Private sector jots wish list
With the prospect of a new government achingly close, key business figures are spelling out their wants and needs in terms of continuity and improvements, write Post reporters
- 11 Feb 2019 at 04:30
- WRITER: POST REPORTERS
On March 24, Thailand gets a fresh chance to align the public and private sectors. (Photo by Wichan Charoenkiatpakul)
Despite having different work cultures and development mindsets, public and private policies should ideally go hand-in-hand to usher a country's development forward.
While this might not always be the case for most countries, Thailand gets another chance to reshape the alignment of public and private policies as the general election edges closer.
Eligible Thai voters are set to cast their ballots on March 24 after a series of delays and false promises by the military-led government.
The run-up to the election has seen some colourful developments, but less coverage has been focused on what the private sector wants to see in a new government.
The Bangkok Post talked to prominent business figures about their views on policy continuity and future improvements.
REFORM AND REASSESS
The primary focus of most political parties is the economy, since bread-and-butter issues affect party popularity and election results, particularly support from the grassroots electorate.
Besides implementing economic policies adhering to fiscal discipline, laying the long-term economic foundation should go hand in hand with policies associated with bread-and-butter issues, said Paiboon Nalinthrangkurn, chairman of the Federation of Thai Capital Market Organisations.
"I want political parties to think about what to do with state-owned enterprises," Mr Paiboon said. "At first, the incumbent government came to say that it would reform these enterprises, but then stopped for an unknown reason."
Reform of state-owned enterprises is key to strengthening Thailand's economic fundamentals because they are involved with businesses that have great importance to the country's basic infrastructure, he said.
Today's state-owned enterprises are not strong in terms of management policy and financial position, Mr Paiboon said.
Clearly establishing economic policies with countries having trade importance to Thailand and setting such policies at the ministerial level for strategic export destinations should also be prioritised, he said.
"It's about time Thailand reassess its economic structure, as 85% of GDP comes from exports and tourism, effectively relying on the external front [for boosting economic growth]," he said.
The regulatory guillotine is also a must, since there are still several outdated regulations in place that impede the Thailand 4.0 strategy, Mr Paiboon said.
Ariya Tiranaprakij, executive vice-president of the Thai Bond Market Association, said promoting long-term savings to prepare for a greying demography is what she wants to see in a new government.
Such investment promotion doesn't have to be restricted to the equity asset class, but rather it can be expanded to other classes such as debt securities, Ms Ariya said.
Continuity of the existing policy on limiting investment in bills of exchange (B/Es) to avoid risk exposure is preferred, she said.
At present, investors wanting to purchase B/Es must be no more than 10 people per single B/E purchase, while high-net-worth investors can only invest in B/Es via intermediaries.
The new government should continue the development of the planned infrastructure megaprojects, which are deemed the key drivers for the country's future economic growth, said Kalin Sarasin, chairman of the Thai Chamber of Commerce.
The projects include the Eastern Economic Corridor (EEC), double-track rail, motorways, mass transit projects in Greater Bangkok, the high-speed rail network linking three major airports, and the third-phase development of Laem Chabang seaport.
These projects will help enhance the country's competitiveness in the long run, Mr Kalin said.
Expansion of Suvarnabhumi and U-tapao airports to ease air traffic congestion, as well as upgraded airport capacity in Chiang Mai, Khon Kaen and Phuket provinces, also must continue, he said.
Connectivity development with neighbouring countries is vital for businesses, especially border trade promotion.
While the village internet initiative is essential to help develop the country's e-commerce sector, the government must educate people in communities to apply the scheme to full capacity.
Nonetheless, the most important issue the new government must continue is the effort to tackle income disparity, Mr Kalin said. To address the problem in the long run, the government should provide knowledge and education to the people.
Graduates from vocational education should be retrained to upgrade their skills to cope with disruptions arising from the digital economy.
The government should promote tourism in villages and communities and train people in communities as service providers. Income from tourism will help reduce the prevailing income disparity.
According to Mr Kalin, R&D is a crucial issue. The government should allocate more budget to develop people and industries through collaboration with the private sector.
On farm prices, he said the government should not intervene in the commodities market by unreasonably raising prices via farm subsidies. The new government should let market mechanisms work independently, while monitoring imports of farm products flooding into the country.
Mr Kalin proposed that the next government move forward with improvements in ease of doing business to reduce local manufacturers' production costs.
Amid rapid changes occurring in the global markets, the government should act as both the facilitator and supporter, he said.
Ghanyapad Tantipipatpong, chairwoman of the Thai National Shippers' Council, said the upcoming government should continue the flagship EEC project and investment in infrastructure development, as well as support rising exports.
Infrastructure investment should accelerate after the election, now that the infrastructure master development plan covering the rail network is in place, she said.
Investment in the e-commerce platform and 5G technology infrastructure should continue to upgrade internet services.
For embattled farm prices, the government should not only offer farmers with financial assistance, but also provide techniques on improving their cultivation and harvesting efficiency to lower production costs, Ms Ghanyapad said.
Income disparity will become lower once farmers earn more profit and income, she said.
The new government should also handle the wage issue more carefully. Most politicians usually opt to raise the daily minimum wage without thinking about productivity enhancement.
For every minimum daily wage hike, foreign labourers will get more benefits, as labour-intensive factories prefer hiring foreign workers.
Instead, the government should provide education and develop the necessary skills for Thai labourers, Ms Ghanyapad said.
Thai industries still need skilled labourers. If their skills are upgraded, employers will be more than willing to raise wages, she said.
Continuity in monetary and fiscal stability, including interest rates, inflation, foreign exchange and public debt, is what the private sector wants to see the most, said Predee Daochai, chairman of the Thai Bankers' Association.
Policymakers have been managing Thailand's monetary and fiscal stability soundly, and the private sector wants it to be continued to further drive economic growth, Mr Predee said.
The private sector also desires to see resolutions of income disparity and labour shortages, movement on environmental issues and continuity in public investment and budget disbursement on the new government's to-do list, he said.
Although the outgoing government's efforts to help those stuck at the bottom of the income scale have made strides in bringing down the poverty rate, reducing the gap between the rich and poor through tax measures and education must continue.
Economic growth without regard to the environment can stifle future development goals, as witnessed by the PM2.5 dust problem.
The environmental problem could also add operating costs for business operators in the event that there are no protection measures, Mr Predee said.
The labour shortage problem has lingered for a while, he said, and the existing workforce needs to be re-skilled amid intensifying digital disruption.
Last but not least, public investment and budget disbursement must continue during the transition period of the new government, he said.
Given time constraints, budgeting is among the priorities of the next administration to avert discontinuity in management that could stall economic momentum.
"The new government's stability is beyond control," Mr Predee said. "Any [political] parties that form a government must address the country's existing problems."
Thailand's upcoming general election is a positive factor poised to move the economy forward through boosting consumer and investor confidence. With such anticipation, many business operators have high hopes that the general election will change Thailand's economic growth trajectory.
Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI), said business operators have a positive outlook that the election will boost Thailand's economic growth potential and improve the country's image worldwide.
"Thailand has had no election for several years," Mr Supant said. "This will be a great time to move the country forward in many ways in terms of the economy, society and international diplomatic relations. Many countries will accept Thailand as a democracy."
The FTI wants to see continuity in existing economic policies under the new government, as several public investment projects have already been jump-started and there are projects deemed to provide support for local businesses.
"The Eastern Economic Corridor (EEC) is the main infrastructure investment project, and major investments in [this zone] will help boost Thailand's economic growth in the future," Mr Supant said.
He said the business sector wants to see the new government tackle social inequality because it has been a major drag on the country's development for too long.
The FTI expects the new government to promote and support innovation, high technology and R&D because Thailand needs to improve efficiency across every industry and enhance business competition.
The federation anticipates the new government having a honeymoon period of about two months. Afterward, it should be a reality check for the government to work and follow campaign policies.
The FTI will give a three-month time frame for the new government to work and uphold its campaign policies.
"This is enough time to analyse the new government," Mr Supant said. "The FTI hopes the new government will listen to the private sector or business operators, because government policies and the private sector's business plans should align in terms of investment."