateral relationship.
As you very well know, the outlook for the world economy today is not so bright. However, consider Asia. It has a population of 4.5 billion people, a combined GDP of 27 trillion US dollars, and accounts for a third of the world’s total trade value. Moreover, Asia is an important center of economic growth, has natural resources in abundance, and has food and energy security. It also has a high-quality workforce that has increasing purchasing power and the ability to innovate. Asia, therefore, has the potential to reinvigorate the world from its economic doldrums, and drive regional and global economic growth.
As Thailand is a longstanding ally of the United States in the Asia-Pacific, I am pleased to see that the United States — and President Obama — gives importance to Thailand and ASEAN by pursuing the Strategic Rebalancing policy, which allows the United States to once again increase its role on security, economic, and social issues in the region by reconnecting with its friends and partners. This Strategic Rebalancing helps find better balance in the relations between the large and small countries in the region. At the same time, it helps build economic connectivity which benefits all sides – both between ASEAN Member States and between ASEAN and its dialogue partners such as China, Japan, India Russia and the United States. I believe that Thailand is the important link in all of this. I also truly believe that if the United States and other major powers pursue their policies in a constructive manner with a focus on mutual benefits and common interests, it will contribute to peace and prosperity in the region. In this respect, the private sector plays an important role, helping to complement and bring to fruition policy by pursuing tangible economic cooperation, trade and investment.
Today, I would like to reiterate that my Government is committed to reform the country toward stability, prosperity and sustainability so that Thailand can be a responsible, strong and constructive partner for the United States, its friends and the international community.
However, before being able to be a responsible partner to the world, Thailand first has to build its internal strength. The Government, therefore, has taken inspiration from His Majesty the King’s Sufficiency Economy Philosophy as the country’s approach to national development. The Philosophy rests upon 3 important components: moderation, prudence and self-immunity, and emphasizes the application of knowledge as well as ethics and virtues in the actions that we take. The Government uses this guidance to develop the country sustainably in accordance with the UN’s Sustainable Development Goals (SDGs), which aim to bring about a sustainable world, an inclusive economy, the reduction of economic disparity, and development that is environmentally-friendly, or the so called “balanced development through responsible capitalism” which creates prosperity for the people, eliminates waste and pollution, and reduces excessive consumption of natural resources. In driving major reforms in 5 areas – political, economic, social, law and justice procedures – the Government utilizes the mechanism of People Public Private Partnerships (PPPP) in order to allow the public sector, the private sector, the academic sector and the civil society to cooperate and drive forward the country together. My Government has joined hands with Thailand’s biggest corporations to form 13 People Public Private Partnership working groups to strengthen SMEs. These include the Working Group on Improving Innovation and Products; the Working Group on Attracting Investment and Infrastructure; and the Working Group on the Promotion of Exports and Investment in Foreign Countries.
Even in the face of a volatile and slumbering world economy, the Thai economy in 2015 grew more than many had forecast because of strong economic fundamentals, such as the high level of reserves, low unemployment rate, and highly-skilled and innovative labour force.
Thai – US economic ties are as close as ever. Our bilateral trade value in 2015 was at 39.8 billion US dollars. The U.S. is our third largest trading partner. On the investment side, the U.S. is the second largest investor in Thailand, with over one hundred U.S. companies investing in various sectors. I hope to see more U.S. companies invest in Thailand or become partners with Thai companies.
The Government is trying to create an environment that is suitable for investment and give high priority to combating corruption to achieve transparency and good governance. It has made combating corruption a national agenda and has pursued the policy through various means including the establishment of the National Anti-Corruption Committee, the requirement of an Integrity Pact (IP) in contracts to prevent the giving or receiving of bribes, and the Construction Sector Transparency Initiative (CoST), which allows greater opportunity for the people to investigate public procurement and reduces the chances of a third party seeking illegal benefits from authorized persons.
My Government also gives priority to pursuing policy and reforming Thailand’s economic infrastructure to increase the ease of doing business in Thailand. The Government has undertaken various measures to facilitate trade and business operations, such as the reduction of corporate taxes, and the exemption of import duty on machinery. Moreover, the Board of Investment of Thailand has also established a One Start One Stop investment Center (OSOS) in order to promote and support foreign investment in Thailand.
I would therefore like to take this opportunity to inform you that these reforms, especially the economic reforms, will bring about ample opportunities for us to strengthen our cooperation in trade and investment.
First is the opportunity to enter into the regional supply chain. The Government gives high priority to the development of Special Economic Zones (SEZs), in both cluster and super-cluster forms. It is one of the most important economic policies of the Government to promote integration of businesses and organizations that undertake related economic activities in the same or nearby areas in order to reduce economic obstacles and develop economic value chains both vertically and horizontally. This is to enhance Thailand’s investment potentials as well as to spread development to various regions. Investment in cluster format will obtain more benefits and incentives than normal investment. There are two target groups for clustered investment. One is the First S-Curve industries or the five existing groups of industries in which Thailand has high potentials – next generation automotive, next generation electronics, affluent medical and wellness tourism, agriculture and biotechnology and food for the future. The other target group is the New S-Curve or the industries for the future, such as robotics, aviation and logistics, biofuels and biochemicals, digital industries and medical hubs, which will enjoy further tax incentives and measures.
Second is the opportunity to take part in developing Thailand’s digital economy, which will contribute to a new phase of the country’s economic development. The Digital Economy will be an important step in the modernization of the Thai economy by allowing the use of ICT technology to manage businesses and provide services. For example, Thailand is now working on setting up ICT and communication networks all over the country as well as setting up data centers. Furthermore, the Government is improving ways to provide services and transactions electronically. We now provide government services electronically via a system called “e-Government”. The latest effort to driving Thailand’s Digital Economy is the fourth generation (4G) license auction which was done in a transparent and competitive manner. In addition, the Ministry of ICT is in the process of proposing eight pieces of new legislation to support the development of a comprehensive Digital Economy and which the National Legislative Assembly (NLA) will consider this month. Also, Thailand is currently drafting the new Digital Economy development plan for 2016 – 2020, which will provide a great opportunity for the U.S. private sector to join with Thailand in the development of our Digital Economy.
Third, the protection of intellectual property rights is an important tool to encourage the development of new technology and innovation for manufacturing and industries. On 11 February this year, I chaired the first meeting (of this year) of the national intellectual property policy committee to underscore the importance of inter-agency cooperation. I instructed all agencies to take law enforcement on violations of intellectual property rights very seriously, including the suppression of violations of intellectual property rights both in general and on the internet.
Furthermore, Thailand is currently drafting an action plan for intellectual property rights reform, which consists of 4 areas – creative activity, protection, application for commercial use and prevention. This will support Government policy in promoting creative ideas and innovation to propel economic development toward stability, prosperity and sustainability.
Furthermore, the Government is improving rules and regulations on the process of intellectual property rights registration in order to make the process more efficient and increase the standard of intellectual property rights protection. The Government is genuine and sincere in working to improve intellectual property rights protection and has allocated more resources to address the issue. For example, we will increase the number of examiners in order to support the increasing number of applications. Furthermore, we place great importance on instilling in our people, especially children and youths still in school, a respect for intellectual property rights, and an awareness of the harms caused by violations of such rights.
Lastly, this year is an important year for Thailand and ASEAN, as the ASEAN Community has been established. It is a great opportunity for ASEAN and its partners, especially the U.S., to strengthen cooperation in all dimensions. I think this is your chance to extend Thai-US economic cooperation to other ASEAN Member States, especially the CLMV, in a tangible manner through the Thailand+1 initiative. We will grow together without leaving anyone behind.
The Government’s current infrastructure policy aims to strengthen our strategic location as a hub for regional connectivity. This entails a complete upgrade of our land, water and air transportation systems. Our recent infrastructure investment initiatives are as follows:
- Railway – The Government has developed new routes of the dual-track railways; a regional route connecting Thailand-Laos-China, inter-city high speed trains between Bangkok-Chiang Mai, Bangkok-Hua Hin, Bangkok-Pattaya-Map Ta Phut and 10 other new railway routes.
- Water transportation – The Government has expedited the improvement of deep seaports in Laem Chabang and Phuket to receive high-end tourist cruise ships and yachts.
- Air transportation – such as the Expansion of Suvarnabhumi International (Phase II), and renovation of U-Tapao International Airport and Don Mueang Airport which is already on-going.
On 15-16 February this year, I attended the special ASEAN-US Summit in Sunnylands, California. In that meeting, Leaders have agreed to promote entrepreneurs’ ability to use innovation and technology to reduce production costs and improve product standards in a concrete way. The leaders supported President Obama’s initiative to establish a network of three Connect Centers in Jakarta, Singapore and Bangkok in order to strengthen the U.S. economic engagement with ASEAN and the ASEAN Member States. The Centers will also be coordinating between the private and public sectors, which will allow for faster and easier access to public information and U.S. government resources.
On connectivity between international trade agreements, there are 2 relevant international agreements – RCEP and TPP. I see a need for us to truly integrate the region’s economy through RCEP and TPP integration in a way that is complimentary. To this effect, cooperation between ASEAN and the U.S. can help increase the overall capabilities of the ASEAN members to modernize current rules and regulations to support high quality trade and investment agreements. Currently, Thailand is studying the TPP to prepare ourselves for possible accession to the agreement in the future.
No matter who will become the next president of the U.S., I hope you, as leading businessmen of the U.S., will be able to influence policy so that Thailand and the U.S. remain close partners who continue to grow together economically. Today, I would like to see us spend time talking over and exchanging ideas on how we can continue our cooperation and lend each other support.
Finally, I would like to thank you once again. My delegation and I are very pleased to be invited by the USCC and the USABC to tonight’s dinner as we are delighted to be among friends of Thailand like you. I fervently hope that all of you will be a part of our success and stand side by side with us to strengthen our partnership. We will be “stronger together”.
Kob Khun and Sawasdee Krub (Thank you.)
* * * * *