Latest ASEAN news

NSTDA partners with Railway Technical Research Institute (RTRI) Japan to enhance “Research and development in the Thai railway system”

NSTDA and RTRI, Japanese’s technical research company, under the Japan Railways (JR) group of companies, have entered into a 3-Year Memorandum of Understanding (MOU) from 1 July 2021 to 30 June 2023, to establish a formal technical cooperation to exchange and co-create information, know-how, human development, and joint research in the area of railway technology. This formal collaboration aims for the enhancement and advancement of the Thai railway system.

The MoU signing ceremony has been conducted through a virtual platform. The MOU has been signed by Dr. Narong Sirilertworakul, President of NSTDA, and Dr. Ikuo Watanabe, President of RTRI, and witnessed by Dr. Ekkarut Viyanit, Director of Rail and Modern Transports Research Center of NSTDA, and Dr. Tetsuo Uzuka, General Director of International Division of RTRI. Mr. Hosono Keisuke, First Secretary for Digital, Information & Communications Technology, Science, Technology & Innovation, Embassy of Japan in Thailand, also attended and gave a greeting speech to celebrate the partnership.

Formation of the collaboration between NSTDA and RTRI was actually initiated in 2011. Through this relationship, RTRI has actively participated and offered different kinds of support such as hosting a technical visit on rail systems in Japan, and co-hosting Thai Rail Industry Symposium and Exhibition (RISE), an important event for the Thai railway system in Bangkok with NSTDA, from 2016 till present.

“I am very much hoping that the establishment of this formal partnership between NSTDA and RTRI will be a steppingstone to expand the exchange and co-creation of information, know-how, and joint research in the area of railway technologies between our two institutes even wider,” said Dr. Narong Sirilertworakul. “In so doing, I trust we will contribute significantly to the advancement of the Thai railway system as well as bring bilateral relations between Thailand and Japan even closer.”

“Thailand is one of the most strategic partners in South East Asia and NSTDA is among the leading research institutes in the country,” said Dr. Ikuo Watanabe. “RTRI realises that NSTDA has mandated and committed to research and development for the advancement of the railway systems in Thailand. It is very significant for both RTRI and NSTDA to conclude this memorandum of understanding on technical cooperation and, in so doing, to support the R&D activities between our organisations. Realising the aims of this MoU will certainly benefit rail system standards, not only for Thailand, but for our other friends in Asia.”

Mr. Hosono Keisuke added that, “We all know that railway systems are essential infrastructures. Railway systems improve the quality of life through providing logistics and daily transportation for people. From my observation of the spawning of many rail routes in recent years, the railway system in Thailand has progressed rapidly, not least opening new Bangkok skytrain routes almost every year. We are very happy that Japanese technology has been adopted and used in the Red and Purple lines, for instance. This collaboration between NSTDA and RTRI aims to jointly develop innovations and technologies for the advancement of the Thai railway system. As such, it is another important milestone the Embassy of Japan in Thailand would like to commend.”

“For NSTDA’s rail system works and technologies, in February 2020 the Institute founded ‘Rail and Modern Transports Research Center (RMT)’ as an R&D focus centre. RMT mandated development of ready-to-use technologies for rail and modern transport industries and conducted R&D projects into areas of safety and reliability enhancement in the railway system. The focus is on the development of predictive maintenance technology, development of automated inspection techniques, development of technology for railway parts & components manufacturing, and maintenance data analytics. Furthermore, the research work and technical capacity building concerning connected and automated mobility, enhances convenience of railway passengers in last-mile connectivity, and this is among the key areas of RMT responsibilities.”


SME Bank, an agency under the Ministry of Entrepreneur Development and Cooperatives unveils its RM3 billion Sukuk Wakalah Programmes and will become the first Development Financial Institution (DFI) in the country to issue Sustainability Sukuk to meet its funding and working capital requirement moving forward.

Minister of Entrepreneur Development and Cooperatives, YB Dato Sri Dr Hj Wan Junaidi Bin Tuanku Jaafar said, “The Sustainability Sukuk issuance by SME Bank is timely during this time of crisis whereby there is a need of balance in doing business for profit and doing good to fulfil our obligations towards the environmental, social and governance (ESG) factors. SME Bank’s effort to be part of the global trend is a smart move to secure a strong financial imprint in the country’s financial landscape for now and in the future.”

“Taking from this significant development, one important issue surfaces and that is, where are all our Small Medium Enterprises (SMEs) in this space of placing ESG in their DNA? There will come a time ESG will be the norm and our SMEs should be ready and willing to adopt its principles in their daily operations.  The Government, banks and relevant stakeholders who have the capacity to invoke change should take the lead and push for continuous transformation by the SMEs,” he added.

The Chairman of SME Bank, Dato’ Seri Nazir Ariff said, “SME Bank has continued to fulfil its mandate to nurture and develop the nation’s SMEs, backed by the strong support from the Government and all our stakeholders. The AAAIS ratings accorded by the Malaysian Rating Corporation Berhad (MARC) for this Sukuk Wakalah Programme is a testament of our strength and commitment in upholding this virtue.”

Dato’ Seri Nazir added, “SME Bank has been incorporating ESG elements in carrying our mandate since its establishment and with our very own ESG Framework, coupled with its Sustainability Sukuk Framework, it is a step towards reaffirming and deepening the Bank’s vision and mission and raising awareness among the community about the importance of sustainable development. At the same time, it demonstrates our commitment in creating positive impacts on society and the environment.”

Aria Putera Ismail, SME Bank’s Group President/Chief Executive Officer said, “The proceeds from the Sustainability Sukuk issuances will be channeled to finance projects that directly support 11 of the 17 United Nations Sustainable Development Goals (SDGs).”

Aria added, “The 11 categories chosen are aligned with the green and social project categories recognized by the ASEAN Sustainability Bond Standards (ASEAN SUS), ASEAN Social Bond Standards (ASEAN SBS) and ASEAN Green Bond Standards (ASEAN GBS) issued by the ASEAN Capital Market Forum (ACMF). In addition, the 11 categories are also aligned with the Sustainability Bond Guidelines (SBG), Green Bond Principles (GBP), Social Bond Principles (SBP) issued by the International Capital Market Association (ICMA) and follow the standard guidelines from the Sustainable and Responsible Investment Sukuk Framework issued by the Securities Commission Malaysia.”

Aria said, “The green project categories target six initial key sectors which are energy, manufacturing, transport, building, waste and water. These sectors have been identified by the Green Technology Master Plan to facilitate green growth in Malaysia. While the focus of the social project categories is on creating decent work, improving gender equality, and providing economic opportunities to the unserved and underserved social groups in the country. With the issuance of the Sustainability Sukuk, SME Bank is in the right position to promote and educate the importance of incorporating the ESG in business operations to all SMEs. This will enable them to build sustainable businesses, grow bigger and become enterprises that meet international standards.”

SME Bank’s sustainability agenda is also in line with BNM’s Performance Measurement Framework, which emphasises on the importance of DFIs to incorporate additionalities as part of their business operations to promote greater development outcomes and strengthen their accountability as public institutions.

The Sole Principal Adviser/Sole Lead Arranger for this Sustainability Sukuk program exercise is RHB Investment Bank Berhad and the Joint Lead Managers (JLMs) are AmInvestment Bank Berhad, CIMB Investment Bank Berhad, Maybank Investment Bank Berhad and also RHB Investment Bank Berhad. Earlier during the day, SME Bank and JLMs had organized a virtual Group Investor Presentation explaining on the Sukuk Wakalah Programme and its target maiden Sustainability Sukuk issuance to potential and interested investors.

Since its establishment in 2005, SME Bank has stayed true to its mandate of supporting the growth of the SMEs through financing as well as beyond financing efforts. Up to date, SME Bank has approved over RM35 billion worth of financing to more than 19,000 customers who majority of them came from the underserved and unserved SMEs.

Through Centre for Entrepreneur Development and Research Sdn. Bhd. or CEDAR, the Bank’s wholly-owned subsidiary, SME Bank has trained and coached more than 60,000 participants at various levels of development through dedicated programmes. This commitment is in line with the SDGs to enhance the living standards of those around us by meeting SMEs financial needs and delivering exemplary services.


SME Bank’s Sustainability Sukuk Framework and the Second Opinion Report by the External Reviewer, MARC are now available at the Bank’s official website, for viewing. 

The Philippines: PH chairs ASEAN Task Force on Wood-Based Products

The Philippines, through the Department of Trade and Industry’s Bureau of Philippine Standards (DTI-BPS), chaired the 17th Meeting of the Task Force on Wood-Based Products (TFWBP) last 21 May 2021 via video conferencing. Engr. Myra Magabilin, Supervising Trade-Industry Development Specialist of the BPS Standards Development Division (SDD), led the meeting while Mrs. Pattaraporn Krongyuth, Standards Officer of Thai Industrial Standards Institute (TISI), Thailand served as the vice-chair.  PH will chair the TFWBP meetings for three years or until 2023.

The TFWBP assists the ASEAN Consultative Committee on Standards and Quality (ACCSQ) Working Group 1 on Standards and Mutual Recognition Arrangements in addressing the Technical Barriers to Trade for wood-based products sector to support trade facilitation initiatives towards the realization of the ASEAN single market and production base. TFWBP deals with wood-based products for structural and non-structural use such as sawn timber, wood-based panels (e.g. plywood), builders’ joinery and carpentry (BJC), laminated veneer lumber, glued and cross laminated timber, bamboo and rattan, and other wood composites.  TFWBP also discusses the safety, health and performance requirements for wooden furniture such as those made of bamboo and rattan.

Among the topics discussed in the 17th TFWBP Meeting were the identification of wood-based standards, technical assistance and capacity building for wood-based products sector in cooperation with the Japanese Industrial Standards Committee (JISC) and International Organization for Standardization (ISO), and information exchange on the 2019 import and export figures for wood-based products from AMS including the classification of wood-based products according to International HS Codes. 

Engr. Rheychelle Jean Pidoc, Senior Trade-Industry Development Specialist from BPS-SDD and Head of Philippine Delegation, shared the latest progress and development on standards from the five Working Groups under the ISO/TC 296 on Bamboo and Rattan.  Engr. Pidoc also shared the country’s adoption of five (5) newly published ISO standards (i.e. ISO 21625:2020, ISO 21626-1:2020, ISO 21626-2:2020, ISO 21626-3:2020, and ISO 23066:2021) as Philippine National Standards (PNS).

In addition, the Philippines discussed the Department Administrative Order (DAO) No. 20-06, Series of 2020 – The New Technical Regulation Concerning the Mandatory Product Certification of Plywood, which aims to strictly ensure that plywood to be manufactured, imported and distributed in the Philippines meets the specified quality requirements as required under the technical regulation. The reference standards of DAO 20-06:2020 are PNS ISO 12465:2017 Plywood – Specifications and PNS 2103:2017 Plywood – Formaldehyde emissions – Specification for test requirements/methods.

The Philippines, through the DTI-BPS, is a participating member to the ISO Technical Committee on Bamboo and Rattan (ISO/TC 296) since 2015. Currently, Atty. Dulce Blanca Punzalan, President and COO of Filbamboo Exponents, Inc. is the Convenor for Working Group on Bamboo Charcoal (WG 3). Likewise, Dr. Rico Cabangon, Chief of the Engineered Products Development Division under the Department of Science Technology – Forest Product Research and Development Institute (DOST-FPRDI) and BPS/TC 76 Bamboo and Rattan Chairman, is the Convenor for Working Group on Engineered Bamboo (WG 5).

Originally published last June 28, 2021.

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The Philippines: PH and Switzerland reaffirm stronger cooperation at the 4th Meeting of the Joint Economic Commission

MANILA, 17 June 2021 – The Philippines and Switzerland successfully convened the 4th Meeting of the Joint Economic Cooperation (JEC) under the chairmanship of Dr. Ceferino S. Rodolfo, Undersecretary for Industry Development and Trade Policy of the Department of Trade and Industry (DTI), and Ambassador Erwin Bollinger, Head of Bilateral Economic Relations of the State Secretariat for Economic Affairs (SECO).

The meeting marked the 8th anniversary of the bilateral JEC since it was established in June 2013, as well as the 3rd anniversary of the Philippines-European Free Trade Association Free Trade Agreement (PH-EFTA FTA) since the agreement entered into force on 1 June 2018.

The JEC meeting serves as an avenue to discuss trade, investment, economic cooperation, and related matters to forge closer bilateral trade and investment ties between both countries. Undersecretary Rodolfo remarked, “We believe that through this JEC and the PH-EFTA FTA, the Philippines and Switzerland can keep the positive momentum in our relations in the coming years. We continue to accord high importance to the JEC, as it will serve as an instrumental mechanism for us to identify our complementarities and build synergies in areas of mutual interest—in trade, investment, renewable energy, agriculture, and innovation to name a few.”

Under the context of economic recovery from COVID-19, both sides exchanged updates on respective economic recovery strategies. Undersecretary Rodolfo took the opportunity to underline the improvement of the Philippines’ economic performance and progress on the country’s economic policy reforms, including the recent passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act. Both sides also acknowledged the increased collaboration amidst the pandemic, such as the Swiss support for the Philippines’ PPE manufacturing sectors through the Global Quality and Standards Program (GQSP). The forthcoming finalization of this GQSP project is aligned with the DTI’s thrust towards building strong domestic production of internationally certified medical-grade PPEs.

Moreover, discussion covered the implementation and promotion of the PH-EFTA FTA. Undersecretary Rodolfo highlighted, “Since the FTA entered into force in June 2018, the Philippines was able to turn around its trade deficit with EFTA. In 2019, the Philippines posted a trade surplus of USD47 million. Total trade between the Philippines and EFTA likewise increased by 2.40% from USD802 million in 2018 to USD821 million in 2019. For 2020, this surplus even grew to USD109 million despite the COVID19 pandemic. Exports to EFTA likewise increased by 6% in 2020 from USD434 million in 2019 to USD461 million in 2020”. Top Philippine agricultural and food products exported to Switzerland under the PH-EFTA FTA include desiccated coconuts, prepared/preserved tuna, juice of tropical fruit, food preparations, tropical nuts, and raw cane sugar, among others.

The JEC Co-chairs also welcomed the establishment of the informal working group for the PH-EFTA FTA promotion and development of an online interactive FTA web tool, as well as DTI’s advocacies and plans in the pipeline. These include the upcoming DTI-led promotion webinar series this year, which aims to increase exporters’ awareness of the PH-EFTA FTA. This is composed of three series, namely, (a) Understanding the PH-EFTA FTA by Chapter; (b) Understanding the PH-EFTA FTA by Product/Sector, and (c) How to Export in EFTA.  

Complementing initiatives to further maximize the benefits brought about by the PH-EFTA FTA, both sides exchanged updates regarding the market studies on the Philippines’ natural ingredients, processed food, and value-added textiles sector conducted by the Swiss Import Promotion Program (SIPPO). Highlighting the Philippines’ market advantages, these market studies mentioned the country’s large pool of skilled and high-resource English-speaking workforce, high potential in the development of technologies for the processing of native raw material into high-quality natural ingredients, and international reputation to be a 1A origin for many tropical processed foodstuffs, among others. The JEC meeting likewise featured cooperation initiatives and prospective opportunities in investment and Swiss’ strong industrial areas, such as agriculture, renewable energy, and innovation. On the latter, Undersecretary Rodolfo noted the concrete partnership in which the Bern University of Applied Sciences worked with the Philippines to develop an environmentally friendly technology for transforming agricultural byproducts, such as coconut husks, to produce an innovative product with construction applications.

A key highlight of the JEC meeting was the participation of the private sector representatives from chemical, mechanical & electrical, pharmaceutical, watch, elevator/escalator manufacturing, and management service industries. Swiss businesses welcomed the economic reform initiatives undertaken by the Philippines to improve the business and investment environment and to enhance the competitiveness of the country. This special portion provided an opportunity for the Philippines to further clarify its current business and regulatory regime and for both countries to promote sound business-to-business cooperation and to ensure that the JEC outcomes will be commercially meaningful. Prior to the JEC meeting, DTI successfully held the virtual business forum titled ‘Philippines and Switzerland: Investing Together for a Better Future’, which highlighted the two countries’ complementarities on specific areas such as clean technology and renewable energy, infrastructure development, and life sciences.

In 2020, Switzerland remained to be one of the Philippines’ important economic partners in Europe—placing as the country’s 22nd trading partner (up by 6 notches from 28th in 2019 to 22nd in 2020) and 24th investment partner (up by 8 notches from 32nd in 2019 to 24th in 2020). Total trade with Switzerland amounted to about USD 771.29M. These figures are foreseen to steadily increase given the PH-EFTA FTA in place combined with the promotion and cooperation activities being pursued under the JEC.

The Philippines: DTI, TESDA, ink MOA with Logistics Services Association, launch first Philippine Skills Framework–Supply Chain and Logistics

The Department of Trade and Industry (DTI) and the Technical Education and Skills Development Authority (TESDA) signed on 25 June 2021 a Memorandum of Agreement (MOA) with 16 Industry Associations representing the various logistics services sector to advance a competitive and future-ready logistics workforce through training and skills development.

“This agreement with TESDA signals the government’s ongoing support for the logistics services sector and we recognize its importance to our economy as key employment generating sector. This is part of the sector’s Ten Commitments, which was agreed on in 2018,” said DTI Secretary Ramon M. Lopez.

The trade chief added that under the MOA, TESDA shall give priority to workers in the logistics services sector through the conduct of programs with training regulations or non-registered programs. TESDA will also include the logistics sector in its Tulong Trabaho Scholarship Program.

Complementing this effort is the adoption of the Philippine Skills Framework for Supply Chain and Logistics (PSF-SCL), a product of an agreement between the DTI, TESDA, and SkillsFuture Singapore. The PSF-SCL, the first among the priority industries, includes information on Sector and Employment Opportunities, Career Pathways, Occupations and Job Roles, Functional Skills and Competencies, and Enabling Skills and Competencies.

DTI noted the following reasons why a skills framework is important:

  • Employers can assess their logistics manpower requirements, adapt or modify the standard guidelines for work performance, key tasks, skills and competencies, for purposes of recruitment and selection, hiring, job rotation, and promotion. 
  • Education and training institutions can educate students and learners about the sector, as well as make curricula for the facilitation of learning of required skills and competencies that are more aligned to industry needs.
  • Individuals are equipped to make informed decisions about career choices, as well as take responsibility for skills upgrading and career planning. 

In 2018, DTI, together with the Department of Transportation (DOTr) and the private sector—composed of industry associations representing cargo handling, storage and warehousing, freight transport, and customs brokerage services—agreed on the Ten Commitments to transform the logistics services sector as an efficient enabler of the manufacturing, agriculture, and service industries.

Commitment No. 10 states that both government and private sector “shall develop a competitive and future-ready logistics workforce that will address the current and future needs of the logistics services sector.  We will invest in the development of programs and policies that will allow those working in the sector to effectively fulfill their responsibilities to customers and stakeholders alike. We shall develop our people to be an indispensable tool for businesses both here and around the world.  We shall also take the opportunity to increase awareness of the logistics service sector’s role in economic development.”

“We’ve all seen the important role of the logistics services sector in the economy during the time of the pandemic. The heightened awareness of the public has now brought increased consumer expectations,” Sec. Lopez said.

He added, “While the government continues to address the challenge of logistics cost, we cannot neglect the needs of the industry, which is the availability of a skilled workforce. Today and in the years to come, upskilling and reskilling is a must to provide more employment and better opportunities for our people.”

Originally published last June 29, 2021.

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Digitalization of MSMEs key to Southeast Asia’s economic recovery

Despite the extremely challenging environment in 2020, the momentum of Southeast Asia’s digital economy has clearly not been derailed.


Google, Temasek and Bain recently reported that Southeast Asians spent, on average, an hour more a day on the internet during COVID-19-imposed lockdowns, accessing essential goods, healthcare, education, and entertainment. The region added 40 million new internet users in 2020 and they are here to stay – 94 percent of new digital service consumers intend to continue with the service post-pandemic.


HealthTech and EdTech played a critical role during the pandemic, with impressive adoption rates. E-commerce, online media and food delivery adoption and usage surged – the region’s digital economy hit US$100 billion in Gross Merchandize Value (GMV) last year, with Vietnam and Indonesia experiencing double-digit growth. GMV is on track to exceed $300 billion by 2025.


Maximizing the immense potential of the digital economy will undoubtedly be vital to the region’s overall economic recovery efforts. At the heart of these efforts sits the engine of Southeast Asia’s diverse and dynamic economy – the micro, small, and medium-sized enterprises (MSMEs). MSMEs account for 95 percent to 99 percent of all business establishments and more than half of the total employment in all ASEAN member states. SMEs also contribute 30 percent to 53 percent to each member state’s gross domestic product. Digitalization of the region’s MSMEs so that they may contribute more significantly to the digital economy is thus crucial.


To that end, governments in the region must consider policies that encourage greater entry and participation of MSMEs in the digital economy, spur innovation, and empower these businesses with the ability to grow and invest for the future.


Across Southeast Asia, the pandemic pushed many traditional businesses to adopt new ways of selling to customers and accept digitalization as the way forward, accelerating the region’s overall digital transformation. Sea Insight’s research shows this can have significant and lasting positive economic impact for SMEs’ revenue and productivity.


As we look to recover from the devastating economic impact of the pandemic, governments in the region need to seize the opportunity to help MSMEs build resilience and emerge stronger by accelerating digitalization and building an inclusive digital future. This requires a unified and collaborative approach between the public and private sectors, whether it is in co-developing digitalization initiatives or adopting a consultative approach in policy making.


The priority must be to create the best possible ecosystem for MSMEs to thrive in the digital economy so that they may power the overall recovery of the region’s economies.

Source: The Jakarta Post
Author: Jeff Paine (Managing Director, Asia Internet Coalition)

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Japan Ratifies World's Biggest Free Trade Deal involving China, ASEAN

Japan ratified on Friday the Regional Comprehensive Economic Partnership, a mega trade agreement also involving China, Australia and the Association of Southeast Asian Nations, the Foreign Ministry said.


Tokyo deposited its ratification instrument with the ASEAN Secretariat, making it the third member to do so toward the possible enforcement of the 15-nation RCEP by the end of the year.


The ASEAN Secretariat processes operating procedures on behalf of the pact whose members account for about 30 percent of the world's output, trade and population.


"The deal will strengthen the link between Japan and the (Asia-Pacific) region, which is the world's growth center, and will contribute to Japan's economic growth when it comes into force," Economy, Trade and Industry Minister Hiroshi Kajiyama said at a press conference.


The pact will be Japan's first trade deal involving both China and South Korea, its biggest and third-biggest trade partners, respectively. The Japanese government estimated earlier this year that the trade treaty could lift the gross domestic product of the world's third-largest economy by about 2.7 percent.


The trade deal is designed to remove tariffs on 91 percent of goods, and standardize rules on investment, intellectual property and e-commerce among other trade practices. It also aims to promote optimization of the supply chains within the free trade zone.


The pact, signed by 15 countries last November, will enter into effect 60 days after it is ratified by at least six ASEAN members and three other signatory countries. Among the signatories, Singapore and China have completed ratification procedures.


The RCEP groups the 10 ASEAN states -- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam -- as well as Australia, China, Japan, New Zealand and South Korea.

Source: The Jakarta Post
Original published date: 26 June, 2021

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Thailand BOI approves enhanced incentives to promote R&D and HRD

Aims to attract semiconductor manufacturing, digital activities and smart packaging
The Thailand Board of Investment (BOI) at a meeting on 30 June 2021 approved a series of measures to encourage more investment in research and development (R&D) and engage the industry more actively in human resource development (HRD). Enhanced incentives are also offered to attract investment in the growing semiconductor, digital and packaging industries. 
As Thailand aspires to become more innovation-driven, private sector R&D plays a very significant role. To encourage companies to step up their R&D, the BOI has proposed to the Board that projects that invest or spend at least 200 million baht or 1% of their total sales of the first 3 years be entitled to a longer tax breaks (maximum 13 years) with no corporate income tax exemption ceiling. The number of additional years of tax holidays depends on the amount of R&D spending/investment. Moreover, companies that participate in apprenticeship programs or spend on advanced technology training can also enjoy greater tax incentives.
“We see R&D and HRD being the most critical factors in strengthening the country’s competitiveness,” Ms Duangjai Asawachintachit, Secretary General of the BOI, said after the meeting chaired by Prime Minister Gen Prayut Chan-o-cha. 
The Covid-19 crisis has further highlighted the importance of high technology and the digital economy, from rising demand for electronics products of all sorts to increased usage of digital services and platforms. Amid the pandemic, the semiconductor industry has experienced demand hikes and companies are looking for more resilience in the global supply chain. Thailand, with electronic products as the country’s top export category, aims to attract more semiconductor manufacturing. Front-end capital and technology-intensive manufacturing such as wafer fabrication will be given 10-year tax holidays while advanced integrated circuits, IC substrate and printed circuit board projects with machinery investment of at least 1.5 billion baht will be offered an 8-year tax break.
The BOI also approved a revamp of its promotion policy for businesses operating on the supply side of the digital economy by focusing on hiring and developing IT workforce as well as upgrading companies to relevant international standards. Companies applying for BOI privileges under the single reorganised category called “Development of Software, Digital Services Platform or Digital Content” will be eligible for an 8-year tax holiday, with the yearly ceiling reflecting additional hiring of Thai IT personnel, training expenses and costs of international standard certifications, such as ISO 29110 and CMMI Level 2 and above. 
“On the digital business side, the improved investment promotion aims to encourage the development of a broader pool of qualified Thai IT specialists, and to allow the creation of more competitive local platforms and IT operations,” Ms Duangjai said.
Thailand, which has already made significant investment in its digital ecosystem, including by taking the lead in ASEAN in building 5G infrastructure, has long attracted investment from around the world in the electronics sector, with a promotion policy that covers the entire supply chain. Thailand is currently the world’s 13th largest exporter of electronic products and parts.
To ensure that Thailand’s packaging industry stays on top of the global trends in the sector and to encourage investment in technology and environmental sustainability, as emphasised in the Government’s Bio-Circular-Green (BCG) model, the BOI on 30 June approved enhanced investment incentives for the production of so-called smart packaging and environmentally friendly packaging, including recycled materials.
The BOI also approved a revised scope for the International Business Center (IBC) and Trade and Investment Support Office (TISO) categories with the aim to allow for more flexible operations by foreign multinationals operating regional and international offices in Thailand. The revised scope of both categories will allow companies that do not operate a treasury centre to provide lending to affiliated companies in and outside Thailand under the relevant exchange control regulations.
The board also approved five investment applications, with a combined investment value of 49.9 billion baht, as per the following details:
1. Hin Kong Power Company Limited received approval for a power generation project, with an investment value of 32.5 billion baht. The natural gas-fired plant, located in Ratchaburi Province, will have a production capacity 1,540 megawatts.
2. B.Grimm Power (Angthong) 2 Limited received approval for a power generation, and steam production project, with an investment value of 5.3 billion baht. The project, located at World Food Valley Thailand Industrial Estate in Angthong Province, will have a capacity of 145 megawatts of electricity, and 30 tons / hour of steam.
3. B.Grimm Power (Angthong) 3 Limited received approval for a power generation and steam production project and natural gas pipeline project, with an investment value of 5.2 billion baht. The project, located at World Food Valley Thailand Industrial Estate in Angthong Province, will have a capacity of 145 megawatts of electricity, and 30 tons / hour of steam, while the natural gas pipeline will have a capacity of 13,914 million standard cubic feet / year.
4. Top SPP Company Limited received approval for a power generation and steam production project, with an investment value of 4.35 billion baht. Located in Chonburi Province, the project will have a capacity of 120 megawatts of electricity and 294.2 tons / hour of steam.
5. Toyobo Indorama Advanced Fibers Company Limited received approval for a high tenacity synthetic filament yarn project, with an investment value of 2.6 billion baht. The project, located at Map Ta Phut Industrial Estate in Rayong Province, will have an annual production capacity of 9,300 tons. This special type of fabric is commonly used as a raw material for airbags.
For more information, please contact:
Thailand Board of Investment
Tel. +66 (0) 2553 8111
YouTube: Think Asia, Invest Thailand

Global tourism crash may cause $4 trillion loss to world economy

The slump in tourism caused by Covid-19 will cost the global economy more than $4 trillion for 2020 and 2021, much worse than anticipated, as an uneven vaccination rollout crushes developing countries that are highly dependent on international visitors.
The losses this year alone could amount to $1.7 trillion to $2.4 trillion, even as international tourism rebounds in the second half in countries like the U.S., the U.K. and France, which have higher vaccination rates, the United Nations Conference on Trade and Development said in a report.
The study highlights the costly impact from an unequal access to vaccines around the world. Developing countries may account for as much as 60% of the estimated losses to global gross domestic product, according to the UNCTAD.
The report also shows that the tourism crisis is far from over, with travel restrictions and bans still in place in many regions with low vaccination rates. The world may not see a return to pre-pandemic arrivals of international tourists until 2023, according to the study, which was done in collaboration with the UN World Tourism Organization.
Countries such as Thailand and Turkey, which rely on foreign tourists to boost their economies, bore the brunt of the impact. The drop in tourism also threatens closely linked sectors such as food, beverages, retail trade, communications and transport.
Overall, the crash in tourism has led to an average rise of 5.5% in unemployment of unskilled labor, hitting a sector that employs many women and young people.
"Tourism is a lifeline for millions, and advancing vaccination to protect communities and support tourism's safe restart is critical to the recovery of jobs and generation of much-needed resources, especially in developing countries," said UN World Tourism Organization Secretary-General Zurab Pololikashvili.
In developed countries, the prospect of a vacation overseas is looking up. A rising number of Americans are planning a trip to a foreign country, according the Conference Board's June consumer confidence index.
By: Syndication Washington Post, Bloomberg · Peyton Forte

Incubation Programs Help Small Businesses, Contribute to Global Value Chains

The government needs to enhance capability of small and medium enterprises through entrepreneurial development and incubation programs in order to fully maximize and grow their businesses, a senior official has said.

Kasan Muhri, head of Trade Analysis and Development Agency at the Trade Ministry, said if local companies can maximize know-how and technological skills by linking with the transnational companies (TNCs), they can build their own capacities based on these incentives and even expand their businesses by using the TNC’s networks. 

“The government needs also to strengthen the regulatory working environment to expand employment, upgrade technology and contribute to global value chains,” Kasan added.

Aside from that, the government also needs to develop science, technology and innovation infrastructure to enable companies to build more efficient business practices, he emphasized.

Kasan raised those points during a webinar organized by ASEAN-Japan Center (AJC) on May 27, 2021, in response to AJC’s paper titled “Non-Equity Modes of Trade in ASEAN: Promoting new forms of trade between Japan and ASEAN: Paper 3 Indonesia”. 

According to the paper, non-equity modes (NEMs) of trade in Indonesia is foreseen to potentially play a role in expanding opportunities to participate in global value chains and are critical for inclusive economic development especially during the COVID-19 pandemic.

In general, Kasan added, host country governments prefer equity modes (EMs) to NEMs, because EMs give higher level of commitment and bigger impact of the foreign presence to the performance of local economy.

He added non-equity modes are essentially contractual modes, such as leasing, licensing, franchising and management-service contracts.

A smaller degree of ownership means lower commitment on the investment. It shows strategic policy to mitigate business risk in host country. The higher the business risks faced by foreign investor the lower the level of commitment an investor has, he added.

Data shows, Indonesia is the seventh largest economy in the world, and one-third of the country’s economy is contributed by investments. 

Contract-based business or NEMs in Indonesia exists in natural rubber industries in the form of contract farming, in footwear industry through outsourcing and subcontracting, in fast-food and convenience stores through franchising, and in international hotel chains through management contracts or licensing agreements. 

The enforcement of Law No. 11/2020 on Jobs Creation aims to ease the main obstacles to investing in Indonesia, and benefits also NEMs by attracting investors to Indonesia with the expected ease of doing business in the country.

NEMs present opportunities that are not found in foreign direct investment (FDI). For example, it is an attractive choice for international brand owners and TNCs considering their flexibility to enter the Indonesian market through contractual agreements with local companies. 

To meet TNCs’ standards, local companies are expected to be equipped with management and technological skills and capacity. However, as transnational corporations can easily terminate contracts, a long-term deal is not guaranteed particularly when the quality of goods and services does not meet the TNC’s standards. 

While FDI may have a better advantage than NEMs in terms of bringing in capital, NEMs expand the operational methods to have local Indonesian firms engaged in international networks of production.


Original published date: 02 June, 2021

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Thailand Cross-border trade rises 29% in May

Thailand's cross-border trade rose more than 29 per cent in May, increasing for the fifth consecutive month, the Commerce Ministry reported on Tuesday.
Total trade of 677.078 billion baht (21.158 billion USD) represented a rise of 29.15 per cent, with exports up 33.6 per cent to 408.3 billion baht (12.759 billion USD) and imports up 22.93 per cent to 268.777 billion baht. (8.399 billion USD) Thailand registered a trade balance of 139.524 billion baht (4.360 billion USD) spurred by recovery in neighbouring economies.
Efforts to boost trade and exports would be boosted by the opening of 11 more checkpoints as early as possible, said the ministry. Currently, more than half (51) of Thailand’s 97 border checkpoints remain closed under Covid-19 restrictions.
Thailand’s direct border trade with its four neighbours – Malaysia, Myanmar, Laos and Cambodia – rose 19.85 per cent to 371.04 billion baht (11.595 billion USD) in May.
Meanwhile cross-border trade via neighbouring countries to important markets such as China, Singapore and Vietnam grew 42.57 per cent to 306.038 billion baht (9.563billion USD). China remained the biggest trading partner, followed by Singapore, Vietnam, the United States, Taiwan, Japan and South Korea.
The Commerce Ministry said border and cross-border trade is on course to exceed the target of 1.4 trillion baht (43.712 billion USD). 

Source: The Nation Thailand
Photo Credit: Bangkok Post

Policy rate very low, liquidity not impeding recovery - BoT chief

Thailand's policy rate is very low and liquidity in the banking system is ample and not impeding economic recovery, the central bank governor said, as the country struggles with the effects of a recent spike in coronavirus infections.
Financial measures introduced so far have been sufficient and the central bank is ready to implement more if necessary, Governor Sethaput Suthiwartnarueput said in a video clip posted by the Bank of Thailand's (BoT) YouTube channel on Wednesday.
The BoT has left its key rate steady at a record low of 0.50% since the middle of last year after three cuts to mitigate the pandemic impact.
It has since focused on relief measures including 350 billion baht of soft loans recently and a so-called "asset warehousing" scheme to help businesses.
However, there has been a problem of liquidity distribution to small and medium enterprises, Mr Sethaput said.
"Large businesses still have access to loans, retail ones are already heavily indebted and what they need is income, not more debt," he said.
The BoT chief said it would take Southeast Asia's second-largest economy until the first quarter of 2023 to return to pre-Covid-19 levels and tourism could take "five years plus" to normalise.
The lengthy recovery will increase inequality partly due to very high household debt, which will be a drag on recovery for households, he said.
"We will be out of this crisis ... but the recovery will take time and won't be smooth," Mr Sethaput said.

Source: Bangkok Post / Reuters