Drought, floods and other extreme weather exacerbated by climate change could cause damage worth 36 billion baht to the Thai economy this year, says the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB).
Water scarcity caused by drought is the committee's leading concern because it could have a massive impact on both the agricultural and manufacturing sectors, hampering already sluggish exports, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI), a key member of the JSCCIB.
"Manufacturers are worried about drought because it can reduce production capacity and affect exports," he said.
According to the Commerce Ministry's latest data, in the first four months of 2023 Thai exports decreased by 5.2% year-on-year to US$92 billion, while imports fell by 2.2% to $96.5 billion, resulting in a trade deficit of $4.51 billion.
Signs of an export slowdown began late last year when key economic indicators showed a drop in shipments amid worries over the possibility of a recession this year.
The JSCCIB submitted a proposal to Prime Minister Prayut Chan-o-cha on May 31 to deal with the drought, hoping to work with the government to prevent any severe impacts caused by water scarcity.
The business sector wants authorities to prepare mid-term and long-term solutions to ensure investment projects, especially those in the Eastern Economic Corridor (EEC), can continue operating.
The EEC area, which covers parts of Chon Buri, Rayong and Chachoengsao, hosts 12 S-curve industries that are expected to drive the country's economy.
The 12 sectors are: next-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; medical services; defence; and education development. The government wants to turn the EEC into the country's high-tech industrial hub.
According to Mr Kriengkrai, businesses have prepared risk management plans to cope with drought and flood problems.
In the manufacturing sector, companies are adopting 3R measures -- reducing, reusing and recycling water -- to ensure they have enough water for use in their production processes.
Companies are also encouraging farmers to use more innovative technologies to help them better conserve valuable water supplies.
However, over the long term, the government should play a key role in coping with drought and flood-related problems, he said.
Mr Kriengkrai said the FTI earlier asked the government to consider suggestions to deal with drought, drafted by the Water and Environment Institute for Sustainability under the FTI.
Among the suggestions are preparing water pumps and diverting water from certain areas, including the Bang Pakong River, to the Prasae Reservoir in Rayong, which is within the EEC area.
The government should also accelerate the construction of Khlong Wang Tanod Reservoir in the eastern province of Chanthaburi and revise the 20-year water resource development plan to better cope with drought over the next 1-3 years, said the FTI.