About 90% of beach land in Phuket is controlled by foreigners through Thai nominees, a leading research body has found.
A similar situation exists in other prime tourism destinations in provinces such as Chiang Mai and Rayong.
Local officials and legal experts have helped clear the way for foreign investors to take control of the country's rice farms and property in resort provinces, according to research on foreign land ownership by the Thailand Research Fund.
TRF called a seminar on the research findings yesterday attended by economics and legal scholars.
There recently has been speculation that foreign businessmen, particularly from the Middle East, were snapping up rice fields in the central plains and elsewhere through proxy local companies.
Transnational business consortiums were said to be holding the land through Thai nominees, which is against the law.
Some farmers are leasing land they previously owned but have since sold to the foreigners' proxy firms, observers said.
Siriporn Sajjanont, from the economics faculty at Sukhothai Thammathirat Open University and a member of the research team, said the study showed many kinds of property had been bought by foreigners through Thai nominees.
"About 90% of land along the coastline in Phuket is controlled by foreigners through Thai nominees," she said.
Foreign investment capital was essential for developing Phuket and Samui, as Thais do not have enough money to invest themselves, Ms Siriporn said.
The coastal areas most sought after by foreign investors were Pattaya in Chon Buri, Koh Phangan and Koh Samui in Surat Thani, Phuket and Hua Hin in Prachuap Khiri Khan.
In Chiang Mai, foreigners had used legal loopholes to exceed the limit on sales of condominium units, Ms Siriporn said.
There was evidence they hold the property through Thai nominees by marrying Thais. In some cases, Thai women were asked to register the foreigners' property in their own names.
The study found similar problems in Rayong involving foreign landholdings through Thai nominees with foreigners marrying Thais.
In some land lease cases, the period of leasehold was unusually long, Ms Siriporn said. The study found that some lease contracts stated the leasehold was "for life".
Land ownership by foreigners had been made possible by their Thai lawyers who had found legal loopholes to clear the way for foreigners to take control, the research found.
Village heads also had acted as land brokers to arrange sales of state land given to local people so they could make a living, the panellists said.
Village heads were close to residents and knew which prime land was available.
Some legal entities had been set up with 51% of shares held by Thais,although those Thais turned out to be mere legal advisers for foreigners and had no power to run the legal entities, Ms Siriporn said.
"We also found the same people had set up many entities," she said.
Some entities' regulations on shareholding structures allowed foreign shareholders more power than Thais in running those entities.
Col Surin Pikulthong, president of the Community Organisations Development Institute, said he had received information that Hmong people in the US had provided financial support for Hmong in Nan province to buy land and grow rice for shipment to the US.
Silaporn Buasai, vice-president o f the institute, said she had heard that investors from Taiwan had bought land here for growing oranges to be sold in Taiwan.
Wichian Phuanglamjiak, vicepresident of the Thai Rice Growers'Association, said rice farmers held additional information on land grabs by foreign investors.
He said the problem had remained unaddressed for too long and no state agency had taken the matter seriously.
Mr Wichian said farmers were pinning their hopes on the Department of Special Investigation to pursue the matter.
DSI investigator Pakorn Sucheevakul on Saturday said the agency was investigating four Thai companies in Ayutthaya which own rice farms of almost 10,000 rai.
Malee Antasin,59, a farmer in Ayutthaya's Bang Ban district, said businessmen had bought many plots in her village since 1995.
She said she had felt "besieged"and pressured to sell her rice plot as her land had been enclosed by other plots owned by those investors. She was now taking the matter to court.
Monday, August 24, 2009
Boost for Thai, China trade
Thai and Chinese investors last week signed nine agreements in Guangzhou, China to boost the two countries' rade and investment by Bt20 billion.
Industry Minister Charnchai Chairungrueng said these deals will lead to Bt13 billion in trade between Thai firms and their partners in this southern Chinese province. Combined investment would reach up to Bt7 billion as a result of the Board of Investment's effort.
China was planning to purchase Thai fruits worth Bt10.5 billion and cassava worth Bt500 million.
A joint venture would be formed by Thai and Chinese firms to invest Bt350 million in the production of watch parts and electrical wiring products in Thailand.
Junging Lu, chairman of the association, said China Science and Merchants would set up a fund worth US$3 billion (Bt102 billion) to provide loans to help Chinese investors purchase machinery for projects in Thailand. Thai firms and suppliers Thailand can also apply for financing, he said.
Industry Minister Charnchai Chairungrueng said these deals will lead to Bt13 billion in trade between Thai firms and their partners in this southern Chinese province. Combined investment would reach up to Bt7 billion as a result of the Board of Investment's effort.
China was planning to purchase Thai fruits worth Bt10.5 billion and cassava worth Bt500 million.
A joint venture would be formed by Thai and Chinese firms to invest Bt350 million in the production of watch parts and electrical wiring products in Thailand.
Junging Lu, chairman of the association, said China Science and Merchants would set up a fund worth US$3 billion (Bt102 billion) to provide loans to help Chinese investors purchase machinery for projects in Thailand. Thai firms and suppliers Thailand can also apply for financing, he said.
Thai-Chinese business matching yields many deals
Thai and Guangzhou companies has created potential bilateral trade and investment of Bt20 billion, said Industry Minister Charnchai Chairungrueng.
Speaking at a press briefing last Friday, he said the business-matching-held the previous day by the Board of Investment-had created trade valued at Bt13 billion.
Of the 98 business-matching deals, nine memoranda of understanding were signed, worth a combined Bt15 billion-Bt12 billion for trade and Bt3 billion for investment.
The minister said that of the nine MoUs, those for fruit trade had generated the biggest combined value at Bt10.5 billion, followed by the export of cassava to China at Bt500 million.
The third-biggest value is the MoU worth Bt350 million between a Thai and a Chinese company, which will jointly invest in Thailand in the production of watch parts and electrical wiring.
Charnchai said the ministry would hold a similar business-matching between Thai and Shanghai businessmen in November in Shanghai following an invitation from the World Eminence Chinese Business Association.
Junging Lu, chairman of the association, said China Science & Merchants would set up a fund worth US$3 billion (Bt102 billion) to provide loans to help Chinese investors purchase the machinery to do business in Thailand.
"Moreover, Thai suppliers who are doing business with Chinese firms in Thailand can apply for funding to buy machines," he said.
Speaking at a press briefing last Friday, he said the business-matching-held the previous day by the Board of Investment-had created trade valued at Bt13 billion.
Of the 98 business-matching deals, nine memoranda of understanding were signed, worth a combined Bt15 billion-Bt12 billion for trade and Bt3 billion for investment.
The minister said that of the nine MoUs, those for fruit trade had generated the biggest combined value at Bt10.5 billion, followed by the export of cassava to China at Bt500 million.
The third-biggest value is the MoU worth Bt350 million between a Thai and a Chinese company, which will jointly invest in Thailand in the production of watch parts and electrical wiring.
Charnchai said the ministry would hold a similar business-matching between Thai and Shanghai businessmen in November in Shanghai following an invitation from the World Eminence Chinese Business Association.
Junging Lu, chairman of the association, said China Science & Merchants would set up a fund worth US$3 billion (Bt102 billion) to provide loans to help Chinese investors purchase the machinery to do business in Thailand.
"Moreover, Thai suppliers who are doing business with Chinese firms in Thailand can apply for funding to buy machines," he said.
Options plan wins farmers' support
Shrimpers and farmers plan to submit a working plan to the government supporting the new options programme intended to stabilise prices of key commodities including shrimp starting in the next harvest season.
The options programme to be used for maize, cassava, rice and shrimp would replace the traditional price pledging scheme that has caused huge financial burdens on the government and taxpayers for years.
"We realised the burdens and considered the mortgage programme not only deepened corruption but did little to improve product prices," said Poj Aramwattananont, honorary adviser to the Thai Frozen Food Association, at a meeting in Songkhla last week.
Exporters, processors and shrimp farmers have accepted the options programme for shrimp, expecting it will promote sustainable growth in an industry that earns 70-80 billion baht in export income a year.
The government agreed to spend 1.4 billion baht to pledge 10,000 tonnes of vannamei white shrimp from farmers from July 15 to Sept 30 to lessen pressure over falling prices as exports slump. The pledging volume later increased by 5,000 tonnes to meet farmers' demands.
The pledging prices varied based on the size of the shrimp, with 40 shrimp per kilogramme to be pledged at 155 baht,50 shrimp for 135 baht, and 60 shrimp for 125 baht.
Under the new options programme,Mr Poj suggests the government set reference prices or insurance prices by considering costs of production and transport, export prices, risk factors from exchange rates and fuel costs, and farmers'profits.
As with other crops, if the insurance prices fall below market prices, the government will use the put-option practice to absorb the difference.
Panisuan Jamnarnwej, president of the association, encouraged shrimp farmers to form as a group or in cooperatives and supply product only to certified exporters or those that are members of the association to prevent any possible business risks, such as refusal to buy when prices change.
Shrimp exporters and processors who run cold storage facilities have to inform the association about the farms where they want to buy shrimp. The practice should conform with the requirements for carbon footprint labels from the EU market, which considers the amount of carbon emitted during production.
The association and representatives of farmers from the southern provinces that control about 70% of the country's shrimp production will present the plan to Deputy Prime Minister Korbsak Sabhavasu soon.
Thailand's shrimp production is projected to be 400,000 to 450,000 tonnes this year, of which 362,000 tonnes would be exported.
The options programme to be used for maize, cassava, rice and shrimp would replace the traditional price pledging scheme that has caused huge financial burdens on the government and taxpayers for years.
"We realised the burdens and considered the mortgage programme not only deepened corruption but did little to improve product prices," said Poj Aramwattananont, honorary adviser to the Thai Frozen Food Association, at a meeting in Songkhla last week.
Exporters, processors and shrimp farmers have accepted the options programme for shrimp, expecting it will promote sustainable growth in an industry that earns 70-80 billion baht in export income a year.
The government agreed to spend 1.4 billion baht to pledge 10,000 tonnes of vannamei white shrimp from farmers from July 15 to Sept 30 to lessen pressure over falling prices as exports slump. The pledging volume later increased by 5,000 tonnes to meet farmers' demands.
The pledging prices varied based on the size of the shrimp, with 40 shrimp per kilogramme to be pledged at 155 baht,50 shrimp for 135 baht, and 60 shrimp for 125 baht.
Under the new options programme,Mr Poj suggests the government set reference prices or insurance prices by considering costs of production and transport, export prices, risk factors from exchange rates and fuel costs, and farmers'profits.
As with other crops, if the insurance prices fall below market prices, the government will use the put-option practice to absorb the difference.
Panisuan Jamnarnwej, president of the association, encouraged shrimp farmers to form as a group or in cooperatives and supply product only to certified exporters or those that are members of the association to prevent any possible business risks, such as refusal to buy when prices change.
Shrimp exporters and processors who run cold storage facilities have to inform the association about the farms where they want to buy shrimp. The practice should conform with the requirements for carbon footprint labels from the EU market, which considers the amount of carbon emitted during production.
The association and representatives of farmers from the southern provinces that control about 70% of the country's shrimp production will present the plan to Deputy Prime Minister Korbsak Sabhavasu soon.
Thailand's shrimp production is projected to be 400,000 to 450,000 tonnes this year, of which 362,000 tonnes would be exported.
Other industries support upstream push
Industry operators support establishing an upstream steel industry in Thailand as it would reduce risks from importing expensive steel products.
Ninnart Chaithirapinyo,vicechairman of Toyota Motor Thailand, said an upstream steel producer would vastly reduce the production cost of locally made vehicles. Locally produced steel is 10-15% cheaper than imported products because of import tax, logistics cost and shipment insurance, he said.
Local supply would also allow production flexibility as imported steel purchasing orders must be made three months in advance. Local supply would also eliminate exchange-rate and price fluctuations as speculative investment can affect global steel prices, said Mr Ninnart.
Local production promotes development of other industries that need quality steel products such as shipbuilding, bus,rail and plane assemblers.
The government should support steel industry development, especially local community understanding of the industry and environmental protection,he said.
"Interested investors for projects need to know the government's direction,"said Mr Ninnart.
Last year, the automotive industry contributed 900 billion baht or 10% of GDP. The industry employs 1.2 million workers and vehicles are the secondlargest export product, in terms of value.Electrical and electronics items are the country's top export.
Payungsak Chartsutipol, president of the Steel Industry Club at the Federation of Thai Industries (FTI), agrees the country needs upstream steel production.
"All industries would benefit. We use 13 million tonnes of steel products yearly to support various industries," he said.
"While steel demand is expected to surge to 15 million in a few years, we should have local production to complete the supply chain, create local jobs and guard against steel speculation and exchange-rate fluctuation."
According to Vikrom Vajragupta, director of the Iron and Steel Institute of Thailand (ISIT), four upstream steel investors - Japan's Nippon Steel and JFE Steel, India's Arcelor-Mittal and China's Baosteel - have all filed preliminary environmental and community management plans to the Board of Investment (BoI).
An upstream steel industry development team under Industry Ministry supervision has selected three to four potential sites in the southern and eastern regions. The sites need massive environmental rehabilitation and investors are expected to contribute to this improvement.
"The project would also have to be acceptable to the local community," said Mr Vikrom.
The ISIT is now waiting for 38 million baht from the 2010 government budget to be disbursed so it can go ahead with in-depth research on the finalist sites.
Ninnart Chaithirapinyo,vicechairman of Toyota Motor Thailand, said an upstream steel producer would vastly reduce the production cost of locally made vehicles. Locally produced steel is 10-15% cheaper than imported products because of import tax, logistics cost and shipment insurance, he said.
Local supply would also allow production flexibility as imported steel purchasing orders must be made three months in advance. Local supply would also eliminate exchange-rate and price fluctuations as speculative investment can affect global steel prices, said Mr Ninnart.
Local production promotes development of other industries that need quality steel products such as shipbuilding, bus,rail and plane assemblers.
The government should support steel industry development, especially local community understanding of the industry and environmental protection,he said.
"Interested investors for projects need to know the government's direction,"said Mr Ninnart.
Last year, the automotive industry contributed 900 billion baht or 10% of GDP. The industry employs 1.2 million workers and vehicles are the secondlargest export product, in terms of value.Electrical and electronics items are the country's top export.
Payungsak Chartsutipol, president of the Steel Industry Club at the Federation of Thai Industries (FTI), agrees the country needs upstream steel production.
"All industries would benefit. We use 13 million tonnes of steel products yearly to support various industries," he said.
"While steel demand is expected to surge to 15 million in a few years, we should have local production to complete the supply chain, create local jobs and guard against steel speculation and exchange-rate fluctuation."
According to Vikrom Vajragupta, director of the Iron and Steel Institute of Thailand (ISIT), four upstream steel investors - Japan's Nippon Steel and JFE Steel, India's Arcelor-Mittal and China's Baosteel - have all filed preliminary environmental and community management plans to the Board of Investment (BoI).
An upstream steel industry development team under Industry Ministry supervision has selected three to four potential sites in the southern and eastern regions. The sites need massive environmental rehabilitation and investors are expected to contribute to this improvement.
"The project would also have to be acceptable to the local community," said Mr Vikrom.
The ISIT is now waiting for 38 million baht from the 2010 government budget to be disbursed so it can go ahead with in-depth research on the finalist sites.
Exporters renew plea for greater loan access
H1 STATE BANK LOANS: Approved: B300bn Target: B625.5bn
Thailand's exports still have a chance to contract by a modest 5-10% if the government rapidly extends loans to ease liquidity problems for local industries and exporters, according to the Thai Chamber of Commerce.
"The most effective stimulus measure to improve exports right now is accelerating loan extensions," said Pornsil Patchrintanakul, the deputy secretarygeneral of the chamber."Tight liquidity remains unaddressed and the credit extension by local banks is still moving at a snail's pace despite government pledges to speed up their lending activities."
Local industry groups have complain-ed of increased difficulty in obtaining credit in recent months as commercial banks have tightened lending procedures due to heightened risk.
The government has responded with increases for credit-guarantee programmes and directives to state banks to expand lending activities to prevent the economy from deteriorating even further.
State banks have been slow to react,however, approving just 300 billion baht worth of loans in the first half, compared with atarget of 625.5 billion.Disbursements have totalled just 100 billion baht.
Finance Minister Korn Chatikavanij said the government had now directed state banks to raise their lending to one trillion baht from 600 billion planned earlier. The banks' extra funding would come from the second economic stimulus package.
However, Mr Korn brushed aside a Commerce Ministry proposal to cut the so-called blue corner tax, which would guarantee higher tax rebates for imports to be used in export-oriented production, as prior legal amendments would be needed.
Mr Korn also vowed to work more closely with the Bank of Thailand to make sure the baht moves in the same direction as currencies in the region.
To curb further baht appreciation,he said, the government would promote using the weak US dollar to buy imported capital goods.
Mr Pornsil said the ministry's idea to offer higher tax rebates was good,but in practice it was likely to run against World Trade Organisation rules, as a higher tax rebate is tantamount to a government export subsidy.
The Finance Ministry's denial of the proposal was unlikely to affect the sector that much, said Mr Pornsil.
Thailand's exports rose for the third consecutive month in July, making the government increase its export projection for the year to a contraction of 10-18%. The previous forecast was for a 15-19% shrinkage.
Shipments in July increased to $12.9 billion, their highest value in seven months, from $12.33 billion in June and $11.65 billon in May. The year-onyear contraction was 25.68%.
The marginal improvement was mainly due to a reduced contraction for shipments of agricultural, agroindustrial and industrial products.
Thailand's exports still have a chance to contract by a modest 5-10% if the government rapidly extends loans to ease liquidity problems for local industries and exporters, according to the Thai Chamber of Commerce.
"The most effective stimulus measure to improve exports right now is accelerating loan extensions," said Pornsil Patchrintanakul, the deputy secretarygeneral of the chamber."Tight liquidity remains unaddressed and the credit extension by local banks is still moving at a snail's pace despite government pledges to speed up their lending activities."
Local industry groups have complain-ed of increased difficulty in obtaining credit in recent months as commercial banks have tightened lending procedures due to heightened risk.
The government has responded with increases for credit-guarantee programmes and directives to state banks to expand lending activities to prevent the economy from deteriorating even further.
State banks have been slow to react,however, approving just 300 billion baht worth of loans in the first half, compared with atarget of 625.5 billion.Disbursements have totalled just 100 billion baht.
Finance Minister Korn Chatikavanij said the government had now directed state banks to raise their lending to one trillion baht from 600 billion planned earlier. The banks' extra funding would come from the second economic stimulus package.
However, Mr Korn brushed aside a Commerce Ministry proposal to cut the so-called blue corner tax, which would guarantee higher tax rebates for imports to be used in export-oriented production, as prior legal amendments would be needed.
Mr Korn also vowed to work more closely with the Bank of Thailand to make sure the baht moves in the same direction as currencies in the region.
To curb further baht appreciation,he said, the government would promote using the weak US dollar to buy imported capital goods.
Mr Pornsil said the ministry's idea to offer higher tax rebates was good,but in practice it was likely to run against World Trade Organisation rules, as a higher tax rebate is tantamount to a government export subsidy.
The Finance Ministry's denial of the proposal was unlikely to affect the sector that much, said Mr Pornsil.
Thailand's exports rose for the third consecutive month in July, making the government increase its export projection for the year to a contraction of 10-18%. The previous forecast was for a 15-19% shrinkage.
Shipments in July increased to $12.9 billion, their highest value in seven months, from $12.33 billion in June and $11.65 billon in May. The year-onyear contraction was 25.68%.
The marginal improvement was mainly due to a reduced contraction for shipments of agricultural, agroindustrial and industrial products.
Saturday, August 22, 2009
Drought forces Indis to turn to imports
The drought situation in India was extraordinary and the government would import items in short supply, Finance Minister Pranab Mukherjee said yesterday.
"The decision is already there that whichever commodity will be in short supply, to maintain demand-supply mechanism, we will go for imports,"Mukherjee said while addressing a meeting of state agriculture ministers in the Indian capital.
"We have developed a certain expertise to handle drought. We will not publicise the government's plans to import food,"he said."The moment news is spread that India is going for big imports, the market prices are jacked up."
News of the drought in India had already pushed up sugar prices in the international market. India is the world's second largest sugarcane producer after Brazil.
Mukherjee also said the drought could impact the economy and inflation."Drought does not affect only crop pro-duction it has a cascading effect."
India announced on Wednesday that 246 of its 626 administrative districts were drought-hit after insufficient monsoon rainfall.
Many of these districts are among the top rice-producing regions in the country."The drought situation is difficult. It is an extraordinary situation,"Mukherjee said.
It was critical to save standing crops and provide alternative crops to farmers who have lost their crops, federal Agriculture Minister Sharad Pawar said at the meeting.
Sowing of the winter crop should be done early as there had been some late monsoon showers, he told the state agriculture ministers.
"The situation is grim. Not just for crop sowing and crop health but also for sustaining animal health, providing drinking water, livelihood and food, particularly for the small and marginal farmers and landless labourers," Pawar said.
More than 700 million people in India depend on agriculture and allied activities for their livelihood.
Farming in India is heavily dependent on the seasonal monsoon rainfall which comes from June to September. It is estimated only 30% of India's farmland has access to irrigation.
The month of September was critical,Ajit Tyagi, director general of India's Meteorological Department, said.
A revival of the monsoon over the past week could be promising for the winter crop, although it was too late for the summer crop, Tyagi added.
Mukherjee said India had started the drought year with good food grain buffer stocks.
According to the government's estimate, India has enough buffer stocks to cover any shortage for a period of 13 months.
Uttar Pradesh, Madhya Pradesh, Karnataka, Bihar, Assam and Manipur are the states worst affected by the current drought.
"The decision is already there that whichever commodity will be in short supply, to maintain demand-supply mechanism, we will go for imports,"Mukherjee said while addressing a meeting of state agriculture ministers in the Indian capital.
"We have developed a certain expertise to handle drought. We will not publicise the government's plans to import food,"he said."The moment news is spread that India is going for big imports, the market prices are jacked up."
News of the drought in India had already pushed up sugar prices in the international market. India is the world's second largest sugarcane producer after Brazil.
Mukherjee also said the drought could impact the economy and inflation."Drought does not affect only crop pro-duction it has a cascading effect."
India announced on Wednesday that 246 of its 626 administrative districts were drought-hit after insufficient monsoon rainfall.
Many of these districts are among the top rice-producing regions in the country."The drought situation is difficult. It is an extraordinary situation,"Mukherjee said.
It was critical to save standing crops and provide alternative crops to farmers who have lost their crops, federal Agriculture Minister Sharad Pawar said at the meeting.
Sowing of the winter crop should be done early as there had been some late monsoon showers, he told the state agriculture ministers.
"The situation is grim. Not just for crop sowing and crop health but also for sustaining animal health, providing drinking water, livelihood and food, particularly for the small and marginal farmers and landless labourers," Pawar said.
More than 700 million people in India depend on agriculture and allied activities for their livelihood.
Farming in India is heavily dependent on the seasonal monsoon rainfall which comes from June to September. It is estimated only 30% of India's farmland has access to irrigation.
The month of September was critical,Ajit Tyagi, director general of India's Meteorological Department, said.
A revival of the monsoon over the past week could be promising for the winter crop, although it was too late for the summer crop, Tyagi added.
Mukherjee said India had started the drought year with good food grain buffer stocks.
According to the government's estimate, India has enough buffer stocks to cover any shortage for a period of 13 months.
Uttar Pradesh, Madhya Pradesh, Karnataka, Bihar, Assam and Manipur are the states worst affected by the current drought.
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