Thailand needs to attract more trading activities to boost the country's economic growth potential, says Deputy Prime Minister MR Pridiyathorn Devakula, adding the country could be a crossroads reaping the benefits from regional emerging economies.
"We have to add trading activities to Thailand's GDP. Thailand has good constituents to develop itself into a trading nation, but we never have any package or rules of law to draw trading activities into Thailand," he said yesterday at the Bloomberg Asean Business Summit held in Bangkok.
Pridiyathorn: Need to change rules
Malaysia and Singapore own the lion's share of trading activities and trade headquarters in Southeast Asia due to their well-developed infrastructures, attractive business incentives and political stability.
Although Thailand is regarded as a champion of consumer products in Asean, the country has incurred an opportunity loss because it lacks policy incentives to attract trading activities and the establishment of trade headquarters, said MR Pridiyathorn.
"Profits from production to wholesale are very minimal, but trading profits between wholesale and retail are much bigger," he said, adding the country has to increase this aspect for future economic growth.
"The digital economy will be another growth engine in addition to trading activities. These two trade engines will make Thailand's economy lively, and then it can become a good middleman between our friends in Cambodia, Laos, Myanmar, and Vietnam."
He said Thailand could become a crossroads for regional emerging markets, namely Cambodia, Laos, Myanmar and Vietnam, which are forecast to record substantial economic growth in the future.
Earlier, MR Pridiyathorn spelled out plans for Thailand to become a trading nation by urging the Board of Investment to have a stronger role in promoting overseas investment in Thailand, while stating that the government would need to change rules and regulations in the near future.
The rules included the need to make the tax system more competitive with Thailand's rivals, reduce the cost of living, better methods to tackle corruption and improve logistics systems, including the construction of additional deep-sea ports on the Andaman Sea, changing the revenue structure and developing the digital economy.
Despite the global economic downturn in the West, Thailand has suffered economic growth rates below 3% since 2008 mainly because of labour shortages and rising labour costs, denting the two main sources of the country's GDP growth in the past — private investment and exports, said MR Pridiyathorn.
Asean must not adopt a common currency and collective policy interest rate structure, he said, citing the EU's troubles.
In the meantime, Bank of Thailand governor Prasarn Trairatvorakul said decent economic growth needs to be based on sound stability, and the role of the central bank's monetary policy is aimed at supporting conducive conditions for economic growth.
Since monetary policy has played its role in facilitating accommodative financial conditions, fiscal policy and reforms in education, infrastructure, and taxation will be the main drivers of Thailand's economic growth momentum in the coming years, he said.
The global economic slowdown and different monetary policy stances implemented by major central banks are deemed as external risks, while internal risks include domestic politics, supply-side reforms, and supervision of specialised financial institutions, said Mr Prasarn.