bangkok post f..--a atnendtnent · mr chainarong said the govemment was committed to easing foreign...

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Bangkok Post 12 F..--A atnendtnent controversy hots up Government: Changes will not be retroactive PHUSADEE ARUNMAS NOP TEPHAVAL .The government has insisted the planned amendment to the Foreign Business Act (FBA) ofl999 will not be retroactive, mean- ing it will not affect foreign businesses that have already invested in Thailand. It also said it was committed to easing restrictions on foreign investment in Thai businesses on the conditions that local businesses were ready to compete and Thai authorities better prepared to supervise. Chainarong Chochai, deputy direc- tor-general of the Business Development Department. told a public hearing yester- day about the proposed amendmenis to the controversial changes to the FBA, insisting they would abide by international stand- ards and the proposed amendments were aimed at bringing about an equilibrium between Thai and foreign investment. The changes wiJl also comply with the govern- ment's investment promotion policies. The Commerce Ministry called the public hearing, and representatives from the Joint Foreign Chambers of Commerce in Thailand (JFCCT), the Federation of Thai Industries (FT!), the Thai Chamber of Commerce (TCC) and the Thai Bank- ers' Association attended. It was the second hearing after one held with 22 relevant state agencies. A final hearing is slated for Friday with business operators and after which a working panel governed by the Members of foreign chambers of commerce mull the amendment. THANARAK KHUNTON department will summarise the hearings and hammer out a first draft. The first draft is e>''Pected next month . "Foreign investors are concerned the government will impose new conditions in the FBA..that would make what some businesses are doing illegal." said Mr Chainarong. "We can assure you that any changes wiJl not harm existing businesses, and the government will not do anything that disrupts existing businesses. It would be unfair if we added conditions now, par- ticularly any concerning the definition of a foreigner." He said the hearing focused mainly on the definition of "foreign" under the planned amendments, in which voting rights are accounted for in addition to proportion of shareholdings, capital and management control. There remains a difference of opinion between the TCC, HI and JFCCT, as Thai firms see it as imperative to include voting rights, but the foreign chambers argue com- petitiveness should be considered instead. Mr Chainarong said the govemment was committed to easing foreign quaUfications and penalties in the FBA. The current Act stipulates foreign businesses will be subject to Ucenceremoval even if they conunit petty offences such as not reporting .changes of office location or failing to inform authori- ties of annual financial statements. JFCCT vice-chairman Marc Spiegel said his group's stance remained unchanged, and it would not support any changes to the FBA that made it more restrictive or protectionist. In a public statement , the JFCCT said any changes to the FBA must help to open up the service sector. Any redefinition that would only apply to liberalised sectors and divestiture must be avoided. "Such moves to tighten restrictions on equity and investment would misalign Thailand with Asean and send a message that Thailand was not interested in wel- coming foreign investment," it said. The European Association for Business . and Commerce in Thailand (EABC) also I released a statement noting European investors were worried about proposed changes to foreign shareholding rules in the FBA. "The use of preferential voting shares is legal. and by prohibiting such an arrange- ment it will send the wrong message to European investors;' said EABC president Rolf-Dieter Daniel. "While other Asean countries are open- ing up their service sectors, Thailand seems . to be going the other way, which also sends a negative signal to potential investors." He said European investors were sur- prised that under the World Trade Organ- ization framework, no consultation with General Agreement on Trade in Services trading partners took place. This could harm ongoing negotiations for a free trade agreement between Thailand and the BU.

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  • Bangkok Post 12

    F..--A atnendtnent

    controversy hots up

    Government: Changes

    will not be retroactive

    PHUSADEE ARUNMAS

    NOP TEPHAVAL

    . The government has insisted the planned amendment to the Foreign Business Act (FBA) ofl999 will not be retroactive, meaning it will not affect foreign businesses that have already invested in Thailand.

    It also said it was committed to easing restrictions on foreign investment in Thai businesses on the conditions that local businesses were ready to compete and Thai authorities better prepared to supervise.

    Chainarong Chochai, deputy director-general of the Business Development

    Department. told a public hearing yesterday about the proposed amendmenis to the controversial changes to the FBA, insisting they would abide by international standards and the proposed amendments were aimed at bringing about an equilibrium between Thai and foreign investment. The changes wiJl also comply with the government's investment promotion policies.

    The Commerce Ministry called the public hearing, and representatives from the Joint Foreign Chambers of Commerce in Thailand (JFCCT), the Federation of Thai Industries (FT!), the Thai Chamber of Commerce (TCC) and the Thai Bankers' Association attended. It was the second hearing after one held with 22 relevant state agencies.

    A final hearing is slated for Friday with business operators and acad~mics, after which a working panel governed by the

    Members of foreign chambers of commerce mull the amendment.THANARAK KHUNTON

    department will summarise the hearings and hammer out a first draft. The first draft is e>''Pected next month.

    "Foreign investors are concerned the government will impose new conditions in the FBA..that would make what some businesses are doing illegal." said Mr

    Chainarong. "We can assure you that any changes wiJl not harm existing businesses, and the government will not do anything that disrupts existing businesses. It would be unfair if we added conditions now, particularly any concerning the definition of a foreigner."

    He said the hearing focused mainly on the definition of "foreign" under the planned amendments, in which voting rights are accounted for in addition to proportion of shareholdings, capital and management control.

    There remains a difference of opinion between the TCC, HI and JFCCT, as Thai firms see it as imperative to include voting rights, but the foreign chambers argue competitiveness should be considered instead.

    Mr Chainarong said the govemment was committed to easing foreign quaUfications and penalties in the FBA. The current Act

    stipulates foreign businesses will be subject to Ucenceremoval even if they conunit petty offences such as not reporting .changes of office location or failing to inform authorities of annual financial statements.

    JFCCT vice-chairman Marc Spiegel said his group's stance remained unchanged, and it would not support any changes to the FBA that made it more restrictive or protectionist.

    In a public statement, the JFCCT said any changes to the FBA must help to open up the service sector. Any redefinition that would only apply to liberalised sectors and divestiture must be avoided.

    "Such moves to tighten restrictions on equity and investment would misalign Thailand with Asean and send a message that Thailand was not interested in welcoming foreign investment," it said.

    The European Association for Business

    . and Commerce in Thailand (EABC) also I released a statement noting European

    investors were worried about proposed changes to foreign shareholding rules in the FBA.

    "The use of preferential voting shares is legal. and by prohibiting such an arrangement it will send the wrong message to European investors;' said EABC president Rolf-Dieter Daniel.

    "While other Asean countries are opening up their service sectors, Thailand seems . to be going the other way, which also sends a negative signal to potential investors."

    He said European investors were sur

    prised that under the World Trade Organ

    ization framework, no consultation with

    General Agreement on Trade in Services

    trading partners took place. This could

    harm ongoing negotiations for a free trade

    agreement between Thailand and the BU.

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  • 'Paving the way to be a regional trade hub' ERICH PARPART THE NATION

    MR Pridiyathorn Devakula, the deputy prime minister In charge of the economy, said yesterday the new· ' national agenda or the new way tor IhaHand to . make a tivlng is for It to become amal or ''trading nation" in the region. . .. . .. ..

    . I he current government has to lay down all the foundations necessary for the transition for the new government to follow, he said.

    Industry had already led the way for the county to beccme a trading nation within Aseao by expanding their production bases to neighbouring countries due to rising labour costs here. . Thailandis following asimitar path as Japan during its transition to atrading natien

    . forthewddd. , The military government

    ~RIDIYATHORN would supp:ort this apparent " ; . transition by amending rules

    and regulations to betterattract foreign companfes to open their international trading headqUarters and manage their regional trading o-perations here. '

    "If we can'upgrade all ofour champion products, we will become one of the world's tradingnations and this is anew opportunity, a new way forus to. make aliving," he said: '

    The government will ensure theBoard of . Investment can support local companies outside the country. His office is also working with the Finance Ministry to amend regulations to match those of Singapore and tear do'wn the barriers blockingtne' country's transition to aregional traoing hub. .

    The digital economy concept is meant to support this transition along with the development of other economic engines, which wilt not beneglected ' throughoot this transformation. - . '

    His office is waiting for Parliament to enact the new laws and regulations before the digital.and tradifignation plans can be put into full force,headaeo.

    • BOT MAY RESORTTO STIMULUS 1B

  • THE 2014 ifF;

    •Imu

    CENTRAL BANK KEEPING A WARY EYE ON SLUGGISH RECOVERY

    THE NATION icy interest rate at 2 per cent. began, the government planned to Easing monetary measures .Lcceierate short-term disburse

    THE BANK OF THAILAND could remainappropriate for the econo ment. If the fiscal measures could turn on the stimulus tap, as risks my ifit continues decelerating, and ' not stimulate the economy, moneare rising that the economy might it is possible forthe tary stimulus might·need to step in, not reach 1.5':per~cent gro\\rth this central bank to Prasarn said. year, and that exports might even unleash additional However, he noted, monetary contract. . monetary stimu measures were not a magic pill for

    "We are watching closely. If eco lus to prop up the all problems, so it was more proper nomIc growth contInues at a low economy, Prasarn to employ fiscal stimulus. level, it may be necessary for addi said. In the past three to four years, tIOnal monetary pobcy," BO 1. Fiscal policy is although Thailand has confronted Governor Prasarn 'l'ralratvorakul the key issue the political problems or external saId yesterday, . . BOT has been PRASARN impacts, it was a proper direction for

    In Its most recent meeting, the considering in increasing monetary accommodacentral bank's Monetary . Policy deciding whether to adjust mone tion, as that helped absorb shocks Committee (MPC) expressed eon tary policy and, recently, state budg from external factors. cern over economic expansion, et disbursement has been slower Since the second quarter oflast which remained weaker than than expected. year, the MPC has slashed the expected. It decided to leave the pol- In late October, after fiscal 2015 . policy rate three times, from 2.75

    per cent to 2.00 per cent. u more slowly than expected mainIn its surveys of business opera ,y ecause 0 rops In t e pnces 0

    tors, the central bank has rarely . rubber and nce, and structural· heard about impacts from the rate problems involving electronics cuts, which generally benefited goods. ThIS year may see exports

    business operators. Only the labour shnnk.

    shortage and state assistance prob WIth Europe's economic slow

    lems have been rep·orted. down and political conflicts with

    The economy, in the pastthree to Russia, foreign-tourist arrivals are four years, has faced uncertainties expected to cO-me in at 25 million in growth, from both internal and this year, against the target of 27 external factors. In the first half of million. ..-4

    . this year, Thailand saw political This will leave Thailand depend- : impacts drag its economy into neg ent on domestic drivers, including

    ative-growth territory. The econo investment and consumption, for

    my started recovering in the second growth .

    quarter. . However, the government istry

    The central bank forecasts the ing to accelerate investment this fiseconomy expanding in the second cal year and rush spending of the

    halfofthis year, but it is expected to carry-over budget. It is also speed

    remain at risk of missing the 2014 ing up approval by the Board of

    gro\\rth target of 1.5 per cent. Investment ofprojects to help boost

    Exports have also been picking the economy.

  • BANGKOK NOVEMBER 2014POST

    FAO backs farm input subsidies

    ARIANE KUPFERMAN-SUTTHAVONG

    Investing in crop insurance and input subsidies, not price intervention schemes, is the way to support Thai farmers, the United Nations Food and Agriculture Organisation (FAa) said.

    Hiroyuki Konuma, FAa Assistant pirettor-General and Regiona.l Repre~entative for Asia and the Pacific, said input subsidies such as providing rice seeds and other agriculrural aids will encourage farmers to grc'...': mere fcod at 1c"."",er costs, \,,!pile crop insurance will protect them in case natural disasters destroy their produce.

    Mr Konuma told a UN Model Conferenceon food loss and food waste in Southeast Asia that this was a "much healthier way" of helpirig farmers.

    His comments stand in contrast to the attempts of some governments in the region to introduce price intervention schemes. , Thailand introduced a controver

    sial rice-pledging scheme under the last government.

    Mr Konwna said support for the agricultural sector will prove increasingly

    important as food security is not guaranteed and faces imminent losses.

    Intensified urbanisation processes along with population increases have academics fearing a shortage of farmers - as the current generation ages - and of agricultural produce. With the calorie intake per person per daygrowing every year, Mr Konuma is pessimistic about the future.

    By the year 2050, a 60% increase in global food production will be needed - rising to 77% in developing countries - to keep supplies high, he said.

    , "If we are to reduce poverty and chronic hunger, the best solution is to support smail-scale agriculture and family-farm ing," Mr Konwna said.

    The FAO encourages governments (0 take a closer look at the vital role small farmers play in the region's food seCluity.

    Research and innovation will prove equally necessary to boost crop production, Mr Konuma told his audience including agriculture students from Kasetsart, Srinakarinwirot and Japan's Meiji universities.

    The younger generation of researchers must promote efficient farming methods

    and technology and address the issue of food waste and food loss, he said.

    Around 30% of world food production is either' lost or wasted annually, further reducing food supplies for the larger part of the population. The issue offood waste, which reflects economic inequalities, must be urgently tackled, Mr Konuma said.

    Supermarkets are huge food wasters because competition between fums to seil the freshest produce and expiry date rules mean they throw out edible food.

    The FAO has been working to make manufacrurers and retailers aware.

    The organisation has also' been working with the Ministry of Education on the Save Food campaign in primary schools and on integrating the topic into lessons next semester.

    Habit changes can go a long way. Following the Save Food drive, a test to measure food waste was carried ,out in schools and food waste amounts were cut by a few kilogranunes thanks to attention brought to the issue, Mr Konuma said.

    "Srudents stopped putting more on their plate than they could ea!," he said.

  • BANGKOK

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    Labour working in a warehouse where sacks of rice are piled up to hide empty space inside. The military junta wants the next charter to stop populist programmes in the wake of.extensive corruption and losses from the rice-pledging scheme. PONGPAT WONGYALA

  • BANGKOK NOVEMBER 2014POST

    APEC SUMMiT

    China wins no

    for trade zone

    Leaders launch

    two-year study

    HUAIROU, CHINA: Leaders of Asia-Pacific economies agreed yesterday to begin work toward possible adoption of a Chinesebacked free-trade pact, giving Beijing a victory in its push for a bigger role in managing global commerce.

    In a joint statement after a t\'Vo-day . Asia-Pacific Economic Co-operation summit, the leaders including US President Barack 0 bama and Russia's Vladimir Putin agreed to take a first step bylaunching a two-year study of the initiative ..

    "This is a historic step in the direction of an Asia-Pacific free trade area," said Chinese President Xi Jinping at a news conference.

    China is promoting the proposed FreeTrade Area of the Asia Pacific despite US pressure to wrap up other trade negotiiltions. Analysts see it as a response to a US-led initiative, the Trans-Pacific Partnership, which includes 12 countries but excludes China.

    Beijing has launched a series of trad.e and finance initiatives in pursuit of a bigger role in US-dominated economic and security organisations to reflect Beijing's status as the world's second-biggest economy.

    Apec was the first major international gathering in China since Xi took power and gave Beijing a platform to lobby for a bigger leadership role.

    On the eve of the summit, Beijing announced a free-trade agreement with South Korea. Also on Monday, regulators approved a plan to open Chinese stock markets lvider to foreign investors by linking exchanges in Hong Kong and Shanghai. That followed the weekend' announcement of a $40 billion Chinese:'· financed fund to improve trade links between Asian economies.

    Earlier this year, Beijing launched a regional development bank lvith 20 other governments. In May, Xi called for a new Asian structure for security co-operation based on a group that includes Russia and Iran but excludes the United States.

    China says its motives are benign, but its growing economic weight as the top trading partner for most of its neighbors from South Korea to Australia could erode US influence.

    The Asia-Pacific trade pact was first proposed by an Apec business panel but China took the lead in promoting it. It marks the first time Beijing has played a leading role in a multinational trade agreement.

    "(The US-led) TPP is being used to push aside China and to weaken China's economic core status," said Wu Xinbo, director of the Center for American Studies at Fudan University in Shanghai. "Promoting its own initiative will give China a bigger right to speak in the Asia-Pacific - to have a new status:'

    Obama said Monday the United States "welcomes the rise of a prosperous, peaceful and stable China:' Still, American officials chafe at Beijing's insistence

    on promoting 'the Free-Trade Area of the Asia Pacific.

    US trade officials say the two proposals are not competitors. But they want Beijing to VVlap up aUS-Chi..--:ese !r.1.'estment treaty and a separate agreement to lower barriers to trade in information technology.

    Washingron and some other governments argued the Chinese proposal would be a distraction at Apec but Beijing made it the centrepiece of the meeting.

    Few details of the US-led proposal have been released but promoters say it would reduce or eliminate tariffs on mOst goods amorigthe member countries. That might hW't China by encouraging member coUntries tei trade more with each other.

    Leaders of the nations involved in TPP talks, including the United States, Mexico, Japan and Australia, met on Monday and issued a statement saying they were making progress. The talks have been delayed repeatedly by disputes over the sweeping nature of its market-opening proposals.

    "We have instructed our ministers and negotiators to make concluding this agreement a top priority," the statement said.

    The initiative promoted by Beijing is less ambitious and is aimed at reducing conflict among overlapping trade agreements between pairs of AsiaPacific economies.

    "It is a logical response to being excluded from the TPP," said Li Wei, an economist at the Cheung Kong Graduate School of Busine'ss in Beijing. "If the US doesn't want Chilli! to join the TPP, then China can form its own trade groups:' AP

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