Bangkok Post – Finance minister calls for rejigging of domestic investment
Finance Minister Pichai Chunhavajira expects the trade war between the United States and China will intensify, regardless of who becomes the 47th US president.
Therefore, Thailand must step up restructuring domestic investment to increase the proportion of local content in an effort to reduce trade barriers.
“Regardless of who becomes the US president, challenges will persist as they are bound to prioritise the country’s interests. Previously, the US operated as a ‘one-way show’, but now other powers are rising to compete,” he said.
“Nevertheless, amid intensifying competition, if we can cope with such challenges carefully, we may benefit.”
According to Mr Pichai, given the anticipated escalating trade war, more foreign investors have recently chosen Thailand as a production base, as seen in the increased number of applications for Board of Investment support last year.
However, after investors apply for investment promotion, Thailand must work to increase local content in production in order to ensure that products qualify as being ‘made in Thailand’, he said. This is an approach that Thailand must adopt urgently in order to improve.
He added that when products manufactured in Thailand have a high proportion of local content, the ownership structure must also belong to the Thai people, rather than merely importing parts for assembly in the country.
Regarding the baht, Mr Pichai noted that whether it strengthens or weakens, Thailand must compare it with the currencies of competitors. If the baht weakens, it should weaken less than their currencies.
In the case of a stronger dollar, funds may flow back to the US, but this will not impact Thailand as much as in the past because Thailand now has sufficient liquidity and foreign reserves to manage this situation.
However, he emphasised that he would like to see export capabilities improve.
Given the baht’s prospects, he said that in the short term, the baht in certain periods may strengthen or weaken against competitors, but he encouraged looking at the long-term perspective, not just the next 3-6 months.
“The exchange rate is becoming increasingly important. Many countries that used to focus on inflation for economic management are now also paying attention to exchange rates, whether they are looking at it openly or discreetly, ” said Mr Pichai.
“However, we will not intervene excessively in the value of the baht, but each country is believed to have already managed its own currency.”
Regarding the government’s planned stimulus measures, Mr Pichai said there are short-, medium- and long-term measures.
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