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ECONOMY
PARISTA YUTHAMANOP
Strong global trade and high commodity prices will help Thailand make trade gains and lift economic growth in this year, according to Supachai Panitchpakdi, secretary-general of the United Nations Conference on Trade and Development (Unctad).
The two factors will offset impacts from slowing global economic growth caused by the housing market crisis in the United States and Europe.
Unctad recently forecast that world economic growth this year would be 2.9%, or one percentage point lower than last year, with a further decline to 1-1.5% next year. But global trade should not decrease significantly.
''External factors will have a limited impact on Thailand. It might even be positive,'' Dr Supachai said in a speech in Bangkok yesterday.
The current tension in Thailand, unless prolonged, should not affect investment sentiment. But sluggish investment could erode competitiveness later, said Dr Supachai, a former deputy prime minister.
An Unctad investor survey a year ago showed that Thailand was ranked second after China in terms of attractiveness for infrastructure and markets.
Given that scenario, he said, the government should focus its spending on policies to increase long-term competitiveness rather than short-term stimulus, otherwise it risks fuelling inflation.
Thailand should see some export opportunity to meet world food shortages and continue its efforts in agricultural sector development.
''I think investors have their eyes on Thailand for the long term. Commodity prices, which have been high for three to four years, are expected to remain high in the long term.''
He said Unctad's agenda currently focused on farm sector development and trade among developing countries as they are key drivers of global trade.
''Globalisation now is driven by developing countries. Trade among them accounts for one third [of global trade] and is growing faster than global trade. Thailand should look at how to benefit from the South-South trade development,'' Dr Supachai said.
In any case, Unctad wants to promote regional trade integration rather than bilateral agreements, given the dim prospects for the Doha talks under the World Trade Organisation (WTO), which Dr Supachai headed until 2005.
He said the country should also seek ways to benefit from creativity-based industries as the WTO has stepped up efforts to encourage intellectual property rights protection.
He also said Unctad was considering strategies to promote farm sector development through more production of seedlings, infrastructure development and technology upgrades such as fertiliser production in developing countries.
It will also push world policymakers to introduce regulations for large institutional investors such as hedge fund, private equity and index funds to reduce speculation in the commodity market.
Unctad is also studying several options to promote a ''carbon-free'' development strategy, including a fund to support the reductions of carbon emissions in developing countries.
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