The government is developing a new incentive package for investment in green industries on Thailand's eastern seaboard as part of a comprehensive package to stimulate the sluggish economy, Deputy Prime Minister Somkid Jatusripitak said on Friday.
After launching measures to boost rural spending and financing for small and medium enterprises (SMEs), the country's economic czar said his next target was to boost local and foreign investor confidence. He would do this by eliminating bureaucratic obstacles for businesses and providing incentives for both new and existing investments in environmentally-friendly industries in Laem Chabang, he said.
"Special incentives will be introduced soon for non-polluting green industries," Mr Somkid, 62, told the Bangkok Post.
The minister, who replaced MR Pridiyathorn Devakula in overseeing economic affairs at the end of last month, added that he was keen to retain Japanese investors.
The government wants to promote industries including IT, food and healthcare, Mr Somkid said, adding that Singapore's Biopolis, an international biomedical research and development centre, was a model that Thailand wanted to emulate.
The Ministry of Science and Technology is working with the private sector and universities to establish "Food Innopolis," an innovation and development centre aiming to increase the value of the country's abundant commodities, such as rice and rubber, Mr Somkid said.
Since taking office late last month, Mr Somkid, a veteran politician with a PhD in marketing from the Kellogg School of Management at Northwestern University in the United States, has switched tack in economic policy from his predecessor by injecting money into villages to boost rural spending, and offering cheap loans to SMEs and tax incentives to start-up firms.
The 137-billion-baht stimulus plan includes microfinance loans through the Village Funds Programme and small-scale construction projects. The stimulus package for SMEs include 100 billion baht in soft loans and income tax cuts of 10% for SMEs earning net profits of more than 300,000 baht.
"I have unlocked the two main problems of the economy ... it is now the time to urge corporations to invest now ... the sooner, the better," said Mr Somkid, who was mentored by internationally renowned marketing guru Philip Kotler.
The minister said he wanted local investors, both individuals and institutions, to invest in government infrastructure projects through investment funds, so they could avoid overseas borrowing and currency risks.
"I want to see individuals invest in government infrastructure funds and I have instructed the transport minister to borrow domestically, not internationally," said Mr Somkid, a former finance minister during 2001-2003 under the Thaksin Shinawatra government.
He has instructed a team of experts to work on fund structuring that will give investors better returns than deposit rates of commercial banks.
Mr Somkid said the economies of the US, European Union and Japan were improving and that Thailand should be benefiting from this upward trend.
However, global bank Credit Suisse on Sept 4 cut its economic growth forecast for Thailand, from 2.5% to 2% for this year, and from 3.4% to 3.0% for the following year, due to the "likely economic impact" from the China slowdown and the deadly Erawan blast.
"We fear that the hit to growth from the twin shock of the China slowdown and the recent tragic bombing might be greater than market and government expectations, shaving 0.6-0.9 percentage points off 2015's GDP," research analyst Santitarn Sathirathai wrote in a client note.
The government's economic planning agency in August cut its growth forecast for this year from 3-4% to 2.7-3.2%, after growth in the second quarter grew just 2.8%, compared with 3% in the first quarter.
The slowed growth was caused by a contraction in the farming sector and sluggish growth in other sectors.
Mr Somkid said he was working with various government agencies to boost foreign investor confidence in Thailand, by addressing issues that are obstructing the business sector.
He said Thailand's budgeting system needed to be adjusted to allow different ministries to collaborate and implement the government's agendas.
"The new budgeting system should be agenda-based, as different ministries are currently unable to work together on agendas because there isn't money set aside for this," he said.
Mr Somkid said he would begin a roadshow in an unspecified Asian country when he has enough stories to convince investors.
With Prime Minister Prayut Chan-o-cha's blessing and unity in his economic ministerial team, Mr Somkid, who is diabetic, said he was determined to push his ideas forward as long as "my health can accommodate me".