Speech by H.E. Mr. Abhisit Vejjajiva, Prime Minister of the Kingdom of Thailand “Special Investors Event for The Stock Exchange of Thailand”, 24 September 2010: 10.00-11.00 hrs., New York Palace Hotel.
Speech by H.E. Mr. Abhisit Vejjajiva, Prime Minister of the Kingdom of Thailand “Special Investors Event for The Stock Exchange of Thailand”, 24 September 2010: 10.00-11.00 hrs., New York Palace Hotel.Document Transcript
Speech by H.E. Mr. Abhisit Vejjajiva, Prime Minister of the Kingdom of Thailand Special
Investors Event for The Stock Exchange of Thailand , 24 September 2010: 10.00-11.00 hrs., New
York Palace Hotel. (24/9/2010)
Speech by H.E. Mr. Abhisit Vejjajiva, Prime Minister of the Kingdom of Thailand Special Investors
Event for The Stock Exchange of Thailand , 24 September 2010: 10.00-11.00 hrs., New York Palace
Hotel, New York.
Mr. Tim Leissner, President of Goldman Sachs, Southeast Asia,
Mr. Charamporn Jotikasthira,
President of The Stock Exchange of Thailand (SET),
Distinguished Guests, Ladies and Gentlemen,
First of all, I wish to thank Goldman Sachs and the Stock Exchange of Thailand for co-hosting this
event. It is my great pleasure to meet and exchange views with such a distinguished group of New York
City s great minds in business and finance.
I intend to be brief with my remarks because I understand that you are all knowledgeable about
Thailand. Moreover, I believe that as friends of Thailand you have been following closely the political and
economic developments in the country. So my aim today, therefore, is to simply update you on where we
stand and where we will be heading in the next 12 to 24 months, and leave ample time for your questions
and comments. Let me start by informing you where we stand today.
First, the Thai economy appears to have decoupled itself from Thailand s political difficulties. The
economy has recovered well and fast despite the political unrests. GDP expanded by 11 % year-on-year in
the first half of this year, and we project close to 8% for this half. Such expansion was mainly driven by
exports, investment, and private consumption. Production has also expanded across all key sectors.
Tourism appeared to be the only sector that was adversely affected by the political unrest in the second
quarter. But the setback was brief. The total number of inbound tourists for the first half of this year has
already increased by 14% from the same period last year.
It is very encouraging also to learn that foreign investors continued to have strong commitment to
Thailand. On foreign direct investment, the number of investment applications for Board of Investment
(BOI) promotion during the first half of this year increased by 35% year-on-year. The value of total
foreign investment applications nearly reached 100 billion baht, almost doubling the value applied in the
first half of 2009.
On portfolio investment, foreign investors temporarily left Thailand during the peak of the political
crisis. But they resumed quickly after stability had returned. Since end of May, foreign investors net
buying in the Thai stock market amounted to around 40 billion baht. It is, in fact, still a small figure, even
undervalued, when compared to the strong exports we have seen. So there is room for growth and we
encourage more active foreign participation. On the bright side, it should also be pointed out that the index
of the Thai stock market barely moved during the political unrest, reflecting strong confidence of various
groups of investors in the Thai economy. As several assessments show, the Thai stock market is now one
of the world s best performers in the world in 2010.
So clearly, despite earlier concerns about negative repercussions of the political situation, the
economy is performing much better than many had expected.
Next, despite the slowdown in the global economic recovery, especially in the U.S. and Europe,
Thailand s economy remains strong. It has appears to have decoupled itself from the industrial economies
in at least two dimensions. The first is the area of export to emerging economies in Asia and around the
world which now account for more than 60% of our overall exports and have been a steady driver of our
recovery. It is also encouraging to learn that Thailand has had trade surpluses with most ASEAN
countries, with the exception of Malaysia and Myanmar from where we import oil and gas. This
demonstrates well Thailand s competitive strength in ASEAN. It reflects the potential to fully benefit
from the ASEAN Economic Community when it is realised in 2015. A market of 600 million people with
a combined GDP of over 1.5 trillion USD, the burgeoning community already offers Thailand tremendous
business opportunities. There have also been numerous ASEAN agreements on trade and investment
liberalisation signed with partners; there we have on-going negotiations with EU, EFTA and Chile. In
addition, ASEAN s economic potential is already being brought out by the ASEAN Plus Six framework,
and there are deliberations on an expansion into an ASEAN Plus Eight framework, which includes the
United States. The role of the United States in this framework is therefore highly important.
The second dimension is strong domestic demand, which also contributes to the resilience and quick
rebound of our market. On the year-on-year basis, private investment grew remarkably by 20% in the first
half of this year, as reflected in the purchase of commercial durables, imports of capital goods and the
expansion of construction areas for business and housing.
All of these indicators provide us with all the assurance that the Thai economy is well insured against
another possible global economic slowdown, if there would be one in the future.
Ladies and Gentlemen,
Turning to the outlook of Thailand over the next 12 to 24 months, I believe that the Thai economy will
continue to expand at a satisfactory rate due to a number of factors.
The Thai Government will also embark on new major logistic and infrastructure projects. Early this
month, the Government approved a framework for Thailand-China cooperation to build three high-speed
train routes connecting Thailand s northeast with China via Lao PDR. The second line will connect
Bangkok to the Thai eastern seaboard center of Rayong, and the third line will go to the Malaysian border
town of Padang Besar. These high-speed trains will not only facilitate the rapid movement of goods and
people, but will also provide even more benefits to Thailand once ASEAN becomes a single market and
Thailand becomes a stronger production base for the Economic Community.
You may also be interested to learn that my government fully supports capital market reform in
Thailand. This is in the belief that there are fresh opportunities in the economy to expand. The Capital
Market Development Plan was endorsed by the Cabinet at the end of last year. The purpose of this plan is
to deepen and broaden Thailand s capital market with a view to increasing its efficiency and liquidity.
Included in the Plan are measures, among others, to demutualize the Stock Exchange of Thailand (SET),
promote Mergers and Acquisitions (M&A) activities, enhance securities law enforcement, and reform tax
measures related to capital market transactions. The Government believes that the successful
implementation of the Capital Market Development Plan will benefit the capital market and have far-
reaching benefits for the Thai society and economy at large. It will improve Thailand s competitiveness,
promote savings, and improve the linkage between the Thai and global capital markets. We are also
embarking on cooperation with stock exchanges in other countries, including the New York Stock
Exchange where I had the opportunity to visit last year, to create linkages between stock exchanges of the
world and in the region. Those in ASEAN, for example, are very keen to create such linkage with us.
In the political dimension, I would just like to stress that we have made progress in the reconciliation
process after the April and May unrest. You would agree that each country faces unique challenges that
come in different forms. But like every other country, we in Thailand have strived to overcome these
problems. The fact that I am standing here in front of you today is testament that the political situation in
Thailand was manageable and that it is, essentially, under control. We enjoy greater stability now and the
Thai people have a common resolve to see peace and progress for the country.
During the remainder of my term as Prime Minister, I will remain firmly committed to strengthening
Thailand s investment climate and improving Thailand s competitiveness, while at the same time
addressing the needs and issues affecting those who feel left out to ensure greater opportunities for more,
and that Thailand s economic growth over the long term will be politically and socially sustainable.
It now remains for me to thank you all again for being good friends of Thailand and for your continued
support. I will be glad to answer any questions you may have. Sawasdee Krub.