June 7, 2010. The prime minister has urged the Agriculture and Agricultural Cooperatives Ministry to come up with plans to tackle the ongoing drought, which is considered the worst in two decades.
Financial markets have so far been accommodative of the government’s borrowing plans. The expansion of expenditures stemming from the stimulus packages combined with a decline in revenues due to the economic crisis has led to an increase in the fiscal deficit and, consequently, government debt ratios, which have reached 45 percent of GDP in September. Because Thailand entered the crisis with a relatively strong fiscal position, the cyclical increase in debt levels is not by itself a concern as long as Thailand’s historical fiscal performance is maintained in the future.
FDI policies
The country’s well-defined investment policies focus on liberalization and encourage free trade. Foreign investments, especially those that contribute to the development of skills, technology and innovation are actively promoted by the government. Thailand consistently ranks among the most attractive investment locations in international surveys, and the World Bank’s 2010 Ease of Doing Business report places Thailand as the 12th easiest country in the world in which to do business.
Government support and incentives are provided for foreign investors in Thailand
Numerous government agencies support investors. Through the Board of Investment, the government offers a range of tax incentives, support services and import duty exemptions or reductions to an extensive list of promoted activities.
Companies receiving investment promotion privileges from the Board of Investment are not subject to foreign equity restrictions in the manufacturing sector, and there are no local content requirements nor export requirements, as Thailand’s investment regime is in total compliance with WTO regulations.
The Board of Investment also coordinates the activity of the One-Stop Service Center for Visas and Work Permits, which enables foreign staff of BOI-promoted companies to obtain work permits and long-term visas within three hours or less.
The BOI also administers the One Start One Stop Investment Center, which opened in November 2009 to facilitate a full range of services and streamline investment procedures by bringing representatives from more than 20 government agencies under one roof.
In addition to the activities of the BOI, other government organizations, such as the Department of Export Promotion and international chambers of commerce, provide invaluable support and a host of other important services.
EGAT has also announced its solicitations for power purchase from IPP projects to enhance competition in the generation business. This has been followed by power purchase from small power producers (SPPs) to particularly promote energy efficiency and the use of renewable energy resources for electricity generation.
In terms of international cooperation, EGAT has collaborated with neighboring countries in pursuing the ASEAN Power Grid Project to integrate the transmission systems within ASEAN countries for energy security and mutual economic benefits. The Electricity Generating Authority of Thailand is also in talks with neighbouring countries, to make joint developments in hydropower projects.
Amidst changes and challenges, EGAT has been and will be tirelessly developing the country’s electric power system to ensure that its electricity supply remains the most secure and reliable infrastructure service which contributes significantly to the betterment of the quality of life and the environment and drives the country’s economic and social growth in the future. The expertise and experience gained over 35 years of operation have provided EGAT with the multi-faceted power and strength needed in maintaining its leadership and a competitive edge in the new business environment.
