Thailand needs to prepare for Asean liberalisation

Oct. 19–The International Institute for Trade and Development has urged Thailand to prepare for its role as a major logistics hub as Asean economic integration is planned for 2015.

Executive director Weerasak Kowsurat said both public and private sectors should get ready for the Asean Free Trade Area’s (Afta) full liberalisation. Government agencies should have experts on Afta to help them cope with changes.

“We should find the ways to benefit from the huge population of 570 million in Asean. Some 270 million Indonesians speak Bahasa, but how many Thais can speak this language or know how to benefit from Afta?” he asked.

Last year, Thailand used only 29% of its Afta privileges while other countries exercised up to 60%. For example, exports to Indonesia can be facilitated with certification, but many Thai companies either do not know where to apply for it, or do not want to change their procedure and choose to pay tariffs instead.

“When the full liberalisation of Afta takes place, Thailand will benefit the most as a logistics hub due to our location in the region,” Mr Weerasak said.

He noted the Thailand-China free trade agreement is important because of China’s rapid growth and the government and businesses should have experts on China. Although China has high business potential, it poses many risks because its economy is closed.

“If China devalues its yuan, the global economy will be shaken immediately. Therefore, any action with China must be carefully considered, especially when it comes to trade liberalisation,” said Mr Weerasak.

Investing in Chinese hotels is attractive because of the rapid increase in the number of international tourists. At the same time, average annual domestic tourism is estimated to have reached 1.61 billion trips with revenue of 777 billion yuan.

Most tourists prefer to stay in big hotels with a minimum of 500 rooms. This kind of hotels has an average occupancy rate of 65%, while the occupancy rate of hotels with 300-499 rooms is about 64%.

The Chinese government has supported Chinese-foreign joint ventures, particularly for huge investments.

The institute recently conducted a study on Afta and its benefits for Thai people. A publication showing research results began distribution in July and is still available in some coffee shops. –Chadamas Chinmaneevong, Bangkok Post, Thailand