ASEAN KEY DESTINATIONS
Thai minister pushes investment strategy
Mr. Korn, speaking after an address before the British Chamber of Commerce, said it is inevitable that the baht would continue to appreciate against the US dollar considering global economic trends.
"We have wasted enough time already discussing ways to address the problem [of a stronger baht]," he said.
"But it's a problem worldwide, that of dollar depreciation. Rather than spend time thinking about how to weaken our currency, better to consider what benefits we can gain from a strong baht."
The baht, which traded yesterday at 29.63/65 to the US dollar, has appreciated by over 11 percent against the greenback this year as a result of capital inflows and a steady trade surplus. Most Asian currencies have posted gains over the dollar as capital has poured into the region in search of higher returns relative to the sluggish US and European economies.
Mr. Korn said Thailand must invest trillions of baht over the next decade to help strengthen the country's water management, rail, telecommunications and education systems.
The country should take advantage of the strong baht to move forward with investments requiring high import content due to lower costs in local terms.
At the same time, higher imports would help increase capital outflows and ease pressure on the baht to appreciate.
Mr. Korn said national carrier Thai Airways, for instance, has a clear need to procure new aircraft to modernize its fleet and improve passenger service.
Share prices for the airline have rocketed from as low as 15 baht per share late last year to over 45 baht now, in part due to the fact that the stronger baht has helped reduce investment costs in local terms, he said.
Mr. Korn acknowledged that public investment has been low and slow to date, due to inefficiencies in the system.
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