Increased investment, especially in research and development, and a secure life for farmers are the keys to sustainable development of the country, Prime Minister Prayut Chan-o-cha said on Friday.
More investment, along with corporate research spending, is needed to spur national development, according to the prime minister. (Photo by Pattanapong Chatpattarasill)
In his weekly broadcast address to the country, Gen Prayut said his government had recently approved more incentives to encourage companies to increase research and development (R&D) spending. Among them is a proposal to allow businesses to deduct 300% of R&D costs, compared with 200% now, from corporate taxable income.
He said the country currently was not spending enough on the R&D needed to enhance its competitiveness to deal with heavy global competition.
R&D spending in Thailand currently is just 0.37% of gross domestic product, compared with an average of 1.6% for Asia and 3-4% in many developed countries, the Science and Technology Ministry reported recently. Japan spends 3.8% of GDP on research and South Korea 3.4%.
"Promoting investment in research and development is important, and the government aims to increase the investment to account for one percent of GDP," the prime minister said in his 49-minute address.
With new tax breaks the government was aiming to increase the ratio of private-sector research and development to 70% of the total from 30% now, he said.
"Private sector research spending in the past two or three years has increased to 20 billion baht. However, this is not enough for the intense competition in business," he said.
"The additional tax exemption measures could provide an incentive for the private sector to increase research and development spending. These ventures will lead us toward sustainable growth."
Innovation could also lead to solving the problem of low prices of farm products if more of them could become raw materials for value-added manufacturing, Gen Prayut said.
In the past eight months, he said, his government had accelerated approval of investment projects applying for Board of Investment privileges, and had also sped up issuing factory licences.
The government had endorsed 1,050 investment projects worth 680 billion baht, and about 2,000 projects worth 1.4 trillion baht had been proposed to the BOI last December alone, he said.
The prime minister will visit Japan from Sunday to Tuesday to further promote trade and investment. While there, he is expected to update Japanese investors on plans for new special economic zones (SEZs).
The government has designated SEZ areas in 10 districts in five provinces — Chiang Rai, Nong Khai, Kanchanaburi, Nakhon Phanom and Narathiwat — along the border. The total area covers 1.83 million rai (about 2,900 square kilometres).
Investors in the zones would enjoy extra tax exemptions and reductions and the government would spend hundreds of billions of baht on infrastructure development to start investment there as soon as possible, Gen Prayut said.
Many operators were interested in developing logistics, cargo distribution, shopping centres, farm product processing facilities, textile production, tourism and consumer product manufacturing in the zones, he added.
To further empower farmers, Gen Prayut said his government was trying to help them to stand on their own feet. The key will be for more cooperatives to increase their bargaining power, marketing channels and product prices as they could eliminate middlemen.
The sufficiency economy philosophy and organic farming that yielded products fetching higher prices were other ways to promote empowerment, the prime minister said. He said he saw an obvious example of well-established cooperatives in the Korat Tapioca Cluster in Nakhon Ratchasima, which he visited this week.
He also encouraged farmers' cooperatives to educate members and cooperate actively with authorities and businesses to improve product quality and prices.
For its part, the government is offering immediate assistance through subsidies and finance and water sources.
The government also plans to introduce agricultural zoning to match farm producers with processing factories in particular areas to meet market demand. This would also allow the government to better plan irrigation, Gen Prayut said.
In addition, the government is operating 822 learning centres nationwide to transfer knowledge to farmers and sponsoring the training of young farmers so that they could further develop their 8,898 cooperatives in the future, he said.
Cooperatives currently have 11.28 million members and he said he hoped they eventually would be capable of buying, processing and exporting products by themselves.
Farmers' empowerment is one of the keys to sustainable development, says Prime Minister Prayut Chan-o-cha. (Photo by Chudate Seewong)