OBG talks to Udom Wongviwatchai, Secretary-General, Thailand Board of Investment (BOI)

Interview: Udom Wongviwatchai

What are some of the BOI’s current priorities?

UDOM WONGVIWATCHAI: Thailand is committed to overcoming the “middle income trap” and is striving to raise standards of living by transitioning into a knowledge-based economy. It is vital that the nation continuously reinvents itself, leveraging unique strengths to upgrade from an economy driven by low labour costs to one based on innovation and sustainable development. The BOI, in turn, is shifting its investment promotion priorities towards skills and technology development, innovation, and research and development (R&D), the driving forces for future economic growth.

Moving forward, the BOI is looking to offer incentives based on the importance of the activity, moving from sectoral to merit-based incentive schemes that evaluate a project’s commitment to R&D and environmental protection. That said, one sector that is set to be prioritised when it comes to ensuring greater value-added production is agriculture. This focus, with attention paid to enhancing the sector’s export competitiveness, also complements the national goals of food security and cleaner energy.

Special privileges are being offered towards investments in energy conservation and alternative energy, as well as towards the production of eco-friendly materials and products such as medical food and natural and synthetic fibres. Another new mandate under the BOI, which should help strengthen the competiveness of Thai companies, is the promotion of outbound investment, especially into neighbouring countries.

What is being done to encourage and build cross-border supply chains and industrial clusters with neighbouring ASEAN countries?

UDOM: The ASEAN Economic Community (AEC) represents a collective trading block of 600m people with growing purchasing power. As the second-largest economy in ASEAN, Thailand is well positioned to take advantage of the new trading regulations that will create freer movement of goods and services. The AEC should also enable Thailand to leverage the strength of the regional block in its bilateral trade negotiations with other markets. Regional connectivity is a top priority, taking centre stage as the formation of the AEC in 2015 draws nearer. Critical to enhanced connectivity will be the strengthening of transportation links to facilitate the movement of goods and reduce logistics costs in Thailand and the Mekong sub-region. The government will play the leading role in investing in strategic projects, including roadways, which will be developed as public-private partnerships.

Linking the country’s roads to other means of transport will be equally important for improving logistics and lowering costs, and the development of the rail network is critical in this regard. A number of missing links will be the first to be constructed, including the 6-km gap in railroads connecting Thailand and Cambodia which will ultimately form a part of the Singapore-Kunming railway. Another important linkage will connect Thailand to the Dawei port in Myanmar.

Reforming rules and regulations on inter-country trade and investment will help facilitate cross-border transport, reducing bureaucratic costs and speeding up processes. Under the Cross Border Transport Agreement within the Greater Mekong Sub-region framework, there is an exchange of traffic rights between countries in the Mekong sub-region.

In addition, a single-stop inspection will be implemented to reduce the time it currently takes for goods to cross borders. Trials are under way along some of the main economic corridors.

In terms of supply chain links in the sub-region, a key priority for Thailand is connectivity with Myanmar, including the Dawei industrial zone and deepsea port, the Kanchanaburi Special Economic Zone, and the East-West Economic Corridor. Fostering environmental cooperation with Mekong countries and ensuring efficient use of natural resources is also a goal, and Thailand provides support by sharing expertise from academic institutions and public organisations with our neighbours.