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NEWS UPDATES 12 July 2010

Foreign businessmen push reforms

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Short-term reforms of the financial and telecom sectors and harmonising government economic policies are keys to maintaining the country's attractiveness to foreign investors, says the Joint Foreign Chamber of Commerce in Thailand. ‘‘‘Thailand has been very successful in opening up its manufacturing sector, but the service sector underperforms,’’ NANDOR VON DER LUEHE Chairman, Joint Foreign Chamber of Commerce, told the Bangkok Post.

Chairman Nandor von der Luehe said both local and foreign investors experienced difficulties doing business in the country.

The reforms should be made in conjunction with national reconciliation in order to properly address critical issues of political division and inequality within society, he said. "Inequality in Thailand even exists in the business and financial sectors," he said, pointing out that large companies enjoyed greater access to bank loans at lower interest than did small businesses and individual borrowers.

"There is a wide range of people and businesses looking for financial support. The banking and financial systems need to be overhauled."

In the short term, the government should look at structural reform in various sectors to improve services, such as auctioning off 3G mobile broadband licences in the telecom sector. Amendment of the Foreign Business Act should also be speeded up. "Thailand has been very successful in opening up its manufacturing sector, but the service sector underperforms. The service sector is a new engine that can give Thailand a competitive edge," said Mr von der Luehe.

"Right now, Thailand is at a very difficult stage. It's very important to gradually open up financial markets and the service sector."

Thailand ranked 12th out of 183 countries in the World Bank's most recent Ease of Doing Business survey, but Mr. von der Luehe said some areas still needed major improvement. "Different measures come out of different ministries without co-ordination," said Mr. von der Luehe. "We believe the BoI can play a superior role as a 'super investment body' in harmonising government policies, so that the Ease of Doing Business [ranking] will improve." Meanwhile, regional competition to attract foreign investment is intensifying. Malaysia, for example, now offers foreign retirees moving to the country a long-term visa that allows them to work 20 hours a week and own land, said Mr von der Luehe.

"Through this very interesting scheme, a neighbouring country can attract not only money, but also intelligence," he noted. "Economically, Thailand is very strong and attractive, but you cannot always rely on that. Thailand should look not only inward, but also outward." Mr. von der Luehe also expressed concern about national reconciliation. "Reconciliation is something we worry about. If any party does not take part, you cannot have reconciliation," he said.

"In a country that has a division between two big groups, if they don't talk to each other, how can the gap be overcome? Ideally, they should start talking to each other again and find ways to live together."

Meanwhile, the government should state clearly to the public why the state of emergency is continuing, as it definitely is hurting the tourism sector. "Safety and stability within the country is the priority, but we don't have enough information or reasons why the government keeps the state of emergency in place if things are going back to normal," he said.

The JFCCT is also waiting for a final resolution from the government of environmental and legal issues surrounding the Map Ta Phut issue, he added.

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