Problems relating to Trade and Investment on Thailand
26. Others |
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Issue |
Issue details |
Requests |
Reference |
| (1) Inadequate Flood Control Measures | - A member firm's subsidiary (MFS) has been compelled to temporarily suspend its operation, due to its suppliers damage from the massive flood of 2011. It has experienced much difficulty in grasping the accurate status due to the mixed information reaching it in quality and accuracy. In 2013, in the floods in Bang Pakong river, another river, the same sort of phenomena arose. - MFS sustained a severe damage directly and indirectly from the flood of unprecedented magnitude occurred in October 2011, due to the inadequacy of the GOT's measures prepared in advance. - In 2011, the large-scale floods also hit our member firm's subsidiary (MFS) plant in Ayutthaya. While GOT has expedited its effort in terms of both emergency measures and a long-term measures by inviting international competition, such efforts have not completely wiped out the risk of floods. Developers have improved the banks for protection from floods in the industrial estate near Bangkok. However, no improvement has taken place by way of requisite number of workforce and arterial road for distribution. The water damage risks remain for workers housings. |
- It is requested that GOT: -- strengthens the protective measures against flood and inundation as soon as possible, -- provides the flood related accurate information in multiple languages, and -- ensures speedy and widespread dissemination of information after the advent of flood, and -- takes adequate measures such as drainage. - It is requested that GOT: -- draws up and implements fundamental measures for flood control, and -- provides adequate assistance to enterprises damaged by the flood. - While GOT's flood control measures have made a fair progress, including management, it is requested earnestly that GOT continues its effort to enhance its flood control. - It is requested that GOT: -- accelerates the sweeping solution for protection from floods, -- analyses the total situation for continuation of business operation, including the risk of infrastructure hiatus, and traffic congestions, -- discloses more information, especially to foreign funded enterprises, and -- construct canals for protection from flood. |
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| (2) Increased Insurance Premium against Great Natural Disasters | - The 2011 flood has triggered the insurance premium to take a jump. Subscription to GOT authorised Catastrophe Insurance Policy (CIP) is a compulsory requirement for MFS to subscribe to voluntary insurance policy. However, insurance premium is sky-high. To enable FFEs to continue their business operation, improvement is prerequisite by way of increasing in cover rate of 30%, additional 1.25%, and the high threshold for triggering the total damage in excess of 5 billion bahts, etc. However, it is only when private insurance carrier can provide in excess of 20% less expensive insurance that MFS may be excluded from the CIP subscription obligations. | - It is requested that GOT flexibly adjusts the threshold for subscription to CIP, reviews the cover rate, and reduces insurance premium commensurate With reduced risks for the progress achieved from flood-control works. | |
| (3) Political Instability | - Especially since 2006, confrontation has surfaced and has been intensified between the administration and anti-administration wings, frequently accompanying occupation of major facilities, road occupancy, lock-out, demonstration, coup d'etat etc., threatening safety in livelihood, and hindering business activity. Due to the continuing instability of this kind, the international status of Thailand has suffered down-grading to the extreme as a candidate country for investment and for manufacturing foothold. - Occurrences of coup d'etat in every plural years, accompanied by monetary turmoil drive MFS into much difficulty in taking responsive action internally. |
- It is requested that GOT stabilises the political climate in Thailand. - It is requested that GOT: -- secures political stability, and -- makes all out efforts nationwide into upgrading education. |
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| (Action) - In April 2009, the East Asia Summit in Bataya had to be aborted because of obstruction by the ex-PM Taksin faction and intrusion into the Diet House by a citizen group, The United Front for Democracy Against Dictatorship (UDD), while the capital Bangkok was driven into a mobbish state of affairs, which was followed by declaration of the state of emergency. - On 7 April 2010, Prime Minister Abhisit issued proclamation of the state of emergency in the entire Bangkok Capital City and the neighbouring 5-provinces. The commotion in the central Bangkok developed into Security Force's expulsion of the demonstrators, and the arson and brigandage into the metropolitan commercial facilities, which were finally calmed down while claiming numerous casualties, killed and injured. - The mobbish state of affairs in Bangkok drove an increasing numbers of Japanese affiliated retailers and fast-food chain industry into halting their operation. Japanese affiliated manufacturers likewise were forced to suspend temporally operation of their distribution companies and sales offices. However, the application for inward direct investment into Thailand was 97% amount of the same period between January through June 2010, and the number of application showed an increase by 33%, while Japan's application represented about 40% of the total application amount of Bt98.3 billion. Most conspicuous were investments made into the motor vehicles, electric appliances, and renewable energy business sectors. According to the announcement of National Economic and Social Development Board (NESDB), the real GDP growth rate in the 1st quarter 2010 was 12.0% against the same period 2009, and 9% in the 2nd quarter 2010 against the same period 2009, showing high increase rate. NESDB Director estimates the demonstration caused the drop in the real growth rate in the 2nd quarter by 3 points. - On 20 May 2014, General Prayuth Chan-ocha, the Army Commander ordered nationwide Martial Law. On 22 May, Thailand National Council for Peace and Order (NCPO) (Chaired by Prayuth Army Commander) declared his grasp of the total sovereignty. On 30 May, NCPO announced "the Roadmap" toward resumption of the Civil Law Administration spread in excess of one year (Promulgation of provisional constitution during July, legislative conference and stopgap government in September, startup of reform conference in October, promulgation of new constitution targeted in July 2015, general election implemented 3-months after promulgation of new constitution, and resumption of civil administration during 2015.) With the approval of King Bhumibol, Mr. Prayuth formally took office as temporary premier, and on 1 September, formed the new Cabinet. |
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| (4) Corruptions | - When each year end comes, officers from tax office come around, acting like parasites, murmuring in chorus something like: "I want so many bahts." | - It is high time GOT takes step to annihilate bribery demands. | |
| (Action) - According to "Corruption Perceptions Index 2013"(Transparency International), in 2013, Thailand lost 2 points relative to the preceding year and its ranking slid back to the 102nd position, down by 14 positions. |
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| (5) Increased Harbour Charges | - In 2014, collection started at the container depot for lift-on-charge, increasing the cost of export. On the other hand the terminal charge fee increase by large margin, although postponed until March 2015 is due anytime, debilitating the competitive edge of the export business from Thailand. | - It is requested that GOT endeavours to maintain status quo of export charges. | |
| (6) Non or Delayed Payment | - MFS, having experienced nonpayment/delayed payment of accounts receivables, due in part to differences in traditions in commerce, business ethics, balance of power, etc., has switched to advance payment in its terms of sale. However, on products with short life expectancy cycles (such as manufacturing equipment for smartphone parts), the delivery terms and the prices claim the top priority, so that even if collection is completed successfully, the delay in payment severely affects the profitability of the MFS operation. | - It is requested that GOI: -- extends its helping hands to the less powerful SMEs by provision of information, and -- facilitates collection of accounts receivables. |
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