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Keynote Speech by H.E. Mr. Abhisit Vejjajiva
Prime Minister of the Kingdom of Thailand
at A Luncheon "Prime Minister meets Japanese Investors"
14 July 2010 at 13.00 hrs,
Centara Grand, Bangkok
Excellencies,
President of the Thai-Japanese Association,
President of the Japanese Chamber of Commerce, Bangkok,
Distinguished Guests,
Ladies and Gentlemen,Introduction
1. First of all, let me say how delighted I am to see you again. It is always a pleasure to meet Japanese investors whom, I am sure, my fellow countrymen consider "friends of Thailand" -- friends that we can always count on even through difficult times. In this regard, let me express my appreciation to the Thai-Japanese Association, the Japanese Chamber of Commerce, Bangkok, and all others involved in organising this event.
2. Today, there continues to be a large Japanese community in Thailand, actually near my house in Sukhuwit, in Bangkok. I believe that you are the biggest expatriate group in this country. Every day when I leave home for work or when go back, I do pass several Japanese restaurants, supermarkets and stores, and also see a lot of Japanese walking along the pavements.
Japanese investment in Thailand
3. Indeed, for many years the Japanese people -- both investors and tourists -- have contributed much to the Thai economy. On behalf of the Royal Thai Government I would like to thank you for your continued support, trust, confidence and commitment in our country.
4. Last Friday, I chaired a meeting of the Board of Investment of Thailand (BOI), and I was very pleased to see that Japanese investors remain at the top of our investors. This year alone, 150 Japanese projects have applied for BOI promotion, with a total value of more than 38.5 billion baht. This is twice as much compared with the same period last year. As BOI Chair, I sincerely thank these investors for their interest and enthusiasm in pursuing their business in Thailand. I am sure that the BOI would like to approve all of these projects if possible. But given the criteria that it has to observe, 14 projects were approved this time around -- and nearly half of this number were by Japanese companies.
5. Besides these new projects, just two weeks ago the President of Mitsubishi Motors informed me of the company's plan to expand its production plant for eco-cars in Thailand. This particular project would entail 15 billion baht worth of investment, the creation of 3,000 employment opportunities, and a capacity to build over 200,000 eco-cars for the Thai market and for exports. This speaks, loud and clear, of Mitsubishi's confidence in Thailand's capacity and capability to serve as their production base.
6. Mitsubishi Motors is one example of many investment projects in Thailand belonging to our Japanese friends. Earlier this year, Toyota and Nissan have also announced the expansion of their production bases in Thailand. And this week, Sony also announced its increased investment here. These are all welcome moves, ones which indeed bode well for the future of the Thai economy.
7. In fact, during the course of the past year and a half that I have been prime minister, I have visited Japan twice for official occasions. I met two of your prime ministers already -- Prime Minister Aso and Prime Minister Hatoyama. I have not yet met your new prime minister but I am looking forward to doing so when I go to APEC meeting later in the year. Despite the change in government and its leading figures, one thing remains unaltered -- that is, that there continues to be great interest from the Japanese government, investors and tourists to do business with us, and to come and experience "Amazing Thailand". I fervently hope that this positive trend and attachment to Thailand and the Thai people forever continues -- government after government, generation after generation.
Thailand's Political situation
Ladies and Gentlemen,
8. As many of you -- especially those of you who live here -- can see, we Thai people are friendly, peace-loving and warm-hearted. What you have witnessed over this past several months in terms of protests was something that is uncharacteristic of our country. It was an aberration. So beyond the veil of unrest, prolonged demonstrations and violence, one may not see -- or forget to see -- the typical character of Thai people. Most importantly, one may not see that despite the political difficulties experienced by our country, Thailand has never closed its doors on its foreign friends. Foreign friends continue to be welcome, and their safety and well-being have been accorded top priority from the Government.
9. I do sincerely regret that many Japanese businesses have been affected by the unrest. In this regard, the Government is doing its best to make sure that those who have been affected are helped in the appropriate manner. A committee has promptly been set up for this purpose, headed by my Secretary-General, Mr. Korbsak Sabhavasu; and I hope those of you who were affected have already availed yourselves of this avenue.
10. In addition to some short-term relief measures that the Government has undertaken, it is also imperative that Thailand undergo a major reform in the long-run. And it will take quite some time before the wound from the recent events is healed. Thais need to learn to live in a society where people with different opinions can co-exist harmoniously, and one in which their views can freely be expressed as long as they do not break the law and do not infringe on other people's rights. This is an important step for us to transition to an even more mature democratic society.
11. It is now clear that the majority of Thai people want to move on, and it is incumbent on this Government to make sure that Thailand does move forward. With that in mind, I have laid out the five-point national reconciliation plan upon which various committees have been created and various initiatives are being crafted. Issues that will be addressed include: unity among Thai people to show reverence and respect for the Monarchy; national reform agenda that includes addressing the disparities and inequity; political reform, including constitutional amendments; media reform; and also embark upon a fact-finding mission on the incidents that transpired from the protests in April and May.
12. I am pleased to inform you that some of these committees have already started working on their tasks. The Chairs and members of all the committees have already been appointed. These committees are all independent and are free from the Government's interference.
13. Indeed, last month I wrote a short letter to the public, asking for their participation in moving Thailand forward for a better future. And earlier this month, the Government organised the "6 days 63 million opinions" campaign with a view to hearing opinions, concerns and grievances from the general public so that they can be addressed appropriately. This is the first time that any Thai government to date has undertaken such an exercise and fully allowed people from all walks of life and across the country to participate. My Government deeply cares for the people and is ready and willing to listen to all their voices. My Government wants the people to be part of this historic reconciliation process and to build our country together.
14. All in all, these initiatives that I have just laid out are only the beginning of the path towards national reconciliation and reform. I have no illusion that this path would be tough and difficult, but I am confident that the inherent strength and resilience of the Thais will once again lead us to success and a brighter future. And as I announced last month, by the 1st of January next year, we will have a comprehensive plan from which we all can work so that concrete implementations can be carried out.
Economic future of Thailand
Ladies and Gentlemen,
15. But moving beyond the issues of political events, the prospect of our economy also bears a significant weight when you make your decisions about businesses in Thailand.
16. In this regard, I am very pleased to inform you that despite the political unrest in Thailand, our economic performance has not been too adversely affected. In fact, the figures for our economic performance for the first quarter this year were impressive -- a rate of 12 percent growth year-on-year. And this is a much improved figure from the same quarter last year, which was a minus 7.1 percent. In terms of exports, the value of trade in the first five months of this year registered 75 billion USD -- an increase of around 35 percent from the same period last year. Our economic fundamentals, by and large, remain strong. Our foreign reserves still remain high, and we have managed to collect revenues that have exceeded our target by 200 billion baht.
17. So, one can safely say that Thailand's economy has definitely picked up after last year's economic recession; and it is in fact in pretty good shape. The projected growth rate this year could be around 5 to 6 percent; and I believe the 6 percent mark is achievable. In fact, the IMF has been even more optimistic than the Government and has recently revised upward its economic growth forecast for this year to be 7 percent.
18. Indeed, part of our recovery success is due to the fact that we have chosen appropriate, responsive, and effective measures in addressing the impact of the global economic crisis. Our two stimulus packages have paid off, and their results can be measured by numbers.
19. Be that as it may, the satisfactory numbers that we have seen in terms of growth in the GDP and export are no cause for our complacency. Thailand recognises full well that the world is changing at a fast pace and has become more competitive. It is all a matter of "survival of the fittest". So, if we stand still, we will be left behind. And this is not how I would like to see my country proceed.
20. So, we will move on; Thailand will move forward even more competitively. We will move ahead with our infrastructure projects and improve our logistics capabilities. We will pursue more research and development as well as upgrades in human resources development and the education system. And through the creative economy, we will be able to utilise our traditional wisdom and knowledge in order to add value to our products and diversify their ranges and markets. With all this, I am confident that Thailand and its workforce will be ready to embrace the changing global market and the nature of competition.
Ladies and Gentlemen,
21. We have always strives to improve the quality and the ease of doing business. Last year, the One-Start-One-Stop centre (OSOS) was open to serve as a focal point of contacts for businesses. Last week, the "Single Point" service was also launched. This additional service is created with the aim to complement -- not to compete with -- the existing OSOS. The Single Point will make documentation process for starting a business quicker and easier. Indeed, it will actually cut the time for this procedure from four days to 90 minutes. Moreover, we continue to move on in terms of providing you packages to attract investment. The Cabinet has recently approved the tax incentives for multinational companies in establishing Regional Operating Headquarters (ROH) in Thailand, by putting in a package which, I can say, is probably the most attractive in the region. Within this package, the ROHs will enjoy, for 15 years, a tax break for income earned outside Thailand and only 10% corporate income tax on income earned domestically. The expatriates of these ROHs will also benefit from the reduced personal income tax rate of 15% for eight years. These incentives, which have been effective since the beginning of this month, will revive confidence and attractiveness for foreign companies in Thailand.
22. Having said that, I take note one main business concern for several of you, which is the Map Ta Phut issue. Indeed, the uncertainty that transpired from the interpretation of law here has affected the attitude and confidence of some investors. In this regard, I do appreciate many of your who have shown understanding and patience. But now, the Map Ta Phut is well on the way to a resolution. A four-party committee -- a panel which I appointed to find solutions, chaired by former Prime Minister Anand Panyarachun -- has concluded its work and that work has been sent to the Environment Committee; and we believe that the issue of the approved list of activities that are considered to be harmful to the environment, and therefore required to go through the procedures as set up in the Constitution, could be finalised over the next two months. The review is going on. But at the same time all the pending cases are being resolved, and I thank many of you for the cooperation in voluntarily taking the time to go through the process of the EIA and HIA, and also the public hearings, which would mean that these cases would get released from the injunction of the Court over the next three or four months. And at the same time the OSOS Centre will continue to function as a focal point where queries and other problems can be submitted on this matter.
Ladies and Gentlemen,
23. The picture of investment potential in Thailand will not be complete without mentioning the Japan-Thailand Economic Partnership Agreement (JTEPA) and Thailand's connectivity to ASEAN and the sub-regions, such as the Mekong sub-region.
24. The Agreement -- the JTEPA -- since coming into force in November 2007, has greatly boosted trade and investment between Thailand and Japan in various areas. It has also enhanced cooperation between Thailand and Japan, for instance, in the promotion of the business environment and the promotion of trade and investment -- especially in regard to Thai cuisine; steel, automobile, and textile industries; as well as energy conservation. With the JTEPA, therefore, the potential for Japanese investors doing business in Thailand is always there, remained to be tapped into.
25. With the future realisation of the ASEAN Economic Community in less than five years, the potential of Thailand to serve as a "gateway to ASEAN" cannot be dismissed. Centrally located at the heart of ASEAN, Thailand is ready to serve as a logistics hub for ASEAN, and is ready to serve this single market of more than half a billion people with a combined GDP of over 1.5 trillion USD. As ASEAN Chair last year Thailand also led ASEAN to sign many investment agreements and free trade agreements. So, not only Thailand is a "gateway to ASEAN", one can say that it is a "gateway to ASEAN's Dialogues Partners" too. And when their markets are combined, the prospect for trade and investment is tremendous.
26. As for the Mekong sub-region, there are now various initiatives to promote the prosperity and environmental sustainability of this great sub-region, including the Mekong River Commission and the Mekong-Japan framework. Thailand can serve as a vital link for all of these initiatives both in terms of logistics and human resources development.
Closing
27. At the end of the day, Ladies and Gentlemen, I have to re-emphasise that moving Thailand forward and making it conducive to your business requires a confluence of efforts. As "Government," we will do our part to ensure the stability of the country and the ease of doing business in Thailand. And we will also count on your continued support, trust and confidence in our country. Your business relationship means a lot to us. But more importantly, we would not want to see the Japanese investors just as our business partners, but as our "real or true friends". To this end, we will build upon the existing trade and investment agreements -- like the JTEPA -- and we will build our cooperation upon the cordial ties of friendship that have existed between our countries for over five centuries, and we will make sure that such bonds will last for generations to come.
28. Thank you very much.