Tuesday, August 21, 2012

Infrastructure development ‘priority’

The government must rapidly develop the country’s infrastructure to encourage more private investment, National Strategic Committee for Reconstruction and Future Development chairman Virabongsa Ramangkura said on Tuesday.

In his speech on “Global Trade Change: How can Thailand step forward” at a seminar to mark the 92nd aniversary of the Ministry of Commerce, Mr Virabongsa said both the Ministry of Commerce and the Bank of Thailand are duty-bound to support Thais making investments overseas.

When compared to the world, Thailand is only a tiny economy that has to rely on global international trade to mobilise its economic expansion, he said.

Since the problems related to the eurozone debt crisis and economic recession are unlikely to be settled in a short period, the government must focus on its infrastructure development megaprojects, he said.

The infrastructure development investment plans would allow the private sector to come up with investment plans in line with the infrastructure development projects, said Mr Virabongsa.

The project to link transportation networks between the  Laem Chabang and Map Ta Phut deep seaports on the Eastern Seaboard and the Dawei deep seaport in Burma would  substantially boost trade volume on the country’s west coast, from the current 30 per cent of the total, he said.

The eastern Gulf coast accounted for 70 per cent of the total.

If the deep sea ports connection plan succeeds, it would change trading face of the country over the next 20-30 years because Thailand will become a gateway to China and other member countries of Asean, he added.

On the question of rising inflation, Mr Virabongsa said the government should allow product prices to increase in line with the market mechanism.

“A correct way to settle the high cost of living problem is to increase the people’s income, but the central bank disagrees with this and focuses more on keeping inflation at a level suitable for boosting the economy.

"There is no problem about such a difference of opinion and I and the BoT can still work side by side to find the best solution in overseeing the economy,” the renowned economist said.

Supachai Panitchpakdi, secretary general of the United Nations Conference on Trade and Development (Unctad), said he expected that  global economic growth next year would be below 2.5 per cent.

Also speaking at the ministry's seminar, he said the fragile US economy and the financial problems in Europe would trim the global economic expansion.

Non-tariff trade barriers being imposed by several countries were also a major negative factor that could derail  global economic recovery.

Mr Supachai said the government should hold talks with its trade partners, especially those in Asean, to find ways to minimise the impact and establish a strong regional economic community.