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Remarks by H.E. Mr. Alongkorn Ponlaboot

Deputy Minister of Commerce

at the Meeting with Chiefs of Economics and Trade Missions and

Heads of Foreign Chambers of Commerce

on the Effects of the Political Situation and Foreign Trade and

Investment in Thailand

8 June 2010, Ministry of Commerce

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Good afternoon,

Excellencies, Heads of Foreign Chambers of Commerce,

Distinguished Guests,

It is my pleasure to welcome you to the Ministry of Commerce.

I apologise for rescheduling the meeting. If you will recall, last week

the Prime Minister met with the diplomatic corps, heads of international

organizations, and presidents of foreign chambers of commerce to

explain Thailand’s political situation.

Today’s meeting is a similar exercise but with a focus on the Thai

economy and the Ministry of Commerce’s plans to assist and aid affected

businesses. In particular, I have invited you here today so that we could

sit down and discuss the effects of the political situation on the foreign

business community in Thailand. I would like to listen to your concerns

and suggestions, as Thailand’s business partners, on the types of

assistance that would be most helpful to members of the foreign business

community.

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Before I open the floor to all of you, please allow me to briefly update

you on three issues: first, the political situation in Thailand and its effects

on the economy; second, the Ministry of Commerce’s plans to assist and

aid affected businesses by the political situation; and third, an outlook on

the Thai economy.

Return to Normalcy

I am pleased to inform you that the country has returned to normalcy.

We are in the process of rehabilitation and reconciliation.

In the short run, our priority is healing the affected people and restoring

public security. A censure debate against the government took place on

the 31st May and 1

st June which is a good sign of the general acceptance

of the parliamentary process by the vast majority of the Thai people.

Moreover, the government succeeded in clarifying all issues claimed by

the opposition and won the no-confidence vote.

Both the government and private sector are working closely together to

rehabilitate the country. The “Big Cleaning Day” where thousands of

volunteers joined the Bangkok Metropolitan Administration (BMA)

for a mass clean up of the ravaged city center, is an excellent example.

Another is the “Thonglor Walking Street Sale” where a 14-rai sports

compound was transformed by its proprietor into a rent-free outlet for

businesses affected by the political situation. I commend these joint

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public and private efforts to move us forward. Most importantly

these actions show that Thai people are compassionate and willing to

make sacrifices for the good of others and the country.

I understand that most of you are concerned about the political

situation’s impacts on the Thai economy and whether it will affect

our trade and investment policies. Almost everyone from importers and

exporters, to local convenient stores, establishment owners, and tourists

were affected.

The Fiscal Policy Office’s monthly report for April 2010 states that

economic indicators for the month reflected a continual expansion when

compared with the same period last year, particularly in export and

domestic spending, while there were signs of a slow down due to

the recent political turmoil.

The Thai economy in April 2010 steadily expanded at 12 percent when

compared with the same period last year, but slowed down slightly when

compared with March 2010. Export figure for the month was still

encouraging with a growth of 35.2 percent year on year. Similarly,

private investment as represented by capital goods import grew at 39.4

percent. The number of in-bound tourists decreased, a first in seven

month, from 1.45 million persons in March 2010 to 1.1 million people in

April. The situation is estimated to cost the Thai economy 145 billion

baht or 1.5 percent of the country’s GDP .

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The Ministry of Commerce is well aware of the negative impact and loss

of opportunity for trade and investment caused by the political turmoil.

Accordingly, we have already started to implement series of measures in

order to mitigate damage and bring about a speedy economic recovery.

MOC Economic Rehabilitation Program

Short-term program Short term measures have already been introduced

by the Ministry. This type of assistance aims to help business operators

affected by the political turmoil achieve a speedy recovery, through trade

facilitation measures and stimulation of domestic consumption.

These measures include extending the deadline for businesses to submit

their financial statements by one month; deploying of mobile units to

receive business registration applications; and organizing additional trade

fairs and best buy markets, including bargain price sales such as

the “Blue Flag” consumer products festival. During 28-29 May,

the Ministry of Commerce in cooperation with the Bangkok

Metropolitan Administration and the Royal Thai Police organized

a “Together We Can Grand Sales” on Silom Road. More than 1,600

business operators affected by the political situation participated in this

event which attracted more than 400,000 people. Sales during this two-

day-event amounted to around 140 million baht.

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Within the next month we will also provide assistance with respect to

business matching through the organization of two trade fairs, namely,

“Thailand Best Friend” and “Thaifex” which will be held in Bangkok

during the end of June and early July, respectively.

Medium-term program Medium term assistant provided by the

Ministry of Commerce aims to stimulate domestic consumption and

regain global confidence in the Thai economy. We have also instructed

our overseas offices and representatives to explain and provide accurate

information about the situation in Thailand to the foreign press. The

Ministry will organize international trade exhibitions in Thailand and

participate in trade fairs overseas as previously planned, so that the

country’s exports and economic growth meet their preset target.

Long-term program I would like to take this opportunity to reaffirm

our commitment under international and bilateral trade obligations and

that the Ministry of Commerce will continue to promote and facilitate

trade and investment through consistent and transparent trade policies.

We believe that maintaining our open approach to trade and investment

liberalization is a better way to cope with the impact of recent events and

to regain global confidence than to adopt a protectionist stance.

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Outlook on Thai Economy

Lastly, I would like to give a brief overview of the outlook on the Thai

economy. As all of you live and work here, I am sure you must realize

that the Thai economy has very sound economic fundamentals.

Accordingly, I believe the political situation will affect trade and

investment only in the short run. With the government and private sector

working together, I believe the Thai economy will pick up quickly. It

already has a very good recovery going and during the first quarter of

this year, our GDP expanded at an annual rate of 12 percent, a 15 year

record high. This was due to increase of exports of goods and services

which benefited from the recovery of the global economy. We believe

export growth for the year will be at least 14 percent. Looking ahead, we

hope to see a 4-5 percent growth in the economy this year.

Asean, the US, the EU and Japan continue to be important markets for

Thailand’s exports. The Ministry will continue to seek out new

potentials especially in emerging markets around the world.

Thailand is located in the heart of the Southeast Asian region which

makes it an ideal transport and logistics hub to countries within the

region and vice versa for other regions. In order to boost trade with its

trading partners in the region, Thailand employs an “ASEAN First”, and

a “Three Rings, Five Doors” strategy.

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Thailand is located at the center and is surrounded by its partners from

the following “Three Rings” or three FTAs. The first ring is the ASEAN

FTA. The second ring is “ASEAN+3” or the ASEAN-China-Japan-

Korea FTA. The third ring is “ASEAN+6” or the ASEAN-China-Japan-

Korea-India-Australia-New Zealand FTA. Hence the “three rings.”

Airborne transport with these countries generally does not exceed 6

hours. Furthermore, different modes of transport across these counties

are well linked which ensure speedy movement of goods and people.

Thailand’s strategic location complements its FTAs with ASEAN

member countries and countries mentioned above and vice-versa.

Thailand shares its borders with Cambodia, Laos, Malaysia and

Myanmar. Thailand’s five regions will be developed into special

development zones which will facilitate trade with our neighbors.

Hence the “Five Doors.”

Before concluding, allow me to briefly touch upon the topic of “Creative

Economy” which will be the future of the Thai economy. In short,

Thailand’s rich cultural diversity will be effectively utilized to add value

to our goods and services, protected by intellectual property rights.

In concluding, I would like to thank all of you for your attention and for

your continued support to the Ministry of Commerce. Now I would like

to open the floor for discussion.

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