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Executive Summary
- Thai Cabinet Reshuffle Announced
- PM Yingluck Addresses CEO Forum, Outlining Government Policy on Flood Prevention
- Toyota Announces US$257 million Investment in Thailand
- Thailand Launches A New Quality Assurance: Thailand Trust Mark
- Thai Tourism Bounces Back
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Thai Cabinet Reshuffle Announced
Prime Minister Yingluck Shinawatra last week reshuffled 16 portfolios in her cabinet. Out of these, six members of the first Yingluck Cabinet were transferred to new positions and 10 new members brought in. The new cabinet of PM Yingluck would be formally sworn in before His Majesty the King on Monday.
With this cabinet reshuffle, Mr. Kittirat Na-Ranong has been appointed as Deputy Prime Minister and Minister of Finance, General Yuthasak Sasiprapa as Deputy Prime Minister, Mr. Woravat Auapinyakul as Minister attached to the Prime Minister’s Office, Mrs. Nalinee Thavisin as Minister attached to the Prime Minister’s Office, Mr. Niwatthamrong Boonsongpaisan as Minister attached to the Prime Minister’s Office, Air Chief Marshal Sukumpol Suwanatat as Minister of Defence, Mr. Tanusak Lekuthai as Deputy Minister of Finance, Mr. Natthawut Saikua as Deputy Minister of Agriculture and Cooperatives, Mr. Charupong Ruangsuwan as Minister of Transport, Mr. Chadchart Sittipunt as Deputy Minister of Transport, Mr. Arak Chonlatanon as Minister of Energy, Mr. Boonsong Teriyapirom as Minister of Commerce, Mr. Suchart Tadathamrongvej as Minister of Education, Mr. Sakda Kongpet as Deputy
Minister of Education, Mr. Surawit Khonsomboon as Deputy Minister of Public Health, and M.R. Pongsvas Svasti as Minister of Industry.
The eight ministers dismissed from the Cabinet are Police General Kowit Wattana (deputy PM), Thirachai Phuvanatnaranubala (Finance Minister), Kritsana Seehalak (PM's office minister), Pichai Naripthaphan (Energy Minister), Kittisakdi Hathasongkroh (Deputy Transport Minister), Pornsak Charoenprasert (Deputy Agriculture Minister), Torpong Chaiyasarn (Deputy Public Health Minister) and Surapong Eungampornwilai (Deputy Education Minister).
According the Public Relations Department, many business leaders believed that the cabinet reshuffle was likely to improve the performance of the government. The reshuffle is not expected to affect any change to the Thai government’s policies. The President of the Federation of Thai Industries, Mr. Payungsak Chartsutipol, said that the business community would like to see the cabinet keep pace with the changing situation to enable the private sector to become more competitive.
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PM Yingluck Addresses CEO Forum, Outlining Government Policy on Flood Prevention
Prime Minister Yingluck Shinawatra, referring to the flood that devastated certain parts of Thailand last year, affirmed her government’s commitment to turn crisis into opportunity. Addressing an audience of 400 investors and business leaders at the Board of Investment Fair’s CEO Forum on January 17, the Thai prime minister said US$11 billion had been set aside to invest in water management programs. She outlined key areas of the government plan to prevent and address future crises.
As post-flood rehabilitation efforts continue, PM Yingluck sought to assure investors that the Thai government is working hard to ensure last year’s devastation would not recur. In her speech, she noted, in particular, that five key areas for water management would be addressed. These are: 1) construction and reinforcement of flood walls, dams and barriers, and development of flood-resistant infrastructure which will protect industrial estates; 2) construction of floodways and diversion channels, improvement of drainage systems and flood retention areas to better manage water flows; 3) development of effective early warning systems, including an information database and local contingency planning to limit risks to communities; 4) consolidation of command authority in flood management during times of crisis; and 5) promotion of reforestation and better management of
eco-systems at the national level and regional level.
On the same occasion, the prime minister also assured investors that Thailand should be able to achieve economic growth of 4.5-5.5 percent this year, citing the government’s commitment to promoting domestic demand through investment and government spending. Meanwhile, as Thailand is preparing itself for ASEAN Community in 2015, corporate income taxes will be cut, while labor skills would be improved as Thailand is preparing itself for the ASEAN Community in 2015. PM Yingluck also underlined greater political stability through on-going reconciliation.
PM Yingluck met on the same day with UK former prime minister Tony Blair who was in Thailand for the BOI’s CEO Forum. During the meeting, Mr. Blair expressed confidence in the Thai government’s policies, noting they would lead to political development and a stronger economy. He also said that British investors were satisfied with the investment climate in Thailand, and that they would continue to invest in the country. Mr. Blair further elaborated that he saw Thailand as an important gateway to ASEAN and many British investors hope to establish their regional headquarters in Thailand.
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Toyota Announces US$257 million Investment in Thailand
Toyota Motor Corp. announced last Tuesday that Toyota Motor Thailand Co., Ltd. (TMT), the largest automaker in Thailand, would invest 8.2 billion baht (US$257 million) more in Thailand. These include the building of a new vehicle production plant and restarting a production line at its Thai Auto Works (TAW) plant. The expansion reflects the company’s confidence in the expected resurgence in Thailand’s economy this year, with Thai automobile sales expected to rise by nearly 40 percent. Analysts believe that Toyota and other Japanese automakers will continue investing and expanding in Thailand, despite the challenges faced by the industry last fall during the flooding.
The new manufacturing plant, Gateway Plant No. 2, will be located at Gateway industrial park in Chachoengsao province and is scheduled to start operations in mid-2013. The combined annual capacity production for Gateway Plants No. 1 and 2 is estimated to be 290,000 vehicles. Toyota is also restarting a production line at its Thai Auto Works plant to build passenger and environmentally friendly “eco cars”, according to Kyoichi Tanada, TMT president. By mid-2013, the five Toyota plants located in Thailand will have the capacity to produce 760,000 automobiles.
Looking at the Thai economy, Tanada said, “There is still very high demand in Thailand's automotive market and the demand is likely to increase in 2012." Thailand’s automobile market is expected to post a strong recovery after weak sales in the fourth quarter last year, due to pent-up demand and a tax rebate plan passed for first-time car buyers. Toyota’s market share in Thailand’s auto industry last year was nearly 37 percent.
Other automakers such as Chevrolet and Mazda also announced on January 19 that they expect their sales to be higher this year due to pent-up demand because of the flood crisis.
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Thailand Launches A New Quality Assurance: Thailand Trust Mark
The Thai Ministry of Commerce’s Department of International Trade Promotion recently launched the 'Thailand Trust Mark' (TTM), a new quality assurance for Thai products and services. The new mark, which replaces Thailand’s Brand logo introduced in 1990, will certify Thai products and services that meet internationally accepted standards. It represents another effort by the Thai government to take a step further to assure worldwide consumers of “Trusted Quality” of the Thai products. It is also part of the government’s proactive policy on trade development in preparation for the integration into the ASEAN Economic Community in 2015.
In his interview with the Bangkok Post, Deputy Prime Minister Kittirat Na-Ranong, who presided over the launch event on January 18, said the ‘Thailand Trust Mark’ (TTM) would help promote the high quality and standards of Thai goods not only in ASEAN when it becomes a single market in 2015 but also globally. Meanwhile, Mrs. Kessiri Siripakorn, Minister for Commercial Affairs of the Royal Thai Embassy, noted: “TTM will help certify products and services that are in conformity of internationally accepted standards. It will also help boost consumer’s confidence in the quality of the products. The Commerce Ministry will step up efforts to promote TTM trademark worldwide including the major market such as the U.S.”
Despite a slowing global economy, Thailand is expected to continue to enjoy export growth of at least 15 percent this year because of trade-stimulation measures and the ability of Thai exporters to add value to their products and services. Thailand will also focus more on promoting two-way trade with its counterparts instead of concentrating only on exports. Export accounts for more than two-thirds of the country’s GDP.
You can watch a video presentation to see examples of some of Thai goods under TTM.
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Thai Tourism Bounces Back
The Tourism Authority of Thailand (TAT) announced last week that tourism arrival numbers returned to normal, following a slight decline at the end of the year due to flooding. In 2011, Thailand saw more than 19 million tourists visiting Thailand, an increase of 20 percent from 2010. The country had a good start in 2012 with 300,000 international visitors arriving during the first week of January. Thailand’s brand image as well as niche markets including sailing and fashion, music and film festivals will be in focus.
The TAT sets a target of more than 19.5 million international arrivals for this year, 26 percent higher than last year’s target. Tourism revenues for 2012 are estimated to reach US$24 billion, an increase of 28 percent from 2011. “The Thai tourism sector has proven its ability to bounce back when faced with similar situations in the past,” said Sansern Ngaorungsi, TAT Deputy Governor for International Marketing for Asia and the South Pacific. “This is due to the uniqueness and quality of our tourism products and the strength of the Thailand brand, which has strong affinity with travelers all over the world,” he said.
The TAT’s strategy for 2012 will focus on Thailand’s brand image, digital marketing, sustainable tourism and effective crisis communications. For Brand Image, the TAT will continue to reinforce the essence of the Thailand brand, “Amazing Thailand Always Amazes You”, with a focus on authenticity, value for money, and hospitality.
The Thai tourism industry also focuses on niche markets including golf, health and wellness, shopping, entertainment, and cultural tourism. An example of such an emerging new market is sailing. Thailand was recently named the favorite sailing venue and best regatta destination in Asia in a survey of international sailors. Those surveyed cited Thailand for its five regattas, beautiful scenery and ideal weather conditions.
Another niche market for tourists is Thailand’s established fashion, music and film festival culture. Among others, the TAT and the National Film Association of Thailand is co-hosting a Hua Hin Film Fest, during which 50 movies from around the world will be shown from 26 to 29 January 2012, along with seminars and a movie workshop. This is in addition to the annual Hua Hin Jazz Festival usually held in summer at this popular seaside resort town. In addition, the upcoming Silverlake Music Festival
2012 in Silverlake Vineyard, Pattaya, (on January 28, 2012), will feature musical artists representing genres from the U.S., Europe, Asia and Thailand. These initiatives and niche markets are key as tourism contributes six percent of Thailand’s gross domestic product and creates two million jobs.
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