Money and Banking magazine organizes Money Expo 2010 with special theme “The Road to Wealth” to celebrate its 10th year anniversary and support Thailand economic recovery to distribute wealth to all Thais. The first event, bringing great wealth to Eastern Seaboard, is Money Expo PATTAYA 2010.
Mr.Santi Viriyarangsarit, Money and Banking magazine editor and president of Money Expo 2010 announces that “after its 9 successful years in 2009 with total 5,185,500 visitors and transactions value of 646,000 million baht, Money Expo 2010 will celebrate its 10th anniversary in 2010 in 4 regions in the country with the theme “The Road to Wealth”.
Money Expo brings together best investments and finance offers from nation’s leading commercial banks, financial institutions, along with varied life insurance options available in the market so that retail customers and SMEs can access directly to “funding source” and “Investment Choices”. At the same time, opportunities are opened for Bank and financial institute to expand both retail and SMEs base.
The first Money Expo 2010 The Road to Wealth, the roadmap to achieve wealth for all Thais, will be held in Pattaya of Chonburi province with title “Money Expo Pattaya 2010” during 5-7 February 2010 at PEACH, Royal Cliff Beach Resort Hotel where 22 organizations, including commercial banks, financial institutions together with leading organization from private sector and government agencies will participate.
These organizations will roll out golden promotions for their quality products and services, ranging from low-interest lending rate, special mortgage rate, auto loan, education loan, SMEs loan, credit card, cash card to attractive deposit rates. The best conditions will be offered for investment in stock market, bonds, derivatives, life insurance. Meanwhile, investment guidance and consultancy services will also be provided to those interested. Moreover, liveStage performances from leading superstars are scheduled to entertain visitors.
Commercial banks participate in Money Expo PATTAYA 2010 are Krung Thai Bank Pcl. , Bangkok Bank Pcl. , Kasikorn Bank Pcl. , Siam Commercial Bank Pcl. , Bank of Ayudhya Pcl. , TMB Bank Pcl. , The Siam City Bank Pcl. , CIMB Thai Bank Pcl. , The Thai Credit Retail Bank Pcl. , Commercial banks participate Government Housing Bank , Islamic Bank of Thailand , Muang Thai Life Assurance Co. Ltd. , Ayudhya Capital Auto Lease Plc. , AEON Thana Sinsap (Thailand) Pcl. , Asia Forestry Management Co., Ltd. , Profitable Group , Bank of Thailand , The Revenue Department , The Stock Exchange of Thailand , Securities and Exchange Commission , Office of Insurance Commission and The Agriculture Futures Exchange of Thailand
Chonburi province is the economic, commercial and tourism center of the East given purchasing power of 1.2 million population. At the end of 2008, Gross Provincial Product (GPP) stood at 492,051 million baht, rose by 38,165 million baht from end 2007, while GDP per Capita was 416,003 baht, increase by 27,829 million baht from the end of 2007.
As of September 30, 2009, Chonburi shelters 280 of Banks’ branches. All of which provided 153,324 million baht net credits and raised 191,457 million baht net deposits. From January to October 2009, there are 35 projects applied for investment privileges from BOI.
In addition, there are positive signs of economic recovery given the revised 2010 GDP growth forecast to 3.3 to 5.3% from previous 3.0 to 3.5% by the The Bank of Thailand.
“All indicators show that there are strong demand for loans in Chonburi and the whole Eastern region and consumers still look for better yields in deposits and investment. I’m confident that Money Expo PATTAYA 2010 will again succeed as highly as the first Money Expo PATTAYA held during 6-8 February 2009 that has attracted 45,000 visitors and generated 19,213.68 million baht worth of transactions” Mr.Santi said.
Three other Money Expo 2010
Central - Money Expo 2010 at Queen Sirikit National Convention Center, 6-9 May 2010
North Eastern - Money Expo KORAT 2010 at MCC Hall, The Mall Korat, 8-10 October 2010
North - Money Expo Chiangmai 2010 at Chiangmai University Convention Center, 12-14 November 2010
Wednesday, December 16, 2009
New Generation Trading System for China Foreign Exchange Trade System (CFETS) goes live nationwide
Tata Consultancy Services, the leading IT services, business solutions and outsourcing firm today announced that the Reminbi currency trading platform for the Chinese inter-bank market, an initiative of China Foreign Exchange Trade System (CFETS), a subsidiary of People’s Bank of China (PBoC) has successfully gone live nationwide. The New Generation CNY Trading System (NGCNYTS) is a forward-looking trading system, which aims to incorporate the future vision of the Chinese Interbank market and relevant international best practices. It is designed to meet the fast growing requirements of the Chinese financial market with efficient risk management and real time monitoring systems. It supports multiple trading methods, including special features for market makers.
NGCNYTS is a next generation system providing unified platform across Debt, Money and Derivative Markets. NGCNYTS gained national importance, as it is the primary trading platform for all financial institutions such as Commercial Banks, Pension, Trust & Mutual Fund, Securities firms and Insurance companies in China.
Speaking on the successful implementation of this landmark project, Girija Pande, Executive Vice President and Head, TCS Asia Pacific, said, “We are extremely pleased to successfully deliver the CFETS project built based on our experience in other global markets and in close cooperation with CFETS who have experience in Chinese domestic market. It also provides flexibility to connect with third party front ends and other external interfaces. Deploying in ten markets at a time is a unique challenge which TCS could complete successfully.”
“The project is among the most prestigious venture of TCS in the APAC region, involving a highly dedicated multi-cultural team of over 130 associates spanning a period of more than 2 years. The team will be maintaining the system going forward and enhancing the system for additional markets,” he further added.
TCS’ trading solution at CFETS is scalable and can handle rapid growth in volumes with ease. Due to its scalable and configurable architecture, it also simplifies the addition of multiple financial products thus reducing the overall time to market.
Besides CFETS, TCS has successfully delivered the mission critical trading systems for the National Stock Exchange of India Limited, India, National Commodity and Derivatives Exchange, India and Clearing Corporation of India Limited (CCIL). TCS is also the chosen strategic partner involved in maintaining the trading applications at Deutsche Boerse AG, Germany.
TCS pioneered the entry of Indian IT industry in China in 2002 and remains at the forefront of that thrust with 1100 consultants in China and four Global delivery Centres (Beijing, Shanghai, Tianjin& Hangzhou). In 2005, TCS was invited by Chinese Government to form a Joint Venture to create a large scale global sourcing base in China. TCS China is serving over 30 Global and domestic clients like Eaton, Motorola, Cummins, China Foreign Exchange Trade System (CFETS), Guangdong Provincial Rural Credit Cooperative Union (GDRCC), China Trust Bank, Hua Xia Bank.
NGCNYTS is a next generation system providing unified platform across Debt, Money and Derivative Markets. NGCNYTS gained national importance, as it is the primary trading platform for all financial institutions such as Commercial Banks, Pension, Trust & Mutual Fund, Securities firms and Insurance companies in China.
Speaking on the successful implementation of this landmark project, Girija Pande, Executive Vice President and Head, TCS Asia Pacific, said, “We are extremely pleased to successfully deliver the CFETS project built based on our experience in other global markets and in close cooperation with CFETS who have experience in Chinese domestic market. It also provides flexibility to connect with third party front ends and other external interfaces. Deploying in ten markets at a time is a unique challenge which TCS could complete successfully.”
“The project is among the most prestigious venture of TCS in the APAC region, involving a highly dedicated multi-cultural team of over 130 associates spanning a period of more than 2 years. The team will be maintaining the system going forward and enhancing the system for additional markets,” he further added.
TCS’ trading solution at CFETS is scalable and can handle rapid growth in volumes with ease. Due to its scalable and configurable architecture, it also simplifies the addition of multiple financial products thus reducing the overall time to market.
Besides CFETS, TCS has successfully delivered the mission critical trading systems for the National Stock Exchange of India Limited, India, National Commodity and Derivatives Exchange, India and Clearing Corporation of India Limited (CCIL). TCS is also the chosen strategic partner involved in maintaining the trading applications at Deutsche Boerse AG, Germany.
TCS pioneered the entry of Indian IT industry in China in 2002 and remains at the forefront of that thrust with 1100 consultants in China and four Global delivery Centres (Beijing, Shanghai, Tianjin& Hangzhou). In 2005, TCS was invited by Chinese Government to form a Joint Venture to create a large scale global sourcing base in China. TCS China is serving over 30 Global and domestic clients like Eaton, Motorola, Cummins, China Foreign Exchange Trade System (CFETS), Guangdong Provincial Rural Credit Cooperative Union (GDRCC), China Trust Bank, Hua Xia Bank.
Barclays Capital lists iPath Exchange Traded Note on SGX, first-ever ETN in Asia outside Japan
Barclays Capital, the investment banking division of Barclays Bank PLC, and Singapore Exchange Limited (SGX) today announced the listing of the iPath Dow Jones-UBS Commodity Index Total ReturnSM Exchange-Traded Note (ETN) on the SGX. The iPath Dow Jones-UBS Commodity Index Total ReturnSM ETN is the first-ever ETN listed in Asia outside Japan and provides both institutional and retail investors with exposure to a broad range of commodities during the Asian time zone.
iPath ETNs were first launched by Barclays Capital in the US in 2006 and are designed to provide investors with convenient access to the returns of market benchmark indices, less investor fees. The iPath ETNs are senior, unsecured, unsubordinated debt securities linked to the performance of an underlying index.
"We are very excited to bring the iPath ETN platform to investors in Asia. iPath ETNs have been tremendously successful in the US attracting over US$5 billion in market capitalisation with over US$80 billion in volume traded since inception," said Philippe El-Asmar, Head of Investor Solutions at Barclays Capital. "iPath ETNs provide investors with simple, transparent, cost efficient instruments that provide access to difficult-to-reach markets with the ease of trading through an exchange," he added.
Ms Janice Kan, Senior Vice President & Head of Product Development at SGX said, "We are pleased to be the first listing venue for Barclays Capital's iPath ETN platform in Asia. The launch of this new product class broadens our suite of investment offerings and will provide investors with cost-efficient access to the commodities asset class, and eventually, a range of other asset classes. This underpins our efforts in developing SGX as the one-stop investment gateway in Asia."
Peter Hu, Barclays Capital's Head of Investor Solutions in Non Japan Asia said, "We are delighted to be able to provide investors with a new way to invest across different asset classes during Asian trading hours. The iPath Dow Jones-UBS Commodity Index Total ReturnSM ETN we are launching today enables investors to gain exposure to a broad range of underlying commodities with ease via a single, liquid and transparent instrument. We see self-directed investors becoming an increasingly important client segment in Asia and we plan to cater for their varied investment needs by launching many more iPath ETNs in the future."
iPath ETNs were first launched by Barclays Capital in the US in 2006 and are designed to provide investors with convenient access to the returns of market benchmark indices, less investor fees. The iPath ETNs are senior, unsecured, unsubordinated debt securities linked to the performance of an underlying index.
"We are very excited to bring the iPath ETN platform to investors in Asia. iPath ETNs have been tremendously successful in the US attracting over US$5 billion in market capitalisation with over US$80 billion in volume traded since inception," said Philippe El-Asmar, Head of Investor Solutions at Barclays Capital. "iPath ETNs provide investors with simple, transparent, cost efficient instruments that provide access to difficult-to-reach markets with the ease of trading through an exchange," he added.
Ms Janice Kan, Senior Vice President & Head of Product Development at SGX said, "We are pleased to be the first listing venue for Barclays Capital's iPath ETN platform in Asia. The launch of this new product class broadens our suite of investment offerings and will provide investors with cost-efficient access to the commodities asset class, and eventually, a range of other asset classes. This underpins our efforts in developing SGX as the one-stop investment gateway in Asia."
Peter Hu, Barclays Capital's Head of Investor Solutions in Non Japan Asia said, "We are delighted to be able to provide investors with a new way to invest across different asset classes during Asian trading hours. The iPath Dow Jones-UBS Commodity Index Total ReturnSM ETN we are launching today enables investors to gain exposure to a broad range of underlying commodities with ease via a single, liquid and transparent instrument. We see self-directed investors becoming an increasingly important client segment in Asia and we plan to cater for their varied investment needs by launching many more iPath ETNs in the future."
Tuesday, December 15, 2009
Investment-Grade Composite Spread Tightens To 212 Basis Points
Standard & Poor's investment-grade and speculative-grade composite spreads tightened on Friday to 212 basis points (bps) and 660 bps, respectively. By rating, the 'AA' spread tightened one basis point to 145 bps, 'A' compressed 3 bps to 181 bps, 'BBB' tightened 2 bps to 267 bps, 'BB' tightened 8 bps to 489 bps, 'B' compressed 7 bps to 660 bps, and 'CCC' expanded 3 bps to 1,055 bps.
By industry, banks and telecommunications tightened by the largest margin of 4 bps each to 292 bps and 320 bps, respectively. Industrials followed, compressing 3 bps to 340 bps, trailed by financial institutions and utilities, which tightened 2 bps each to 370 bps and 214 bps, respectively.
Despite material tightening since their record highs in December 2008, the speculative-grade spread remains range-bound within a default cycle, and the investment-grade spread continues to face pressure from financial institutions and banks. In addition, speculative-grade defaults continue to accelerate, as does the preponderance of credit downgrades. Because of these factors, we expect spreads to remain at their elevated levels for some time as investors, the credit markets, and the economy cautiously tread through the current recessionary period.
By industry, banks and telecommunications tightened by the largest margin of 4 bps each to 292 bps and 320 bps, respectively. Industrials followed, compressing 3 bps to 340 bps, trailed by financial institutions and utilities, which tightened 2 bps each to 370 bps and 214 bps, respectively.
Despite material tightening since their record highs in December 2008, the speculative-grade spread remains range-bound within a default cycle, and the investment-grade spread continues to face pressure from financial institutions and banks. In addition, speculative-grade defaults continue to accelerate, as does the preponderance of credit downgrades. Because of these factors, we expect spreads to remain at their elevated levels for some time as investors, the credit markets, and the economy cautiously tread through the current recessionary period.
TRIS Rating Affirms Company Rating of “DBSVT” at “A-” with “Negative” Outlook
TRIS Rating Co., Ltd. has affirmed the company rating of DBS Vickers Securities (Thailand) Co., Ltd. (DBSVT), a wholly-owned subsidiary of DBS Vickers Securities Holdings Pte., Ltd. (DBSVSH) in Singapore, at “A-”. The outlook has been changed to “negative’ from “stable”. The rating is enhanced from DBSVT’s stand-alone credit profile to reflect its status as a strategically important subsidiary of the DBS Group, which provides DBSVT with both financial and non-financial support. The stand-alone rating is based on DBSVT’s ability to utilize the network and resources of the DBS Group, and also takes into account DBSVT’s adequate capital base and sufficient liquidity, which provide DBSVT with a cushion to absorb normal business risk. However, these strengths are partially offset by concerns over the company’s deteriorating market position in the stock brokerage business and its financial performance during the last three years which was lower than TRIS Rating’s expectation. The rating is also constrained by uncertainty of the Thai stock market and operating climate following the brokerage business liberalization in 2010 and the global capital market volatility. These might partly affect the company’s business and financial position in the future.
The “negative” outlook reflects DBSVT’s market position and financial performance in securities brokerage business during the last three year which was lower than TRIS Rating’s expectation. TRIS Rating will closely monitor the company’s operating performance and market position when the sliding brokerage commission scales implemented in 2010. Any future downturn in operating performance will negatively impact the rating. However, the success implementation of DBSVT’s wealth management business, as the company’s strategic plan, and the recovery of the market position to a sustainable level will support DBSVT’s credit strengths. TRIS Rating expects DBSVT to remain a strategically important entity of the DBS Group, sustain to play a role in Thailand’s securities market as part of the DBS Group’s international network and continue getting the DBS Group’s implicit support.
TRIS Rating reported that DBSVT provides brokerage services as its core business, as well as other non-brokerage services, including financial advisory, equity underwriting, and wealth management. In the brokerage business, DBSVT faced a gradual decline in market share over the past four years: share fell from 2.9% in 2005 to 2.8% in 2006 and 2007, and then declined sharply to 2.1% in 2008. The substantial drop in market share was mainly from increased competition, especially from foreign brokerage firms who have a Direct Market Access (DMA) trading system. However, even after DBSVT implemented the DMA system in 2008, volume from overseas investors dropped due to the global financial crisis. The overseas investors have contributed 40%-50% of the company’s trading volume during the last five years. Market share, therefore, slid to 1.9% for the first nine months of 2009, and DBSVT ranked 22nd in terms of market share among 38 brokerage companies, down from 15th for all of 2007. However, excluding the proprietary trade, the company’s market share was 2.2% for the first nine months of 2009, down from 2.4% in 2008 and 3.0% in 2007.
Based on the support from the DBS Group and the flow of investable fund resulting from liquidity injections by the US and EU governments, TRIS Rating said DBSVT might be able to regain market share from overseas investors. Regarding the retail client base, the company plan to enlarge the market share through Internet trading, wealth management teams, and a company strategy to expand margin loans. However, recovery of both the overseas and retail volume with stable contribution has yet to be monitored, after the sliding scale of brokerage commission is implemented in 2010. In the investment banking business, the company targets medium-sized firms. DBSVT was the lead underwriter for the Asiasoft PLC deal worth Bt840 million in 2008. This is a sharp turnaround from only Bt74 million in deals in 2007. However, the company had no fee-based income for the first half of 2009. As investment banking is highly related to prospects for the stock market, DBSVT is expanding to offer other advisory services including mergers and acquisitions (M&A), and financial advisory work through the resources and international franchise network of its parent company. However, the revenue contribution from these activities was only 4% of total revenue for the last five years. The company does not expect any sizable amount of revenue from this business during the next 2-3 years.
Net profit gradually declined from Bt209 million in 2005 to Bt172 million in 2006 and Bt132 million in 2007, due to unfavorable market conditions and increasing competition among securities firms. In 2008, the company reported a net loss of Bt22 million due to substantial losses on margin loans, a direct result of the stock market turmoil during the last quarter of 2008. The unfavorable market conditions continued through the first quarter of 2009. DBSVT reported a net loss of Bt9 million for the first half of 2009. However, performance is likely to reverse for the second half of the year, because the market volume has improved since the second quarter of 2009. The average daily trading volume on the Stock Exchange of Thailand (SET) during April to September 2009 was around Bt21,000 million, up sharply from a daily average of trading volume of around Bt8,600 million for the first quarter of 2009.
DBSVT’s total assets ranged from Bt1.6-Bt1.9 billion during 2005-2008, before significantly increased to Bt2.31 billion as of June 2009. This remarkable increase arose from higher market trading volumes. However, outstanding margin loans remained flat at around Bt500 million from the beginning of 2008 through June 2009, due to the imposition of more stringent credit criteria. Margin loans outstanding were accounted for 31.3% of total assets in 2008 and 22.7% as of June 2009. However, the company plans to re-expand the margin loan portfolio when the opportunity arises, with the support from the DBS Group. The policy to maintain a high level of margin loans could raise the market share of retail customers. However, the loan expansion could expose the company to higher credit risk, particularly when the company has high concentration risk on large customers. Based on the current amount of outstanding margin loans, the company still has a sufficient capital to cover any losses from margin loan transactions. As of June 2009, the Net Capital Rule (NCR) was 49.56%, far above the requirement of the Securities and Exchange Commission (SEC) of Thailand.
TRIS Rating said, DBSVT has only a small exposure from its own investments. DBSVT invested Bt14 million in shares of TSFC Securities Ltd. (TSFC). This investment was a mandated poll-fund for all financial institutions to subsidize the establishment of TSFC. The investment was totally written off during the first half of 2009. Liquidity and financial flexibility remains sufficient, even after DBSVT started utilizing credit facilities from various financial institutions and the DBS Group to finance the margin loan portfolio expansion. As of August 2009, the company utilized 3.0% of the total available credit facilities worth Bt2.3 billion from several financial institutions and had a Bt200 million of subordinated loan from the DBS Group. However, TRIS Rating expects the DBS Group to provide timely financial support if needed. DBSVT has an adequate capital base despite a decrease from Bt1,273 million as of December 2007 to Bt964 million as of June 2009. The drop was due to a Bt277 million extra dividend payment and from net losses from operations.
The “negative” outlook reflects DBSVT’s market position and financial performance in securities brokerage business during the last three year which was lower than TRIS Rating’s expectation. TRIS Rating will closely monitor the company’s operating performance and market position when the sliding brokerage commission scales implemented in 2010. Any future downturn in operating performance will negatively impact the rating. However, the success implementation of DBSVT’s wealth management business, as the company’s strategic plan, and the recovery of the market position to a sustainable level will support DBSVT’s credit strengths. TRIS Rating expects DBSVT to remain a strategically important entity of the DBS Group, sustain to play a role in Thailand’s securities market as part of the DBS Group’s international network and continue getting the DBS Group’s implicit support.
TRIS Rating reported that DBSVT provides brokerage services as its core business, as well as other non-brokerage services, including financial advisory, equity underwriting, and wealth management. In the brokerage business, DBSVT faced a gradual decline in market share over the past four years: share fell from 2.9% in 2005 to 2.8% in 2006 and 2007, and then declined sharply to 2.1% in 2008. The substantial drop in market share was mainly from increased competition, especially from foreign brokerage firms who have a Direct Market Access (DMA) trading system. However, even after DBSVT implemented the DMA system in 2008, volume from overseas investors dropped due to the global financial crisis. The overseas investors have contributed 40%-50% of the company’s trading volume during the last five years. Market share, therefore, slid to 1.9% for the first nine months of 2009, and DBSVT ranked 22nd in terms of market share among 38 brokerage companies, down from 15th for all of 2007. However, excluding the proprietary trade, the company’s market share was 2.2% for the first nine months of 2009, down from 2.4% in 2008 and 3.0% in 2007.
Based on the support from the DBS Group and the flow of investable fund resulting from liquidity injections by the US and EU governments, TRIS Rating said DBSVT might be able to regain market share from overseas investors. Regarding the retail client base, the company plan to enlarge the market share through Internet trading, wealth management teams, and a company strategy to expand margin loans. However, recovery of both the overseas and retail volume with stable contribution has yet to be monitored, after the sliding scale of brokerage commission is implemented in 2010. In the investment banking business, the company targets medium-sized firms. DBSVT was the lead underwriter for the Asiasoft PLC deal worth Bt840 million in 2008. This is a sharp turnaround from only Bt74 million in deals in 2007. However, the company had no fee-based income for the first half of 2009. As investment banking is highly related to prospects for the stock market, DBSVT is expanding to offer other advisory services including mergers and acquisitions (M&A), and financial advisory work through the resources and international franchise network of its parent company. However, the revenue contribution from these activities was only 4% of total revenue for the last five years. The company does not expect any sizable amount of revenue from this business during the next 2-3 years.
Net profit gradually declined from Bt209 million in 2005 to Bt172 million in 2006 and Bt132 million in 2007, due to unfavorable market conditions and increasing competition among securities firms. In 2008, the company reported a net loss of Bt22 million due to substantial losses on margin loans, a direct result of the stock market turmoil during the last quarter of 2008. The unfavorable market conditions continued through the first quarter of 2009. DBSVT reported a net loss of Bt9 million for the first half of 2009. However, performance is likely to reverse for the second half of the year, because the market volume has improved since the second quarter of 2009. The average daily trading volume on the Stock Exchange of Thailand (SET) during April to September 2009 was around Bt21,000 million, up sharply from a daily average of trading volume of around Bt8,600 million for the first quarter of 2009.
DBSVT’s total assets ranged from Bt1.6-Bt1.9 billion during 2005-2008, before significantly increased to Bt2.31 billion as of June 2009. This remarkable increase arose from higher market trading volumes. However, outstanding margin loans remained flat at around Bt500 million from the beginning of 2008 through June 2009, due to the imposition of more stringent credit criteria. Margin loans outstanding were accounted for 31.3% of total assets in 2008 and 22.7% as of June 2009. However, the company plans to re-expand the margin loan portfolio when the opportunity arises, with the support from the DBS Group. The policy to maintain a high level of margin loans could raise the market share of retail customers. However, the loan expansion could expose the company to higher credit risk, particularly when the company has high concentration risk on large customers. Based on the current amount of outstanding margin loans, the company still has a sufficient capital to cover any losses from margin loan transactions. As of June 2009, the Net Capital Rule (NCR) was 49.56%, far above the requirement of the Securities and Exchange Commission (SEC) of Thailand.
TRIS Rating said, DBSVT has only a small exposure from its own investments. DBSVT invested Bt14 million in shares of TSFC Securities Ltd. (TSFC). This investment was a mandated poll-fund for all financial institutions to subsidize the establishment of TSFC. The investment was totally written off during the first half of 2009. Liquidity and financial flexibility remains sufficient, even after DBSVT started utilizing credit facilities from various financial institutions and the DBS Group to finance the margin loan portfolio expansion. As of August 2009, the company utilized 3.0% of the total available credit facilities worth Bt2.3 billion from several financial institutions and had a Bt200 million of subordinated loan from the DBS Group. However, TRIS Rating expects the DBS Group to provide timely financial support if needed. DBSVT has an adequate capital base despite a decrease from Bt1,273 million as of December 2007 to Bt964 million as of June 2009. The drop was due to a Bt277 million extra dividend payment and from net losses from operations.
Saturday, November 21, 2009
UN trade and investment policy body for Asia and the Pacific opens first session
The main policy body on trade and investment for the regional arm of the United Nations in Asia and the Pacific opened its first session today, noting that the region was on the path to recovery from the economic and financial crises but also that the adverse social effects would be felt for a long time.
The Committee on Trade and Investment, which provides policy guidance to the work of the Economic and Social Commission for Asia and the Pacific (ESCAP), is meeting through Friday in Bangkok under the theme, “Trade-Led Recovery and Beyond.”
In her remarks to the Committee, Noeleen Heyzer, Under-Secretary-General of the United Nations and Executive Secretary of ESCAP, emphasized the need to enhance connectivity in the region in support of intraregional trade.
Many developing countries in the region, particularly the least developed and landlocked ones, lack sufficient access to markets or are not competitive enough to fully use trade as a tool for wealth generation and poverty reduction. “For these countries effective integration with regional and global trading systems will potentially provide important additional sources of growth,” she said.
Trade measures should also be specifically designed to target the sectors of the economy linked with small businesses, women and the poor to ensure that future trade-led economic growth was pro-poor and benefited people who needed it most, Dr. Heyzer added.
Foreign Minister Kasit Piromya of Thailand said in his inaugural address that regional economic cooperation was essential to promoting sustainable growth and strengthening resilience against future economic crises. He referred to last month’s ASEAN Summit which had launched an initiative to establish an East Asian Free Trade Area comprising the 10 ASEAN members and China, Japan and the Republic of Korea. He also emphasized the importance of public-private partnerships, particularly in infrastructure projects.
The Committee also discussed trade and investment as a means to achieve inclusive and sustainable development. Kiat Sittheeamorn, Thailand Trade Representative, said Asia stood to benefit greatly from trade and should therefore take a pro-active role in promoting trade liberalization. “Trade is a victim of the crisis but a hero of recovery,” he said, adding that Asia should speak with one voice to get the maximum benefit out of trade.
The Committee also noted that Asia was leading the recovery from the crisis and exports were poised for strong growth in 2010. Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, called for Asia to be at the forefront of trade-led growth. “The global economy creates many opportunities; for instance, Asia is already taking a lead in developing green technologies,” he said. In a modern economy, there was a need for a proper balance between the invisible hand of the market and the visible hand of good government.
Damdin Tsogtbaatar, State Secretary of the Ministry of Foreign Affairs and Trade of Mongolia, noted that the crisis had revealed that the “old economy” was neglected in favour of the “new economy.” “Important traditional sectors such as agriculture and mining cannot easily be replaced by dot.com industries in many countries,” he said.
The first session of the Committee on Trade and Investment, which drew about 100 senior officials, academics and private sector representatives from some 25 countries, is part of a series of events which make up ESCAP’s first Asia-Pacific Trade and Investment Week. Secretary-General Supachai Panitchpakdi of the UN Conference on Trade and Development (UNCTAD) is scheduled to deliver a keynote address Thursday to the Committee.
Other events during the Week have included the Asia-Pacific Economists’
Conference on “Trade-led Growth in Times of Crisis” to commemorate the fifth anniversary of the Asia-Pacific Research and Training Network on Trade (ARTNeT), the OECD/ESCAP Conference on Corporate Responsibility and other workshops.
The Committee on Trade and Investment, which provides policy guidance to the work of the Economic and Social Commission for Asia and the Pacific (ESCAP), is meeting through Friday in Bangkok under the theme, “Trade-Led Recovery and Beyond.”
In her remarks to the Committee, Noeleen Heyzer, Under-Secretary-General of the United Nations and Executive Secretary of ESCAP, emphasized the need to enhance connectivity in the region in support of intraregional trade.
Many developing countries in the region, particularly the least developed and landlocked ones, lack sufficient access to markets or are not competitive enough to fully use trade as a tool for wealth generation and poverty reduction. “For these countries effective integration with regional and global trading systems will potentially provide important additional sources of growth,” she said.
Trade measures should also be specifically designed to target the sectors of the economy linked with small businesses, women and the poor to ensure that future trade-led economic growth was pro-poor and benefited people who needed it most, Dr. Heyzer added.
Foreign Minister Kasit Piromya of Thailand said in his inaugural address that regional economic cooperation was essential to promoting sustainable growth and strengthening resilience against future economic crises. He referred to last month’s ASEAN Summit which had launched an initiative to establish an East Asian Free Trade Area comprising the 10 ASEAN members and China, Japan and the Republic of Korea. He also emphasized the importance of public-private partnerships, particularly in infrastructure projects.
The Committee also discussed trade and investment as a means to achieve inclusive and sustainable development. Kiat Sittheeamorn, Thailand Trade Representative, said Asia stood to benefit greatly from trade and should therefore take a pro-active role in promoting trade liberalization. “Trade is a victim of the crisis but a hero of recovery,” he said, adding that Asia should speak with one voice to get the maximum benefit out of trade.
The Committee also noted that Asia was leading the recovery from the crisis and exports were poised for strong growth in 2010. Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, called for Asia to be at the forefront of trade-led growth. “The global economy creates many opportunities; for instance, Asia is already taking a lead in developing green technologies,” he said. In a modern economy, there was a need for a proper balance between the invisible hand of the market and the visible hand of good government.
Damdin Tsogtbaatar, State Secretary of the Ministry of Foreign Affairs and Trade of Mongolia, noted that the crisis had revealed that the “old economy” was neglected in favour of the “new economy.” “Important traditional sectors such as agriculture and mining cannot easily be replaced by dot.com industries in many countries,” he said.
The first session of the Committee on Trade and Investment, which drew about 100 senior officials, academics and private sector representatives from some 25 countries, is part of a series of events which make up ESCAP’s first Asia-Pacific Trade and Investment Week. Secretary-General Supachai Panitchpakdi of the UN Conference on Trade and Development (UNCTAD) is scheduled to deliver a keynote address Thursday to the Committee.
Other events during the Week have included the Asia-Pacific Economists’
Conference on “Trade-led Growth in Times of Crisis” to commemorate the fifth anniversary of the Asia-Pacific Research and Training Network on Trade (ARTNeT), the OECD/ESCAP Conference on Corporate Responsibility and other workshops.
Friday, November 13, 2009
UMI TO INCREASE MOSAIC EXPORT FOCUS NEXT YEAR
Union Mosaic Industry next year will increase its mosaic-tile export volume to cash in on its Asian competitors having slowed down or shut production after facing high labour costs.
The company current exports 15 per cent of its production of ceramic tiles and mosaic, but the proportion will be boosted next year for mosaic.
UMI chairman Paweena Laowiwatwong said yesterday that the production slowdown or shutdown of some mosaic manufacturers in Asia had presented the company with an opportunity to win more overseas orders.
She said mosaic production was more labour intensive than ceramic-tile production, whereas the market was smaller. This had led to the closure of some tile and mosaic-makers.
Many countries in the Middle East and other parts of Asia still offer demand for mosaic tiling , however.
UMI's mosaic sales account for 6-7 per cent of its revenue, she said. Although demand is not high, the company still produces mosaic because it offers a better margin than ceramic tiles.
She said the export outlook for its range next year should be brighter than this year's because of the global market recovery. UMI expects to enjoy export growth of 10 to 20 per cent. This year's exports have dropped by 10 per cent due to the economic crisis.
UMI yesterday reported a third-quarter net profit of Bt61 million in the same perioed last year. Its net profit in the first nine months was Bt95.54 million, compared with a loss of Bt34.46 million over the same period last year.
The company expects to turn a profit this year because of its focus on cost reduction and high-margin product development, Paweena said. It posted a loss of Bt115.23 million last year.
She said the company targeted sales growth next year at 5 to 10 per cent, from expected revenue of Bt2.1 billion this year.
"If we can maintain our gross profit margin at 20 per cent and enjoy stable oil and natural-gas prices, we believe the company will achieve sales growth," she added.
The company's board is considering paying a diveidend to stakeholders for the first time in four years, she said.
Paweena said the Thai Khemkhaeng project was a positive factor driving demand for tiling next year.
UMI plans to run at 85-per-cent capacity in response the expected rise in domestic demand. It currently operates at 75 per cent.
The company current exports 15 per cent of its production of ceramic tiles and mosaic, but the proportion will be boosted next year for mosaic.
UMI chairman Paweena Laowiwatwong said yesterday that the production slowdown or shutdown of some mosaic manufacturers in Asia had presented the company with an opportunity to win more overseas orders.
She said mosaic production was more labour intensive than ceramic-tile production, whereas the market was smaller. This had led to the closure of some tile and mosaic-makers.
Many countries in the Middle East and other parts of Asia still offer demand for mosaic tiling , however.
UMI's mosaic sales account for 6-7 per cent of its revenue, she said. Although demand is not high, the company still produces mosaic because it offers a better margin than ceramic tiles.
She said the export outlook for its range next year should be brighter than this year's because of the global market recovery. UMI expects to enjoy export growth of 10 to 20 per cent. This year's exports have dropped by 10 per cent due to the economic crisis.
UMI yesterday reported a third-quarter net profit of Bt61 million in the same perioed last year. Its net profit in the first nine months was Bt95.54 million, compared with a loss of Bt34.46 million over the same period last year.
The company expects to turn a profit this year because of its focus on cost reduction and high-margin product development, Paweena said. It posted a loss of Bt115.23 million last year.
She said the company targeted sales growth next year at 5 to 10 per cent, from expected revenue of Bt2.1 billion this year.
"If we can maintain our gross profit margin at 20 per cent and enjoy stable oil and natural-gas prices, we believe the company will achieve sales growth," she added.
The company's board is considering paying a diveidend to stakeholders for the first time in four years, she said.
Paweena said the Thai Khemkhaeng project was a positive factor driving demand for tiling next year.
UMI plans to run at 85-per-cent capacity in response the expected rise in domestic demand. It currently operates at 75 per cent.
Cabinet wants second look at tapioca sale
The cabinet has declined to approve a Commerce Ministry proposal to sell more tapioca in domestic and export markets.
Prime Minister Abhisit Vejjajiva said the sale should be approved first by the Tapioca Committee chaired by Deputy Prime Minister Korbsak Sabhavasu and then proposed to the cabinet.
The government still has 1.6 million tonnes of tapioca chips and 326,180 tonnes of starch that have been in its stockpiles for 10 months. Further delays would result in damage to the quality,the ministry has said.
Prime Minister Abhisit Vejjajiva said the sale should be approved first by the Tapioca Committee chaired by Deputy Prime Minister Korbsak Sabhavasu and then proposed to the cabinet.
The government still has 1.6 million tonnes of tapioca chips and 326,180 tonnes of starch that have been in its stockpiles for 10 months. Further delays would result in damage to the quality,the ministry has said.
CRISIS FORCES ADAPTATION
Hoping to turn a crisis into an opportunity and take advantage of the nascent economic recovery, Thai businesses are adjusting the way they do business in a variety of ways.
Teeradej Snongtaweeporn, deputy administrative director of Big Star, the maker of Gambol footwear, said the company had revised its strategy to focus more on own-brand products and reduce the amount of original-equipment manufacturing (OEM) of footwear for client brands.
"We want to export more footwear under our Gambol brand, and to move away from the OEM business," Teeradej said, adding that the company currently exports Gambol footwear to 10 markets in Southeast Asia, in addition to the Middle East and Eastern European countries including Ukraine and Russia.
"We want to reduce OEM from 40 per cent to about 20 per cent of our export business by the second quarter of next year," Teeradej said. Exports currently account for about 40 per cent of Big Star's total sales.
"Relying too much on OEM leaves you vulnerable to clients who shift orders to lower-cost manufacturers. So we want to focus on our own brand, which is quite strong," Teeradej said.
The company saw OEM orders from Europe plunge during the recent global economic turmoil, but was able to offset this by exporting more footwear under the Gambol brand.
"The Thai economy is expected to recover in the second half of next year, driven by higher purchasing power among consumers, aided in part by the [government's] Thai Khemkhaeng economic stimulus scheme. We plan to increase our production capacity by 10 per cent next year. The company currently produces about 10 million pairs of footwear per annum," Teeradej said.
The economic crisis has also brought about some changes at ICC International, according to director Somphol Chaisiriroj, who oversees the Arrow apparel brand. He said the company expected to achieve close to Bt2 billion in sales of Arrow products this year, up nearly 10 per cent over last year - but lower than the 15 per cent targeted at the beginning of the year.
"Rather than worry about the economic crisis, I'd rather learn from it and use those lessons to formulate a new business plan," said Somphol.
The downturn should encourage business operators to think about society in all its dimensions, he said, and not just their bottom lines.
"It should be a mission of all businesspeople today to try and do something to help other people," he said.
Consumers want to buy brands that make a contribution to society, Somphol said.
In 2007, Arrow launched a corporate social responsibility campaign, "Send Me Home", with the goal of releasing eight captive elephants back into the wild. The last two elephants are due to be released next month.
Sales of Arrow apparel were stagnant for the first six months, but grew a strong 15 per cent in the third quarter, which he attributes largely to the exposure achieved via the campaign.
Singer Thailand, meanwhile, has revamped its instalment payment plan for electrical appliances.
"We have increased the payment-period options from 12 and 18 months to 24 and 38 months, and reduced the monthly payments from between Bt700 and Bt1,000 to just Bt500 for refrigerators, and from between Bt1,500 and Bt2,000 to Bt900 for air-conditioners. This will make it easier for consumers to access our installment plan amid the current economic difficulties," Boonyong said.
Teeradej Snongtaweeporn, deputy administrative director of Big Star, the maker of Gambol footwear, said the company had revised its strategy to focus more on own-brand products and reduce the amount of original-equipment manufacturing (OEM) of footwear for client brands.
"We want to export more footwear under our Gambol brand, and to move away from the OEM business," Teeradej said, adding that the company currently exports Gambol footwear to 10 markets in Southeast Asia, in addition to the Middle East and Eastern European countries including Ukraine and Russia.
"We want to reduce OEM from 40 per cent to about 20 per cent of our export business by the second quarter of next year," Teeradej said. Exports currently account for about 40 per cent of Big Star's total sales.
"Relying too much on OEM leaves you vulnerable to clients who shift orders to lower-cost manufacturers. So we want to focus on our own brand, which is quite strong," Teeradej said.
The company saw OEM orders from Europe plunge during the recent global economic turmoil, but was able to offset this by exporting more footwear under the Gambol brand.
"The Thai economy is expected to recover in the second half of next year, driven by higher purchasing power among consumers, aided in part by the [government's] Thai Khemkhaeng economic stimulus scheme. We plan to increase our production capacity by 10 per cent next year. The company currently produces about 10 million pairs of footwear per annum," Teeradej said.
The economic crisis has also brought about some changes at ICC International, according to director Somphol Chaisiriroj, who oversees the Arrow apparel brand. He said the company expected to achieve close to Bt2 billion in sales of Arrow products this year, up nearly 10 per cent over last year - but lower than the 15 per cent targeted at the beginning of the year.
"Rather than worry about the economic crisis, I'd rather learn from it and use those lessons to formulate a new business plan," said Somphol.
The downturn should encourage business operators to think about society in all its dimensions, he said, and not just their bottom lines.
"It should be a mission of all businesspeople today to try and do something to help other people," he said.
Consumers want to buy brands that make a contribution to society, Somphol said.
In 2007, Arrow launched a corporate social responsibility campaign, "Send Me Home", with the goal of releasing eight captive elephants back into the wild. The last two elephants are due to be released next month.
Sales of Arrow apparel were stagnant for the first six months, but grew a strong 15 per cent in the third quarter, which he attributes largely to the exposure achieved via the campaign.
Singer Thailand, meanwhile, has revamped its instalment payment plan for electrical appliances.
"We have increased the payment-period options from 12 and 18 months to 24 and 38 months, and reduced the monthly payments from between Bt700 and Bt1,000 to just Bt500 for refrigerators, and from between Bt1,500 and Bt2,000 to Bt900 for air-conditioners. This will make it easier for consumers to access our installment plan amid the current economic difficulties," Boonyong said.
Sunday, November 8, 2009
Tapioca starch sale to China blocked
Deputy Prime Minister Korbsak Sabhavasu insisted yesterday the Commerce Ministry must renegotiate its tapioca starch deals with the Chinese government, saying the prices proposed were too low.
Mr Korbsak made the comment after a meeting of the National Tapioca Policy Committee on Monday turned down a Commerce Ministry proposal to sell 200,000 tonnes of tapioca starch under a government-to-government contract to China.
The rejection has reportedly baffled the Commerce Ministry, as the deals were said to be handled according to conditions and guidelines set by a similar committee chaired by Mr Korbsak.
The conditions oblige the government to sell tapioca starch at between 7,600 and 8,100 baht per tonne. China's Ming Yang from Guangxi had proposed to buy 200,000 tonnes of tapioca starch from the Thai government at 7,950 baht a tonne.
But Mr Korbsak insisted yesterday that the ministry needs to re-negotiate for a better price, as the proposed price is lower than that paid by Thai firms to buy government stocks.
At the committee's meeting, Mr Korbsak said the government was paid 8,300 baht a tonne when it sold 130,000 tonnes of tapioca starch stocks to six firms.
"The government earns much better prices from selling the products in the domestic market. So the deals to foreign buyers at cheaper prices do not make sense," said Mr Korbsak.
He added that the rejection was unlikely to affect relations between the two countries, as China is now rich and can afford tapioca starch at higher prices.
In other deals, Mr Korbsak said the committee had agreed to sell 340,000 tonnes of tapioca chips at 4,800 baht per tonne to eight exporters, and another 100,000 tonnes of tapioca chips at 4,477 baht per tonne to three companies for sale domestically.
Thailand is the world's biggest exporter of tapioca products, controlling 75% of the global market. Exports take the form of chips, pellets and flour.
The government is currently estimated to hold about 400,000 tonnes of tapioca starch and 1.7 million tonnes of chips.
Mr Korbsak made the comment after a meeting of the National Tapioca Policy Committee on Monday turned down a Commerce Ministry proposal to sell 200,000 tonnes of tapioca starch under a government-to-government contract to China.
The rejection has reportedly baffled the Commerce Ministry, as the deals were said to be handled according to conditions and guidelines set by a similar committee chaired by Mr Korbsak.
The conditions oblige the government to sell tapioca starch at between 7,600 and 8,100 baht per tonne. China's Ming Yang from Guangxi had proposed to buy 200,000 tonnes of tapioca starch from the Thai government at 7,950 baht a tonne.
But Mr Korbsak insisted yesterday that the ministry needs to re-negotiate for a better price, as the proposed price is lower than that paid by Thai firms to buy government stocks.
At the committee's meeting, Mr Korbsak said the government was paid 8,300 baht a tonne when it sold 130,000 tonnes of tapioca starch stocks to six firms.
"The government earns much better prices from selling the products in the domestic market. So the deals to foreign buyers at cheaper prices do not make sense," said Mr Korbsak.
He added that the rejection was unlikely to affect relations between the two countries, as China is now rich and can afford tapioca starch at higher prices.
In other deals, Mr Korbsak said the committee had agreed to sell 340,000 tonnes of tapioca chips at 4,800 baht per tonne to eight exporters, and another 100,000 tonnes of tapioca chips at 4,477 baht per tonne to three companies for sale domestically.
Thailand is the world's biggest exporter of tapioca products, controlling 75% of the global market. Exports take the form of chips, pellets and flour.
The government is currently estimated to hold about 400,000 tonnes of tapioca starch and 1.7 million tonnes of chips.
DOMESTIC SALES LOOK MORE PROMISING
Next year's outlook for automobile exports remains murky due to the high risk of sluggish economies in many countries and the rising price of oil, while domestic sales are expected to expand about 5 per cent thanks to the government's economic stimulus package and rising farm income.
"Our exports have dropped some 40 per cent year on year since the first quarter and there are still no signs of them getting better. We're afraid that the situation can get worse in case those countries have no more economic stimulus packages and their economies are kept in hardship," Suparat Sirisuwanangkura, president of the Thai Automotive Industry, said yesterday.
Auto exports in 2010 will either rise or fall by 5 per cent from this year's target of 540,000 units. However, lower exports tend to have more chance of taking place.
Another important foctor is the continual hike in oil prices, which have a high probability to spiral up from US$75-$80 per barrel at present to $100 next year, he said.
Nonetheless, auto-makers have opportunities to expand their customer bases in the Middle East and Asean where the markets have been recovering faster than other parts of the world."
In Thailand, sales of new passenger cars are on an upward tick since sales fell only 8 per cent in the first three quarters, while sales of pickup trucks shrank 29 per cent due to lowincome in the agricultural sector.
"I believe pickup sales will become higher following the government's policy of guaranteeing crop prices. On the side of carmakers, we would like the government to give a clear direction for its energy policy so we can plan our business properly," he said.
Domestic atuo sales in the first nine months fell 20 per cent from the same period last year to 360,000 units, he said. In the same period, exports declined 39.3 per cent to 363,000 units.
Auto-makers have cut their production target from 1.08 million units to 1 million units this year, with 520,000 units for the domestic and the rest for export.
Some 70 per cent of terminated and laid-off workers have been called back to auto and auto-parts plants since the global economic crisis was unwound, he added.
"Another important factor is the continual hike in oil pirces, which have a high probability to spiral up from US$75-$80 per barrel at present to $100 next year."
"Our exports have dropped some 40 per cent year on year since the first quarter and there are still no signs of them getting better. We're afraid that the situation can get worse in case those countries have no more economic stimulus packages and their economies are kept in hardship," Suparat Sirisuwanangkura, president of the Thai Automotive Industry, said yesterday.
Auto exports in 2010 will either rise or fall by 5 per cent from this year's target of 540,000 units. However, lower exports tend to have more chance of taking place.
Another important foctor is the continual hike in oil prices, which have a high probability to spiral up from US$75-$80 per barrel at present to $100 next year, he said.
Nonetheless, auto-makers have opportunities to expand their customer bases in the Middle East and Asean where the markets have been recovering faster than other parts of the world."
In Thailand, sales of new passenger cars are on an upward tick since sales fell only 8 per cent in the first three quarters, while sales of pickup trucks shrank 29 per cent due to lowincome in the agricultural sector.
"I believe pickup sales will become higher following the government's policy of guaranteeing crop prices. On the side of carmakers, we would like the government to give a clear direction for its energy policy so we can plan our business properly," he said.
Domestic atuo sales in the first nine months fell 20 per cent from the same period last year to 360,000 units, he said. In the same period, exports declined 39.3 per cent to 363,000 units.
Auto-makers have cut their production target from 1.08 million units to 1 million units this year, with 520,000 units for the domestic and the rest for export.
Some 70 per cent of terminated and laid-off workers have been called back to auto and auto-parts plants since the global economic crisis was unwound, he added.
"Another important factor is the continual hike in oil pirces, which have a high probability to spiral up from US$75-$80 per barrel at present to $100 next year."
NEW ZEALAND'S HOME BUILDING APPROVALS INCREASE 3.3 PER CENT
Home-building approvals in New Zealand rose for the fifth time in six months in September, signalling lower mortgage rates are helping to kick-start demand for property.
Permits increased 3.3 per cent from August, Statistics New Zealand said, citing seasonally adjusted fugures. Excluding apartments, approvals rose 2.8 per cent to a 13-month high.
Reserve Bank Governor Alan Bollard said he was unlikely to raise borrowing costs from a record low until the second half of next year, to help the economy emerge from its worst recession in three decades. There are signs the economy is growing again.
"The pace of increases is not substantial but is in line with what would be expected given the increase in house sales, low interest rates and improvement in net migration," said ANZ National Bank economist Philip Borkin.
Economists monitor approvals excluding apartments because apartment consents are volatile. There were 155 apartment approvals in September, up from 30 in August and down from 366 in September 2008.
Excluding apartments, approvals in the third quarter increased 31 per cent quarter on quarter. Economists expect building approvals to keep pacing gains in house sales, property prices and immigration.
Home sales rose 44 per cent year on year in September, the Real Estate Institute reported. House prices increased 1.9 per cent from August. The number of permanent migrant arrivals exceeded departures by 17,043 in the year ending September 30, the most since 2004, the government said last week.
"With house sales still rising, further consent increases are likely over the next six months, and this should see residential construction make some reasonable contributions to growth over 2010," Borkin said.
Property construction has slump year on year because of the recession, which began in last year's first quarter, and as a credit crisis curbed development projects. In the 12 months ending September 30, approvals fell 35 per cent.
The value of approvals for home building and renovations declined 14 per cent in September from a year earlier to 480 million New Zealand dollars (Bt11.56 billion), the agency said.
Permits increased 3.3 per cent from August, Statistics New Zealand said, citing seasonally adjusted fugures. Excluding apartments, approvals rose 2.8 per cent to a 13-month high.
Reserve Bank Governor Alan Bollard said he was unlikely to raise borrowing costs from a record low until the second half of next year, to help the economy emerge from its worst recession in three decades. There are signs the economy is growing again.
"The pace of increases is not substantial but is in line with what would be expected given the increase in house sales, low interest rates and improvement in net migration," said ANZ National Bank economist Philip Borkin.
Economists monitor approvals excluding apartments because apartment consents are volatile. There were 155 apartment approvals in September, up from 30 in August and down from 366 in September 2008.
Excluding apartments, approvals in the third quarter increased 31 per cent quarter on quarter. Economists expect building approvals to keep pacing gains in house sales, property prices and immigration.
Home sales rose 44 per cent year on year in September, the Real Estate Institute reported. House prices increased 1.9 per cent from August. The number of permanent migrant arrivals exceeded departures by 17,043 in the year ending September 30, the most since 2004, the government said last week.
"With house sales still rising, further consent increases are likely over the next six months, and this should see residential construction make some reasonable contributions to growth over 2010," Borkin said.
Property construction has slump year on year because of the recession, which began in last year's first quarter, and as a credit crisis curbed development projects. In the 12 months ending September 30, approvals fell 35 per cent.
The value of approvals for home building and renovations declined 14 per cent in September from a year earlier to 480 million New Zealand dollars (Bt11.56 billion), the agency said.
DEUTSCHE BANK EXECUTIVE WANTS TO OPEN A POLITICAL ACCOUNT
As the managing director and head of the Global Markets division of Deutsche Bank in Thailand, responsible for more than 133 billion baht in assets and liabilities, and a mother of three young children, Ornkanya Pibuldham could be regarded as a "Thai Superwoman".
She is also one of the best paid and increasingly influential women in Thailand and is looking beyond business, aiming to enter politics and maybe become a senator or even a minister one day.
Ms Ornkanya, also known as Mook and who turned 40 in September, was born in Bangkok."My father used to run an engineering consulting firm and my mum was a professor of engineering at Chulalongkorn University. As both my parents were engineers,I also became one. After graduating with a bachelor's degree in engineering from Chulalongkorn University, I helped my dad, working for his company."
But engineering didn't suit her, and pursuing an early interest in golf, she opened the first golf school in Thailand while still in her early twenties. She also became the publisher of Golf Digest Magazine . However, the business wasn't successful and seeing so many of her friends doing well in banking,she went to the University of Exeter in the UK in 1995, and emerged two years later with an MA in finance and investment.
"After that I took a job at Standard Chartered Bank in London as a foreign exchange trader and management trainee. I was with them [in London] for one year and another four in Thailand.
"I was approached by Deutsche Bank in 2000, and have worked here since. We are the largest bank in Germany and one of the biggest foreign banks in Thailand. My first position was in corporate foreign exchange sales, and my career took off," Ms Ornkanya said.
"I was appointed to my current position in February 2007. I look after the bank's balance sheet, trading, sales activities, clients,markets, managing the cash-flow for the bank and so on. I have 15 people in my team, and they are all smart. I like them to be smarter than me, so that I can work less," she joked.
"Since I'm in trading and sales, the work is quite intensive. It involves a lot of stress because we are trading. I'm so lucky that I do well. The Deutsche Bank group market department is the major contributor of the bank's revenue," Ms Ornkanya said.
Commenting on the current economic situation in Thailand, she added:"Last year was a good year for us because the market was volatile - the stock market moved and the currency moved, because of all the news about the global economy. We were lucky that we could catch the trends so we could make money.
"However, if you ask me about the economy, I think that Thailand is lucky because of the Bank of Thailand (BoT). It has stringent rules and regulations, but doesn't control the banks, and it has very good, well qualified people working for it. The BoT is very strict,both for local and foreign banks. That's why most of them here weren't affected [by the crisis].
"Thai banks survived the crisis and are generally doing well in comparison to many banks abroad that collapsed because of the 'sub-prime' crisis. They [Thai banks] have plenty of cash and because of it they can lend to their clients, and for that reason the companies here have a lot of money as well.The fact that Thai companies went out buying assets in other regions is because they have access to cheap liquidity and use it as an opportunity to buy cheap assets.
"Thailand is a country with liquidity because the banks were not affected by the crisis. We are an exporting country, so when other countries are not doing well, it is difficult for us to do well, but in general, because we have liquidity, the country has the money to muddle through the crisis.
"The worst of the financial crisis in Thailand is most probably over. However, political uncertainties and rumours in the market are factors that discourage investors who can choose to invest somewhere else," she warned.
And she had some advice for foreign investors:"If you ask me for advice for corporate investors, I'd need some parameters before I could advise what company or sector they should look at.
"But for those coming here as individuals,I strongly recommend they invest in property in Bangkok, especially in the business districts.This is a very attractive investment and you can make money. To me, Bangkok is Thailand.Twenty per cent of the Thai population live here and the numbers are increasing every day. If you can't afford to invest in these areas, then buy a piece of property on the outskirts of Bangkok. As long as it's within Bangkok, you will be fine. All the infrastructure will come to you. With our current pace of development, I can't really see Chiang Mai or Khon Kaen becoming Boston or Manchester in the near future - you're not going to make money there.
"Thailand is a good place for foreigners to invest - great infrastructure, rigid laws and regulations, a strong financial system. We may have instability on our politics, but we all know by now that it is just 'our way of life'.
"We might not have been able to come this far without this instability," she stressed,adding:"I haven't found a foreigner who has a negative view of Thailand. They all love Thailand. Sometimes I ask myself whether Thai people love Thailand as much, whether we are proud to be Thai and say enough good things about our country.
"Of all the foreign banks in Thailand, I'm the only female who does this kind of work.The others are all men. This job is very demanding, especially for a woman with three children to look after, plus I do a lot of travelling abroad."
On her priorities, both personal and in business, Ms Ornkanya said:"I work for the bank, so I want the bank to be successful,because then I will be as well. As for my personal life, my priority is to make sure that my kids are doing well in a secure environment.
"As to the future, I'm at the top at Deutsche Bank, so what next? Whatever happens, I want to live and work in Thailand. When I was young, I used to think about working abroad, but not now. If you talk about job security, or your value to an international firm, it is here."
Commenting on her biggest achievements and failures, she said:"To have my three beautiful kids and to be a good mum to them. My family and my job are equally important to me, but of course, family is the most important. I can walk away from being a Deutsche Bank executive, but not from being a mother. No major failures as yet,definitely not in my business."
As for her biggest challenges, Ms Ornkanya said:"Maybe I'll sit here for another few years. I need to move on at some time so my people can grow. One day, I'd like to be in politics to be able to do something for my country. My day-to-day work gives me the opportunity to get to know people and to understand their organisations and their needs. I'm making my way up there. I was approached to join a political party, but I haven't made any decision at this time. Don't you think Thai politics has many more colours than other countries? It can get you into a big fight with your best friend, and make your parents stop talking to each other."
Ms Ornkanya attributes her success to her parents, who are also her role models:"My mum gave me self confidence and my dad gave me a great sense of humour. When people have self confidence, they tend to be surrounded by smart people.
"And a sense of humour stops you from becoming arrogant. By the way, I'm not that successful, I have another 20 years to go before retirement. Let's talk about my 'success'then."
Finally, Ms Ornkanya had some advice for young Thai women:"You should be committed and persistent in whatever you do.We have to make choices every day, so make sure that you make the right choices. Women always make decisions based on emotion.That's why we make wrong choices all the time. I have made wrong choices, and I have to live with them," she said without elaborating.
She is also one of the best paid and increasingly influential women in Thailand and is looking beyond business, aiming to enter politics and maybe become a senator or even a minister one day.
Ms Ornkanya, also known as Mook and who turned 40 in September, was born in Bangkok."My father used to run an engineering consulting firm and my mum was a professor of engineering at Chulalongkorn University. As both my parents were engineers,I also became one. After graduating with a bachelor's degree in engineering from Chulalongkorn University, I helped my dad, working for his company."
But engineering didn't suit her, and pursuing an early interest in golf, she opened the first golf school in Thailand while still in her early twenties. She also became the publisher of Golf Digest Magazine . However, the business wasn't successful and seeing so many of her friends doing well in banking,she went to the University of Exeter in the UK in 1995, and emerged two years later with an MA in finance and investment.
"After that I took a job at Standard Chartered Bank in London as a foreign exchange trader and management trainee. I was with them [in London] for one year and another four in Thailand.
"I was approached by Deutsche Bank in 2000, and have worked here since. We are the largest bank in Germany and one of the biggest foreign banks in Thailand. My first position was in corporate foreign exchange sales, and my career took off," Ms Ornkanya said.
"I was appointed to my current position in February 2007. I look after the bank's balance sheet, trading, sales activities, clients,markets, managing the cash-flow for the bank and so on. I have 15 people in my team, and they are all smart. I like them to be smarter than me, so that I can work less," she joked.
"Since I'm in trading and sales, the work is quite intensive. It involves a lot of stress because we are trading. I'm so lucky that I do well. The Deutsche Bank group market department is the major contributor of the bank's revenue," Ms Ornkanya said.
Commenting on the current economic situation in Thailand, she added:"Last year was a good year for us because the market was volatile - the stock market moved and the currency moved, because of all the news about the global economy. We were lucky that we could catch the trends so we could make money.
"However, if you ask me about the economy, I think that Thailand is lucky because of the Bank of Thailand (BoT). It has stringent rules and regulations, but doesn't control the banks, and it has very good, well qualified people working for it. The BoT is very strict,both for local and foreign banks. That's why most of them here weren't affected [by the crisis].
"Thai banks survived the crisis and are generally doing well in comparison to many banks abroad that collapsed because of the 'sub-prime' crisis. They [Thai banks] have plenty of cash and because of it they can lend to their clients, and for that reason the companies here have a lot of money as well.The fact that Thai companies went out buying assets in other regions is because they have access to cheap liquidity and use it as an opportunity to buy cheap assets.
"Thailand is a country with liquidity because the banks were not affected by the crisis. We are an exporting country, so when other countries are not doing well, it is difficult for us to do well, but in general, because we have liquidity, the country has the money to muddle through the crisis.
"The worst of the financial crisis in Thailand is most probably over. However, political uncertainties and rumours in the market are factors that discourage investors who can choose to invest somewhere else," she warned.
And she had some advice for foreign investors:"If you ask me for advice for corporate investors, I'd need some parameters before I could advise what company or sector they should look at.
"But for those coming here as individuals,I strongly recommend they invest in property in Bangkok, especially in the business districts.This is a very attractive investment and you can make money. To me, Bangkok is Thailand.Twenty per cent of the Thai population live here and the numbers are increasing every day. If you can't afford to invest in these areas, then buy a piece of property on the outskirts of Bangkok. As long as it's within Bangkok, you will be fine. All the infrastructure will come to you. With our current pace of development, I can't really see Chiang Mai or Khon Kaen becoming Boston or Manchester in the near future - you're not going to make money there.
"Thailand is a good place for foreigners to invest - great infrastructure, rigid laws and regulations, a strong financial system. We may have instability on our politics, but we all know by now that it is just 'our way of life'.
"We might not have been able to come this far without this instability," she stressed,adding:"I haven't found a foreigner who has a negative view of Thailand. They all love Thailand. Sometimes I ask myself whether Thai people love Thailand as much, whether we are proud to be Thai and say enough good things about our country.
"Of all the foreign banks in Thailand, I'm the only female who does this kind of work.The others are all men. This job is very demanding, especially for a woman with three children to look after, plus I do a lot of travelling abroad."
On her priorities, both personal and in business, Ms Ornkanya said:"I work for the bank, so I want the bank to be successful,because then I will be as well. As for my personal life, my priority is to make sure that my kids are doing well in a secure environment.
"As to the future, I'm at the top at Deutsche Bank, so what next? Whatever happens, I want to live and work in Thailand. When I was young, I used to think about working abroad, but not now. If you talk about job security, or your value to an international firm, it is here."
Commenting on her biggest achievements and failures, she said:"To have my three beautiful kids and to be a good mum to them. My family and my job are equally important to me, but of course, family is the most important. I can walk away from being a Deutsche Bank executive, but not from being a mother. No major failures as yet,definitely not in my business."
As for her biggest challenges, Ms Ornkanya said:"Maybe I'll sit here for another few years. I need to move on at some time so my people can grow. One day, I'd like to be in politics to be able to do something for my country. My day-to-day work gives me the opportunity to get to know people and to understand their organisations and their needs. I'm making my way up there. I was approached to join a political party, but I haven't made any decision at this time. Don't you think Thai politics has many more colours than other countries? It can get you into a big fight with your best friend, and make your parents stop talking to each other."
Ms Ornkanya attributes her success to her parents, who are also her role models:"My mum gave me self confidence and my dad gave me a great sense of humour. When people have self confidence, they tend to be surrounded by smart people.
"And a sense of humour stops you from becoming arrogant. By the way, I'm not that successful, I have another 20 years to go before retirement. Let's talk about my 'success'then."
Finally, Ms Ornkanya had some advice for young Thai women:"You should be committed and persistent in whatever you do.We have to make choices every day, so make sure that you make the right choices. Women always make decisions based on emotion.That's why we make wrong choices all the time. I have made wrong choices, and I have to live with them," she said without elaborating.
Saturday, October 31, 2009
JAPAN TO BE URGED TO EXPAND IMPORT QUOTA FOR THAI RICE
The Commerce Ministry will urge Japan to enlarge its import quota for Thai rice, as part of the government's plan to boost new-harvest exports.
Commerce Minister Porntiva Nakasai yesterday said she would talk to state agencies in Japan about extending the country's import quota.
In addition, the government will offer to sell new-harvest rice to Japan as part of the ministry's plan to boost exports via government-to-government contracts.
Porntiva will accompany Prime Minister Abhisit Vejjajiva on a visit to Japan next week in a bid to forge closer economic ties.
"We hope Japan will consider importing three to four times more rice in the near future," she said, adding that the country currently imports mainly low-quality rice to supply its rice-product manufacturing sector.
Porntiva said Thailand could export an overall 2 million tonnes from the new rice crop over the remainder of the year. Of the total, 1 million tonnes will be under government-to-government contracts.
The ministry is planning to visit the Philippines to negotiate rice sales on a government-to-government basis.
It also plans to increase rice exports via government-to-government contracts to between 2 million and 3 million tonnes next year.
"Importing countries are placing orders to build up their stocks. Thai exporters also forecast rice prices will increase beyond the level during the food crisis of last year," the minister said, adding that jasmine rice would exceed Bt30,000 per tonne.
The higher-price trend derives from major importing countries having faced natural disasters that direct affected their rice production.
Yanyong Phuangrach, permanent secretary of the ministry, said the reference paddy rice for November 1-15 had been fixed.
Jasmine rice is quoted Bt14,840 per tonne, with the price gap to compensate farmers under the government's income-guarantee project at Bt460 per tonne.
Bt8,389 is quoted for white rice, Bt9,175 for Pathum Thani rice and Bt7,680 for sticky rice.
Commerce Minister Porntiva Nakasai yesterday said she would talk to state agencies in Japan about extending the country's import quota.
In addition, the government will offer to sell new-harvest rice to Japan as part of the ministry's plan to boost exports via government-to-government contracts.
Porntiva will accompany Prime Minister Abhisit Vejjajiva on a visit to Japan next week in a bid to forge closer economic ties.
"We hope Japan will consider importing three to four times more rice in the near future," she said, adding that the country currently imports mainly low-quality rice to supply its rice-product manufacturing sector.
Porntiva said Thailand could export an overall 2 million tonnes from the new rice crop over the remainder of the year. Of the total, 1 million tonnes will be under government-to-government contracts.
The ministry is planning to visit the Philippines to negotiate rice sales on a government-to-government basis.
It also plans to increase rice exports via government-to-government contracts to between 2 million and 3 million tonnes next year.
"Importing countries are placing orders to build up their stocks. Thai exporters also forecast rice prices will increase beyond the level during the food crisis of last year," the minister said, adding that jasmine rice would exceed Bt30,000 per tonne.
The higher-price trend derives from major importing countries having faced natural disasters that direct affected their rice production.
Yanyong Phuangrach, permanent secretary of the ministry, said the reference paddy rice for November 1-15 had been fixed.
Jasmine rice is quoted Bt14,840 per tonne, with the price gap to compensate farmers under the government's income-guarantee project at Bt460 per tonne.
Bt8,389 is quoted for white rice, Bt9,175 for Pathum Thani rice and Bt7,680 for sticky rice.
CBRE spots opportunity in Cambodia
CB Richard Ellis Group Inc (CBRE) is opening a new office in Phnom Penh to expand its footprint in Southeast Asia. The company aims to capitalise on growing demand for professional real estate services and is also planning ahead to serve the market on Cambodia's southern coast.
"The opening of an office in Cambodia will allow CBRE to provide research,consultancy, valuation and advisory services in the country and will strengthen our broader platform in Southeast Asia,"said Daniel Parkes, country manager of CBRE Cambodia.
He said land prices in Cambodia had eased back from the sharp rises experienced since 2005. The market could be compared to Thailand, in particular Bangkok in the late 1980s, and Vietnam in the early 1990s -with a lot of potential for growth, few modern developments but latent demand.
The good news, he said, is that the government is very pro-investment and is offering a tax cap of 20%. It already offers 99-year leases to foreigners and is considering full foreign freehold.
Cambodia's Council of Ministers in July approved a sub-decree covering new co-ownership regulations, allowing legal ownership of individual apartments or condominium units, which paves the way for a law allowing foreign ownership of some property.
The new co-ownership regulations will make it possible to own units within a larger building without having title to the land it occupies. The goal is to guarantee and protect rights of legal holders in apartments or condominiums for coownership. It will also facilitate management on behalf of co-owners who live in the apartments or condominiums.
As well, the new regulations facilitate co-ownership for sale, exchange, donation, inheritance, permanent rental and collateralising of private holdings as personal ownership.
Foreigners have not been able to own Cambodian land or housing in the past.They could only rent property for their business or residence. Also, foreigners cannot buy land near borders with neighbouring countries because it could affect national sovereignty and security.
"The market is not without challenges and is coming off a low base," said Mr Parkes."There is no doubt that per-capita income in Phnom Penh is continuing to improve, with a surprisingly high number of private cars, trucks and bikes.
"Inbound retailers, while they lack a modern centre, are enjoying good business - for example, pizza franchises. There is only one modern high-rise office, Canadia Tower, which is soon to be completed. Projected rents are comparable to those of Bangkok's Grade A space."
In 2008, the GDP of Cambodia reached $9.2 billion, with tourism contributing $1.72 billion. Culture has played a key role in Cambodia in the past three decades and has created many jobs. From 2000 to 2008, GDP per capita in Cambodia increased by 158% from $286.90 to $739.
Take-up of industrial property is slow but major global companies are already buying land for assembly and manufacturing facilities, said Mr Parkes. There is also a fledgling condominium market and Korean developers have been active. There has also been a boom in new villas, with prices of up to $1 million each.
Chris Brooke, president and chief executive officer of CBRE in Asia,said the company's presence in the market would facilitate the provision of professional property services,while also supporting regional clients who have an interest in a unique emerging market.
As the capital, Phnom Penh has become a major focal point for economic and business development in recent years, said Mr Brooke. This region offers enormous business potential for further growth of domestic and foreign businesses.
In particular, backed by investment resulting from positive sentiment,Cambodia's real estate market is expected to continue its growth momentum in the years to come, particularly the resort property market along the coastline.
In the future CBRE will consider a resort office on the south coast, with the opening of the Ream airport, said Mr Parkes.
The company already has two major contracts. It is the sole agent for marketing exclusive villas on a private island, which are priced from $200,000 and come with hotel management and guaranteed returns. The company also has a key advisory role for Koh Rong, an island being positioned as an eco-tourism destination and a potential rival to Phuket and Koh Samui in Thailand.
"The opening of an office in Cambodia will allow CBRE to provide research,consultancy, valuation and advisory services in the country and will strengthen our broader platform in Southeast Asia,"said Daniel Parkes, country manager of CBRE Cambodia.
He said land prices in Cambodia had eased back from the sharp rises experienced since 2005. The market could be compared to Thailand, in particular Bangkok in the late 1980s, and Vietnam in the early 1990s -with a lot of potential for growth, few modern developments but latent demand.
The good news, he said, is that the government is very pro-investment and is offering a tax cap of 20%. It already offers 99-year leases to foreigners and is considering full foreign freehold.
Cambodia's Council of Ministers in July approved a sub-decree covering new co-ownership regulations, allowing legal ownership of individual apartments or condominium units, which paves the way for a law allowing foreign ownership of some property.
The new co-ownership regulations will make it possible to own units within a larger building without having title to the land it occupies. The goal is to guarantee and protect rights of legal holders in apartments or condominiums for coownership. It will also facilitate management on behalf of co-owners who live in the apartments or condominiums.
As well, the new regulations facilitate co-ownership for sale, exchange, donation, inheritance, permanent rental and collateralising of private holdings as personal ownership.
Foreigners have not been able to own Cambodian land or housing in the past.They could only rent property for their business or residence. Also, foreigners cannot buy land near borders with neighbouring countries because it could affect national sovereignty and security.
"The market is not without challenges and is coming off a low base," said Mr Parkes."There is no doubt that per-capita income in Phnom Penh is continuing to improve, with a surprisingly high number of private cars, trucks and bikes.
"Inbound retailers, while they lack a modern centre, are enjoying good business - for example, pizza franchises. There is only one modern high-rise office, Canadia Tower, which is soon to be completed. Projected rents are comparable to those of Bangkok's Grade A space."
In 2008, the GDP of Cambodia reached $9.2 billion, with tourism contributing $1.72 billion. Culture has played a key role in Cambodia in the past three decades and has created many jobs. From 2000 to 2008, GDP per capita in Cambodia increased by 158% from $286.90 to $739.
Take-up of industrial property is slow but major global companies are already buying land for assembly and manufacturing facilities, said Mr Parkes. There is also a fledgling condominium market and Korean developers have been active. There has also been a boom in new villas, with prices of up to $1 million each.
Chris Brooke, president and chief executive officer of CBRE in Asia,said the company's presence in the market would facilitate the provision of professional property services,while also supporting regional clients who have an interest in a unique emerging market.
As the capital, Phnom Penh has become a major focal point for economic and business development in recent years, said Mr Brooke. This region offers enormous business potential for further growth of domestic and foreign businesses.
In particular, backed by investment resulting from positive sentiment,Cambodia's real estate market is expected to continue its growth momentum in the years to come, particularly the resort property market along the coastline.
In the future CBRE will consider a resort office on the south coast, with the opening of the Ream airport, said Mr Parkes.
The company already has two major contracts. It is the sole agent for marketing exclusive villas on a private island, which are priced from $200,000 and come with hotel management and guaranteed returns. The company also has a key advisory role for Koh Rong, an island being positioned as an eco-tourism destination and a potential rival to Phuket and Koh Samui in Thailand.
Tuesday, October 20, 2009
Fed chairman warns of imbalance risks
US Federal Reserve chairman Ben Bernanke warned on Monday that Asian export-promotion policies and large US budget deficits could refuel global economic imbalances and put efforts to achieve more durable growth at risk if not curbed.
Throwing his weight behind a recent call by leaders of the Group of 20 major powers to rebalance the global economy in the wake of a devastating financial shock, Bernanke said Asian nations, like China, that enjoy large trade surpluses should discourage excess saving and boost consumption.
At the same time, he said the United States needed to increase its saving and "substantially reduce federal deficits over time."
"To achieve more balanced and durable economic growth and to reduce the risks of financial instability, we must avoid ever-increasing and unsustainable imbalances in trade and capital flows,"Bernanke said at a conference on Asia sponsored by the San Francisco Federal Reserve Bank.
He said that while trade imbalances had started to narrow as US households ramped up saving in response to a deep recession that ate at their wealth, he cautioned that the imbalances "may resume growing as the global economy recovers and trade volumes rebound."
"Policies in Asian countries that encourage exports and saving over consumption are a concern," Bernanke said,repeating a long-standing US complaint.
"Trade surpluses achieved through policies that artificially enhance incentives for domestic saving and the production of export goods distort the mix of domestic industries and the allocation of resources, resulting in an economy that is less able to meet the needs of its own citizens in the longer term,"he said.
US officials have long pressed China to allow its yuan currency to appreciate,which would lessen any price advantage Chinese goods may have in global markets. China has vowed to move toward more currency flexibility, but it has kept the yuan on a tight leash.
Bernanke praised China and other Asian nations, saying they "are looking more seriously at rebalancing" than in the past.
But he said the possibility of asset price bubbles emerging in Asia "are a concern, and that the risks could be addressed through relaxing currency constraints.
"One way to address it would be through some greater exchange rate flexibility," Bernanke said.
However, he also acknowledged the part the United States must play in addressing global imbalances by increasing savings and embarking on a moresustainable fiscal path.
The performance of the US economy and the dollar, which has fallen 7%against a basket of currencies this year,"will depend on the government's success in controlling its budget deficit,"he said.
The Obama administration said on Friday that the budget shortfall hit a record $1.4 trillion in the fiscal year that ended September 30. At 10% of GDP, it was the largest deficit since World War II.
"Our policy-makers recognise that we need to develop a fiscal exit strategy that will involve a trajectory toward sustainability," Bernanke said in response to a question.
"That is critically important in order to maintain confidence in our economy and confidence in our currency. I know that is very well understood in Washington," he added.
Throwing his weight behind a recent call by leaders of the Group of 20 major powers to rebalance the global economy in the wake of a devastating financial shock, Bernanke said Asian nations, like China, that enjoy large trade surpluses should discourage excess saving and boost consumption.
At the same time, he said the United States needed to increase its saving and "substantially reduce federal deficits over time."
"To achieve more balanced and durable economic growth and to reduce the risks of financial instability, we must avoid ever-increasing and unsustainable imbalances in trade and capital flows,"Bernanke said at a conference on Asia sponsored by the San Francisco Federal Reserve Bank.
He said that while trade imbalances had started to narrow as US households ramped up saving in response to a deep recession that ate at their wealth, he cautioned that the imbalances "may resume growing as the global economy recovers and trade volumes rebound."
"Policies in Asian countries that encourage exports and saving over consumption are a concern," Bernanke said,repeating a long-standing US complaint.
"Trade surpluses achieved through policies that artificially enhance incentives for domestic saving and the production of export goods distort the mix of domestic industries and the allocation of resources, resulting in an economy that is less able to meet the needs of its own citizens in the longer term,"he said.
US officials have long pressed China to allow its yuan currency to appreciate,which would lessen any price advantage Chinese goods may have in global markets. China has vowed to move toward more currency flexibility, but it has kept the yuan on a tight leash.
Bernanke praised China and other Asian nations, saying they "are looking more seriously at rebalancing" than in the past.
But he said the possibility of asset price bubbles emerging in Asia "are a concern, and that the risks could be addressed through relaxing currency constraints.
"One way to address it would be through some greater exchange rate flexibility," Bernanke said.
However, he also acknowledged the part the United States must play in addressing global imbalances by increasing savings and embarking on a moresustainable fiscal path.
The performance of the US economy and the dollar, which has fallen 7%against a basket of currencies this year,"will depend on the government's success in controlling its budget deficit,"he said.
The Obama administration said on Friday that the budget shortfall hit a record $1.4 trillion in the fiscal year that ended September 30. At 10% of GDP, it was the largest deficit since World War II.
"Our policy-makers recognise that we need to develop a fiscal exit strategy that will involve a trajectory toward sustainability," Bernanke said in response to a question.
"That is critically important in order to maintain confidence in our economy and confidence in our currency. I know that is very well understood in Washington," he added.
Saturday, October 17, 2009
Integration will make Asean an economic powerhouse
WITH A COMBINED economy bigger than India or South Korea and a total population of more than half a billion people, Asean has the potential to become an economic force that could rival China, India, Brazil and Russia. The absence of Asean from investors' radar screens as a unified economic unit is due to the lack of integration of the bloc's economies and financial markets. Both local and international investors still widely view the Southeast Asian region as 10 separate economies due to differences in regulations, business environment, institutional capacity and culture. Thus, further integration of Asean is necessary in order to maximise intra-regional synergies and keep the region relevant to the international economy and investors.
History is on Asean's side. The global economic and financial crisis has seen a redistribution of economic power from the developed economies to the emerging markets. The September summit of G-20 leaders in Pittsburgh was a landmark event in this shift, with the expansion of the forum from seven industrialised nations to the 20 countries with the greatest global economic influence.
Although Indonesia became the only Southeast Asian member of the G-20, Asean as a group was invited to participate in the G-20 summits in London in April 2009 and in Pittsburgh as a result of its growing influence on the global economy. The US is set to hold its first-ever summit with Asean in November, when President Barack Obama visits Singapore for the Apec meetings. These events have provided opportunities for Asean to emerge from the shadows of China and India and transform itself into an economic force in its own right.
Asean has earned its way to the high table. Its member countries have weathered the financial storm well. Economic activity did contract in some open economies, such as Singapore, Thailand and Malaysia, but the worst is over, and their economies and financial systems have suffered no collateral damage. Meanwhile, Indonesia and Vietnam are emerging as Asia's two out-performers. We estimate that Asean's purchasing power could double by 2023, creating significant opportunities in consumer products and services.
All of this reflects the fact that Asean economies have built up their resilience through years of reform and restructuring since the Asian financial crisis of 1997. The accumulation of foreign-exchange reserves has helped to maintain investor confidence and limit undue volatility, while a well-capitalised banking sector has been crucial for ensuring the smooth running of the region's economy.
Last but not least, disciplined fiscal policy has provided governments with the capacity to pump-prime, often in innovative ways, when needed.
Indeed, the Asean region has all the ingredients to become a global economic force. In 2008, its 10 members had a combined GDP of US$1.5 trillion (Bt50.34 trillion), 580 million people and total trade of $1.7 trillion (26 per cent of it intra-regional). If Asean were a single country, it would be the world's 10th-largest economy and the third-most populous country. Counting only extra-regional trade, Asean is the world's fifth-largest trading power, after the US, Germany, China and Japan. In recent years, Asean's free-trade agreements with China, India, Japan and South Korea have deepened the region's economic links with the rest of Asia.
Also, Asean as a combined economy would rank among the world's top 10 in terms of foreign direct investment inflows. Fears of China taking every FDI dollar from Asean have not been matched by reality. Asean still managed to attract $60 billion of FDI in 2008, with intra-regional investment accounting for a sizeable portion as foreign investors, especially from within Asia, see countries such as Indonesia and Vietnam as alternative manufacturing bases as the cost of doing business in China rises. In fact, relative to the sizes of their economies, Asean attracted more FDI than China, which absorbed $108 billion of FDI in 2008, while its GDP was three times the size of Asean's.
That said, further enhancements are badly needed to increase foreign investor interest in Asean. The region's economic integration is still at an early stage and much more work is required to remove barriers to the trade of goods and the free flow of capital, information, and talent. These measures are relevant to businesses as they enhance access to the whole Asean consumer market from any one member country.
Amid the rise of China and India, there are ongoing concerns that some Southeast Asian nations may be marginalised. This is primarily a result of the economic and political diversity of Asean members. For example, the World Bank's "Doing Business Survey 2010" ranks Singapore as the easiest place in the world to do business, while it ranks Laos 167th out of 181 countries. Politically, Asean's members range from Indonesia, the world's third-largest democracy (after the US and India), to Burma at the other end of the spectrum. Brunei's economy is heavily dependent on oil and gas. Thailand, Vietnam, Indonesia and Malaysia have considerable agricultural production bases. By contrast, Singapore has few, if any, natural resources and relies on imports for local consumption, and manufacturing, financial services and trading drive its economy. Singapore, Asean's richest member, has a per-capita GDP 150 times higher than its poorest, Burma, and 15 times the Asean average. While Singapore, Malaysia and Thailand boast the region's best ports, airports and transportation networks, other Asean countries are disadvantaged due to poor logistics and infrastructure.
Clearly, Asean's smaller members need a common platform to represent their interests, and Asean could become that key channel through which these members can make their voices heard.
The challenge for Asean leaders converging in Thailand this month for the 15th Asean Summit is to convince the business sector and investors that Asean is a workable concept. The Asean Charter, adopted by all 10 members in 2008, is an important step towards integration. The plan to establish an Asean Economic Community by 2015, while ambitious, is necessary to push the region's integration forward and help establish Asean as a global economic powerhouse.
History is on Asean's side. The global economic and financial crisis has seen a redistribution of economic power from the developed economies to the emerging markets. The September summit of G-20 leaders in Pittsburgh was a landmark event in this shift, with the expansion of the forum from seven industrialised nations to the 20 countries with the greatest global economic influence.
Although Indonesia became the only Southeast Asian member of the G-20, Asean as a group was invited to participate in the G-20 summits in London in April 2009 and in Pittsburgh as a result of its growing influence on the global economy. The US is set to hold its first-ever summit with Asean in November, when President Barack Obama visits Singapore for the Apec meetings. These events have provided opportunities for Asean to emerge from the shadows of China and India and transform itself into an economic force in its own right.
Asean has earned its way to the high table. Its member countries have weathered the financial storm well. Economic activity did contract in some open economies, such as Singapore, Thailand and Malaysia, but the worst is over, and their economies and financial systems have suffered no collateral damage. Meanwhile, Indonesia and Vietnam are emerging as Asia's two out-performers. We estimate that Asean's purchasing power could double by 2023, creating significant opportunities in consumer products and services.
All of this reflects the fact that Asean economies have built up their resilience through years of reform and restructuring since the Asian financial crisis of 1997. The accumulation of foreign-exchange reserves has helped to maintain investor confidence and limit undue volatility, while a well-capitalised banking sector has been crucial for ensuring the smooth running of the region's economy.
Last but not least, disciplined fiscal policy has provided governments with the capacity to pump-prime, often in innovative ways, when needed.
Indeed, the Asean region has all the ingredients to become a global economic force. In 2008, its 10 members had a combined GDP of US$1.5 trillion (Bt50.34 trillion), 580 million people and total trade of $1.7 trillion (26 per cent of it intra-regional). If Asean were a single country, it would be the world's 10th-largest economy and the third-most populous country. Counting only extra-regional trade, Asean is the world's fifth-largest trading power, after the US, Germany, China and Japan. In recent years, Asean's free-trade agreements with China, India, Japan and South Korea have deepened the region's economic links with the rest of Asia.
Also, Asean as a combined economy would rank among the world's top 10 in terms of foreign direct investment inflows. Fears of China taking every FDI dollar from Asean have not been matched by reality. Asean still managed to attract $60 billion of FDI in 2008, with intra-regional investment accounting for a sizeable portion as foreign investors, especially from within Asia, see countries such as Indonesia and Vietnam as alternative manufacturing bases as the cost of doing business in China rises. In fact, relative to the sizes of their economies, Asean attracted more FDI than China, which absorbed $108 billion of FDI in 2008, while its GDP was three times the size of Asean's.
That said, further enhancements are badly needed to increase foreign investor interest in Asean. The region's economic integration is still at an early stage and much more work is required to remove barriers to the trade of goods and the free flow of capital, information, and talent. These measures are relevant to businesses as they enhance access to the whole Asean consumer market from any one member country.
Amid the rise of China and India, there are ongoing concerns that some Southeast Asian nations may be marginalised. This is primarily a result of the economic and political diversity of Asean members. For example, the World Bank's "Doing Business Survey 2010" ranks Singapore as the easiest place in the world to do business, while it ranks Laos 167th out of 181 countries. Politically, Asean's members range from Indonesia, the world's third-largest democracy (after the US and India), to Burma at the other end of the spectrum. Brunei's economy is heavily dependent on oil and gas. Thailand, Vietnam, Indonesia and Malaysia have considerable agricultural production bases. By contrast, Singapore has few, if any, natural resources and relies on imports for local consumption, and manufacturing, financial services and trading drive its economy. Singapore, Asean's richest member, has a per-capita GDP 150 times higher than its poorest, Burma, and 15 times the Asean average. While Singapore, Malaysia and Thailand boast the region's best ports, airports and transportation networks, other Asean countries are disadvantaged due to poor logistics and infrastructure.
Clearly, Asean's smaller members need a common platform to represent their interests, and Asean could become that key channel through which these members can make their voices heard.
The challenge for Asean leaders converging in Thailand this month for the 15th Asean Summit is to convince the business sector and investors that Asean is a workable concept. The Asean Charter, adopted by all 10 members in 2008, is an important step towards integration. The plan to establish an Asean Economic Community by 2015, while ambitious, is necessary to push the region's integration forward and help establish Asean as a global economic powerhouse.
Tuesday, October 13, 2009
AFFECTED INVESTORS GO FOR SEPARATE APPEAL AGAINST RULING
Companies involved in the 76 industrial projects worth more than Bt400 billion that were halted will file separate appeals against the Central Administrative Court's injunction against them.
"We have decided to file the appeal by October 28 and will simply ask the court to cancel the suspension order," Federation of Thai Industries (FTI) vice chairman Payungsak Chartsutipol said yesterday after an informal meeting of the companies.
The companies, including the PTT and Siam Cement groups, were asked to gather more information. They will meet again today to discuss the matter in greater detail.
After the court put a brake on the projects, which were taken as evidence of the government's failure to comply with Article 67 of the Constitution, the government early this month appealed the injunction. Private companies and the Japanese Chamber of Commerce have cried foul, saying the projects should be allowed to proceed, because they had passed environmental-impact assessments (EIAs).
At a separate meeting yesterday, members of the Joint Private Committee on Commerce, Industried and Banking resolvejd to establish a special team to provide facts on industrial development in Map Ta Phut and nearby areas in Rayong province to all parties. FTI representatives will lead the team, which will be the first of its kind, and they will initially boost coordination with provincial state agencies, local communities and non-governmental organisations.
"We want to tell everyone that we [the private sector] are just as environmentally concerned as anyone else. Most of the 76 projects are joint ventures with multinational firms that emphasise environmental protection, in order to ensure their products are sellable in developed countries," said Dusit Nontanakorn, chairman of the Board of Trade and the Thai Chamber of Commerce.
Thai Bankers Association chairman Apisak Tantivorawong said Thai banks remained unaffected by the incident. Only half of the total investment was raised from bank loans and debentures.
The Cabinet today will consider legal options to ease the private sector's difficulties. A law could pave the way for establishment of an independent environmental body, while a set of EIA and health-impact assessment guidelines wil be issued.
Regarding the NGO's requests for similar moves against any polluter among the 500 projects that won EIA approval after the Constitution took effect, Prime Minister Abhisit Vejjajiva yesterday said the government was prepared to look into each case.
He said if a petition was filed, the government would appeal against the case.
Regarding complaints from industrial companies, the Royal Bank of Scotland said in a report that since the Supreme Administrative Court had accepted the government's appeal to revoke the temporary injunction, a final verdict could be expected within four to six weeks and would ultimately favour the private companies.
"We have decided to file the appeal by October 28 and will simply ask the court to cancel the suspension order," Federation of Thai Industries (FTI) vice chairman Payungsak Chartsutipol said yesterday after an informal meeting of the companies.
The companies, including the PTT and Siam Cement groups, were asked to gather more information. They will meet again today to discuss the matter in greater detail.
After the court put a brake on the projects, which were taken as evidence of the government's failure to comply with Article 67 of the Constitution, the government early this month appealed the injunction. Private companies and the Japanese Chamber of Commerce have cried foul, saying the projects should be allowed to proceed, because they had passed environmental-impact assessments (EIAs).
At a separate meeting yesterday, members of the Joint Private Committee on Commerce, Industried and Banking resolvejd to establish a special team to provide facts on industrial development in Map Ta Phut and nearby areas in Rayong province to all parties. FTI representatives will lead the team, which will be the first of its kind, and they will initially boost coordination with provincial state agencies, local communities and non-governmental organisations.
"We want to tell everyone that we [the private sector] are just as environmentally concerned as anyone else. Most of the 76 projects are joint ventures with multinational firms that emphasise environmental protection, in order to ensure their products are sellable in developed countries," said Dusit Nontanakorn, chairman of the Board of Trade and the Thai Chamber of Commerce.
Thai Bankers Association chairman Apisak Tantivorawong said Thai banks remained unaffected by the incident. Only half of the total investment was raised from bank loans and debentures.
The Cabinet today will consider legal options to ease the private sector's difficulties. A law could pave the way for establishment of an independent environmental body, while a set of EIA and health-impact assessment guidelines wil be issued.
Regarding the NGO's requests for similar moves against any polluter among the 500 projects that won EIA approval after the Constitution took effect, Prime Minister Abhisit Vejjajiva yesterday said the government was prepared to look into each case.
He said if a petition was filed, the government would appeal against the case.
Regarding complaints from industrial companies, the Royal Bank of Scotland said in a report that since the Supreme Administrative Court had accepted the government's appeal to revoke the temporary injunction, a final verdict could be expected within four to six weeks and would ultimately favour the private companies.
Monday, October 12, 2009
TEN YEARS HAVE SHOWN REMARKABLE PROGRESS IN EUROPEAN SECURITY
2009 IS A LANDMARK YEAR for the European Union's role in the world. It marks 10 years of the European Security and Defence Policy (ESDP), during which the EU became a global provider of security, making a real difference to people's lives all over the world. At the same time, we are on the threshold of a new era when then Lison Treaty enters into force and provides fresh impetus for our external action.
In 10 years, we have deployed 20 operations on three continents to help prevent violence, restore peace and rebuild after a conflict. From Kabul to Pristina, from Ramallah to Kinshasa, the Eu is monitoring borders, overseeing peace agreements, training police forces, building up criminal justice systems and protecting shipping from pirate attacks. Thanks to our achievements, we are receiving more and more calls to help in a crisis or after a war. We have the credibility, the values and the will to do this.
The EU was ahead of its time in 1999. The comprehensive, multifaceted nature of our approach was novel. And the EU remains the only organisation that can call on a full panoply of instruments and resources that complement the traditional foreign policy tools of its member states, both to pre-empt or prevent a crisis and to restore peace and rebuild institutions after a conflict.
This is where the EU's unique added value lies. We combine humanitarian aid and support for institution-building and good governance with crisis-management capacities, technical and financial assistance, and political dialogue and mediation. The EU's joint civilian-military approach makes us flexible and able to offer tailor-made solutions to complex problems. Today's conflicts demonstrate lmore clearly than ever that a military solution is neither the sole nor the best option, particularly during the stabilisation of a crisis - a truth US President Barack Obama has also emphasised.
The ESDP first cut its teeth in the Balkans. When the Yogoslav wars broke out in the 1990's we watched as our neighbourhood burned because we had no means of responding to the crisis. We learned our lesson and organised ourselves, acquiring a set of capabilities coupled with decision-making procedures and a security doctrine. In 2003, we prevented a fresh out-break of hostilities in the former Yugoslav Republic of Macedonia through our diplomatic efforts and then deployed Operation Concordia. In 2004, Operation Althea took over from the Nato peacekeeping force in Bosnia and Herzegovina. Today, we are still deeply engaged in the Balkans, fighting organised crime and building up the institutions of law and order. For example, Eulex Kosovo is the largest EU mission to date, with some 2,000 staff, working in the police and judicial system and in mobile customs teams.
The EU's crisis-management and peace-building activities are not restricted to its backyard. We have made a real difference in Africa, helping for example to provide a secure environment for elections in the Democratic Republic of Congo and protecting refugees and aid workers from the fall-out of the Darfur crisis. Last year, we mounted Eunavfor, our first-ever naval operation, to compact piracy in the waters off Somalia. Who would have guessed 10 years ago that the EU would one day lead a taskforce of 13 frigates in the Indian Ocean that would cut the success rate of pirate attacks by half?
This year the EU has 12 operations running concurrently - more than ever before. Since 2003, some 70,000 men and women have been deployed in 23 crisis-management operations. They come from EU member states and non EU countries that also take part in our operations, including Norway, Switzerland, Ukraine, Turkey and the United States.
Of these 23 millions, six have been military and the other 17 civilian. We deploy army or navy personnel when and where they are needed but our business is peace-building, not waging war. The EU is not a military alliance. The solution to any crisis, emergency or conflict must always be political our ESDP actions are always firmly anchored in political strategies, formed by consensus.
Our ESDP missions have taken us as far field as Aceh, Indonesia, where we monitored the peace agreement reached after the 2004 tsunami, following decades of civil war. Working closely with the Association of Southeast Asian Nations, we mediated between rebels land the government and oversaw the decommissioning of weapons.
As we gain experience and expertise we are mounting increasingly ambitious operations. Our success with Operation Artemis, in the Democratic Republic of Congo, where the EU intervened in 2003 after violent clashes and a humanitarian crisis in Bunia, helped prepare us to mount our Eufor operation in Chad and the Central African Republic and Euvafor Somalia, which South Africa has expressed an interest in joining.
Last year, we showed how rapidly we could mobilise when we dispatched a monitoring mission to the Caucasus in less than three weeks to help defuse the crisis between Russia and Georgia, following the EU-mediated peace agreement. As a member of the International Quartet, the EU is deeply engaged at a diplomatic level in the Middle East peace process and the moment and agreement is reached between the Isralis and Palestinians we will be ready to help implement it on the ground. We already have a mission in the West Bank helping to build up the Palestinian civil police and criminal justice system. In Somalia, we are considering security-sector reform measures to complement Eunavfor Somalia and the humanitarian aid and political support that we are already providing.
To respond to the growing calls to help tackle regional and global security challenges, the EU must improve the efficiency and coherence of its external action still further. We currently have a gap between our ambitions and our resources, which must be addressed. Clearer priorities and more sensible budgeting decisions are needed. And we need to strengthen our civilian and military capabilities and boost their funding in order to back up our political decisions.
The EU's unique, joint civilian-military approach must be further developed to make us yet more flexible. Our capacity to deploy rapid reaction forces also needs strengthening. In the second decade of ESDP, the Lisbon Treaty will put all this within the EU's grasp.
In 10 years, we have deployed 20 operations on three continents to help prevent violence, restore peace and rebuild after a conflict. From Kabul to Pristina, from Ramallah to Kinshasa, the Eu is monitoring borders, overseeing peace agreements, training police forces, building up criminal justice systems and protecting shipping from pirate attacks. Thanks to our achievements, we are receiving more and more calls to help in a crisis or after a war. We have the credibility, the values and the will to do this.
The EU was ahead of its time in 1999. The comprehensive, multifaceted nature of our approach was novel. And the EU remains the only organisation that can call on a full panoply of instruments and resources that complement the traditional foreign policy tools of its member states, both to pre-empt or prevent a crisis and to restore peace and rebuild institutions after a conflict.
This is where the EU's unique added value lies. We combine humanitarian aid and support for institution-building and good governance with crisis-management capacities, technical and financial assistance, and political dialogue and mediation. The EU's joint civilian-military approach makes us flexible and able to offer tailor-made solutions to complex problems. Today's conflicts demonstrate lmore clearly than ever that a military solution is neither the sole nor the best option, particularly during the stabilisation of a crisis - a truth US President Barack Obama has also emphasised.
The ESDP first cut its teeth in the Balkans. When the Yogoslav wars broke out in the 1990's we watched as our neighbourhood burned because we had no means of responding to the crisis. We learned our lesson and organised ourselves, acquiring a set of capabilities coupled with decision-making procedures and a security doctrine. In 2003, we prevented a fresh out-break of hostilities in the former Yugoslav Republic of Macedonia through our diplomatic efforts and then deployed Operation Concordia. In 2004, Operation Althea took over from the Nato peacekeeping force in Bosnia and Herzegovina. Today, we are still deeply engaged in the Balkans, fighting organised crime and building up the institutions of law and order. For example, Eulex Kosovo is the largest EU mission to date, with some 2,000 staff, working in the police and judicial system and in mobile customs teams.
The EU's crisis-management and peace-building activities are not restricted to its backyard. We have made a real difference in Africa, helping for example to provide a secure environment for elections in the Democratic Republic of Congo and protecting refugees and aid workers from the fall-out of the Darfur crisis. Last year, we mounted Eunavfor, our first-ever naval operation, to compact piracy in the waters off Somalia. Who would have guessed 10 years ago that the EU would one day lead a taskforce of 13 frigates in the Indian Ocean that would cut the success rate of pirate attacks by half?
This year the EU has 12 operations running concurrently - more than ever before. Since 2003, some 70,000 men and women have been deployed in 23 crisis-management operations. They come from EU member states and non EU countries that also take part in our operations, including Norway, Switzerland, Ukraine, Turkey and the United States.
Of these 23 millions, six have been military and the other 17 civilian. We deploy army or navy personnel when and where they are needed but our business is peace-building, not waging war. The EU is not a military alliance. The solution to any crisis, emergency or conflict must always be political our ESDP actions are always firmly anchored in political strategies, formed by consensus.
Our ESDP missions have taken us as far field as Aceh, Indonesia, where we monitored the peace agreement reached after the 2004 tsunami, following decades of civil war. Working closely with the Association of Southeast Asian Nations, we mediated between rebels land the government and oversaw the decommissioning of weapons.
As we gain experience and expertise we are mounting increasingly ambitious operations. Our success with Operation Artemis, in the Democratic Republic of Congo, where the EU intervened in 2003 after violent clashes and a humanitarian crisis in Bunia, helped prepare us to mount our Eufor operation in Chad and the Central African Republic and Euvafor Somalia, which South Africa has expressed an interest in joining.
Last year, we showed how rapidly we could mobilise when we dispatched a monitoring mission to the Caucasus in less than three weeks to help defuse the crisis between Russia and Georgia, following the EU-mediated peace agreement. As a member of the International Quartet, the EU is deeply engaged at a diplomatic level in the Middle East peace process and the moment and agreement is reached between the Isralis and Palestinians we will be ready to help implement it on the ground. We already have a mission in the West Bank helping to build up the Palestinian civil police and criminal justice system. In Somalia, we are considering security-sector reform measures to complement Eunavfor Somalia and the humanitarian aid and political support that we are already providing.
To respond to the growing calls to help tackle regional and global security challenges, the EU must improve the efficiency and coherence of its external action still further. We currently have a gap between our ambitions and our resources, which must be addressed. Clearer priorities and more sensible budgeting decisions are needed. And we need to strengthen our civilian and military capabilities and boost their funding in order to back up our political decisions.
The EU's unique, joint civilian-military approach must be further developed to make us yet more flexible. Our capacity to deploy rapid reaction forces also needs strengthening. In the second decade of ESDP, the Lisbon Treaty will put all this within the EU's grasp.
Sunday, October 11, 2009
A financial revolution with profound political implications
The plan to de-dollarise the oil market, discussed both in public and in secret for at least two years and widely denied last week by the usual suspects - Saudi Arabia being, as expected, the first among them - reflects a growing resentment in the Middle East, Europe and in China at America's decades-long political as well as economic world dominance.
Nowhere has this more symbolic importance than in the Middle East, where the United Arab Emirates alone holds $900 billion (29.9 trillion baht) of dollar reserves and where Saudi Arabia has been quietly coordinating its defence,armaments and oil policies with the Russians since 2007.
This does not indicate a trade war with America - not yet - but Arab Gulf regimes have been growing increasingly restive at their economic as well as political dependence on Washington for many years. Of the $7.2 trillion in international reserves,$2.1trn is held by Arab countries - China holds about $2.3trn - and the nations interested in moving away from dollar-trading in oil are believed to hold over 80% of international dollar reserves.
Saudi Arabia's denials of any such ambitions were regarded by Arab bankers as a normal part of Gulf politics. The Saudis, of course, managed to deny that Iraq had invaded Kuwait in 1990.
Saudi bankers are well aware that in nine years' time - the current timeframe for a transition away from the dollar in oil trading - China will have doubled its national income to $10trn (assuming a growth rate of 7%), at which point the US might hold no more than 20% of the world's gross income.
Such massive financial movements,encouraged by the de-dollarisation of oil, will have enormous political effects in the Middle East, especially if economic superpower rivalry between America and China comes to dominate the Arab world.Will American economic support for Israel remain as loyal in nine years' time if China and the Arabs are setting the pace in global financial markets? Indeed - perhaps with this in mind - some Israeli financiers have been expressing interest over the past two years in nondollar Arab bank investments. Whenever a change of this magnitude takes place over a number of years, it has to be commenced in secrecy.
Nor can it be denied that the very project to take oil trading away from the dollar market has deep political roots.The collapse of the Soviet Union has allowed the US to dominate the Middle East more than any other world region,and the Arabs - who can no longer contemplate an oil boycott of the kind they imposed on the West after the 1973 Middle East war - are still anxious to prove that they can flex their economic power to bring about change.
Saudi Arabia's pan-Arab offer to recognise Israel and its security in return for an Israeli withdrawal from occupied Arab land is not - according to the Saudis themselves - indefinite. If they are ignored or rebuffed, then they can search for other allies through new financial institutions to force a new Middle East peace. China will be happy to help.
Nowhere has this more symbolic importance than in the Middle East, where the United Arab Emirates alone holds $900 billion (29.9 trillion baht) of dollar reserves and where Saudi Arabia has been quietly coordinating its defence,armaments and oil policies with the Russians since 2007.
This does not indicate a trade war with America - not yet - but Arab Gulf regimes have been growing increasingly restive at their economic as well as political dependence on Washington for many years. Of the $7.2 trillion in international reserves,$2.1trn is held by Arab countries - China holds about $2.3trn - and the nations interested in moving away from dollar-trading in oil are believed to hold over 80% of international dollar reserves.
Saudi Arabia's denials of any such ambitions were regarded by Arab bankers as a normal part of Gulf politics. The Saudis, of course, managed to deny that Iraq had invaded Kuwait in 1990.
Saudi bankers are well aware that in nine years' time - the current timeframe for a transition away from the dollar in oil trading - China will have doubled its national income to $10trn (assuming a growth rate of 7%), at which point the US might hold no more than 20% of the world's gross income.
Such massive financial movements,encouraged by the de-dollarisation of oil, will have enormous political effects in the Middle East, especially if economic superpower rivalry between America and China comes to dominate the Arab world.Will American economic support for Israel remain as loyal in nine years' time if China and the Arabs are setting the pace in global financial markets? Indeed - perhaps with this in mind - some Israeli financiers have been expressing interest over the past two years in nondollar Arab bank investments. Whenever a change of this magnitude takes place over a number of years, it has to be commenced in secrecy.
Nor can it be denied that the very project to take oil trading away from the dollar market has deep political roots.The collapse of the Soviet Union has allowed the US to dominate the Middle East more than any other world region,and the Arabs - who can no longer contemplate an oil boycott of the kind they imposed on the West after the 1973 Middle East war - are still anxious to prove that they can flex their economic power to bring about change.
Saudi Arabia's pan-Arab offer to recognise Israel and its security in return for an Israeli withdrawal from occupied Arab land is not - according to the Saudis themselves - indefinite. If they are ignored or rebuffed, then they can search for other allies through new financial institutions to force a new Middle East peace. China will be happy to help.
Thursday, October 8, 2009
Amendments could unblock Map Ta Phut projects
The government plans to amend the National Environment Act as a shortterm measure to enable some investment projects suspended by a court injunction to move ahead.
Prime Minister Abhisit Vejjajiva said the government could amend Article 46 (2) of the National Environment Act to allow industrial projects that pose no threat to the environment and do not breach any laws to move forward in the short term.
The existing act requires industrial projects to run only environmentalimpact assessments (EIA).
But the proposed amendments would add a requirement for health-impact assessments (HIA) and public participation, before the creation of organic laws to set up an independent body under Section 67 of the 2007 Constitution,said Mr Abhisit.
The organic law process to set up the new body under Section 67 would take time, with the completion likely early next year.
Section 67 requires public hearings for projects seen as harmful to the environment and people's health. It requires the government to set up an independent agency to advise on such projects.
The Council of State ruled earlier that authorities could process applications in the absence of the organic law to set up the body.
Amendments to the environment act would take about three weeks before being submitted to the national environment committee for approval.
The premier yesterday met with civil servants and industrialists to discuss the Administrative Court's injunction that has suspended the operating permits of 76 industrial projects - including many at Rayong's Map Ta Phut Industrial Estate - and to attempt to resolve the issue.
Mr Abhisit quoted Kiat Sittheeamorn,head of the Thailand Trade Representative office, as reporting that foreign investors had started complaining and seeking clarification from the government over the injunction.
The prolonged conflict over invest-ment in Map Ta Phut could slow the country's economic growth in the last quarter and next year, according to the University of the Thai Chamber of Commerce (UTCC).
Thailand's growth is expected to slip 0.5 percentage points in the last quarter to between 1.5% and 2.5% from an earlier forecast of between 2% and 3%, due to the disappearance of industrial investment worth 10-20 billion baht.
This would also affect employment and the construction sector, the UTCC said.
Prime Minister Abhisit Vejjajiva said the government could amend Article 46 (2) of the National Environment Act to allow industrial projects that pose no threat to the environment and do not breach any laws to move forward in the short term.
The existing act requires industrial projects to run only environmentalimpact assessments (EIA).
But the proposed amendments would add a requirement for health-impact assessments (HIA) and public participation, before the creation of organic laws to set up an independent body under Section 67 of the 2007 Constitution,said Mr Abhisit.
The organic law process to set up the new body under Section 67 would take time, with the completion likely early next year.
Section 67 requires public hearings for projects seen as harmful to the environment and people's health. It requires the government to set up an independent agency to advise on such projects.
The Council of State ruled earlier that authorities could process applications in the absence of the organic law to set up the body.
Amendments to the environment act would take about three weeks before being submitted to the national environment committee for approval.
The premier yesterday met with civil servants and industrialists to discuss the Administrative Court's injunction that has suspended the operating permits of 76 industrial projects - including many at Rayong's Map Ta Phut Industrial Estate - and to attempt to resolve the issue.
Mr Abhisit quoted Kiat Sittheeamorn,head of the Thailand Trade Representative office, as reporting that foreign investors had started complaining and seeking clarification from the government over the injunction.
The prolonged conflict over invest-ment in Map Ta Phut could slow the country's economic growth in the last quarter and next year, according to the University of the Thai Chamber of Commerce (UTCC).
Thailand's growth is expected to slip 0.5 percentage points in the last quarter to between 1.5% and 2.5% from an earlier forecast of between 2% and 3%, due to the disappearance of industrial investment worth 10-20 billion baht.
This would also affect employment and the construction sector, the UTCC said.
Saturday, October 3, 2009
NATIONAL LOGISTICS STRATEGY "CRUCIAL TO GMS SUCCESS"
The government should draw up a national strategic logistics plan as Thailand is part of the global value chain, repositioning itself as a corridor in the Greater Mekong Subregion, a major logistics firm said yesterday.
Speaking at the "Logistics Asia 2009" seminar, SCG Logistics Management managing director Bhanumas Srisukh said: "The government should also look at Singapore as an ally reather than as a competitor."
He said the major role the government should speedily play was easing the multiplicity of dated rules and regulations relating to transportation, as well as investing more in important infrastructure such as road and rail systems.
The latter would link Thailand with GMS countries, including southern China(Yunnan), Burma, Laos and Vietnam, so that the Kingdom can be a corridor to enhance trade between the GMS region and the rest of the world, transporting goods by road to Laem Chabang Port, which can them connect to Singapore before shipping goods around the globe.
"Developing missing links from the GMS to Thailand would not only enhance the competitiveness of our exports, but also boost international trade. This would be instead of building Pak Bara Port in Satun, for which the country has drawn up a strategic logistics plan to use the port as a point of exit for the Andaman coast to link China with India," said Bhanumas.
He said that for this strategy, the country was being seen as Singapore's competitor, whereas in fact it was not ready to compete.
He added that as Singapore had develooped its logistics management system to global standards, Thailand should improve its own logistics standard to support that of Singapore as part of a logistics value chain.
Considering the Kingdom's strengths, Thailand has a central location with a coastline on two sides, is service-minded, has an extensive road network, low labour costs and a large labour pool, plus the ability to connect transportation with China,he said.
However, its weaknesses are the small size of its seaports, limited rail network, lack of skilled human resources and out-of-date rules and regulations.
Oh Bee Lock, senior vice president for corporate planning at Singapore's PSA Corp, said he regarded Thailand as an ally of Singapore, not a competitor. The two countries. therefore, can connect their transportation at the same standard level to enhance freight between Asean and other regions more rapidly and at a competitive cost.
The port of Singapore connects to 600 ports in more than 120 countries. PSA has 28 ports in 16 countries wit annual revenue of 4.4 billion Singaporean dollars (Bt104 billion) and throughput of 63 milliion containers (20-foot equivalent units).
"Logistics Asia 2009" was cohosted by the Thailand Management Association, the Thai Chamber of Commerce and the Transportation Institute.
Speaking at the "Logistics Asia 2009" seminar, SCG Logistics Management managing director Bhanumas Srisukh said: "The government should also look at Singapore as an ally reather than as a competitor."
He said the major role the government should speedily play was easing the multiplicity of dated rules and regulations relating to transportation, as well as investing more in important infrastructure such as road and rail systems.
The latter would link Thailand with GMS countries, including southern China(Yunnan), Burma, Laos and Vietnam, so that the Kingdom can be a corridor to enhance trade between the GMS region and the rest of the world, transporting goods by road to Laem Chabang Port, which can them connect to Singapore before shipping goods around the globe.
"Developing missing links from the GMS to Thailand would not only enhance the competitiveness of our exports, but also boost international trade. This would be instead of building Pak Bara Port in Satun, for which the country has drawn up a strategic logistics plan to use the port as a point of exit for the Andaman coast to link China with India," said Bhanumas.
He said that for this strategy, the country was being seen as Singapore's competitor, whereas in fact it was not ready to compete.
He added that as Singapore had develooped its logistics management system to global standards, Thailand should improve its own logistics standard to support that of Singapore as part of a logistics value chain.
Considering the Kingdom's strengths, Thailand has a central location with a coastline on two sides, is service-minded, has an extensive road network, low labour costs and a large labour pool, plus the ability to connect transportation with China,he said.
However, its weaknesses are the small size of its seaports, limited rail network, lack of skilled human resources and out-of-date rules and regulations.
Oh Bee Lock, senior vice president for corporate planning at Singapore's PSA Corp, said he regarded Thailand as an ally of Singapore, not a competitor. The two countries. therefore, can connect their transportation at the same standard level to enhance freight between Asean and other regions more rapidly and at a competitive cost.
The port of Singapore connects to 600 ports in more than 120 countries. PSA has 28 ports in 16 countries wit annual revenue of 4.4 billion Singaporean dollars (Bt104 billion) and throughput of 63 milliion containers (20-foot equivalent units).
"Logistics Asia 2009" was cohosted by the Thailand Management Association, the Thai Chamber of Commerce and the Transportation Institute.
SUCCESS OF FOOD INGREDIENTS ASIA 2009 SETS THE STAGE FOR 2010 EXPANSION
Bangkok was once again the center of attention for the food ingredients industry as Food ingredients (Fi) Asia 2009 got underway at the Queen Sirikit National Convention Center on the 9th of September.
This exciting event ran for three days and attracted over 7000 attendees from around the world. They were drawn to Fi Asia by the outstanding opportunity to network with the industry's key players and learn about the latest developments in this dynamic market.
Many attendees were particularly interested in opportunities in the rapidly growing functional food market. Dr. Damri Sukhothanang, Permanent Secretary of the Thai Ministry of Industry, underlined this trend in his opening address. He stated the industry' s current health-oriented focus has developed in response to consumers increasing affluence and health consciousness, and many companies in the region are now offering healthier food choices with high nutritional value.
The 2009 show featured a highly informative program of conderences and seminars. The first in the series was "What's New in the World of Functiional Food ingredients?" which was co-organized by the Food Science & Technology Association of Thailand (FoSTAT).
International speakers covered 18 other relevant topics and all the high level conderence events were well attended and covered by the many media companies in attendance.
In order to offer Fi Asia exibitors and visitors increased access to the ASEAN region, the Fi team will be branching out into new markets in 2010.
Fi Asia be held in Indonesia in 2010 and return to Thailand in 2011. a new event, the Fi Asia Summit, will make its debut in Vietnam in 2010 and then bring the industry to the Philippines in 2011.
This exciting event ran for three days and attracted over 7000 attendees from around the world. They were drawn to Fi Asia by the outstanding opportunity to network with the industry's key players and learn about the latest developments in this dynamic market.
Many attendees were particularly interested in opportunities in the rapidly growing functional food market. Dr. Damri Sukhothanang, Permanent Secretary of the Thai Ministry of Industry, underlined this trend in his opening address. He stated the industry' s current health-oriented focus has developed in response to consumers increasing affluence and health consciousness, and many companies in the region are now offering healthier food choices with high nutritional value.
The 2009 show featured a highly informative program of conderences and seminars. The first in the series was "What's New in the World of Functiional Food ingredients?" which was co-organized by the Food Science & Technology Association of Thailand (FoSTAT).
International speakers covered 18 other relevant topics and all the high level conderence events were well attended and covered by the many media companies in attendance.
In order to offer Fi Asia exibitors and visitors increased access to the ASEAN region, the Fi team will be branching out into new markets in 2010.
Fi Asia be held in Indonesia in 2010 and return to Thailand in 2011. a new event, the Fi Asia Summit, will make its debut in Vietnam in 2010 and then bring the industry to the Philippines in 2011.
Palm oil advocate trumpets the cause
Palm oil, a key export for Southeast Asian nations, is likely to be the biggest victim of the ongoing effort to prevent forests being levelled to make way for plantations, a study reveals.
The commodity is one of the biggest non-oil and gas exports for Indonesia and Malaysia and it is gaining ground in countries such as Laos.
These countries will likely be affected by moves to protect forests, says World Growth, a non-governmental organisation which undertook the study.
The NGO said there has been a sudden increase in hostility towards the palm oil industry which employs a large number of the region's inhabitants.
The US-based World Growth says its philosophy is to encourage economic well-being for people in the developing countries while caring for the environment but not compromising the improving of living standards.
"This campaign [against palm oil plantations] is unusual as it has started to appear in the last 12 months ahead of the Copenhagen summit," Alan Oxley,chairman of World Growth, said at a Bangkok press conference.
Mr Oxley, who is in Bangkok to attend the Bangkok Climate Change Talks, said measures to prevent some forest land being used for palm oil hampered efforts to reduce poverty and improve living standards in the region's countries.
About 40% of land in Indonesia is forest, but Mr Oxley said 20% was the normal amount a country needs to preserve to protect biodiversity.
Malaysia and Indonesia have set aside 55% and 25% respectively for forest conservation while the European average is 25%, he said.
An increase in palm oil production could provide a vital cashflow for the substantial poor populations of such countries, he said.
Mr Oxley, however, has come under heavy fire from the environmental lobby which accuses him of being a climate change sceptic. In 2006 he was named by The Australia Institute's director Clive Hamilton as one of Australia's so-called climate change "dirty dozen".
He has stated "there is no reasonable certainty that increases in atmospheric carbon dioxide from human activity cause significant global warming."
Nevertheless, he says the oil palm offers much stronger financial returns than traditional crops which could be used to help local people. A hectare of oil palm oil generates about $2,500 per year compared with $80 for rice, he said.
Studies show that about 60% to 70%of deforestation is caused by poor people growing rice, he said.
A report by the UN Food and Agriculture Organisation showed that deforestation is largely due to human settlement, not commercial crops, he said.
He also said oil palm uses less land than crop-based oilseeds, using only 0.26 hectares of land to produce one tonne of oil, while soyabean, sunflower and rapeseed need 2.2,2 and 1.5 hectares,respectively.
On claims that the oil palm industry was destroying forest biodiversity in developing countries, Mr Oxley said in Malaysia, the world's second largest producer, the crop was restricted to 20% of state land allocated for agriculture.
Issues surrounding palm oil delayed implementation of the Asean-India Free Trade Agreement, signed in Bangkok in August, he said.
One reason for the delays could be that other edible oil industry bodies are looking to undermine palm oil as a replacement for soybean, rapeseed or other vegetable oils.
"Today palm oil accounts for about 30% of the global consumption, up from 20% nearly a decade ago," he said,"this maybe prompting the oil seed producers to defend their territory."
Major palm oil producers should be wary of groups such as Friends of the Earth and Greenpeace who are campaigning for processors and consumers to boycott the commodity and for the European Union to block imports of it.
The EU Renewable Energy Directive already has restrictions on the availability of palm oil, he said.
World Growth, which Mr Oxley described as a "free market NGO", launched its "PalmOil Green Development" campaign to counter claims made by environmental groups that cutting down forest reserves to grow palm oil is negative.
World Growth, however, will not disclose its funders, leading some commentators to speculate that its backers do not support measures such as the green lobby's campaign, which they think restricts the free market.
The commodity is one of the biggest non-oil and gas exports for Indonesia and Malaysia and it is gaining ground in countries such as Laos.
These countries will likely be affected by moves to protect forests, says World Growth, a non-governmental organisation which undertook the study.
The NGO said there has been a sudden increase in hostility towards the palm oil industry which employs a large number of the region's inhabitants.
The US-based World Growth says its philosophy is to encourage economic well-being for people in the developing countries while caring for the environment but not compromising the improving of living standards.
"This campaign [against palm oil plantations] is unusual as it has started to appear in the last 12 months ahead of the Copenhagen summit," Alan Oxley,chairman of World Growth, said at a Bangkok press conference.
Mr Oxley, who is in Bangkok to attend the Bangkok Climate Change Talks, said measures to prevent some forest land being used for palm oil hampered efforts to reduce poverty and improve living standards in the region's countries.
About 40% of land in Indonesia is forest, but Mr Oxley said 20% was the normal amount a country needs to preserve to protect biodiversity.
Malaysia and Indonesia have set aside 55% and 25% respectively for forest conservation while the European average is 25%, he said.
An increase in palm oil production could provide a vital cashflow for the substantial poor populations of such countries, he said.
Mr Oxley, however, has come under heavy fire from the environmental lobby which accuses him of being a climate change sceptic. In 2006 he was named by The Australia Institute's director Clive Hamilton as one of Australia's so-called climate change "dirty dozen".
He has stated "there is no reasonable certainty that increases in atmospheric carbon dioxide from human activity cause significant global warming."
Nevertheless, he says the oil palm offers much stronger financial returns than traditional crops which could be used to help local people. A hectare of oil palm oil generates about $2,500 per year compared with $80 for rice, he said.
Studies show that about 60% to 70%of deforestation is caused by poor people growing rice, he said.
A report by the UN Food and Agriculture Organisation showed that deforestation is largely due to human settlement, not commercial crops, he said.
He also said oil palm uses less land than crop-based oilseeds, using only 0.26 hectares of land to produce one tonne of oil, while soyabean, sunflower and rapeseed need 2.2,2 and 1.5 hectares,respectively.
On claims that the oil palm industry was destroying forest biodiversity in developing countries, Mr Oxley said in Malaysia, the world's second largest producer, the crop was restricted to 20% of state land allocated for agriculture.
Issues surrounding palm oil delayed implementation of the Asean-India Free Trade Agreement, signed in Bangkok in August, he said.
One reason for the delays could be that other edible oil industry bodies are looking to undermine palm oil as a replacement for soybean, rapeseed or other vegetable oils.
"Today palm oil accounts for about 30% of the global consumption, up from 20% nearly a decade ago," he said,"this maybe prompting the oil seed producers to defend their territory."
Major palm oil producers should be wary of groups such as Friends of the Earth and Greenpeace who are campaigning for processors and consumers to boycott the commodity and for the European Union to block imports of it.
The EU Renewable Energy Directive already has restrictions on the availability of palm oil, he said.
World Growth, which Mr Oxley described as a "free market NGO", launched its "PalmOil Green Development" campaign to counter claims made by environmental groups that cutting down forest reserves to grow palm oil is negative.
World Growth, however, will not disclose its funders, leading some commentators to speculate that its backers do not support measures such as the green lobby's campaign, which they think restricts the free market.
India's absence could push Thai rice exports to record
Rice exports from Thailand may beat forecasts this year and hit a record in 2010 on higher African demand and a lack of Indian exports, says Chookiat Ophaswongse, president of the Thai Rice Exporters Association.
"Thailand benefits from India's absence in the world market," Mr Chookiat said yesterday.
He said exports could be between 8.7 million and 9 million tonnes this year,beating a forecast of 8.5 million, possibly reaching 10 million tonnes next year.
India suspended most rice exports last year amid concern of a global shortage, which helped trigger record prices.Another hike could occur if rising energy costs raise prices of commodities, said Mr Chookiat.
"Thai rice exports next year will hit a new high," said Paka-on Tipayatanadaja,an analyst at the Kasikorn Research Center."African demand will expand further in the fourth quarter of this year and into the first half of 2010."
Rice futures in Chicago peaked at US$25.07 per 100 pounds in April 2008 as India was joined by Vietnam and Cambodia in restricting exports, prompting a rush for supplies from buyers such as the Philippines, the top importer.Rice traded yesterday at $13.30 per 100 pounds.
"The risk of a food crisis reoccurs every five to six years," said Mr Chookiat."Rice prices could hit a record should global oil prices rise above $120 a barrel."
The surge last year came as crude prices peaked at $147 a barrel, pushing up farming costs, including fertiliser.Crude traded yesterday at $70.11.
The outlook for Thai rice exports con-tinues to be robust, said Mr Chookiat. A drought in India this year may help to prolong that nation's shipment curbs.
Thai rice exports reached a record 10.14 million tonnes in 2004, and last year totalled 10.01 million.
Output in India will total 82 million tonnes this crop year, according to the US Foreign Agricultural Service. That compares with an earlier forecast of 88 million, and the record 99.2 million harvested in the season ended Sept 30.
Thailand's 100% grade-B white rice,the benchmark export variety, touched a record $1,038 a tonne in May last year.This week it was at $554 a tonne, the lowest level since May 20. The exporters association sets prices every Wednesday.
Thai exports of parboiled rice to Africa may rise to about 4.5 million to 5 million tonnes this year, beating a previous forecast of 3.5 million, and may increase to 5.5 million tonnes next year, said Mr Chookiat. In the 2009-10 crop year, starting in November, Thai rice production will total 23.5 million tonnes,1.2% more than in the previous year, according to the Agriculture Ministry.
"Thailand benefits from India's absence in the world market," Mr Chookiat said yesterday.
He said exports could be between 8.7 million and 9 million tonnes this year,beating a forecast of 8.5 million, possibly reaching 10 million tonnes next year.
India suspended most rice exports last year amid concern of a global shortage, which helped trigger record prices.Another hike could occur if rising energy costs raise prices of commodities, said Mr Chookiat.
"Thai rice exports next year will hit a new high," said Paka-on Tipayatanadaja,an analyst at the Kasikorn Research Center."African demand will expand further in the fourth quarter of this year and into the first half of 2010."
Rice futures in Chicago peaked at US$25.07 per 100 pounds in April 2008 as India was joined by Vietnam and Cambodia in restricting exports, prompting a rush for supplies from buyers such as the Philippines, the top importer.Rice traded yesterday at $13.30 per 100 pounds.
"The risk of a food crisis reoccurs every five to six years," said Mr Chookiat."Rice prices could hit a record should global oil prices rise above $120 a barrel."
The surge last year came as crude prices peaked at $147 a barrel, pushing up farming costs, including fertiliser.Crude traded yesterday at $70.11.
The outlook for Thai rice exports con-tinues to be robust, said Mr Chookiat. A drought in India this year may help to prolong that nation's shipment curbs.
Thai rice exports reached a record 10.14 million tonnes in 2004, and last year totalled 10.01 million.
Output in India will total 82 million tonnes this crop year, according to the US Foreign Agricultural Service. That compares with an earlier forecast of 88 million, and the record 99.2 million harvested in the season ended Sept 30.
Thailand's 100% grade-B white rice,the benchmark export variety, touched a record $1,038 a tonne in May last year.This week it was at $554 a tonne, the lowest level since May 20. The exporters association sets prices every Wednesday.
Thai exports of parboiled rice to Africa may rise to about 4.5 million to 5 million tonnes this year, beating a previous forecast of 3.5 million, and may increase to 5.5 million tonnes next year, said Mr Chookiat. In the 2009-10 crop year, starting in November, Thai rice production will total 23.5 million tonnes,1.2% more than in the previous year, according to the Agriculture Ministry.
THAI BUSINESSS URGED TO SHAPE UP BEFORE AEC
Impriving production capability and increasing the efficiency of labour wil be crucial for Thai enterprises if they are to cope with tougher competition under the move towards an Asean Economic Community(AEC)by 2015, leading businessmen said yesterday.
Dusit Nontanakorn, chairman of the Board of Trade of Thailand and the Thai Chamber of Commerce, said enterprises should urgently prepare for seamless trade and investment under the AEC ot ensure their competitiveness with other countries.
"To do so, businessmen must focus on increasing production, and on labour efficiencies. Thai enterprises can tap a larger market, which will go up from 65 million at present to 560 million under a single market. Enterprises must urgently develop their businesses to reap the benefits from the AEC," said Dusit.
Asia and countries in Asean are becoming attractive as their economies are expected to come out of the global crisis ahead of other nations. In addition, the emerging econimic power of India and China has prompted the West to look eastwards to sustain the world's economic growth.
The Board of Trade, Thailand Management Assocation and Thai Institute of Directors Association, in association with the International Chamber of Commerce, will launch the first "Asean Business Forum" in Bangkok on October 26-27, after the Asean Summit in Hua Hin.
The event aims to help Asean businesses boost their potential to compete after the trade and investment liberalisation among the 10 asean countries, as well as with foreign counterparts.
The Asean Business Forum will be held at the Plaza Athenee Hotel.
Charnchai Charuvasts, president and CEO of the Thai Insitute of Directors Association, said the AEC could be seen as an opportunity or a threat by Thai enterprises.
Thai traders can access a larger market for trading and investing, while Thailand will also allow other countries to trade and invest freely in the Kingdom. If Thai businessmen could develop their efficiency, they would enjoy better business growth.
However, if they fail to develop their business efficiency, they could suffer as a result of the fiercer competition from other Asean enterprises, said Charnchai.
Thailand Mangement Association president Preecha Chaochotechuang said the Asean Business Forum is expected to attract over 500 entrepreneurs. About 100 will come from foreign enterprise.
Dusit Nontanakorn, chairman of the Board of Trade of Thailand and the Thai Chamber of Commerce, said enterprises should urgently prepare for seamless trade and investment under the AEC ot ensure their competitiveness with other countries.
"To do so, businessmen must focus on increasing production, and on labour efficiencies. Thai enterprises can tap a larger market, which will go up from 65 million at present to 560 million under a single market. Enterprises must urgently develop their businesses to reap the benefits from the AEC," said Dusit.
Asia and countries in Asean are becoming attractive as their economies are expected to come out of the global crisis ahead of other nations. In addition, the emerging econimic power of India and China has prompted the West to look eastwards to sustain the world's economic growth.
The Board of Trade, Thailand Management Assocation and Thai Institute of Directors Association, in association with the International Chamber of Commerce, will launch the first "Asean Business Forum" in Bangkok on October 26-27, after the Asean Summit in Hua Hin.
The event aims to help Asean businesses boost their potential to compete after the trade and investment liberalisation among the 10 asean countries, as well as with foreign counterparts.
The Asean Business Forum will be held at the Plaza Athenee Hotel.
Charnchai Charuvasts, president and CEO of the Thai Insitute of Directors Association, said the AEC could be seen as an opportunity or a threat by Thai enterprises.
Thai traders can access a larger market for trading and investing, while Thailand will also allow other countries to trade and invest freely in the Kingdom. If Thai businessmen could develop their efficiency, they would enjoy better business growth.
However, if they fail to develop their business efficiency, they could suffer as a result of the fiercer competition from other Asean enterprises, said Charnchai.
Thailand Mangement Association president Preecha Chaochotechuang said the Asean Business Forum is expected to attract over 500 entrepreneurs. About 100 will come from foreign enterprise.
ASEAN PLANS INFRASTRUCTURE FUND
Asean plans to set up a US$1-billion(Bt33.5 billion)infrastructure fund and will join Japan, China and South Korea in creating a $500-million bond-guarantee fund for investment in the region, Finance Minister Korn Chatikavanij said yesterday.
Meanwhile, the Finance Ministry will offer more tax incentives to multinational irms if they choose Thailand as the base for their regional head-quarters.
The fund plans will be discussed on the sidelines of the annual meeting of the World Bank and the International Monetary Fund, being held in Istanbul from today until Wednesday, Korn said via videoconference from the Turkish city.
Korn, who is currently chairman of the Asean Finance Ministers, said the 10-member regional grouping would discuss the structure of the infrastructure fund, which will be designed to raise finance and then invest in infrastructure projects in the region.
The size of the fund could be about $1 billion, he said. Asean will ask for assistance from the Asian Development Bank(ADB)and the World Bank about how to run the fund and how to create bonds rated up to "AAA".
A high credit rating for the bonds would allow central banks in the region to subscribe to them. The Bank of Thailand, for instance, can invest only in AAA-rated baonds, said Korn. Currently most of the central banks invest in US treasuries.
Many critics have warned that US dollar assets will tend to depreciate due to the weak US economy.
Korn also said Asean and East Asia's three largest economies-Japan, China and South Korea-would discuss a plan to set up an East Asian bond-guarantee fund.
The fund would guarantee bonds issued by local companies in the region in local currencies. The guarantee scheme would support private firms to raise funds from investors at lower cost, the minister said.
"The big tree - Japan, China and South Korea - have already agreed to put in a combined $500 million for the bond-guarantee scheme," he said.
The ADB and Asean will consider how much each should contribute to the fund, he added.
About 70 per cent of the international reserves accumulated by central banks are in the region, which could utilise the money for investment, said Korn,
Asean and the three countries will also discuss implementation of the reserve pool worth $120 billion that was agreed earlier.
The reserve pool - known as Chiang Mai Initiative Multilateralisation (CMIM) - will provide emergency financing to members facing an economc crisis like the one that happened in 1997.
Korn said the office of the CMIM should be located in Thailand.
Meanwhile, Deputy Finance Minister Pradit Pataraprasit said the ministry would offer more tax incentives and other privileges to lure multinational corporations to set up their regional headquarters here.
He said that from a survey conducted in 2007, only nine multinational firms chose Thailand as a base for their regional headquarters.
The top five destinations were Singapore, China, Hong Kong, Japan and South Korea. Singapore and China housed 57 and 56 regional headquarters, respectively.
Meanwhile, the Finance Ministry will offer more tax incentives to multinational irms if they choose Thailand as the base for their regional head-quarters.
The fund plans will be discussed on the sidelines of the annual meeting of the World Bank and the International Monetary Fund, being held in Istanbul from today until Wednesday, Korn said via videoconference from the Turkish city.
Korn, who is currently chairman of the Asean Finance Ministers, said the 10-member regional grouping would discuss the structure of the infrastructure fund, which will be designed to raise finance and then invest in infrastructure projects in the region.
The size of the fund could be about $1 billion, he said. Asean will ask for assistance from the Asian Development Bank(ADB)and the World Bank about how to run the fund and how to create bonds rated up to "AAA".
A high credit rating for the bonds would allow central banks in the region to subscribe to them. The Bank of Thailand, for instance, can invest only in AAA-rated baonds, said Korn. Currently most of the central banks invest in US treasuries.
Many critics have warned that US dollar assets will tend to depreciate due to the weak US economy.
Korn also said Asean and East Asia's three largest economies-Japan, China and South Korea-would discuss a plan to set up an East Asian bond-guarantee fund.
The fund would guarantee bonds issued by local companies in the region in local currencies. The guarantee scheme would support private firms to raise funds from investors at lower cost, the minister said.
"The big tree - Japan, China and South Korea - have already agreed to put in a combined $500 million for the bond-guarantee scheme," he said.
The ADB and Asean will consider how much each should contribute to the fund, he added.
About 70 per cent of the international reserves accumulated by central banks are in the region, which could utilise the money for investment, said Korn,
Asean and the three countries will also discuss implementation of the reserve pool worth $120 billion that was agreed earlier.
The reserve pool - known as Chiang Mai Initiative Multilateralisation (CMIM) - will provide emergency financing to members facing an economc crisis like the one that happened in 1997.
Korn said the office of the CMIM should be located in Thailand.
Meanwhile, Deputy Finance Minister Pradit Pataraprasit said the ministry would offer more tax incentives and other privileges to lure multinational corporations to set up their regional headquarters here.
He said that from a survey conducted in 2007, only nine multinational firms chose Thailand as a base for their regional headquarters.
The top five destinations were Singapore, China, Hong Kong, Japan and South Korea. Singapore and China housed 57 and 56 regional headquarters, respectively.
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