Nov 22, 2012

Thailand - Asean offers firms chance to expand

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Business leaders are urging Thai companies to have a presence in other Asean countries, as the region will become a fast-growing economic zone.

Anon Sirisaengtaksin, the chief executive of PTT Global Chemical, told a Bangkok seminar yesterday on the opportunities of Thai businesses in Asean and Asia that Asean alone will be able to grow continuously by 5% annually over the next four decades. If there are no major hiccups, Asean would become the world's fifth-largest economy after the US, China, Europe and India.

"Asean has the advantages of a plentiful workforce, steady growth in the middle-income population and urbanisation expanding consumption and demand," said Mr Anon, adding that the sectors that will benefit most from the launch of the Asean Economic Community (AEC) are construction, retail and finance.

Kobsak Pootrakool, an executive vice-president of Bangkok Bank, said the AEC will resurrect the region after decades of crisis and political problems.

Recent official visits by the leaders of the US and China have highlighted the importance of the region, while investors are being drawn to Asia and Asean due the problems in the Western economies.

Mr Kobsak said Thailand is stronger than all the other regional countries except Singapore and Malaysia, and he urged businesses to expand in the region.

"We need to go out [to invest] now," he said.

Mr Kobsak said the cost of operating in Thailand is higher than in many countries in the region _ for example, two times higher than in Indonesia, three times higher than in Vietnam and 4-5 times higher than in Cambodia. Any investments in these countries would lower the costs of Thai operators.

Manop Sangiambut, a senior executive vice-president of Siam Commercial Bank, said the government of China, the largest economy driving Asian growth, will make great efforts to cool its economic growth.

He predicted it would be successful, with hardly a chance of a "hard landing".

If China can manage its economy at a controllable level, tension over the impact of slower growth will be limited.

"China's growth should be steady at 6-7% annually in the years ahead compared with the past decade when it had growth of 9-10%," said Mr Manop.

However, he said the policies of China's new leader should be monitored closely, as it is not certain he will come up with aggressive stimulus packages like before.

Mr Manop forecast's Chinese economic growth of 7.5% at most next year.




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