JTBF Mission to Thailand 2010 (2/01-2/04)

Visit to Ministry of Finance

reported by Hiroshi Motomura (Chief of Finance Committee, JTBF)

After greeting and Mr. Kitayama’s introduction of JTBF, Mr. Korn gave us a briefing about the recent Thai economy.

1. Thai economy has entered recovery stage since the 3rd quarter of 2009. Full year GDP of 2009, which was predicted 8-9% negative in the beginning, will end up with 3% negative or lower. Especially in the 4th quarter, consumption of private sectors was recovered. Number of tourists to Thailand was also recovered and recorded the highest month in December.
2. Agricultural sectors are doing well. Rice had a good harvest in 2009. Measures of guaranteed income to farmers are also implemented. Farmers’ income is increased owing to the good harvest and stable prices, which, in turn, contribute to increase of domestic consumption.
3. GDP of fiscal year 2010 is expected to be positive. While one of private research firms makes a strong prediction of 5% positive, our prediction is around 3.5% positive. Government budget takes 1% positive as a firm assumption.
4. In coping with financing problems of SME, we offer a scheme of governmental warranty.
5. Governmental budget balance will be negative for the next year also, exceeding the guide line. It will be 400 billions baht negative for this year. Government cannot afford to invest for the transportation and energy related projects, because social security and support to local government finance must be prioritized. We expect government agencies will make investment in stead.
6. Thai economy still requires economic stimulus measures. It is considered to be too early to withdraw the measures at this moment, in spite of adverse opinions of mass media and opposite parties. Chinese government also declares a similar observation.
7. “Map Ta Phut” is a problem that needs to be dealt with careful consideration. While we understand necessity of an urgent resolution, it will take 6–8 months before all concerned parties, including NGO, will arrive at a complete agreement and legislative supports become ready. We plan to visit Japanese government, Japan Federation of Economic Organizations and other concerned organizations to explain the current status and an outlook for the solution. We expect to make it around March 15. TCC (Thai Chambers of Commerce) and FTI (Federation of Thai Industries) will also accompany. We would like to share understanding with Japanese investors. We will pay our best efforts to find out the most feasible solution within a limit of 2007 revised constitution.

In less than 30 minutes, we had to stop the interview because Mr. Korn was to leave for the Diet.

He is 194 cm tall, graduated from Oxford. As we were informed, in Oxford, he was a member of the boat club and experienced boat racing with Cambridge. It made me recall my university life because I also belonged to the boat club. Then, suddenly my coacher’s advice came back to my mind.
“When you feel yourself in a toil, your opponent is also in a toil. Overcoming yourself is winning the race. It is true not only in a boat race but in our life.”

This advice can be applied to Thailand. When Thailand is in a difficult situation, other countries are also in a difficult situation. If Thailand pursue policies patiently, which are considered truly necessary for the benefit of Thailand, and overcome difficulties, then Thailand will eventually become counted among advanced countries.