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ASEAN currency office to be set up to promote yuan

Mr Abhisit said he was optimistic that his idea of using yuan as a major trading currency in the region could materialise as the issue was discussed during summit of the Association of Southeast Asian Nations (ASEAN)

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Mr Abhisit said he was optimistic that his idea of using yuan as a major trading currency in the region could materialise as the issue was discussed during summit of the Association of Southeast Asian Nations (ASEAN)

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The just ended Group of 20 major economies meeting in South Korea failed to make headway as leaders set vague “indicative guidelines” for measuring imbalances and let details to be discussed in the first half of 2011.

Realising this, Mr Abhisit said he expected the APEC summit would discuss the issue of currency volatility, particularly regarding cooperation among countries in this region aimed at reducing effects from that volatility.

Mr Abhisit said another of his idea on setting up an ASEAN office to handle currency issues, arrived from the Chiang Mai Initiative, could probably “start operations soon.”

The office would be an important mechanism in working with the ADB in future, he added.

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Thai PM proposes yuan use in trade among Asian countries; ASEAN currency office to be set up

Infrastructure services, if quickly improved, could promote a better investment climate in Thailand

During the protests this year and last, tourists in every part of Thailand, especially Phuket, Samui and Chiang Mai experienced no ill-treatment by Thai people, red shirt or yellow shirt – yet this was never publicised.

It is also important to understand that the recent political violence was most uncharacteristic of Thais. We all know Thai people to be warm, friendly, peace-loving and extremely welcoming to foreigners with genuine hospitality. I also know that Thais take great pride in the resilience and strength of their nation.

Citing the political unrest, S&P in April lowered Thailand’s long-term local currency debt rating to A minus from A. Fitch downgraded the long-term foreign currency rating to BBB from BBB+ that month, on the grounds that political strife undermined the ability of the Government to implement policies. The forecasts assume there are no disruptive changes in government in the forecast period and that fscal policy is implemented as planned. In addition to the frst fscal stimulus package, the Government has approved a second package that comprises public investment and that will cost B1.43 trillion ($42 billion) over 3 fscal years starting in October this year. This is equivalent to about 5% of GDP in each of the years.

Private consumption will benefit from a gradually firming labor market and forecast gains in prices of agricultural commodities. Strengthening economies abroad will raise demand for Thailand’s exports of automobiles, electronic and electrical goods, and agricultural products. Afer falling by a projected 18.0% in 2009, exports are forecast to recover by around 15% in 2010. Merchandise imports will rebound strongly if the public investment projects get under way as planned and if private investment rallies. A 28.0% bounce is forecast for imports in 2010. In services trade, tourism is expected to improve, with the pace of recovery depending in large part on the rebound in the international economy and on global eforts to contain the swine fu (H1N1) pandemic.

Thai PM proposes yuan use in trade among Asian countries; ASEAN currency office to be set up

This is precisely the path on which Thailand’s government is embarked, and one in which the country will slowly move from being an attractive investment destination for its low cost high skilled manufacturing to a country that derives increasing prosperity from its innovative and creative economy.

The government in Thailand has implemented several measures in 2008 to mitigate the short run impact of rising inflation and falling incomes.In 2008, the government issued four sets of measures – three of them are aimed at mitigating the impact of the rise in food and oil prices on households and businesses and one in October aimed at mitigating the impact of the global financial crisis.

They include personal income and corporate tax reduction, tax deductions for investment, reduction in property sales transaction fees, subsidies on gasoline, water, electricity, and public buses and train services, direct transfers from the government to administrations at the grassroot level in Thailand, as well as loans by specialized state-owned financial institutions to SMEs and households. However, additional measures to assist affected workers and SMEs in improving their productivity and capacity would enable them to better cope and withstand future shocks in Thailand.

However, measures for the medium term that will enable Thailand to poise itself for higher and sustainable growth as the global economy recovers in the next few years are no less important. While coping and mitigating with the impact of the financial crisis in the short-run, it is equally important for all stake holders in Thailand to prepare for a recovery in global demand and ensure sustainable growth thereafter. The global economy is projected to recover over the next few years and, thereafter competition will intensify.

Clarity and continuity in policy directions and greater public infrastructure investments are needed not only to help stimulate growth in the short-run, but also improve productivity for the longer-term growth.Political stability would help to regain investors as well as assure them the clarity and continuity of policy directions.

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Ecommerce

Disrupted by Covid-19, will South-east Asia’s super apps join forces?

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Disrupted by Covid-19, will South-east Asia's super apps join forces?

– Super apps explore inorganic growth options
– Gojek in talks with e-commerce company Tokopedia over $18bn merger
– Grab reported to be preparing for a public listing in the US
– Food delivery and financial services increasingly important segments

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After a year of external expansion and internal reorganisation due to Covid-19, South-east Asia’s super apps appear to be looking towards mergers and public listings as a strategy for future development.

In early January international media reported that Indonesian ride-hailing and payments giant Gojek was in advanced talks about merging with local e-commerce company Tokopedia, in a deal estimated to be worth $18bn.

Any potential merger between the two would be significant for Indonesia. The two local unicorns could create a digital powerhouse, with integrated services ranging from ride-hailing to digital payments, e-commerce and delivery.

A tie-up would also create numerous synergies, such as Gojek’s fleet being able to serve Tokopedia’s online shopping orders. However, there is also some overlap in the digital payments space, where Gojek’s GoPay platform competes with Ovo, which is 35% owned by Tokopedia, although there is speculation that Tokopedia may look to sell its stake in Ovo.

The news was followed by separate reports in late January that Grab, Gojek’s biggest competitor in South-east Asia, had selected investment banks Morgan Stanley and JP Morgan to help work on an initial public offering (IPO) in the US, set to take place in the second half of the year.

The Singapore-headquartered company, which operates ride-hailing, food delivery, e-payment and insurance services in around 400 cities across eight South-east Asian countries, is valued at around $16bn. Its IPO is expected to raise at least $2bn, which would make it the largest overseas share offering by a South-east Asian company.

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Economics

Thailand’s economic outlook for 2021

The government expects inbound tourism to be at around 8 million by the second half of 2021, well below 40 million in 2019

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The Thai economy will grow next year after contracting by almost 10% this year. Next year, the Thai economy is expected to expand 3 to 4% from this year. It will not be until the end of 2022 before the Thai economy returns to its pre-Covid level of 2019.

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Economics

Finance Ministry Considers Additional Incentives to Increase NSF Members

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BANGKOK (NNT) – The Finance Ministry is considering additional incentives to increase members in the National Savings Fund (NSF) as Thailand is projected to become a “super ageing society” by 2031.

Finance Minister Arkhom Termpittayapaisith said increasing state contributions to the NSF and extending the maximum membership age to 65 years old from 60 as stipulated by law are among the considerations.

He said Thailand is projected to become a fully aged society this year, meaning 20% of the total population is 60 or older. The country is projected to be a super ageing society by 2031, meaning 28% of the total population is 65 or older.

Mr Arkhom said retirement savings are vital because 20 million informal workers in Thailand are without mandatory savings programs.

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