A turbulent economic ride
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A turbulent economic ride

The spotlight in the business sector this year has been on policy rate hikes, the revival of tourism and the telecom mega-merger.

Mr Sethaput believes the Thai economy showed signs of improvement, while the inflation rate peaked in the third quarter of 2022.

Taming inflation

As global interest rates continued to rise in 2022 to tame persistently high inflation, the Bank of Thailand and its governor Sethaput Suthiwartnarueput are being scrutinised as the business sector watches the direction of Thai interest rates.

Aggressive monetary policy this year to curb inflation was led by the US Federal Reserve. The Fed began to increase its policy benchmark rate from March and deployed a hawkish monetary policy throughout the year.

Despite the tight monetary policy of the Fed, the Bank of Thailand has maintained its normalisation of policy rates on a gradual basis, in accordance with the slow recovery of the Thai economy compared with other countries.

The Bank of Thailand's Monetary Policy Committee (MPC) decided to raise its policy rate by 0.25 percentage points to 0.75% in August after maintaining the historically low rate of 0.5% since 2020. Surging inflation in the second quarter of the year prompted the MPC to increase its policy rate.

The central bank hiked the policy rate two more times at 25 basis points each occasion, raising the rate to 1.25% at present, compared with a range of 4.25-4.5% for the Fed. With the wide spread between the Bank of Thailand's rate and the Fed's rate, some analysts are concerned that Thai policymakers are behind the curve.

Mr Sethaput affirmed the Bank of Thailand does not need to follow the Fed on hawkish policy rate hikes, as each country's policy rate is determined based on the context in that nation. He said a gradual policy rate normalisation is appropriate given Thailand's economic context.

Mr Sethaput said the Thai economy is showing signs of improvement and the inflation rate peaked in the third quarter. The central bank assesses GDP growth at 3.2% and 3.7% in 2022 and 2023, respectively.

Economic growth stems mainly from domestic consumption and the tourism sector. The central bank projects foreign tourist arrivals to tally 10.5 million in 2022, rising to 22 million in 2023. Given the global economic slowdown, the Bank of Thailand predicts export growth of only 1% for 2023.

However, key central banks plan to keep a tight monetary policy amid high inflation levels and this could lead to a global economic slowdown in 2023. The International Monetary Fund forecasts global economic growth of 3.2% in 2022, declining to 2.7% in 2023.

Mr Yuthasak says the TAT is still committed to doubling the market to 25 million in 2023.

Promoter to coordinator

Given the surge in infections from Omicron variants earlier this year, few would have imagined Thailand would welcome more than 10 million foreign arrivals in 2022, says Tourism Authority of Thailand (TAT) governor Yuthasak Supasorn.

The full reopening in July was deemed the turning point, when daily arrivals gradually picked up to more than 40,000 from an average of 25,000-30,000 in the first six months. At that point, the TAT pledged its goal of 10 million visitors.

Even as many business leaders saw the target as foolhardy, Mr Yuthasak said the point of the ambitious pledge was to motivate all agency staff in Thailand and abroad to continue their efforts, particularly when the private sector still needs tourists to rouse their businesses from a two-year hibernation.

"I am the only TAT governor who oversaw both the best and worst periods for tourism, from a peak of almost 40 million in 2019 to the rock bottom of 427,000 tourists in 2021," he said.

Mr Yuthasak, 56, was appointed governor by the TAT board in September 2015, the first time the position wasn't inherited by existing executives in the agency.

Under his second four-year term, due to end in August 2023, he said he turned the tourism promotional organisation into a coordinator, helping to bridge understanding between state authorities, the private sector and tourists as Covid-19 changed the travel rules rapidly.

The contagion not only affected people's lives, but also stymied the tourism industry, putting some enterprises out of business, said Mr Yuthasak.

The TAT listened to the private sector's needs and brought their proposals to the Centre for Covid-19 Situation Administration, the body in charge of managing the pandemic.

The strict entry rules were gradually eased, until there were no more requirements in October, which was the same date Covid-19 was pronounced an endemic.

After borders were reopened without any obstacles, the TAT stepped up tourism promotion, aiming to increase seat capacity by convincing airlines to open new routes or resume their services in Thailand until 60% of seats allotted in 2019 were recovered by the end of this year.

With less than a year remaining in office, Mr Yuthasak said the TAT is still committed to doubling the arrivals market to more than 25 million in 2023.

Dr Sarana, chairman of the NBTC board, which faces several challenges next year.

NBTC in the hot seat

The National Broadcasting and Telecommunications Commission (NBTC) has been in the headlines several times in 2022, dealing with tough decisions that caught the public interest.

Five out of seven board members took office in April, allowing the new board to start operating.

The five were selected based on Senate voting in December 2021. They comprise Air Marshal Thanapant Raicharoen, in the field of broadcasting; Pirongrong Ramasoota, in the field of TV; Torpong Selanon, in the field of people's liberty and rights; Suphat Suphachalasai, in the economics field; and Dr Sarana Boonbaichaiyapruck, in the field of consumer protection.

In August, the Senate voted in favour of Pol Gen Nathathorn Prousoontorn as the sixth member of the NBTC board to represent the field of law.

The NBTC faced intense pressure from consumer advocates, academics and civil groups over its decision on the merger of True Corporation and Total Access Communication (DTAC), the second- and third-biggest telecom operators in the country by subscriber base.

Opponents said the merger would erode market competition, with consumers bearing the brunt.

They pressured the regulator into rejecting the deal, but the NBTC in October resolved that it has no authority to consider approving or rejecting the deal, which paves the way for the amalgamation. The NBTC acknowledged the deal and issued remedy measures to govern it.

The NBTC also faced criticism over its "must have" and "must carry" broadcast rules, which hindered private firms from participating in the bidding for the broadcast of the World Cup finals that aired from Nov 20 to Dec 18.

The regulator then contributed 600 million baht from its fund to help the cash-strapped Sports Authority of Thailand come up with the 1.4 billion baht needed to pay for the broadcast rights to the tournament.

The agency vowed to amend the rules to be more practical in the future.

The NBTC has tough tasks ahead in 2023, including its efforts to regulate a broader range of players in the new telecom market, including over-the-top services and low-Earth orbit satellite operators.

It is scheduled to hold the country's first auction of satellite orbital slot packages in January 2023.

The regulator also needs to start the process of recruiting a secretary-general in early 2023, as the position has been vacant since Takorn Tantasith left the post in July 2020.

Mr Kriengkrai encourages Thai manufacturers to depend less on imports for industrial products.

Staying well read

Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, often has fresh ideas when asked to comment on the business outlook or economic circumstances, which he attributed to a habit built up over decades of being an avid reader.

Among the latest pieces of information he told the media is the acronym "BANI", referring to the post-pandemic world.

BANI stands for a brittle, anxious, non-linear and incomprehensible world, which is growing more complex and prone to unexpected problems.

The predecessor of BANI is VUCA, used since the 1980s, referring to volatility, uncertainty, complexity and ambiguity.

VUCA was highlighted when Covid-19 caused Thailand's economic slump in 2020, due mainly to lockdown measures, including those implemented under the zero-Covid policy in China, said Mr Kriengkrai.

During an interview with the Bangkok Post, he talked about security issues. But instead of discussing concerns over energy and food insecurity that often appear in headlines, Mr Kriengkrai pointed to the need to build supply chain security.

This issue is linked to the ripple effects of Covid-19 when Beijing enforced lockdown measures in major cities. China is known as the factory of the world. If draconian measures under the zero-Covid policy are frequently used to contain the spread of the highly transmissible virus there, countries that import goods from China will bear the brunt, he said.

Mr Kriengkrai encouraged Thai manufacturers to depend less on imported components for industrial products and to be more self-reliant, able to produce necessary components among themselves domestically.

He succeeded Supant Mongkolsuthree as FTI chairman in April 2022.

Though Mr Kriengkrai is well-rounded and has plenty of ideas to further develop domestic industries, the 62-year-old businessman values team spirit at work.

"I prefer working in a team to a one-man show," he told the Bangkok Post.

Mr Jirayut says Bitkub continues to develop its business for blockchain technology and the metaverse. Pornprom Satrabhaya

Crypto mogul

Even with SCB X's proposed takeover of Bitkub, which eventually collapsed, Jirayut "Topp" Srupsrisopa, the founder and group chief executive of Bitkub, is largely unknown in Thailand.

Bitkub Capital Group Holdings, Thailand's largest cryptocurrency exchange, announced the deal fell through in August, citing regulatory issues.

Mr Jirayut, 32, is one of Thailand's leading Bitcoin and open blockchain advocates. He has served as a guest speaker at many international forums, representing Thailand at the World Economic Forum (WEF) and the Asia-Pacific Economic Cooperation summit held in Bangkok in November.

He is a member of several groups, including the WEF, the Thailand chapter of the Young Presidents' Organization, and the Thailand metropolitan chapter of the Entrepreneurs' Organization.

This year, Bitkub was among seven Thai companies to join the three main meetings of the WEF, including Davos, along with industry leaders PTT, Charoen Pokphand and Indorama Ventures.

Locally Bitkub made headlines on Aug 25 when SCB Securities, a subsidiary of SCB X, announced that its offer to acquire 51% of Bitkub Online for 17.85 billion baht was rescinded.

SCB X first announced the offer on Nov 2, 2021, when the value of Bitkub was nearing 35 billion baht or US$1billion, making it Thailand's third unicorn. SCB X spent 10 months doing due diligence before both firms announced the cancellation.

"Bitkub still has pending issues to be concluded in accordance with the instructions of the Securities and Exchange Commission (SEC). There is still uncertainty about the timing of such conclusions. The buyer and seller have therefore mutually agreed to cancel this share purchase transaction," SCB X said a statement.

Bitkub's KUB coin price dropped in reaction to the news. The coin price, which peaked at 580 baht, had plunged to 58 baht as of Dec 22, reflecting fundamental factors.

Recently SEC announced a number of regulations that affect Bitkub, such as a ban on public cryptocurrency advertising. Previously Bitkub spent quite a lot on advertising, but the SEC said companies should focus on the development of the system to better support customers first.

Bitkub Group is continuing with new projects and developing various products, including gaming and metaverse projects, said Mr Jirayut.

He said the development is based on blockchain technology and the metaverse.

Bitkub is preparing to expand to other countries in Southeast Asia, seeking local partners for these potential markets, said Mr Jirayut.

The outlook for crypto investment largely relies on the global market environment, he said. With rising interest rates and inflation, the Russia-Ukraine war and a looming recession, Mr Jirayut views 2023 as another year of high volatility and investors are recommended to keep cash and wait for the right moment to invest because of global uncertainty.

Crypto market capitalisation declined from its peak of $3 trillion at the end of 2021 to $833 billion as of Dec 23.

Under the leadership of Mr Sanan, the Thai Chamber teamed up with the Board of Investment to hold roadshows.

Ready to cooperate

Sanan Angubolkul, chairman and president of SET-listed Srithai Superware, the world's largest melamine manufacturer, is considered an industry leader who can work with the government to tackle obstacles for fruit exports to China as well as ramp up trade and investment ties with Saudi Arabia after the restoration of diplomatic bonds following a three-decade ban.

Under the leadership of Mr Sanan, who was appointed the 25th chairman of the Thai Chamber of Commerce in March 2021, the chamber has teamed up with the Board of Investment (BoI) to hold roadshows abroad in an effort to draw foreign investment, while also amending the BoI's investment promotions to make them more enticing to investors.

The chamber also played a key role in hosting the Apec CEO Summit 2022, a meeting of business and government leaders in Asia-Pacific, in November. The summit provided opportunities for executives to engage in dialogue with Apec leaders on the most pressing issues of the day.

Mr Sanan often serves as a conduit, voicing the concerns of the private sector to government and offering advice on how to rehabilitate and stimulate the economy after the prolonged Covid-19 outbreaks.

He vowed to pursue a "Connect the Dots" policy to signify the role business plays in linking the networks of government, the private sector and the people to revive the economy battered by the pandemic.

Mr Sanan said he wants to upgrade the Thai economy to achieve sustainable growth over the long term.

Ms Wallaya says CPN aims to achieve a net-zero goal by 2050.

Powerful businesswoman

Although the retail sector was walloped by the pandemic, retail and property developer Central Pattana Plc (CPN) is continuing to invest for expansion.

The company plans to spend 20.7 billion baht to expand this year. Of the total, 9.7 billion baht is allocated to develop a retail-led mixed-use project, 7.5 billion is slated for asset enhancement including store renovation, and the remaining 3.5 billion is for the extension of office buildings and hotels.

CPN's active investment is credited to Wallaya Chirathivat, president and chief executive of CPN, who believes retail operators and other businesses have to stay resilient and continue their investment both in the long and short terms.

Ms Wallaya spearheaded numerous property development projects nationwide and led CPN's senior management and staff to the organisation's next chapter with her "imagining better futures for all" vision, according to the company.

CPN aims to build a strong and sustainable ecosystem, developing spaces of the future and pioneering cities and urban development across Thailand. Its new mission is to take care of people and the planet simultaneously, said the company.

CPN's commitment is reflected in its five-year 120-billion-baht investment plan (2022–26), which focuses on retail-led mixed-use developments. At the core of this plan is 50 shopping centres in Thailand and overseas, as well as 17 community malls, supported by more than 70 residential projects, 13 office buildings and 37 hotels.

To build growth and promote sustainability, she said the company aims to achieve a net-zero goal by 2050. This long-term vision would be realised through the reduction of energy consumption, chlorofluorocarbons and other atmosphere-harming substances, as well as promoting clean energy.

Ms Wallaya was named one of the top 20 Asian businesswomen of 2022 by Forbes Asia, based on achievements as a leader in driving the organisation and creating outstanding growth for the business amid challenges.

Mr Suttipol protected policyholders when insurance firms wanted to cancel their Covid policies.

Firm on consumer benefits

When the insurance industry was weakened because of a lack of faith as Covid-19 policy claims spiked earlier this year, Suttipol Taweechaikarn, secretary-general of the Office of the Insurance Commission (OIC), stood firm to protect the benefits of policyholders.

The OIC, under Mr Suttipol's leadership, was mandated by the Finance Ministry to oversee the transfer of active insurance policies from Asia Insurance and The One Insurance to other companies. The General Insurance Fund (GIF) was ordered to supervise compensation payments to policyholders who filed for claims.

Later Southeast Insurance, a non-life insurance giant, and its sister company Thai Insurance filed a request to cancel all of their remaining Covid insurance policies offering lump-sum payment. Majority-owned by Thai Group Holdings (TGH), which is controlled by billionaire Charoen Sirivadhanabhakdi, the two firms faced liquidity problems caused by losses from Covid claims.

The OIC rejected the request, stating arbitrary cancellation of the policies is against the law and the companies must comply with the conditions stated in the policies they offered to the public.

The regulator reiterated that when losses occur from the sales of policies, the companies need to be responsible and pay the claims.

Mr Suttipol said the OIC ordered both companies to sell assets and use the proceeds to pay claims or refund premiums to policyholders and their beneficiaries. Southeast Insurance must also ensure the transfer of existing policies to other insurers will not undermine the protection and rights of consumers as stated in the policies.

The two companies claimed the rejection caused them great financial damage, asking a court for permission to cancel their Covid insurance policies.

TGH on Jan 26 informed the Stock Exchange of Thailand that Southeast Insurance will voluntarily surrender its business licence to the OIC, close its business, transfer existing policies to Indara Insurance, another TGH subsidiary, and transfer the business to GIF for management and supervision.

Customers urged the OIC to take action, and the regulator told them Southeast Insurance could not discontinue the business without approval from the OIC.

Southeast Insurance submitted an asset management plan to the OIC on Jan 28. On Feb 1, both insurance firms announced they withdrew the case against Mr Suttipol and the OIC.

Such cases shook public confidence in the industry as customers lost faith in insurance companies' ability to manage their business and products effectively in terms of risk diversification. While this concern started in the non-life industry, it bled into life insurance as more people transfer their life insurance policies to companies they consider financially stronger.

The OIC said non-life insurance companies must be more cautious in issuing products, improve their underwriting risk management plans and be better prepared for any emerging pandemics.

"The Covid pandemic taught the Thai insurance industry a useful lesson on the importance of good management and resiliency," Mr Suttipol said.

To help sustain the industry, the OIC vowed to continue implementing remedy measures to lessen the impact of the pandemic, while companies must show more commitment to adapting to changing circumstances and expedite the adoption of digital technology.

The OIC has accelerated regulatory reforms and promoted sustainable development of insurance businesses, directly and indirectly, in accordance with environmental, social and governance principles.

"We learned insurance companies should not launch risky products. Insurance companies should focus on hedging products that can diversify risks. They should do business on the basis of acceptable risks in a worst-case scenario," he said.

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