The Federation of Thai Industries (FTI) says global disruption caused by the Russia-Ukraine conflict offers major opportunities for the Thai economy.
Fighting in Ukraine is hitting trade across the world including Thailand, driving up the price of fuel and other commodities. Thailand’s economic recovery is now slowing under pressure from inflation, as sanctions imposed on Russia by the West threaten to make the situation even worse.
Last week, representatives of the Thai private sector discussed how to turn this crisis into an opportunity at “The Big Issue 2022” seminar organised by Thansettakij and Bangkokbiz.
FTI vice-chairman Kriengkrai Thiennukul said the conflict was affecting supply chains for many important products. However, Thailand could turn this disruption into an opportunity by establishing industrial estates for several of the affected supply chains, he added.
He said Thailand had the potential to produce material or parts for many industries.
Thai manufacturers could proceed even with the world supply chain facing problems while they could also attract foreign investment to boost the domestic economy.
He said the FTI would propose this move to the Eastern Economic Corridor policy committee and Thailand Board of Investment soon.
Kriengkrai also suggested pushing the Bio-Circular-Green (BCG) model as the new economic engine to create added value across Thai industries.
Meanwhile, Thailand has the potential to become a top-10 exporter of trending products such as plant-based food, he said. The country should push to use more bio-fertilisers to increase the export value of organic goods, he continued.
Thai Chamber of Commerce chairman Sanan Angubolkul said the government should speed up its transition to endemic Covid-19. He said it should not wait until July but instead gradually ease restrictions on economic activities to boost Thailand’s competitiveness and attract tourists.
Sanan urged the introduction of innovative technologies to drive the economy. He also pushed targets for new S-Curve businesses via the four Rs, namely Restart: create new businesses from existing ones; Reimagine: rethink business models to respond to the changing situation; Recover: reorientate and find new opportunities for recovery; and Reform: scrap outdated regulations and laws to transition to e-government.
Sanan added that the government should keep the policy interest rate low to boost small- and medium-sized enterprises (SME) and liquidity. Failure to keep the interest rate low would lead to gross domestic product (GDP) growth of less than three per cent and stagflation, he warned. The government should also use budget borrowing to lift the economy after the Cabinet raised the debt ceiling to 70 per cent.
Krungthai Bank president Payong Srivanich urged the government to help with manufacturing costs, living costs, and the employment situation. It should also adopt measures to boost economic recovery.
In the mid to long term, the government should focus on transitioning to a green economy to reach the goals of the COP26 global climate conference. This would create trust for investment that would boost employment and economic circulation. Manufacturing and investment should be geared to the digital economy era to increase Thailand’s competitiveness, Payong added.
Moreover, he urged the government to avoid over-reliance on exports and tourism, especially Chinese tourists. He suggested focusing on quality tourism and promoting Thailand to new groups of visitors.
Federation of Thai Capital Market Organisations (FETCO) chairman Paiboon Nalinthrangkurn noted that government and private debt had soared above $300 trillion globally because of the Covid-19 crisis.
He warned that purchasing power would be hit if the interest rate is increased.
Addressing inflation, he said the prices of 94 per cent of products that had risen would not fall again once the inflation crisis was over, admitting this was a difficult problem to solve.
He wanted the government to use this opportunity to support investment for small operators and start-ups. FETCO has already proposed this plan to government.
Paiboon added that inflation was being driven up by the rising fuel price. Raising the interest rate would not bring down fuel prices or solve inflation. Instead, the government should continue subsidising fuel to cap prices, he said.
THE NATION (THAILAND)/ASIA NEWS NETWORK