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THAI LAND OF INVESTMENT

THAI LAND OF INVESTMENT. Mr. Korn Dabharansri Deputy Prime Minister India August 2003. Relationship Between India and Thailand. Indian Business That Have Come to Thailand Have Prospered Pulp and Paper Jewelry Hotels Software

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THAI LAND OF INVESTMENT

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  1. THAILAND OF INVESTMENT Mr. Korn Dabharansri Deputy Prime Minister India August 2003

  2. Relationship Between India and Thailand • Indian Business That Have Come to Thailand Have Prospered • Pulp and Paper • Jewelry • Hotels • Software • Dipak Jain and Narayana Murthy Named to Thai Prime Minister’s Eminent Person’s Advisory Board

  3. Free Trade Agreement • Process Began a Year Ago When H.E. Thaksin Shinawatra Visited India • Work Has Continued and I am Meeting with Indian Government to Finalize Details • FTA is Expected to be Signed When H.E. Atal Behari Vajpayee Pays State Visit to Thailand in October

  4. FTA– Early Harvest • FTA Will Begin With So-Called “Early Harvest” of Around 100 Items • Tariffs on these items will be gradually reduced • Goal is zero percent tariff by 2010 • Remaining Items to Be Phased In, Following Negotiations

  5. Benefits of FTA • Bi-lateral Trade in 2002 was Just Over US$1 billion. • +32% from 2001 • Our Goal is to Double bi-lateral Trade by 2004

  6. Thai Economic Overview • 2002 • Despite Global Uncertainty, Thai GDP Expanded By 5.2% in 2002 • 2003 • Early projections for 2003 were 3.5-4.5%, due to concerns about impact of war in Iraq • Ministry of Finance projects 5.1% growth this year • Many in government expect growth to be 5.5-6%, both this year and next

  7. All Segments of Economy Growing • Domestic • Capacity utilization at 70% • Exports – Our Traditional Engine of Growth • Turnaround started in 2nd half of last year • +18% in 2003 (Jan-June) • Full-year projection raised to US$76.8 billion, a 10.8% increase from last year, and a new record for the country

  8. Strong Across The Board • International Reserves Remain Strong • Baht Has Strengthened and is Trading in Narrow Band • Inflation Remains Low • Clearly, We Are at The Start of a New Growth Cycle

  9. Foreign Investment • Investment Figures Confirm Economic Strength, as FDI is a Leading Economic Indicator • Target for 2003 is 200 Billion Baht • First 6 months of the year, we attracted 166 billion baht (+55%) • Clearly, then, we will surpass full-year projection

  10. Importance to Thailand of Indian Investment • BOI Figures (1993-2003) • India Ranks #14, With 34 Billion Baht of Investment, Ahead of: • Australia • Switzerland • Belgium • Italy • Over That Period, Indian Investors Have Created More Than 12,000 Jobs for Thais

  11. Restructuring the Thai Economy • In the Past, Exports Were Our Traditional Engine of Growth • While that strategy worked very well, during 80s, it left is vulnerable to external events • To Protect Our Economy From External Shocks, We Have Placed Great Emphasis on Strengthening Economy at Grass Roots Level • Retraining of rural poor • Improving financing options

  12. A Rising Tide Lifts All Boats • We Have Offered Hope to Those That Had None • Revolving Fund • OTOP • People’s Bank • By Enabling Villagers to Utilize ‘Local Knowledge’ • Increase household income • Stimulate domestic consumption • Increase economic activity

  13. Supporting SMEs • Established an SME Bank to Ensure Promising Enterprises Have Access to Necessary Capital • Lowered Corporate Income Tax on SMEs from 30% to 20% • Offered Additional Tax Incentives for Companies to List on Market for Alternative Investments (MAI)

  14. Finance Sector Reform • To Solve Problem of NPLs from 1997 Crisis, We Transferred NPLS to State-Run Asset Management Corporation (TAMC) • More Than 500 Million Baht of Debt (70%) Has Been Resolved • The balance should be cleared by the end of this year • As a Result, Banks Are Once Again Lending • Profits Are Up 140% in First Half

  15. Bureaucratic reform • Government Undertook First Revision of Thai Civil Service in More Than a Century • New Ministries Created • Departments Combined to Improve Efficiency • Staff Retrained to Function in “New Bureaucracy”

  16. Open Door Policy • While Strengthening Domestic Economy and Reforming our Finance Sector, We are Also Looking to Open Markets • FTA With China • Working Towards FTAs with Australia, Bahrain and USA • Our Objectives are to Provide Thai Manufactured Products with Maximum Opportunities

  17. AFTA • Thailand Has Also Been One of the Driving Forces in ASEAN and the ASEAN Free Trade Area (AFTA) • Progressive implementation • Once Implemented, AFTA Presents a Unified Market of More than 500 Million

  18. Privatization • As You Probably Aware, Thailand is Selling Stakes in Many State-Owned Enterprises • PTT – Listed on Stock Exchange (SET) and is one of the largest capitalized firms • Soon to come are privatization of • Airport Authority • Port Authority • Telephone Organization • Tobacco Monopoly

  19. Thailand: The Heart of Asia

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