Siam Commercial Bank PCL : EIC Conference 2016

SCB Economic Intelligence Center (EIC) held its 2016 annual conference: 'Reviving Investment, Restoring Thailand's Potential' on Wednesday, 8th June 2016 at Crystal Hall, 3rd floor, Plaza Athénée Bangkok, A Royal Meridien Hotel. The aim of the seminar was to provide a forum for discussing economic opportunities and challenges in the current global economic environment as well as exploring the impact on Thailand's business landscape. EIC was honored to have Mr. Somkid Jatusripitak delivering a keynote address on 'Future of Thailand under the new era of infrastructure investment'. Ms. Sutapa Amornvivat, Chief Economist and First Executive Vice President, Siam Commercial Bank PCL, discussed the topic: 'Is investment our silver bullet?' And finally, Mr. Arkhom Termpittayapaisith, Minister of Transport, Mr. Keeree Kanjanapas, Group Chairman, Bangkok Mass Transit System Public Company Limited, and Mr. Weerawong Chittmittrapap, Senior Partner, Weerawong, Chinnavat & Peangpanor Ltd. joined a panel discussion on 'Investment potential: leveraging the new infrastructure.'

Mr. Vichit Suraphongchai, Chairman of the Executive Committee, Siam Commercial Bank PCL, made an opening remark that 'with the global economy in unusual conditions, the Thai economy is facing both domestic and external headwinds. Public investment therefore becomes a crucial economic driver, presenting opportunities and challenges for public and private sectors as well as banks to join together in pushing the economy forward.'

According to Ms. Sutapa Amornvivat, 'eight years after the financial crisis, the world's economy remains weak with no country stepping up as an economic powerhouse as in the past. Structural shifts across the world, such as aging population, high debt levels, and changing technology, have reduced demand for spending and investment that, in turn, results in global interest rates as low as during the period of the Great Depression prior to the second World War.'

Ms. Sutapa added, 'Under the current circumstance, EIC sees that the only solution for the Thai economy is to employ fiscal measures, especially through public investments in infrastructure projects. Such spending can stimulate the economy in the short run and enhance the growth potential in the long run. Nonetheless, projects must be strategically chosen to align with the global economic trends that are shifting towards the development of service businesses.'

EIC proposes top 3 service businesses with high growth potential that should be strategically supported by new infrastructure investments:

1. Tourism business - The number of international tourists in Thailand has more than doubled in the past 5 years and will continue to grow. Correspondingly, the government has already planned for airport expansion and new airport construction to serve the incoming tourists. However, more needs to be done. Investments should be channeled to other types of infrastructure such as public utility systems and security and safety for tourists. Better infrastructures will allow Thailand to enjoy a steady growth in tourism business. Also, supportive architectural investments are essential for elderly tourists whose population share is currently rising.

2. ICT business - Today, mobile data usage in Thailand is skyrocketing through the spread of smartphones and e-commerce. The upcoming National e-Payment system and new technology such as Internet of Things (IoT) will fully transform Thailand into a 'Digital Society.' Yet, Thailand's existing ICT infrastructures, including frequency bands, broadband internet coverage and digital laws, have been falling behind ASEAN counterparts like Malaysia and Singapore. Therefore, Thailand should focus on enhancing these infrastructures to unleash the full potential of the ICT business.

3. Businesses to leverage CLMV growth - Despite a worldwide slowdown, economic activities between Thailand and the CLMV countries (Cambodia, Laos, Myanmar and Vietnam) have followed an opposite trend. Cross-border investment and border trade values have more than doubled in the past 5 years. Therefore, the ongoing public investments in transport infrastructure that connects Thailand to CLMV by road, rail and air will open up new opportunities for logistics businesses including goods shipment and passenger transport. Other service industries, in particular, real estate, and wholesale and retail trade will also benefit from the increasing connectivity. Further plans to develop lands around these construction projects, especially at intersections of the new transport routes, will maximize returns from the investments.

'Investments in infrastructure that support the service sector will boost Thailand's competitiveness to become the leading service hub of ASEAN. The plan, EIC believes, is a viable growth strategy for the country. Nonetheless, the future of the Thai economy hinges on a harmonious collaboration between the public and private sectors, so that the new infrastructure investments will be our most powerful ammunition against Thailand's economic obstacles, bringing us towards a stronger future,' concluded Ms. Sutapa.

During the panel discussion Mr. Arkhom Termpittayapaisith presented the progress of the key transport mega projects including his visions to promote other businesses along these projects. Additionally, Mr. Keeree Kanjanapas shared his experience in undertaking Thailand's first mass transit system including his perspective on future business opportunities. Lastly, Mr. Weerawong Chittmittrapap discussed how the private sector and investors can participate under a new Public-Private Partnership (PPP) regulatory framework.

In photo from left :

• Dr. Sutapa Amornvavat, Chief Economist and First Executive Vice President, Economic Intelligence Center, Siam Commercial Bank
• Mr. Arthid Nanthawithaya. CEO and Deputy Chairman of Executive Committee, Siam Commercial Bank
• Dr. Vichit Suraphongchai, Chairman of the Executive Committee, Siam Commercial Bank
• Dr. Somkid Jatusripitak, Deputy Prime Minister
• Mr. Arkhom Termpittayapaisith, Minister of Transport
• Mr. Keeree Kanjanapas, Group Chairman, Bangkok Mass Transit System Public Company Limited
• Mr. Weerawong Chittmittrapap, Senior Partner, Weerawong, Chinnavat & Peangpapor Ltd.