New investors waiting for national measures
The government should announce a clear water management plan during the first quarter of 2012 or lose attractiveness in the eyes of foreign investors, warn business leaders.
Kan Trakulhoon, president and chief executive of the Siam Cement Group, said while most existing Japanese companies will continue operations in Thailand, it may become difficult to attract newcomers.
“In the first three or four months of next year, the government will have to come up with measures and a master plan. Otherwise, potential new investors will rethink their planned investment in Thailand,” he told a seminar.
He urged every concerned party in the country to provide credible ideas to regain investor confidence.
Bandid Nijathaworn, chief executive of the Thai Institute of Directors, said the water plan should be released no later than the second quarter of 2012.
“The national plan must be made clear first so that individual companies can implement their own plans accordingly,” he said.
Three groups including existing investors have been waiting for the plan to be announced.
“Insurance firms are also eager to hear the plan because they have to assess risk to set fees for flood insurance policies,” said Dr Bandid, a former deputy governor of the Bank of Thailand.
“The last group is foreign buyers, as they must diversify risk in countries less affected by floods.”
Setsuo Iuchi, president of the Japan External Trade Organisation (Jetro) in Bangkok, said Thailand must be clear about its interim and long-term plans.
“Thailand has to make the plan clear as soon as possible. Otherwise, new investors will delay their investment plans in Thailand,” he said.
A Jetro survey taken a month ago showed 70% of companies directly affected by the floods will resume same-site operations, while 10% will relocate within Thailand. No company said it would relocate beyond Thailand, but 30% remain unsure.
“We want a strong commitment from the Thai government that this kind of incident will never be allowed to happen again,” said Mr Iuchi.
Pitak Pruittisarikorn, an executive vice-president of Honda Automobile, said his company has been unable to import cars duty-free to Thailand as approved by the cabinet since the Finance Ministry has yet to endorse an organic law to support the plan.
The company has orders for 40,000 units awaiting delivery. Mr Pitak declined to say when Honda’s inundated Rojana plant would resume production.
Somchai Jitsuchon, research director of the Thailand Development Research Institute, questioned the Thai government’s capability in water management.
He urged the government to work harder over the next 3-6 months, saying investor confidence would be at risk if the government failed to come up with preventive measures as promised.
“I think it’s time for the public to consider and prepare for any disasters,” said Dr Somchai.