The Brief, Issue 4/2012 by The British Chamber of Commerce Thailand

Magazine of the British Chamber of Commerce Thailand Issue 4/2012

www.bccthai.com

AEC: ready or not? The Brief

Issue 4/2012

CONTENTS Issue 4/2012

BCCT

Board of Directors 2012 Chairman Simon Landy Colliers International Thailand T: 02 656 7000 simon.landy@colliers.com

Vice Chairman & Treasurer John Sim KPMG Phoomchai Holdings T: 02 677 2288 jsim@kpmg.co.th Vice Chairmen Matthew Lobner HSBC T: 02 614 4040 matthew.k.lobner@hsbc.com Simon Matthews Manpower Thailand T: 02 634 7273 matthews@manpower.th.com

Dean Thompson Boots Retail (Thailand) Ltd T: 02 694 5900 dean.thompson@bootsrt.com Directors Jane Bailey Equitech (Thailand) Ltd T: 02 259 6255 jane.bailey@pattfoundation.org

Gary Biesty South Asia Law Co., Ltd T: 02 636 0585 garyb@southasia-law.com Viriya (Boyd) Chongphaisal GlaxoSmithKline T: 02 659 3000 viriya.x.chongphaisal@gsk.com David Cumming Amari Orchid Pattaya T: 038 418 418 david.cumming@orchid.amari.com

Richard Greaves Grand Hyatt Erawan Bangkok T: 02 254 6239 richard.greaves@hyatt.com Colin Hastings The Big Chilli Co., Ltd T: 02 235 0170 colin1066@hotmail.com Andrew McBean Grant Thornton T: 02 205 8222 Email: andrew.mcbean@th.gt.com Sriram Narayan British Airways PLC T: 02 627 1723 sriram.narayan@ba.com Chris Thatcher Anglo-Thai Legal Co., Ltd. T: 085 064 8884 christhatcher1@gmail.com

This Edition

PM highlights need for AEC 2015 planning Thailand stalls on AEC movement of labour

22 Front cover: Outgoing ASEAN Secretary-General Surin Pitsuwan is confident that AEC 2015 will bring real benefits.

Ambassador highlights best of British in farewell address to BCCT members

Building brands in the new media landscape

EABC seeks to strengthen EU-Thai business links Golden moments

Chaturon pushes for peace in constitution debate

Turbulent times for airlines in Europe

The Brief

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It CAN strike twice Are you ready?

CONTENTS Issue 4/2012

British Chamber of Commerce Thailand 7th Floor, 208 Wireless Road Bangkok 10330, Thailand Tel: 02-651 5350/3 Fax: 02-651 5354 Website: www.bccthai.com Email: greg@bccthai.com Greg Watkins, Executive Director

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The Brief is published by: British Chamber of Commerce Thailand For advertising and editorial enquiries, please contact Greg Watkins Executive Director - BCCT Production: Scand-Media Corp., Ltd Bangkok

Editor: Dale Lawrence

Executive Directorâ&#x20AC;&#x2122;s Message

Chairmanâ&#x20AC;&#x2122;s Message

18 The views expressed by individual authors are not necessarily those of the British Chamber of Commerce Thailand or of the publisher. Reproduction in whole or in part without written permission from the British Chamber of Commerce Thailand is strictly prohibited.

Olympics spotlight shines brightly on British business

Phuket hotel investments set to hit new record

Transparency improves in Thai real estate market

Former PM Abhisit inspires students at Bangkok Prep

By the Numbers

Chamber events

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Chairman’s Message

wo of the year’s biggest events for the UK marked the months of June and July. The Queen’s Diamond Jubilee celebrations, capped by a fine reception at the Grand Hyatt Erawan, and the spectacular opening ceremony of the Olympics, with the same hotel coming up trumps again by organising a delayed screening for members, with fine champagne and beer generously donated by Diageo and Thai Bev respectively.

Simon Landy

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The ceremony has rightly been widely praised for its portrayal of modern Britain. It was impressive, inspiring and immense, yet quirky, funny and at times a little obscure. Among all the strong social messages – team spirit, multi-culturalism, social justice, etc. – I would say that the defining spirit of progress and development mixed with dissent and irreverence was what gave it its uniquely British feel. Although the Chamber’s events group has a more limited budget than Danny Boyle, they still manage to put on more events than him – and of a remarkably high and consistent quality. Like the opening ceremony, the Chamber’s events cover both serious business issues and social entertainment. Apart from the Olympics screening, the mid-year social agenda included well-attended Third Thursday events, most notably one at the reincarnated Queen Vic Pub at the Embassy, while business events included training workshops and presentations by leading figures. Among our keynote speakers, the Chamber hosted interesting and highly eloquent presentations from both sides of the Thai political divide, with former Prime Minister Abhisit Vejjajiva from the Democrat Party and former Deputy Prime Minister Chaturon Chaisaeng formerly of the Thai Rak Thai Party. We have also had a couple of high-profile visitors from the UK political scene, Ministers Jeremy Browne and Lord Marland, the latter stopping by to address BCCT members after leading the UKTI Myanmar delegation. That Myanmar mission is described in more detail elsewhere in this edition. My main take-away was that although serious challenges to doing business in Myanmar remain, in the current global climate it is hard to think of any other country in the world that has such obvious short-term growth potential. Our physical proximity on the doorstep of Myanmar potentially makes our members among the principal beneficiaries of this opportunity. The BCCT is actively engaged in this process and will be pleased to give initial guidance to our members looking to expand westwards. Another important event took place on August 11th: a changing of the guard at the Embassy, with Ambassador Asif Ahmad departing for pastures new. Having worked as a banker in the halcyon days when banking was regarded as a respected profession, the Ambassador has shown a deep understanding of the needs of the business sector and has been a great champion of British business in Thailand, Thai business in Britain and also of important British charities such as the Royal British Legion. His pro-active involvement in flood relief last year deservedly received widespread praise. He gave generously of his time to the Chamber, not least in his insightful and amusing farewell presentations to members in both Bangkok and Pattaya. He will be missed. But we also look forward to welcoming his successor, Ambassador Mark Kent, who was highly regarded in his last post in Vietnam before embarking on intensive Thai-language training in preparation for his assignment here. The BCCT Board has also had a personnel change. Toni Weber, a huge asset since the start of the year, has moved on to new challenges. However, she has been ably replaced by Viriya Chongphaisal from GSK who was the candidate with the next highest vote in the last election. The Chamber’s programme remains full and our agenda includes intensified lobbying of the Thai government on immigration and related issues, more implementation of recommendations received in our members’ feedback session, preparing proposals to revise the BCCT Constitution for members’ consideration, developing initiatives in Myanmar, education and alumni relations, as well as further developing our events, publications and internal policy capabilities.

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Like Boyle’s ceremony, it’s a complex, multi-faceted programme. Unlike the Olympics, results and rewards are not immediate. We are always on the lookout for more members to get involved, so please let us know if you have an interest in our agenda items. We can’t promise you medals, but at least you won’t get pushed out of a helicopter! Finally, we bid farewell to Rungjit (RJ) Jarernponganarn who has left the Chamber office team to pursue new opportunities. We thank RJ for her sterling efforts and wish her well in her new endeavours. The Brief

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Executive Director’s Message

t took more than 20 years for me to make my first visit to Myanmar/Burma. In 1990 and 1991 I was working in the South East Asia section of the Department of Trade and Industry (now UKTI) in London. I was the desk officer for five countries, one of which was Burma. The others were Thailand, Vietnam, Cambodia and Laos. The desk undertook export promotion and policy work. In Burma’s case there was none of the former given the post-election scenario in Burma at the time and much of the latter. Among my lasting memories are the occasional telephone calls from Aung San Suu Kyi’s mother-in-law who wanted to ensure that the DTI was not in any way promoting trade with Burma. Sadly, during a visit to Bangkok in 1991, I well remember not being permitted to visit Burma.

GREG WATKINS

Fast forward 21 years and Myanmar is opening up. Regular visitors to Myanmar report that business opportunities are appearing and that there is much potential. On 8th July, with BCCT Chairman Simon Landy and board director Gary Biesty, I joined a UKTI mission of British businesses led by UK Minister Lord Marland. The mission was warmly welcomed. Entry to Myanmar was ‘a breeze’ on arrival at Yangon airport. Several things struck me as we drove to the hotel: no motorcycles (they were banned ten years ago) and little traffic. First-time visitors should be aware that there is currently no roaming mobile telephone signal but apparently mobiles can be hired at the airport. There is also little internet coverage and hotel wi-fi connections can be very slow. However, having lunch at The Strand Hotel allowed me to download emails to my Blackberry very quickly. Myanmar has a population of 55 million. The countries bordering Myanmar account for 41 percent of the world’s population and 20 percent of GDP. Looking at key areas of opportunity for BCCT members there is an acute shortage of executive talent and the bureaucracy is not used to handling the large volume of increasingly complex enquiries. Both scenarios offer opportunities for training companies. The banking system is rudimentary and is therefore in need of knowledge transfer. Economists and financial analysts are needed in order to construct reliable economic data upon which investors will base their business plans. The upgrading of up-country roads and railways is a top priority. While there are countless opportunities for consultants and contractors in all types of infrastructure projects, investors and developers are most needed to address the increasing demand for office space and hotel rooms. How about the UK relationship with Myanmar? The United Kingdom was the largest aid donor to Myanmar during the recent period of isolation and this is widely acknowledged and respected by locals as it is British law that forms the foundation of the Myanmar legal system. The UK accounts for 0.5 percent of Myanmar’s trade (the EU has only 1.9 percent). In one presentation we heard that there are at least 10,000 Myanmar nationals in the UK. These are seen as a resource for British companies to access before they return to Myanmar. So, what is next for the BCCT in relation to Myanmar? My objectives in visiting Yangon were two-fold. Firstly, I was looking to further the senior level contact made by Gary Biesty with the Myanmar Chamber of Commerce (aka The Union of Myanmar Federation of Chambers of Commerce & Industry - UMFCCI) which has more than 40,000 members. I met UMFCCI President Win Aung, an anglophile who sent his children to study in the UK. A UMFCCI member, U Moe Kyaw, delivered an excellent presentation on business opportunities in Myanmar. I invited him to write a regular column in The Brief magazine. In due course we hope to sign a memorandum of accord. My second objective was to meet British nationals living and working in Myanmar to assess interest in forming a small British Business Group. The British Embassy in Rangoon is supportive and, although I learnt that there are less than 100 British nationals working in Yangon, those that I did meet were very enthusiastic. The many opportunities bring with them challenges. However, those companies that engage first are well placed to overcome the challenges. At present many service companies and consultants are establishing companies or links to local organisations in order to advise potential investors. The revised Foreign Investment Law is expected to be passed in the current session of parliament. With numerous investment privileges offered it should provide a significant boost to current investment. Furthermore, the current Companies Act permits the establishment of a 100 percent foreign-owned company that commits to a minimum investment of US$50,000. The potential is immense, as are some of the challenges, but can business afford to miss out by not engaging early in Myanmar’s recovery and development? The Brief

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Cover Story

Prime Minister Yingluck Shinawatra joins other regional leaders at the ASEAN summit in Cambodia.

PM highlights need for AEC 2015 planning B

ritish Ambassador Asif Ahmad fears that Thailand will not be ready for the launch of the ASEAN Economic Community. Addressing members of the BCCT at a farewell luncheon in Bangkok, the Ambassador urged Thailand’s parliamentarians to focus on the important steps required to ensure total readiness by 1st January 2015. He feared that lack of action by the government could mean that Thailand is left trailing alongside the likes of Cambodia and Laos in the wake other nations in the region. Ambassador Ahmad is not alone in expressing concerns about Thailand’s lack of preparation for AEC 2015.

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The University of the Thai Chamber of Commerce (UTCC) is also warning that ‘Thailand should move to establish its brand before the ASEAN Economic Community (AEC) kicks off in 2015’. A study published by the UTCC suggests that Thailand remains attractive for foreign investors but that worries remain about political stability, social unrest, corruption and flood management. The UTCC) conducted interviews in four separate international sectors representing media, government, retail investors and large multinational companies. Dr Mana Kuntaraporn, UTCC’s assistant president for corporate commu-

nications, said the biggest concerns in the minds of those questioned were political uncertainty and renewed strife, corruption and flood management. However, Dr Kuntaraporn added that the corruption situation in Thailand is perceived as being somewhat better than in Indonesia or the Philippines. The UTCC is also calling for better English language skills across Thailand as the country moves towards AEC 2015. The study notes that Thailand has strengths as a regional centre but remains weak in languages because those with English-language skills are mostly based in Bangkok. “Thailand is also good at trading and has done well in exports and 24-hour

Cover Story shops, but again this is concentrated in Bangkok,” added Dr Kuntaraporn. She said that logistics links with China and India have helped to increase Thailand’s attractiveness as an investment destination, as have the country’s industrial and farm production bases and the ability to draw labour from neighbouring countries with the government’s new 300 baht daily minimum wage. “Thailand has a high potential in ASEAN but government agencies should work in a unified manner towards a common goal, “said Dr Mana. “Thailand needs to establish the country’s image to differentiate it from other ASEAN countries. An image of modern Thailand should be created.” Prime Minister Yingluck Shinawatra is certainly aware of the pressures facing the public and private sectors. When the Prime Minister opened the symposium ‘The Nation’s Time: A New Thai Economy in the ASEAN Economic Community’ in Bangkok she took the opportunity to highlight some of the challenges facing Thailand as the country prepares for integration. “The phrase ASEAN Community has been thrown around a lot recently but I think it’s time that we gather together to debate what the ASEAN community really means and to consider fundamental questions,” she said. “What will happen to the Thai economy when we become more integrated with ASEAN; how can we prepare for such an integration, and how will the government help support private businesses in growth and stability,” she asked. “The first pillar of the ASEAN Community is politics and security. We will ready ourselves for the transition by maintaining stability in politics and security and building investor trust in our nation. My government has made improvements in this regard and we are confident that we can gain the trust of these investors.

The United States of America is monitoring progress in the region as nations prepare for AEC 2015.

“The second pillar is economics. Our symposium today is dedicated to this very important topic and will touch upon the importance of laying a strong foundation for our economy and how our economy will operate in the context of the AEC,” the Prime Minister added. “The third pillar is society and culture. In the next three years, ASEAN nations will lead integration efforts in these pillars. In the ASEAN Security Community, for example, there is a move towards greater democracy in our nations, especially in Myanmar. In the AEC, we see tremendous economic progress toward freer and fairer trade for ASEAN nations.” The Prime Minister also stressed the importance of the socio-cultural community and the fact that ASEAN countries are culturally related. “Our task is to move toward the integration of the peoples of our ten nations into a unified group. This will be a big benefit because the total population of ASEAN is 600 million. In addition, we are living in rapidly developing countries. In order to sustain our growth, we need to quickly prepare ourselves economically for the

integration. This is why the AEC blueprint is so important,” she said. “ASEAN will be considered a single production base which will give us a bigger bargaining chip. It is no mystery that the entire world is now talking about ASEAN because our countries are rapidly developing and have a large population base. Thailand is in a unique position to benefit from this integration,” the Prime Minister said. She also stressed the importance of creating an economy that is fair and transparent. “After 2015, producers and business people will be able to choose an ASEAN country where they can decrease their international tax and maximise their profit. Of course, competition will increase, but that also means we have more opportunities to invest in other countries. We need to further study the niches of each ASEAN country and how we can best maximise our benefits from this integration. “The third goal is to increase ASEAN competitiveness. Opening our market up increases both competition and opportunities and we need to ready ourselves, from production to human capacity-building. We must develop

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Cover Story

the collective ASEAN economy and make it stronger together. This will allow us to effectively do business with other world economies such as Europe and the United States. The critical point—the heart of the AEC— is that in integrating with ASEAN countries we will inherently integrate further with other world economies.” The opportunities presented by AEC 2015 are certainly being recognised in the world of academia. Professor Boonsom Lerdhirunwong, Dean of Engineering at Chulalongkorn University in Bangkok , is taking steps to prepare the country’s oldest engineering school for the advent of the ASEAN Economic Community. The framework allows for a freer flow of skilled labour within member countries embracing professionals qualified as engineers, architects, doctors, dentists, nurses, accountants and surveyors. “For Chula engineering graduates we want to ensure that they have the right attitudes – hardworking, with language skills, especially English proficiency and other soft skills like ASEAN cultural knowledge,” he said. There are about 60 higher-education institutes in Thailand for engineering, producing around 20,000 graduates annually. Chulalongkorn University produces about 1,000 engineering graduates every year. “As an engineering school, we have to ensure that our curriculum is wellaccepted, with proper accreditation. We also focus on the linkage between our school and industries, so we recently launched the industrial liaison programme (ILP) which will serve as the country’s gateway to ASEAN. “As members of the ILP, private industrial companies can use some of our facilities and benefit from our faculty’s knowledge base, research and other activities. We hope this will be useful for industries such as automobiles, electronics and

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Chulalongkorn University in Bangkok is producing top class engineers that may seek opportunities in other ASEAN markets after 2015.

petrochemical, among others. For big conglomerates such as PTT, Siam Cement Group and Thai Beverage Group, we hope to work with them in their overseas expansion projects as we have over 200 PhD students in our faculty with expertise in various fields. “For small and medium-sized enterprises, we hope to help them grow in other ASEAN markets. For example, we can help them in certification work for various products so that they meet ASEAN and related standards. We also focus on networking with regional universities and academic allies and we hope the Thai government will set aside a bigger budget to finance scholarships and related programmes to attract more ASEAN students to study here. “For Chula engineering graduates, we want to ensure that they have the right attitudes – hard-working, with language skills, especially English proficiency, and other soft skills like ASEAN cultural knowledge,” he added. The MICE sector in Thailand has been brainstorming ideas ahead of AEC 2015 at a forum organised by Thailand Convention and Exhibition Bureau (TCEB).

MICE experts and tourism professionals from other ASEAN nations such as Malaysia and the Philippines also attended the event where Khun Nichapa Yosawee, TCEB MICE Capabilities Department Director, estimated that Thailand would see more than 25 percent annual growth in international arrivals and MICE receipts from 2015 as business sectors enjoy more cross-border freedom within the ASEAN community. The forum heard that TCEB is teaming up with other relevant bodies including the Thailand Incentive and Convention Association, Thai Hotels Association, the Bangkok Metropolitan Authority and the Ministry of Tourism to implement a ‘comprehensive programme to ready the industry for the challenges of economic integration’. TCEB is also reaching out via several cooperation agreements with other ASEAN countries such as Vietnam, Cambodia, Myanmar and Laos. The Bureau is also promoting Thailand as the mainland hub of the Greater Mekong sub-region.

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Thailand stalls on AEC movement of labour By Pimvimol (June) Vipamaneerut and David Duncan

he ASEAN Framework Agreement on Services (AFAS) was signed in 1995 and among its goals was ‘to liberalise trade in services by expanding the scope and depth of liberalisation beyond those undertaken by member states under the GATS with the aim to realise a free trade area in services’.

At the 2003 ASEAN Summit in Bali, member states agreed that they would address these concerns by putting in place Mutual Recognition Arrangements (MRAs), applicable within individual lines of work. They are written to set out the responsibilities of the country of origin, on the one hand, and the host country, on the other, but also to set out responsibilities for the skilled labourers themselves.

As a general matter, AFAS adopts the same four modes of supply as used in GATS, including (1) cross-border supply, (2) consumption abroad, (3) commercial presence, and (4) presence of natural persons. Since 1995, ASEAN member countries have gone through several rounds of negotiations with the goal of easing the flow of services within the ASEAN region. As such, the movement in natural persons (GATS mode 4) is negotiated in the overall context of enhancing trade in services among ASEAN member countries. To this end, one of the goals set in the ASEAN Economic Community Blueprint is the free flow of skilled labour. However, Thailand’s domestic laws are far more restrictive. For example, the Alien Employment Act imposes work permit requirements and also gives effect to a 1979 Royal Decree, wholly excluding non-Thais from some 39 occupations reserved for Thai nationals. Given that other member countries face similar issues Article 33 of the Blueprint provides that ‘in allowing for managed mobility or facilitated entry for the movement of natural persons engaged in trade in goods, services, and investments, according to the prevailing regulations of the

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receiving country, ASEAN is working to facilitate the issuance of visas and employment passes for ASEAN professionals and skilled labour who are engaged in cross-border trade and investment-related activities’. Article 34 goes on to provide that in facilitating the free flow of services (i.e., by 2015), ASEAN is also working toward harmonisation and standardisation, with a view to facilitate the movement of skilled labour within the region. As such, the ASEAN framework goes beyond a push to simplify visa and work permit processing as it also involves the establishment of mechanisms by which member countries can recognise the professional qualifications issued within each. Clearly, harmonisation and standardisation of professional qualifications across member counties is a difficult undertaking.

With respect to an MRA the general approach is that, to be eligible to work in the host country, the skilled labourer must meet the requirements applicable in his or her country of origin. These would include, for example, appropriate qualifications, professional registration and/or licence, minimum experience, satisfaction of continuing education requirements, lack of professional misconduct and no pending investigations thereof, and perhaps other requirements such as medical examinations or competency assessments. However, the eligibility of a skilled labourer to work in a particular host country would always be subject to the host country’s domestic laws and regulations. Moreover, if a skilled laborer is eligible to work in the host country, the skilled labourer will still be obligated to follow the host country’s rules of professional conduct, applicable local laws and regulations and insurance/liability requirements. In addition, there is also provision for mutual respect for cultural and religious differences. As of now, MRAs have been adopted with respect to nurses, architects, engineers, medical practitioners and den-

tal practitioners. For accountants and surveyors, the member countries have agreed to a framework by which their qualifications could be recognised and have encouraged member states to negotiate MRAs among themselves covering these lines of work. Thailand has yet to adopt domestic legislation to implement MRAs and, in fact, faces an interesting journey to do so by 2015. Aside from the need to amend domestic law, the development of MRAs presents significant challenges for some lines of work, given the differences in educational standards across member countries. To address this issue, there are also efforts to develop core competencies and qualifications for various lines of work and the ASEAN University Network is looking at ways to increase mobility for students and staff within the region. In any case, further MRAs are expected as 2015 approaches. Considering all relevant provisions it is important to be aware that these treaties or agreements do not function to override local law. Indeed, all

of the various measures make it clear that the treaties and agreements are applicable only in accordance with prevailing laws and regulations of the host country. Practically, this means that member countries can still impose significant restrictions on the movement of natural persons. In Thailand for instance, the Alien Employment Act remains in force and thus foreign employees still need visas and work permits. Moreover, for some lines of work, it may be impracticable to comply with applicable professional obligations of the host country, given host country issues such as language barriers. Ultimately, we will not see the full benefits of the single ASEAN market without the free movement of natural persons. AFAS is a major component of this, and so is the 2009 ASEAN Comprehensive Investment Agreement which contains relevant provisions with respect to movement of natural persons associated with cross-border investment, including involved companies and their senior

personnel. The free flow of natural persons works along with the movement of capital and particularly services to help all member countries to maximise their economic growth and thus benefit their people. This article was first published in the Bangkok Post. Please send comments to Andrew Stoutley at andrew.s@tilleke.com.

Pimvimol Vipamaneerut and David Duncan may be contacted at Tilleke & Gibbins, Supalai Grand Tower, 26th Floor, 1011 Rama 3 Road, Chongnonsi, Yannawa, Bangkok 10120. Tel: +66 2653 5555 Fax: +66 2653 5678 www.tilleke.com

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Thailand could become regional trade hub C

hairman of UK Trade and Investment’s Business Ambassadors’ Group Lord Jonathan Marland has urged Prime Minister Yingluck Shinawatra to make Thailand more open to foreign competition.

The meeting in Bangkok focussed upon opportunities for Thailand to benefit from the AEC 2015 if Thailand becomes more competitive. Lord Marland, who also serves as Parliamentary Under Secretary of State for the Department of Energy and Climate Change, updated the Prime Minister on his visit to Burma before coming to Thailand. Lord Marland extended an invitation on behalf of Prime Minister David Cameron for Prime Minister Yingluck to pay an official visit to the UK after the Olympic Games. Lord Marland also met Minister of Energy Arak Chonlatanon and Deputy Commerce Minister Poom Sarapol in a move designed to strengthen ThaiUK links on energy and investment.

Lord Marland (centre), accompanied by Ambassador Asif Ahmad, discusses investment opportunities with PM Yingluck Shinawatra.

He also discussed investment opportunities between Thai and UK energy companies with Suraphong Lamchula, acting CEO of PTT Exploration and Production Public Company Limited. Lord Marland’s final call was on Minister of Education, Prof Dr Suchart Tadathamrongvech, to talk about oppor-

tunities for closer engagement between the UK and Thailand in the education, skills and vocational training sectors. In his ministerial meetings Lord Marland encouraged the Thai government to engage more closely with the European Union by pressing forward with negotiations for a free-trade agreement with the region.

Lord Marland believes that Thailand has great potential to be a regional hub for British investors seeking a springboard for exploring opportunities in Myanmar and other ASEAN countries but needs to liberalise its investment regulations so that it can compete effectively with Singapore.

“There is no doubting the great potential for Thailand to be an access point to Myanmar. The country should develop its regulations and liberalise its investment rules to compete with Singapore, which is known as a very liberalised country,” he told The Nation’s reporter.

He also wishes to see a more liberalised taxation policy that promotes growth in trade between the EU and Thailand and urged the government to resolve overlapping territorial claims with Cambodia that continue to create uncertainty for British firms doing business in the Gulf of Thailand.

In an interview with The Nation, the English language national daily published in Thailand, Lord Marland said Thailand should leverage its role by liberalising the services sector and investment as many British firms would like to use this country as a centre for exploring opportunities in Myanmar.

Myanmar is very attractive for British investors, he said. However, as Myanmar has a long way to go before its business and other sectors can grow, UK enterprises still see Thailand as a good destination for continuing investment and use as a gateway for exploring opportunities in the neighbouring country.

Finally, he asked the Thai government to facilitate longer work permits for British and other foreign employees, particularly for skilled workers, to assist in business growth. In his capacity as Chairman of UK Trade and Investment’s Business Ambassadors’ Group, Lord Marland spoke about his impressions of Burma at a lunch organised by the British Chamber of Commerce.

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Email or call us today +66 2 697 9000 | sales.bangkok@thenomadoffices.com for our special promotion packages The Brief

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Olympics spotlight shines brightly on British business By Bradley Jones

outh East Asian markets have always been given a lot of attention by UK Trade and Investment. Their impressive growth rates over the last two decades, their economic resilience in the face of natural disasters and the ebbs and flows of global commerce, and their ongoing transition from agrarian and low-value manufacturing economies to more skills-based, middle income nations, suggest that this is a region that British companies simply cannot ignore.

Over the next few years UK Trade and Investment will devote more of its energies to helping UK companies capture the commercial opportunities arising from ASEAN economic integration. The UK ASEAN Business Council has recently been set up to raise awareness of the opportunities in this part of the world and to encourage businesses to begin thinking of these markets as a regional bloc, with synergies in transport infrastructure, energy supply and supply chains and logistics, not as individual countries hermetically sealed from one another. The three minnows of ASEAN – Burma, Cambodia and Laos – stand to be major beneficiaries of the ASEAN Economic Community. In recognition of this, UK Trade and Investment is currently setting up offices in Burma and Cambodia. Later this year a new British Embassy will open in Laos. For UK-owned businesses in Thailand that are seeking to exploit some of the potential these new markets offer the British Embassies in Rangoon, Phnom Penh and Vien18

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Another memorable moment in the opening ceremony as the Olympic Flame takes centre stage.

tiane should be their first point of contact for business, economic and political advice. As I write this article, just a few days before the London Olympics is set to open, the eyes of the world are, inevitably, shifting towards London. This will be the first Olympics in which business has been a major feature of the programme. Lancaster House has been converted into the ‘British Business Embassy’ for the duration of the Games and many of the world’s top CEOs, including several from Thailand, will be flying in to attend the events being held there. New deals worth in excess of one billion pounds are expected to be brokered over the duration of the British Business Embassy

summits and the global investment conference that precedes it. There will also be major business activities taking place alongside the Paralympics – including the ‘Startup Games’ hosted in Tech City, near Stratford, that are intended to foster entrepreneurship and innovation amongst the world’s most promising new companies. As far as the Olympics legacy goes, in addition to providing long-term regeneration to an area of East London that desperately needed it, the Games are estimated to be worth £21bn to the UK economy in business and tourism revenue. The delivery of the Games, on time and on budget, will demonstrate to the world the UK’s capability in

delivering major, complex infrastructure projects. Closer to home, there will be no letup in the frenetic pace of bilateral engagement between the UK and Thailand. We have seen nine VIP and ministerial visits to Thailand over the course of the last year, and there will no doubt be more to come in the next few months. We also hope that there will be some senior Thai visitors to the UK in the near future. Commercial activity between the countries is buoyant at the moment across a range of sectors including life sciences, education and energy. In the Embassy itself we will have a change of Ambassador in August. Asif Ahmad will be returning to the UK to undertake language training for a while before taking up a new Ambassadorial post elsewhere in Asia. His business background and his experience at the heart of Government in No 10, the Foreign and Commonwealth Office and

in UK Trade and Investment has been a real asset in boosting the commercial relationship between the UK and Thailand and I have valued his advice and guidance very much. I wish Asif and Zubeda all the very best for the future.

For more information on UK ASEAN Business Council, Laos, Burma and Cambodia please visit:

Our new Ambassador is Mark Kent, previously the British Ambassador to Vietnam. His tenure there came at a time when Vietnam took major steps to liberalise its economy. Mark was instrumental in setting up and taking forward the UK-Vietnam Joint Economic Trade Committee, aimed at fostering trade between the two countries. As a result, the UK is now the third biggest EU investor in Vietnam and our commercial footprint there is growing. He will no doubt wish to work with the BCCT from the very outset on the wide range of trade and market access issues affecting the British business community here. I wish Mark, Martine and their family a very happy posting in Thailand.

www.ukinlaos.fco.gov.uk www.ukinburma.fco.gov.uk www.ukincambodia.fco.gov.uk

http://www.ukti.gov.uk/export/ sectors/creativemedia/videogames/item/285280.html

Bradley Jones is Director â&#x20AC;&#x201C; UK Trade & Investment in Thailand, based at the British Embassy, 14 Wireless Road, Bangkok 10330 Tel: 02 305 8256 Fax: 02 255 8619 Email: bradley.jones@fco.gov.uk www.ukinthailand.fco.gov.uk

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Issue 4/2012

Liberal view on strength of China and India British MEP Sir Graham Watson highlighted the growing influence of China and India in a speech to delegates attending the ‘International Trade – from Patronage to Partnership’ conference organised by the Alliance of Liberals and Democrats for Europe and the Council for Asian Liberals and Democrats. An edited version of his speech is printed below.

or at least a thousand years, coinciding roughly with the epoch of the second millennium in the Christian calendar and therefore mainly before the age of European colonisation, China and what is now modern-day India were the two leading civilisations in Asia. They tended to have their own fairly distinct spheres of influence and they tended to have little interaction with each other. China could hardly be described as a Liberal country, but it was an important centre of study and learning and debate. Kong Fu, the man we know as Confucius, was a conservative thinker. But Mong Ke, or Mencius – Confucius’ main interpreter – was more Liberal. Debate was kept internal; those beyond the Middle Kingdom were viewed as barbarians. It was only as imperial China crumbled that Liberal ideas – expressed by people like Cun Zhong-shan, or Sun Yat-sen – were enriched by thought from other civilisations. India, by contrast, though more heterogeneous, was a testing ground for Liberal ideas. The great Mughal emperor Iqbal was codifying a bill of rights in India’s constitution at the time at which, in Europe, a man called Giordano Bruno was burned at the stake for being a heretic. Indian thought fertilised Asian civilisation beyond India’s borders perhaps more than Chinese philosophy. This was important, because prior to around 20

The Brief

Issue 4/2012

percent in the last two decades and has become an engine for growth for Asia and the world. Deng Xiao-ping’s open door policy from 1979 has been a great success in economic terms. In the second quarter of 2010 China became the second largest world economy and may become the first by 2030. China’s per capita GDP remains far behind those of Japan, South Korea, Taiwan and many western economies, but it is catching up. China’s share of total world GDP was less than five percent in 1950 but is estimated today to be around 15 percent. In political terms, however, the country is little freer than before, other than superficially.

Sir Graham Watson

1820 China accounted for around 33 percent of the world’s manufactured goods and India for around 25 percent. Most of this trade was in their respective parts of Asia. The second half of the 20th century, in which ideological warfare became dominant, witnessed heightened tensions between the elephant and the dragon over disputed borders. Tibet no longer served as a buffer state. There was geopolitical competition for power, influence, resources and markets. If we fast-forward to today, China has had an annual growth rate close to 10

India’s trade opening came much later, after 1990. It enjoyed growth rates of around six percent in the first decade of this century and incomes per capita more than doubled in the 25 years between 1990 and 2005. But politically the country has atrophied; freedom and justice which exists in principle is often far from realised in practice. Both India and China seek an international status that is commensurate with their size, strength and potential. Their cultures require them to regain the power and status their leaders consider appropriate The rise of China has prompted many fears in India that the world’s most populous country is seeking to be Asia’s sole Middle Kingdom. ‘One mountain cannot accommodate two

tigers’ (Chinese saying). There are also concerns among other Asian countries, which are generally keen on a multipolar Asia, and they fear that China likes multipolarity on the global level but is less keen on it in the region. This fuels an arms race involving two powers which are so obsessed by the threats they face that they often appear unaware of the threats they pose. Both claim not to be expansionist powers: in the case of China, the recent developments in the Spratly Islands give cause for doubt. India has a lot of catching up to do – economically and militarily. Many Indians see China as predatory in trade and are concerned about being left behind as India has a lower growth rate and less foreign investment. There are overlapping spheres of influence, resource scarcity and rival alliance relationships – competition rather than cooperation – particularly in Asia but also in Africa and Latin America. Both sides are developing free trade agreements with other countries as there is no sign of any meaningful conclusion of the Doha Round. India is currently negotiating about a dozen FTAs, many with Asian countries. The economic and financial crises in the EU (and also in the USA) have pushed both countries to seek to expand their trade with Asia as the proportion of their trade with Europe has declined. China has been the fastest growing economy in the region for the last decade and has surpassed India in terms of growth, world trade share, price competitiveness in product manufacturing and winning oil deals. It has been improving its trade and investment relations with South Asia countries through treaties and bilateral cooperation, notably the 2006 FTA with Pakistan. Beijing has supported states (Pakistan, Bangladesh, Burma, Sri Lanka) that can act as counterweights to India. Nearly 90 percent of

Chinese arms sales go to countries in the Indian Ocean region (2009). Traditionally, India has been the major trading partner with its South Asian neighbours but China’s trade has surpassed India’s in nearly every year since 2000. So what about South East Asia and East Asia? India’s ‘Look East’ policy involves an expanded role in South East Asia and East Asia in order to tap into its dynamic economic growth and secure its energy supplies. There was an eightfold increase in India’s trade with ASEAN countries from 2000 to 2010. ASEAN Secretary General Surin Pitsuwan said India will be a future engine of growth in SE Asia. In 2010 India-ASEAN trade was US$55.3 billion. This is still dwarfed by China’s trade with ASEAN which was US$292.78 billion in 2010 – boosted by the ASEAN-China Free Trade Area. That area came into effect on 1st January 2010 and is the world’s largest free trade area in terms of population and the third largest in terms of nominal GDP. The ASEAN-India FTA came into effect at the same time.

cooperate and compete over oil and gas – both need energy resources for development. “Only when China and India develop well, can one claim that the century of Asia has come. If China and India strengthen cooperation, Asian unity, stability and prosperity will be very hopeful, the world will be in peace and make more progress.” (Deng Xiaoping). Both see the current world order as outdated and designed to perpetuate the domination of western powers. This is one of the guiding principles of the BRICS grouping. Bilateral trade has risen from US$350 million in 1993to US$73.9 billion but India’s trade deficit with China is US$27 billion. In theory the partnership of China’s manufacturers and India’s technology and service sector could make ‘Chindia’ the factory and back office of the world. But China wants to beat India in the services sector as well.

The Shanghai Cooperation Council has strengthened China’s economic and strategic cooperation with Central Asia, including the 1000km long oil pipeline from the Karazhanbas field to Xinjiang.

The trade objectives of China and India are translated into a more assertive policy and often a military build-up. Many Asian countries see India or China as a counterweight to the other Asian giant. Pakistan and Sri Lanka are keen to have strong links – including trade links – with China as a balance to India. Nepal tends to try to play one off against the other.

Both countries recognise the common threats of terrorism, separatism and religious extremisms. They can

Other countries – particularly in South East Asia – do not want to be over-dependent on China.

Sir Graham Watson is a member of the European Parliament representing South West England. He is a qualified interpreter who speaks four European languages. From 1983 to 1987 he served as Head of the Private Office of the Rt.Hon. Sir David Steel MP, then Leader of the Liberal Party. Immediately before entering parliament Graham Watson worked for the Hong Kong & Shanghai Banking Corporation in London and Hong Kong. His six years with HSBC encompassed a three-month stint with the European Bank for Reconstruction and Development. He maintains an active interest in the Far East and is currently learning Mandarin Chinese.

Sir Graham was the first British Liberal Democrat ever to be declared elected to the European Parliament, winning the Somerset & North Devon constituency with a majority of over 22,500. In June 1999 he was elected to represent the new enlarged South West of England constituency, which covers Bristol, Gloucestershire, Somerset, Dorset, Wiltshire, Devon and Cornwall. Graham was knighted in the Queen’s birthday honours in October 2011 and was elected President of the European Liberal Democrat and Reform Party (ELDR), comprising 55 liberal parties from across Europe. He lives in the Somerset market town of Langport.

The Brief

Issue 4/2012

Ambassador highlights best of British in farewell address to BCCT members

British Ambassador Asif Ahmad bids farewell to BCCT members in Bangkok.

here is a long established tradition that when the British Ambassador leaves Bangkok he uses the final speech in Thailand to really let go and speak his mind. You have no doubt heard some ambassadors save all their pent-up frustrations for this day. But I won’t. The simple reason is that those who have gone before me as British Ambassador finished their Foreign Office careers here. But I have survived and I have another new challenge ahead of me. What I will be doing is going back to my roots, to the great City of London. For a year I will be a student learning a new language. No suit and tie for 12 months. Then I will be back as Ambassador for four years in another Asian country. All will be revealed once the country’s leader has replied to Her Majesty the Queen’s letter.

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When I was asked for a topic for my speech I said that I would talk about ‘What Makes Britain Great’. And Britain is great for so many reasons. The pharmaceutical companies have indeed given me good moments in Thailand. With Dr Thavirap’s GSK team I went to Ayutthaya to distribute relief supplies to people stranded in the floods. Little did I know then that within weeks we would be facing the same dangers in central Bangkok. That was a great lesson to me in the character and resilience of the people of Thailand. Many British companies in Thailand suffered from the floods and yet were in the front line helping their staff and communities. Tesco Lotus turned their car parks into relief centres. And just a few days ago, when PCS launched

their new Total Facilities Management offer, it reminded us of the threat to the planet from climate change. With Heather Suksam’s leadership the Chamber has been at the forefront of fighting crimes against children and it was good to bring the British Council and the business community together to protect vulnerable children. Britain has a great record of businesses working with the community. And even though our economy is fighting to return to prosperity our tax payers have not forgotten people in need. Britain is and will remain a major donor to help people living in poverty. But we can do more only if we are in a stronger economic position. Some commentators have written off our chances of success. They see Britain as a nation in terminal decline. I simply

don’t accept that proposition. Britain is still one of the largest economies of the world. We are one of the world’s top ten manufacturers. When I opened Rolls Royce Motors’ first showroom in Thailand this month I said we now make more cars than ever before. And Britain exports more cars than we import. For all its bad publicity, the City of London is still the largest international financial centre in the world. Without the benefit of the CERN collider, years ago Professor Higgs of Britain came up with his theory of how matter is formed. And now we have proof of the Higgs Boson. Few can beat us for creativity and innovation. The best writers, film producers and musicians are from the United Kingdom. And tomorrow night, four billion people throughout the world will watch Great Britain at her best with the opening of the Olympic Games. We have the talent, the ingenuity and the economic base from which we can chart a better future. With the eurozone in crisis and the UK going through a painful process of adjustment things are not going to be easy. Anyone who thinks they are immune from the fate of the eurozone should think again. Just under half of Britain’s exports are to other EU neighbours. For Thailand and Asia as a whole, we are a significant market. Even mighty China is starting to slow down because we are buying less. The British government has made Asia and other emerging regions a priority. At a time when our embassies are shrinking in Europe, we are adding 25 more staff here in Bangkok. You will see more government ministers making their way to Thailand and other ASEAN countries this year. Thailand’s Prime Minister will visit the UK after the Olympics and she will take with her a group of leading business people. When I set out the reasons to 10 Downing Street why seeing the Thai PM was important, I identified more than five billion pounds of real business prospects that we are working on. That builds upon the five billion pounds worth of existing two-way trade in goods and services between Thailand and the UK.

Sahavirya Steel, the company responsible for one of the largest investments into Britain from any country in the world last year, has now started shipping steel from Redcar. That single deal alone will wipe out the one billion pound deficit in the trade deficit in goods that we now have with Thailand. The world has recognised Britain as a great place to do business and we attracted more foreign investment last year than any other member of the EU. That said, we cannot afford to be complacent. Senior government ministers are worried that the recession in Europe may go on for a decade. Business as usual is not going to work as a model for the future. Last month, a handful of Ambassadors were asked by No 10 to write in with our thoughts, no holds barred, on what we should do to secure a better future for our country. The letter I sent is confidential but let me share a few of the themes with you. I said that to be successful in Asia we must be more Asian in our thinking, actions and behaviour. One of the reasons we have enjoyed commercial success in the past has been the legacy of decision makers having had their education in the UK. I said we needed to make students from the emerging nations feel we wanted them to come to Britain. The Prime Minister has already responded. He is taking foreign students out of the figures used to control and reduce immigration. What should then follow are more welcoming visa processes for bona fide students. We will invest more in promoting education abroad.

country. Thailand has fallen behind in the region in English language proficiency. I don’t say this because English is our language. For your businesses and as ASEAN becomes more integrated the country needs far better English speakers. This Monday, the Thai Education minister welcomed the first batch of young British university students and graduates who will spend their summer holiday in Thailand. They will be English Language Teaching Assistants in schools all over the Kingdom. The Thai government is providing food and lodgings and a bit of pocket money. The students paid their own airfare. I hope that the scheme is successful and we see more young Britons coming here to help Thais with their English. They will also benefit from their exposure to Thailand and become better candidates for employment themselves. We are looking at countries that have a successful commercial track record and see what they do best. In my letter to No 10, I pointed to the way in which the German Chambers of Commerce work in a very effective partnership between the public and private sector. Lord Green, the Trade Minister, has responded to that idea by commissioning an urgent study of how leading Chambers from other countries work and he is visiting Germany to take a detailed look.

Not just to get students to come to our country. We want British educators to come out and do more in countries such as Thailand. We are now working with the University of Central Lancashire who plan to set up Britain’s first campus in Thailand. Some 5000 students should be able to enrol for a degree course starting in 2015 here in Bangkok.

UKTI Director Bradley Jones has talked to your Board Members to see how this Chamber might be able to help British business achieve greater success in Thailand and the region. When I was Director Asia for UKTI I looked at the ever growing demand for services in China. There was no way we were going to keep adding staff to the UKTI team in our network in China. Instead, we pumped a million Pounds into the China Britain Business Council to provide services to SMEs looking for opportunities to develop business in China.

The British Council has now become a company incorporated in Thailand. This means they can now ramp up the provision of English language teaching Bangkok and other parts of the

Through a network of offices, the China-Britain Business Council now offers the sort of chargeable service that UKTI provides in Thailand. Now that could be an idea for the Chamber here The Brief

Issue 4/2012

to consider. I can see the arguments for tying up the Chamber network in Britain and abroad more closely to our agenda. I can see some other wider benefits for UKTI. On our visa service, Bradley gives it to you straight. If your people are in a hurry, use the Priority Visa Service. That is our fast track 3 day decision offer. In fact ,whether it is for consular needs or other issues of concern, we do listen to what you say. There are some things we can change and there are others where we can give London feedback to explore new ways of doing things. Take passports as a case. This Chamber and others have told us and our ministers that getting a new passport takes too long and you are experiencing real difficulties as your pages fill up rapidly. We have made some exceptions for Thailand. You donâ&#x20AC;&#x2122;t have to send your original passport when you apply for a new one. You can get a second passport if you have a genuine need. But that is not really the solution you want. I have asked the Home Office to look at giving you the same fast track service that we offer to applicants in the UK. I hope they can sort out the practicalities and make this possible. There are some arguments I am not sure I can win. I have passed on the sense of injustice some people feel about their state pensions being frozen because they live in Thailand rather than a country where we have a special deal. The annual cost of removing the anomaly would be 655 million pounds. And if the payments were to be backdated the total bill would be five billion pounds. I cannot see the British Government giving frozen pensions priority over other demands in the current economic climate. We are making some headway for you in our discussions with the Thai government. The Prime Minister has agreed to form a working group to look at the way in which visas and work permits are processed in Thailand. It is quite extraordinary that up until a month ago English Language teachers working for the British Council were having to do visa runs. We want the Thai immigration office to stop asking for proof of income letters 24

The Brief

Issue 4/2012

A parting gift for Asif Ahmad, presented by BCCT Chairman Simon Landy.

stamped by the Embassy. These letters are costly and meaningless because we donâ&#x20AC;&#x2122;t certify you have the funds. For commercial property leases I think we are close to getting at least 60 year terms. I would prefer 99 years. So far we have reassurances that no adverse changes to the Foreign Business Act will be made. The ASEAN Economic Community will make it difficult for Thailand to have a set of rules limiting foreign businesses in Thailand if they have to open up to foreigners established in say Singapore or Malaysia. We are getting more attention from Thailand on a free trade agreement with the EU. Time is ticking away as the GSP privileges Thailand enjoys giving them low tariff access to Europe are taken away. Thailand faces challenges for sure but it would be wrong to ignore the great strengths of this country. The economy, despite dysfunctional politics, is

growing. The country has a diversified economic base ranging from growing rice to making parts for Rolls Royce engines. The expenditure planned on infrastructure and flood defences will give more stimulus to the economy. If we get our act together, British companies should be able to win a slice of the action. The greatest strength of Thailand is its people. They are resilient and bounce back from adversity. The family bonds are strong. Without a welfare state, the community steps in to look after its own and this is a country that has every reason to be a major economic power. I hand over the keys to the embassy to Mark Kent on August 12th. He has spent the last 18 months learning to speak and read Thai. I hope you will be as generous to Mark Kent as you have been to me. The British Chamber of Commerce in Thailand is a great organisation. Itâ&#x20AC;&#x2122;s been a great pleasure working with you. Thank you for your support.

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Pensions problems could lead to skills shortage in Thailand By Tim Beevor

henever a discussion around pensions takes place, one often hears reference being made to ‘the three pillars of savings’. The purpose of these pillars is to promote a system that allows the elderly and disabled to retire from work in dignity.

Number of PVD Employer members to total registered companies 1999-2011 600,000

Total Registered Companies (LHS)

Number of Provident Fund Employers (LHS)

Members as Percentage of Total Companies (RHS)

500,000 4%

400,000 3%

This article provides an update on the status of second pillar tools in Thailand: the occupational pensions that are available to private company employees (we do not provide updates on the government pension fund, as this is for civil servants only). Pensions are important in a Thai context because Thailand’s population growth rate has reduced from over three percent in the 1960s to 0.6 percent in 2010, a demographic which will mean increasing numbers of old people and fewer young people to pay the taxes necessary for their care. By 2023# it is expected that growth in the Thai population will have ceased. Whereas the world average for the retired as a percentage of national population is eight percent today, in Thailand, 13 percent of the population has already retired. This figure will nearly double over the next twenty years to 22 percent (U.N. 2030 estimate). This ageing is reason enough for the urgent introduction of the now long-mooted National Pension Fund (NPF), a vital savings tool whose introduction successive governments have continued to shelve. On the positive side, this year has seen the introduction of the National Savings Fund, a voluntary fund to provide 26

The Brief

Issue 4/2012

300,000

2.22%

200,000 1.20%

1.27%

1.35%

1.41%

1.50%

1.64%

1.70%

1.78%

1% 100,000

-‐

0% 2003

2004

2005

2006

a pension scheme for citizens currently not covered by either Social Security or a private pension plan (predominantly the self-employed and people employed in the informal sector). It was created under the mandate of the National Savings Fund Act BE 2554 (2011) and launched on 8th May 2012. Anyone aged between 15 and 60 years is eligible, with monthly contributions ranging between THB 50 and THB 1,100; these are matched by government contributions according to an age related scale This article contends that, despite the presence of such schemes, Thailand remains unprepared for its ageing society. It’s not simply government inactivity. Alarmingly, due to the failure of Thai salaries to keep pace with the cost of living, from 1989 to 2003 the household savings rate declined

2007

2008

2009

2010

2011

from 14.4 percent to just 3.3 percent of GDP and today’s households have a lower net worth than ever before. This is despite Thailand having more jobs than it has Thai workers. Today’s unemployment rate is at a level (0.6%) that would normally produce wage inflation. However, because of the relatively under-developed state of most of its neighbouring economies, Thailand is today able to shelve such issues and now survives by attracting Burmese, Laotian and Cambodian workers, estimated to number around six million. These workers largely perform the jobs that Thais are no longer so keen on – crew for fishing vessels, warehouses, construction and janitorial work, jobs without social security or benefits – that allow Thai workers to move up the value chain.

Number of PVD Employer members to total registered companies 1999-2011 Year

PVD Employers (Company)

Listed companies in MOC (Company)

1999

n.a.

421,726

2000

n.a.

421,577

2001

4,660

433,090

1.08%

2002

5,166

442,515

1.17%

2003

5,760

456,799

1.26%

2004

6,338

479,118

1.32%

2005

7,119

502,372

1.42%

2006

7,892

528,844

1.49%

2007

8,692

544,033

1.60%

2008

9,545

555,437

1.72%

2009

10,355

552,857

1.87%

2010

10,996

561,933

1.96%

2011

12,056

507,375

2.38%

Year

Number of Provident Fund Employers (LHS)

Total Registered Companies (LHS)

Members as Percentage of Total Companies (RHS)

2003

5,491

456,799

1.20%

2004

6,068

479,118

1.27%

2005

6,766

502,372

1.35%

2006

7,461

528,844

1.41%

2007

8,187

544,033

1.50%

2008

9,101

555,437

1.64%

2009

9,379

552,857

1.70%

2010

9,976

561,933

1.78%

2011

11,249

507,375

2.22%

Source: 1. Association of Investment Management Companies - the number of PVD employer members 2001-2011 2. Ministry of Commerce Thailand - Total registered companies 1999-2011

This is a very fragile accommodation. The point of the above chart is that tomorrow, developments within Thailand’s neighbouring economies (viz. what’s happening in Myanmar today) may make today’s backup Thai human resources much scarcer. The key long-term question is whether the ageing that is simultaneously occurring in China and Singapore (not to mention that in Japan) will draw away imported workers and even Thai workers that are themselves so essential to Thailand today? In the short-term, regional economic union in 2015 (the creation of the ASEAN Economic Community or AEC) will certainly intensify competition between neighbouring nations to attract mobile workforces. Prevailing quality of life and total compensation will be the key attractors, with pensions forming a large part of the compensation component. Hong Kong,

Singapore and Malaysia have already legislated compulsory pensions and can therefore expect to out-compete for the skilled sectors. It needs to be emphasised quite how far behind Thailand lags in this respect. Previous Aon Hewitt surveys have suggested that 80 percent of Thai companies have a provident fund but this is true only in a multinational company context. In a wider national context, most Thai companies do not offer a pension and only just over two percent of companies offer this benefit. Every company is obliged to make Social Security contributions. Social Security, which entitles members to up to 20 percent of their average salaries in the five years leading to retirement after contributions have been made for fifteen years, is limited to a maximum monthly retirement payment of THB 3,000 (approxi-

mately US$100). The uproar from the business community that greeted the government’s legislated increases to the minimum wage underscores just how margin-sensitive many Thai businesses are. If this sensitivity persists and margins cannot be improved then such businesses will need to relocate to cheaper neighbouring countries. A provident fund adds a minimum of three percent to employment costs. The failure of many Thai employers to provide long term security to their employees neither encourages loyalty nor investment in skills improvement, thus anchoring the country in lowcost manufacturing just as its more sophisticated neighbours develop their service industries. Being realistic, despite the pressing need for a National Pension Fund, the Thai government is presently focussed on political bickering and has its hands full solving flooding issues. So today’s concern is that, by further delaying pensions reform, Thailand will be uncompetitive when the AEC race begins and that the more skilled Thai workers, responding to their own ageing crisis, will migrate to countries where a pension is amongst the employee benefit offerings. This would leave Thailand facing a critical skills shortage without the assistance of migrant workers from its poorer neighbours.

Tim Beevor is Managing Director, Health & Benefits at Aon Hewitt, Thailand. Tim works closely with clients on a wide range of issues including the benchmarking, design and financing of local employee benefits programmes, retirement strategy, flexible benefits and benefits harmonisation. You may contact him at: tim. beevor@aonhewitt.com The Brief

Issue 4/2012

Building brands in the new media landscape By Steve Sowerby and Clint Easthorpe

e are all well aware that there has been an unprecedented explosion of new media channels and communication touchpoints over the last five years, and most of us recognise that our marketing behaviours and strategies will have to adapt. But do we really understand how? In 2012 a great marketing message is not enough; it takes skill and understanding to determine how to most effectively reach your target consumers and customers with the message. Since the floods crisis in late 2011, ad spend growth in Thailand has slowed but television remains the major marketing platform. With channels 3 and 7 representing a 70 percent duopoly of the nation’s TV there is hesitancy from many companies to explore alternative media channels, leading to a demand-fuelled price increase that could force some businesses to seek out other ways of reaching consumers. For example, cable and satellite penetration has now reached over 50 percent of homes (Nielsen), bringing new opportunities to target consumers. Although consumers’ daily lives now involve various digital media, digital activities still represent less than three percent of the Thai market’s ad spend - thanks to confusion, fragmentation and a lack of understanding and expertise in the new and constantly changing fields. The digital world represents a huge and growing opportunity that shouldn’t be missed. For example, the younger generation, becoming known as ‘screen-agers’ who often use a number of digital channels at once (e.g. laptop, TV and smartphone), have learned to crave more content with more accessibility and interactivity.

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Issue 4/2012

About one quarter of this group already watch TV, listen to radio stations and read newspapers online. Importantly, when they are online they expect a different, enhanced experience to what they would get from traditional consumption. For example, they desire the opportunity to comment on articles and clips and not merely be a passive audience. Social media has also become huge, with 80 percent of Thais active daily on social networking sites such as Facebook. Many of these users access social media sites via mobile telephones – the device through which most content will be consumed by 2014, according to latest forecasts. Similarly, for many companies and retailers, the point of sale or retail environment is increasingly the most important decision point for many shoppers and there is a huge focus on ensuring that promotions, in-store displays and communication are plac-

ing their products in focus and with a higher potential. Even with these constant shifts in technology and behaviours of our consumers the start point for any communication planning must always be consumer insight – and this needs to be updated regularly to understand new behaviours as new platforms and technologies emerge, evolve and are adopted. As any business will often get 80 percent of its custom from 20 percent of its consumers and customers we need to be sure that we know and understand these individuals well and that they are targeted clearly with the information and options they need at each stage of their consumer journey. Getting clear consumer insight requires deep understanding of this journey. Along the path, brand owners now have less control over what the shopper sees and this means that the vital skill is understanding which touch-points

tivities such as attractive point of sale materials or promotions. The postpurchase stage of the consumer journey often involves lower cost or even earned media, such as reviews and social media activity, but brands can leverage this by providing platforms for feedback and sharing. An integrated communications strategy throughout the stages of the journey makes the whole greater than the sum of its parts. Synergies and an integrated plan are essential to create a smooth and consistent message in order to win shoppers, earn their loyalty and ambassadorship and to build the brand. The content and messages used must match the media, based on insights about consumer usage. So, TV is for entertainment, internet is for social interaction, learning and investigating, magazines are for keeping up with trends and newspapers are to keep track of local, national and international events.

are the most important and what will be the right message at each point. The new landscape also makes brand loyalists more crucial as they are most likely to create content online that other shoppers will see in a way far more wide-reaching and visible than the private conversations they would have had with friends in the past. The classic linear representation of the consumer journey (awareness, consideration, purchase and loyalty) has been out-grown, becoming a rounder relationship. Informative and independent digital channels have created more discerning and well-informed consumers and now frequently evaluate their purchase options actively. For example, more than 60 percent of skin care shoppers research products online before they buy, and they take into account and report their postpurchase experience of brands. This leads to a more sophisticated consumer and a need, therefore, for more sophisticated marketing.

Gaining understanding of the role, needs and impact of each part of the journey is a crucial step towards an integrated and effective communications strategy. For example, understanding the importance of being in the initial consideration set stage has taught us that brands in this set are up to three times more likely to be purchased than those that are not. Insights like this demonstrate how each stage in the journey calls for use of different media with different goals. For example, to earn a place in the initial consideration set, brands need to build awareness using wide reaching media â&#x20AC;&#x201C; even though it may have an inevitable lower effectiveness per impression. To win in the active evaluation stage, online activity is very important, with a likely higher cost per impression, but better success rate, because at this stage the user is already interested. The â&#x20AC;&#x2DC;moment of purchaseâ&#x20AC;&#x2122; stage relies upon effectiveness of the previous stages but can be enhanced with ac-

With the recent touchpoints explosion, we must remember to avoid jumping on the latest band wagon. We must seek out new opportunities as new platforms emerge but only use those that are relevant to the brand. Finally, we must remember to measure and to learn. This landscape is new for many brands and businesses. Much of this landscape is, for so many, uncharted territory. Keeping track of your activities, results and learnings is a key success factor in ensuring a successful future for your brand in this new communications world.

Steve Sowerby is the CEO of Strategic Consultancy, XPotential: steve@xpotential.co.uk Clint Easthorpe is the CEO of Omnicom Media Group Thailand: clint.easthorpe@ omnicommediagroup.com

The Brief

Issue 4/2012

EABC seeks to strengthen EU-Thai business links

he European business community in Thailand, with the support of the European Union, has launched the first European business Position Paper listing key trade and investment issues with recommendations in support of a competitive economy in Thailand. Through the European-ASEAN Business Centre (EABC), the established platform to represent a unified voice of European business, the Position Paper serves to strengthen the European-Thai economic relations for competitive Thailand and betterment of trade and investment opportunities between Thailand and Europe. Hosted by the EABC President RolfDieter Daniel, the event was presided over by Ambassador David Lipman, the Head of the Delegation of the European Union to Thailand and Mr. Kittiratt Na Ranong, Deputy Prime Minister and Minister of Finance. Some 300 senior government representatives, diplomats and European

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and Thai business executives attended the launch. “I hope that the EABC Position Paper will offer a solid basis for a regular, and substantiated dialogue between the Thai authorities and European industry, in the spirit of mutual benefit and cooperation”, said David Lipman. “Notwithstanding the current crisis in Europe, the EU will maintain its role as a major trade and investment partner in Thailand. The growth prospects of Asia, including Thailand, make we believe that there is scope for further boosting trade and investment. Concluding an FTA with the EU could provide up-front and substantial mutual benefits”. Deputy Prime Minister Kittiratt Na Ranong welcomed this European business Position Paper, recognising the importance of restoring investors’ confidence to ensure sustainability and contributing towards the long-term competitiveness of Thailand and the need to forge closer ties with the EU.

Established specifically to strengthen European-Thai economic relations and to support a more keenly competitive Thailand, EABC has been highlighting Thailand’s deteriorating competitiveness and is encouraging the country to prosper further from its current ‘Upper Middle Income’ status. Crucial areas to enhance Thailand’s long-term competiveness, as emphasised in the Position Paper, are the prompt start of the negotiations on Thailand-EU Free Trade Agreement (FTA); ease of doing business and trade facilitation; progressive liberalisation of services sector, and development of a robust and effective IP (Intellectual Property) regime. EABC plans to make a constructive contribution towards enhancing Thailand competitiveness. A full version of the EABC Position Paper is available online at www.bccthai. com and at www.eabcthailand.eu

Trade show backing EABC is to participate at Food & Hotel Thailand (FHT) 2012 at BITEC in September. The EU Pavilion, offering European companies an attractive presentation platform, is situated in a prime location covering some 90 square metres and gives nine exhibitors the opportunity to present products and services. Further information from Khun Chuthakan Niisappayotye. E-mail: service@eabc-thailand.eu.

Delegation tackles IPR issues An EABC delegation comprising representatives from working groups on Intellectual Property Rights and Healthcare/Pharmaceutical has met with the Director General Pajchima Tanasanti of the Department of Intellectual Property (DIP). Led by Stephane Passeri, chairman of the IPR working group, the meeting an opportunity to follow up on progress in respect of various IPR legislative amendments and enforcement issues. The EABC and the DIP is set to organise a public seminar on â&#x20AC;&#x2DC;Developing your business with IPRsâ&#x20AC;&#x2122; with a date scheduled tentatively for October 2012. For further details please contact counsel@eabc-thailand.eu.

New face on BCCT Board The BCCT is delighted to welcome Viriya (Boyd) Chongphaisal, General Manager of GlaxoSmithKline (Thailand) to the Chamber Board of Directors. Prior to joining GSK, Khun Boyd was the Managing Director of Wyeth Thailand and Indochina region (excluding Vietnam). He also worked at Warner Lambert (now Kraft/Cadbury) where his experiences cover fast moving consumer goods, consumer healthcare and pharmaceuticals. He has worked in the USA and China. Khun Boyd sits on the Board of Directors of the Pharmaceutical Research & Manufacturers Association (PReMA) and is a member of the Institute of Directors of Thailand.

Britain in South East Asia (BiSEA) Cambodia British Business Association of Cambodia c/o Top Recruitment Cambodia 592, Building F, Phnom Penh Centre Corner Sothearos & Sihanouk Boulevards, Phnom Penh, Cambodia Tel: 855-23-997-492 Fax: 855-23-997-493 Email: secretary@bbacambodia.com Website: www.bbacambodia.com Chairman: Tom Sterling Committee Secretary: Kevin Britten Indonesia British Chamber of Commerce in Indonesia Wisma Metropolitan 1, 15th Floor, Jl. Jend, Sudirman Kav 29-31 Jakarta, Indonesia 12920 Tel: 62-21-522-9453 Fax: 62-21-527-9135 Email: bisnis@britcham.or.id Website: www.britcham.or.id Chairman: Haslam Preeston Executive Director: Chris Wren Malaysia British Malaysian Chamber of Commerce E04C1, 4th Floor East Block Wisma Selangor Dredging, 142-B Jalan Ampang 50450 Kuala Lumpur, Malaysia

Tel: 603-2163-1784 /1786 Fax: 603-2163-1781 Email: britcham@bmcc.org.my Website: www.bmcc.org.my Chairman: Dato Larry Gan Director, Business Development: Molly Jagpal Philippines British Chamber of Commerce of the Philippines c/o The British Embassy Manila 120 Upper McKinley Road McKinley Hill, Taguig City 1634 Metro Manila, Philippines Tel: 632-858-2255/858-2372/858-2373 Fax: 632-858-2390 Email: secretariat@bccphil.com Website: www.bccphil.com Chairman: Keith Perrin Executive Director: Alison Doig Henderson Singapore British Chamber of Commerce in Singapore 138 Cecil Street, #11-01 Cecil Court Singapore 069538 Tel: 65-6222-3552 Fax: 65-6222-3556 Email: info@britcham.org.sg Website: www.britcham.org.sg President: Mr. Steve Puckett Executive Director: Brigitte Holtschneider

Thailand British Chamber of Commerce Thailand (BCCT) 7th Floor, 208 Wireless Road, Lumpini Pathumwan, Bangkok 10330 Tel: 66-2651-5350-3 Fax: 66-2651-5354 Email: greg@bccthai.com Website: www.bccthai.com Chairman: Simon Landy Executive Director: Greg Watkins Vietnam British Business Group Vietnam Ho Chi Minh City G/F 25 Le Duan Blvd, District 1 Ho Chi Minh City, Vietnam Tel: 84-8-3829-8430 Fax: 84-8-3822-5172 Email: execdirector@bbgv.org Website: www.bbgv.org Hanoi 67 Le Van Huu, Hai Ba Trung, Hanoi, Vietnam Tel: 84 4 6674 0945 Chairman: Patrick Regis Executive Director: Jakki Lydall

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FCO report highlights risks for Brits abroad T

he annual British Behaviour Abroad Report, published by the FCO on 19 July 2012, reveals some important facts about British nationals in Thailand. In the year ending 31st March 2012, when resident and visitor numbers are taken into account, Thailand was ranked as the second most likely country (after the Philippines) where British nationals would need consular assistance. The report also indicates that British nationals were most likely to be hospitalised in Greece, followed by Thailand and most likely to be detained in Spain, followed by the USA and then Thailand. The report shows that, globally, the number of consular assistance cases increased by three percent, the number of rapes reported to consular staff increased by 10 percent, the number of deaths rose by three percent and the number of applications for emer-

gency travel documents rose by 10 percent. British Ambassador to Thailand Asif Ahmad said, “Thailand rightly remains an attractive tourist destination and a significant number of people have chosen to become long term residents. Good planning is the best way to avoid hazards and insurance for travel and health is essential. Medical bills can run to thousands of pounds and the ordinary British tax payer cannot meet the uninsured costs of fellow citizens who have chosen to venture abroad. “Make sure that you read the small print. Riding a motorbike or other activities could invalidate the insurance policy. Reading the FCO’s Thailand Travel Advice will help visitors familiarise themselves with local laws and customs, and become aware of scams and potential risks. We do recommend travellers to check health requirements to ensure they’ve had all the necessary vaccinations.”

Out of the 296 deaths of Britons in Thailand over the last year about 75 percent were residents, many of whom had retired in Thailand. However, after natural causes, the second most frequent cause of death was road traffic accidents. In recent years in Thailand there has been an average of 12,000 deaths per year from road traffic accidents, of which about 70 percent involved motorbikes. Many accidents are due to poor safety standards of vehicles and drivers and travelling at night in private or public transport increases the risk of death or injury on the roads. “I have seen the sadness and anguish of victims and relatives after incidents which, if thought through, are entirely avoidable. Like the majority of visitors and residents in Thailand, I hope everyone stays safe and enjoys their time in the country,” Asif Ahmad added.

BCCT members have made a site visit to Asia’s first zero carbon store, courtesy of Tesco Lotus. The store, at Bang Phra in Chon Buri province, emits zero net carbon dioxide in its operations. Environmental features include lower wattage LED lighting, hydro-carbon powered fridges and a store design that maximises natural light on the shop floor. The store is powered by a wind turbine and a solar farm of PV cells. Rainwater is collected for use at the car wash and in the store’s lavatories. Tesco Lotus has set a target of a 50 percent reduction in carbon emissions by 2020 against a 2006 baseline.

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TAT goes DISCO in bid to meet tourism targets T

he Tourism Authority of Thailand (TAT) has divided its action plan into five implementation categories under the acronym DISCO Plan. The plan embraces digital marketing, image-building, sustainable development, crystallisation/crisis management and organisation management. TAT Governor Suraphon Svetasreni says that these five categories identify clearly how the TAT intends to work with partners and stakeholders in Thailand and overseas as well as upgrade the quality of its internal personnel skills to deliver the tourism targets.

“The strategic direction for TAT action in 2013 has been formulated entirely with the cooperation of all parties involved in the tourism industry. Its implementation will need the same level of cooperation. We began with brainstorming sessions in the Marketing Think Tank 2013 meetings in March and worked extensively with the private sector through focus groups. All our TAT offices abroad also consulted our foreign partners. Everybody is involved in determining the marketing direction of Thailand’s tourism industry,” said Governor Suraphon. He added that ‘these days the bestlaid plans can be quickly disrupted by unexpected developments, which

means that the industry has to be ready to change all the time’. “The context of the changing world around us is a constant challenge. That never stops. It keeps changing all the times. It is something we have to recognise and be prepared to face. We have to work together to create new opportunities,” he added. “The changing nature of the tourism industry makes it impossible for any marketing agency to operate in isolation. We are fortunate to have a very marketable product and supportive partners, both in the public and private sectors, in Thailand and abroad. With their help and advice, I am sure we will be able to pull off a successful 2012 and 2013.”

TAT summarises its DISCO plan as follows: Digital marketing This is the “new media” of the 21st century, increasingly in use by young people but slowly cutting across all demographics. Its use is growing as countries upgrade their technological capabilities to bridge the digital divide. The TAT moved into the digital era several years ago and gained extensive expertise in the art of using powerful imagery and messages to convince target customers to visit Thailand. This will be continued in future. Image building Thailand has always had a good image amongst the travelling public worldwide. However, maintaining this image remains an on-going challenge, especially in view of

strong competition from both emerging and established destinations worldwide. The emergence of quality lifestyle products such as health & wellness, weddings and honeymoon, golf and marine tourism goes a long way towards strengthening this image and will remain a primary focus of marketing efforts. Sustainability The impact of global warming and climate change means that travellers of all kinds are more conscious of their ecological impact. Hence, the pursuit of economic gains from tourism must be balanced with efforts to offset ecological and environmental impact. This means continuing to reward good practises among the private sector and helping destinations and companies upgrade their sustainability efforts.

Crystalisation & crisis management In a fast-changing and increasingly unstable world the ability to spot emerging trends and react to unforeseen developments lies at the heart of decision-making. Thailand has gained extensive experience in this area, as witnessed by the response to the 2011 flooding crisis. Special units have been set up within the TAT such as a Tourism Intelligence Unit and a Crisis Management Centre. Organisation management This is the heart of the implementation process. All marketing plans need to be professionally executed and evaluated. The TAT will continue to upgrade the delivery skills of its staff in order to ensure a ‘better bang for the buck’ and meeting of the Key Performance Indicators.

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China tourism boom helps boost visitor numbers to Thailand T

The figures show that Thailand has recorded clear increases in both quality and quantity of visitor arrivals. The growth in total number of visitors is being matched by increased average length of stay and average daily expenditure, further underscoring the role of tourism as one of the most important economic sectors and contributor to job creation and nationwide income distribution.

he Thai tourism industry continued its strong performance in the first six months of 2012, with total arrivals of 10,496,789, up 7.6 percent over the same period of 2011. The most important contributor to this growth was arrivals from China which, for the first time, crossed the one million arrivals mark in the six-month period to record a total of 1,124,234 - up by 28.87 percent over the same period in 2011.

According to the Ministry, Thailand recorded 19.23 million international visitors in 2011 - up by 20.67 percent over 2010. With an average length of stay of 9.64 days, and an average daily spend of 4,187.12 baht (US$137) per person, the Thai tourism industry generated 776 billion baht in earnings.

Thailand recorded a 31 percent increase in tourism receipts in 2011 over 2010, according to Ministry of Tourism and Sports figures. The total earnings of 776 billion baht (US$25.45 billion) were also well above the original target of 716 billion baht (US$ 23 billion).

Top Ten source markets of visitors to Thailand: January-June 2012

Rank

Nationality

Jan â&#x20AC;&#x201C; Jun 2012

Jan - Jun 2011

% Change

China

1,124,234

872,348

28.87

Malaysia

1,115,721

1,219,705-

8.53

Russia

634,312

565,287

12.21

Japan

630,058

565,240

11.47

Korea

540,523

515,360

4.88

India

504,634

474,653

6.32

Laos

464,931

425,925

9.16

United Kingdom

433,989

427,497

1.52

Australia

427,096

389,566

9.63

USA

379,430

349,281

8.63

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By regions, the East Asia (+39.40%) recorded the largest increase in receipts in 2011, followed by South Asia (+33.27%), Oceania (+32.84%), Africa (+32.21%), Europe (+26.20%), the Americas (+20.36%) and Middle East (+19.79%). Europe holds the largest share of international tourism receipts in absolute numbers (38.23% share), reaching US$ 9,733 million in 2011, followed by East Asia (37.33% share or US$ 9,505 million), the Americas (7.10% share or US$ 1,807 million), Oceania (7.30% share or US$ 1,858 million), South Asia (4.85% share or US$ 1,235 million), The Middle East (4.29% share) earned US$ 1,093 million and Africa (0.88% share) US$ 224 million. According to the per capita daily spending, the top ten ranked

tourism spenders in 2011 were UAE (US$175.21), Saudi Arabia (US$166.92), South Africa (US$164.10), India (US$161.78), Hong Kong (US$161.63), Singapore (US$160.96), Kuwait (US$159.66), Australia (US$159.19), Brunei Darussalam (US$155.30) and Korea (US$153.17). Amongst Asian visitors, the lowest daily spend is by Laotians (US$101.99) and amongst Europeans, the lowest daily spend is by Germans (US$115.46). Snapshot summary of expenditure by visitors to Thailand: In terms of total expenditure by all visitors, the top five nationalities were Russia, China, Australia, Malaysia, and United Kingdom. Russia: Thanks to the increasing number of charter flights, Russia is now the top generator of arrivals

from Europe, up 63.45% to 1,052,361 in 2011. Last year Russian tourists spent a total of US$1,970.84 million (60 billion baht), based on an average length of stay of 13.29 days and an average daily spend of US$140.92 per person. China: In 2011, China was the second largest source of visitors after Malaysia, with total arrivals of 1,704,800, up 50.57% over 2010. Based on an average daily spend per person of US$146.63, and average length of stay of 7.61 days, Chinese visitors generated tourism revenue of US$1,902.32 million (58 billion baht). Australia: In 2011, Australian visitors to Thailand totalled 835,719, up 18.89% over 2010. Based on an average length of stay of 12.78 days and an average daily spend of US$159.19 per person, Australians generated US$1,700.27 million (51.8 billion baht) of tourism income.

Malaysia: Malaysia is Thailand’s largest source of visitor arrivals with a total of 2,492,034 in 2011, up 21.73% over 2010. Based on an average length of stay of 4.78 days and an average daily spend of US$137.10 per person, Malaysia generated US$1,633.15 million (49.79 billion baht) in tourism receipts. United Kingdom: The United Kingdom is the second largest generator of arrivals from Europe with a total of 771,466 visitors in 2011, up 1.48% over 2010. Based on an average daily spend of US$121.84 per person and an average length of stay of 17.35 days, the UK generated US$1,630.80 million (49.72 billion baht) in tourism receipts. Overall, the figures show that the recent strengthening of the baht against the US$ is having little impact on expenditure patterns and Thailand remains good value for money for visitors across the board.

Jobs boost for Thailand as more investors seek BOI privileges

hailand’s business environment continues to attract investors eager to benefit from the country’s efficient infrastructure and vibrant economy, according to the latest report from the Board of Investment. The Board states that ‘entrepreneurs are gearing up new investment projects at a brisk pace, with applications for BOI privileges in the first half of 2012 exceeding 478 billion baht’ – almost double the figure for the same period in 2011. The Board estimates that these projects will create 105,919 jobs. Between January and June this year, the number of projects rose by 26 percent y-o-y to 1,057, a strong sign of ongoing investor confidence in Thailand as a robust global business centre, the report adds. ‘Entrepreneurs remain drawn to Thailand for its many investment advantages, including the educated and afford-

‘The government’s policies for sustainable development have helped build Thailand into a leading production hub. The country is the world’s No. 1 producer of natural rubber, hard disk drives, cassava products, canned pineapple, pineapple juice, processed chicken, rice, canned and frozen seafood as well as processed shrimp.

Minister of Industry Pongsvas Svasti led a recent delegation to Beijing and Shanghai.

able labour, strategic export location at the heart of fast-growing Southeast Asia, and reliable government support of business growth. This includes generous BOI incentives granted to investors such as exemption of import duties on machinery and corporate income tax exemption’, states the BOI.

Thailand is second biggest sugar maker and is also one of south east Asia’s largest assembly centres for integrated circuits and semiconductors. The nation’s vibrant automotive industry is projected to break into the global top 10 in three years. Services and utilities accounted for the largest share by value of investment applications at the BOI in the first six months of 2012. The automobile, machinery and metal sector has also been active this year with 264 projects worth 111 billion baht in new investment submitted to the BOI. The Brief

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Golden moments Highlights from the 30th Olympiad which began and ended in typically British fashion.

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Chaturon pushes for peace in constitution debate

ne of Thailand’s most influential political figures says the country must focus more upon domestic demand and not rely solely upon exports in the drive for economic growth and prosperity. Khun Chaturon Chaisaeng, a former Deputy Prime Minister, told BCCT members that the Thai economy faces a number of challenges in the short and medium terms. His advice to the Yingluck Shinawatra administration was to create policies designed to boost productivity and improve Thailand’s competitiveness ahead of the integration of nation states into the ASEAN Economy Community in 2015. He acknowledged that political stability was a prerequisite to economic growth and he noted that Thailand had been governed by an elected parliament for only some 30 of the 80 or so years since the country’s absolute monarchy was brought to an end. He also, inevitably, referred to the on-going national debate about the country’s constitution. “We have had 18 constitutions so far and now we are seeking a new one yet again.” Khun Chaturon criticised the Constitution Court for overstepping the mark and he described as ‘unacceptable’ a situation whereby the judiciary can overrule the power of the people. He stated that the recent ruling by the Constitution Court was ambiguous and declared that the Court has no authority over the drafting of a new constitution. “We

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Chaturon Chaisaeng addresses BCCT members.

may need to remove the obstacles’”, he said, in a clear reference to proposals already discussed in political circles to trim the power and authority of judges sitting in the Constitution Court. “There are three or four solutions to this mess but it could take between 10 and 20 years to resolve,” he added. “I am proposing peaceful means to resolve these issues. It could take two years to make the necessary amendments if there is no interference from the Court.” Khun Chaturon, who served as an MP for 20 years until the coup d’état in 2006, said that he while was not seeking to interfere in the separation of powers between the judiciary and the executive he was, nevertheless, make the power of the judiciary ‘less concentrated’.

The Okura Prestige Bangkok has appointed Panida Wannakhon as Director of Rooms. Miss Wannakhon has worked at a number of wellknown hotels in Bangkok, including the Dusit Thani, Montien and Lebua at State Tower. She has some 25 years of experience in hotel operations in Thailand and brings a wealth of knowledge and expertise to her role at The Okura Prestige.

Thailand set to join global entrepreneurs

hailand is set to join Global Entrepreneurship Week (GEW) for the first time. Each November GEW is held on a global scale and the hosts in Thailand are now engaging a broad range of public and private sector organisations in preparing for the event from 12 – 18 November. Steve Cheah, of Ayana Co Ltd, the GEW host in Thailand, says, “We are grateful to have the support of Thai agencies and organisations including the Office of Small and Medium Enterprise Promotion (OSMEP – Ministry of Industry), the Thai-US Creative Partnership and ASEAN-BAC. The JFCCT has proposed a working group to look into how it can promote Global Entrepreneurship in Thailand.” Key events proposed for Thailand include a GEW Forum to which Prime Minister Yingluck Shinawatra would be invited. It is also proposed to bring the annual Global Entrepreneurship Congress to Bangkok in 2014. This year’s Congress was held in Liverpool.

Thailand PM Yingluck Shinawatra pictured with Burma President U Thein Sein.

“We would like Thailand to be the first ASEAN country to host the GEC,” adds Steve Cheah. Good news, too, for business leaders and investors in Burma. President U Thein Sein of Myanmar will formally open Myanmar’s inaugural Global Entrepreneurship Week in November. The President has also pledged to meet CEOs from sponsoring global companies.

GEW is a worldwide campaign to celebrate and promote entrepreneurship among young people. Its primary objective is to create a generation of entrepreneurs by inspiring young people everywhere to embrace innovation, imagination and creativity as well as help them to make their mark and to turn their ideas into reality, engaging them through a range of signature events and workshop activities. GEW provides aspiring entrepreneurs with the skills, networks and values they need to turn their innovative ideas into sustainable enterprises. Global Entrepreneurship Week was founded by Enterprise UK and the Kauffman Foundation.

Delegates from 96 Thai Embassies and Consulates worldwide were at the Sheraton Hua Hin Resort & Spa for a conference organised by the Ministry of Foreign Affairs – the first such gathering since the new government took office in 2011. Pictured above is (right) Martin Raich, General Manager of Sheraton Hua Hin Resort & Spa, welcoming Dr. Surapong Tovichakchaikul, Minister of Foreign Affairs.

Since its launch in 2008, GEW has brought together more than 20 million people through 100,000 activities in over 120 countries. While GEW aims to open the minds of aspiring young entrepreneurs, it also hopes to engage policymakers, influential leaders, celebrity entrepreneurs, educators and others from around the world to take up the call and lend their voices to help promote our young entrepreneurs.

Turbulent times for airlines in Europe A

irlines took a hit in May with the numbers of passengers flying in premium cabins showing only a modest gain of 1.7 percent on the same month last year. Numbers for April 2012 had shown a more encouraging 5.8 percent yearon-year comparison. The share of premium passengers in total international travel fell to just over eight percent in May, with the revenue share down to 27 percent. Total travel is still expanding with the number of passengers up by 5.1 percent up on May last year but that growth is being sustained by economy rather than premium seat sales, according to the International Air Transport Association (IATA). Business travel has been adversely affected by the slowdown in world trade and the recent declines in busi-

ness confidence and IATA is predicting a further deterioration over the course of the next few months. The weakness is dominated by European markets. Within Europe and North/Mid Atlantic premium travel

(34 percent of premium revenues) shrank further in May but markets elsewhere were strong – notably in the Far East, across the Pacific and in South America, Africa and the Middle East.

PTTEP strikes deal on Cove Energy takeover P TT Exploration and Production Plc (PTTEP), Thailand’s sole gas explorer, has finalised a deal to purchase the Londonbased Cove Energy Plc. A majority of Cove Energy’s shareholders have accepted PTTEP’s offer to acquire the firm. PTTEP president and chief executive Tevin Vongvanich said that Cove shareholders that collectively

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own 91.37 percent of the company had accepted a cash offer by PTTEP Africa Investment Co, a wholly-owned subsidiary of PTTEP. The offer, made on 23rd May, is 240 pence a share - up from a previous offer in April of 220 pence a share.

and the transaction completed by the end of September.

PTTEP requires written consent from Mozambique’s Mineral Resources Ministry to indirectly change control of Cove. The company expects the deal to be finalised

Cove has an 8.5 percent participating interest in the Rovuma project - a large natural gas field in East Africa. Rovuma has estimated gas reserves of 60 trillion cubic feet.

“The acquisition marks PTTEP’s entry into the highly prospective East African hydrocarbon region,” said Mr Tevin.

Thai law on employment of people with disabilities

roactive steps are being taken in Thailand to ensure that people with disabilities (PWD) have full access to fair employment. This government-led move has been underway for some time and, in October 2011, a law was passed to ensure that businesses fully participate in the development and employment of disabled people. The new law requires companies employing 100 or more full-time employees (FTEs) to hire one PWD for every 100 FTEs employed. Alternatively, a company may choose to make a direct payment into a social fund set up for the purpose of improving the quality of life for PWD or organise and sponsor an educational internship, vendor/delivery service or similar support to a PWD on a one-year contractual basis. This must be approved by the provincial Department of Employment. Non-compliance requires a penalty payment be made to a specified fund for PWD, no later than January following the year of non-compliance. The penalty is calculated as follows: 100 percent of the annual minimum daily wage multiplied by the required number of PWD minus the number of PWD actually hired. Many companies have already begun enacting recommendations, launching initiatives and carrying out activities aimed at promoting diversity in their workforce. Companies taking steps to ensure adherence to this law should focus on a few key areas: 1) Ensuring robust company policies that support disabled people Many forward-thinking organisations, including HSBC Group, have had longestablished policies aimed at fostering a diverse workforce. Integral to such policies is the need to encourage quali-

It is important for employers to provide work stations that accommodate staff confined to a wheelchair.

fied people – able-bodied or otherwise – to apply for jobs within their organisation. Such policies are often adopted through a strong belief that diversity truly creates value and, with that, even greater success for the company itself. 2) Building an effective recruiting pipeline Companies looking to recruit qualified PWD should look to build relationships with schools providing education programmes to PWD. Engaging in dialogue allows both sides to determine needs and match the right candidates for the right opportunities. 3) Promoting ownership within the business It is becoming vital that companies adopt a broader and more pro-active approach to seeking PWD personnel. Key to successful implementation of these policies is ensuing departments are responsible for the recruitment of qualified PWD to its ranks, encouraging existing employees to get involved with

activities and events aimed at finding, identifying and providing PWD with educational opportunities. In so doing, the availability of qualified PWD will grow and provide a greater pool of qualified human resources for Thailand and its companies. 4) Ensuring that the workforce is fit for purpose The workplace must be evaluated for readiness (and improved if required). HSBC Thailand has been striving to improve the working environment and accessibility to its premises for PWD – especially those in wheelchairs. It has done this by installing such items as sliding doors to offices and the provision of wash room facilities for the disabled. In recognition of this, HSBC Thailand received an award for ‘Best Company for Outstanding Support to Disabled Persons 2007’ from the Ministry of Social Development and Human Security. This article was kindly submitted by HSBC Thailand.

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Member News

Phuket hotel investments set to hit new record P

huket is set to become an investment hotspot for hotels. That’s the prediction from Jones Lang LaSalle Hotels as the agency reflects upon record sales in the first half of 2012. Investment in the hotel property sector in Phuket is expected to exceed THB10bn (US$315m) by year-end. Mike Batchelor, Managing Director of Investment Sales at Jones Lang LaSalle Hotels, said, “Phuket has seen record investment in the first half of 2012 and the market looks on track to enter a renewed period of growth as savvy international investors strategically secure landmark properties in Asia’s premier resort destination.” Jones Lang LaSalle Hotels has managed the sale of several prominent properties in Phuket this year, including the acquisition of the 368 room Movenpick Resort and Spa by Malaysian-based TA Global; the

260-room Evason Phuket and Bon Island at Rawai by Singaporeanbased Lum Chang, and the 254 room Laguna Beach Resort by Hawaiianbased Outrigger Hotels and Resorts.

for the first time. This growth has been fuelled by excellent air links and the expansion of low cost carriers across the region,” added Mike Batchelor.

“With international passenger volumes surging 30 percent in 2011, the island’s international appeal remains strong. International visitors to Phuket exceeded domestic arrivals

Other factors driving growth to the region include a US$180m planned airport upgrade designed to double the existing annual capacity to some 12.5 million passengers.

His Excellency Toomas Hendrik Ilves, President of The Republic of Estonia and Mrs Evelin Ilves, the President’s wife, welcomed Dr Virachai Techavijit, Honorary Consul General of The Republic of Estonia in Bangkok and Chairman of The Regent’s School, on his official visit to the Republic of Estonia. The main purpose of the visit was to develop further ThaiEstonian cooperation in international education and academic exchange. Each year increasing numbers of Estonian students select Thailand as the country in which to further their studies. Pictured, from left to right, are Dr Virachai Techavijit, MrsThiphavan Techavijit Board Director, The Regent’s Schools, President Toomas Hendrick Ilves, Mrs Evelin Ilves, Miss Kadri Ilves and Miss Kwanshanok Techavijit.

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Pattaya property market holds firm with local buyers T he condominium market in Pattaya remains rosy thanks to local demand and despite the general ‘economic blues’. That’s the view of Miss Risinee Sarikaputra, Associate Director of Knight Frank Thailand’s Research and Valuation Department.

are potential buyers of Pattaya condominiums, with preferred locations in the Pratumnak Hill area and Jomtien Sai 2 area. Low-end projects with partial sea views, with studio of 28 square metres in size, are selling at THB 900,000 per unit. New low-end condominiums have also cropped up in Jomtien Sai 2, thanks to the completion of road improvement projects that make the area more attractive. One such resort, Laguna Beach Resort, is a popular project among Russian buyers,” she says.

Miss Risinee said that more Thai buyers are now entering the Pattaya property market. Indeed, at projects located in the North Pattaya or Wongamat areas, where a large number of retail outlets, high end restaurants/ bars and a shopping mall are all located, the demand is mainly from Thai nationals. “However, condominiums in South Pattaya are still generally favoured by foreigners. Jomtien is an area where high demand is present. Russians

Miss Risinee Sarikaputra

“During the first half of 2012 there were approximately 5,500 condominium units from 12 new projects. The majority of condominiums launching this year included budget condominiums with selling prices of THB 0.9 to 1.8 million per unit.”

Standard Chartered Bank’s ‘Indian Week’ included a panel discussion on ‘Thailand-India Opportunities and Outlook’. Pictured with (second right) Lyn Kok, President and CEO of Standard Chartered Bank (Thai), are the panellists: Former deputy Prime Minister Korn Dabbaransi (second left); India’s Ambassador to Thailand Anil Wadhwa, H K Agarwal, Executive President of the Aditya Birla Group (right). Kamalkant Agarwal, Senior Executive Vice President, Origination and Client Coverage at Standard Chartered Bank in Thailand (left), acted as moderator.

The Brief

Issue 4/2012

Member News

Transparency improves in Thai real estate market A

biennial index released by Jones Lang LaSalle and LaSalle Investment Management reveals that recovering real estate markets have prompted renewed impetus to transparency improvements following a slowdown in progress during the financial crisis in 2008 and 2009. Nearly 90 percent of markets have registered advances in real estate transparency during the past two years, driven by improving market fundamentals data and performance measurement, combined with better governance of listed vehicles. The 2012 Global Real Estate Transparency Index, a proprietary Jones Lang LaSalle survey that calculates transparency in 97 real estate markets worldwide by weighting 83 different factors, provides investors and corporate occupiers with data and analysis critical to transacting, owning and operating in global markets. The Index also assists governments and other industry organisations interested in improving transparency. In the 2012 report, Thailand ranks 39th among the 97 markets covered. While this ranking is the same as in the 2010 report, the Kingdom’s real estate market shows continued improvement in transparency score. The scores in the Global Real Estate Transparency Index range between one and five, with one representing the highest level of transparency and five being opaque. Thailand’s real estate transparency score has improved to 2.94 in 2012 from 3.02, 3.16 and 3.40 in 2010, 2008 and 2006 respectively.

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The Aloft Bangkok hotel on Sukhumvit 11 is for sale by international tender through Jones Lang LaSalle Hotels.

Key findings in the 2012 Global Real Estate Transparency Index: • The United States ranks as the world’s most transparent real estate market in 2012, followed closely by the United Kingdom and Australia. Also in the ‘highly transparent’ category: Netherlands, New Zealand, Canada, France, Finland, Sweden and Switzerland • The Index reaffirms the ascent of the MIST growth markets (Mexico, Indonesia, South Korea and Turkey), which all feature among the leading improvers. Turkey once again leads in transparency improvement • Regionally, Latin America has seen the strongest progress in transparency. Brazil’s Tier 1 cities rank second globally in transparency improvement and now sits in the ‘transparent’ category. Mexico sits in third position globally (in terms of progress) • The gap in transparency between Western Europe and some of the main Central European markets has been virtually eliminated as core CEE markets approach the mainstream. Poland, for example, has transparency levels comparable to Western Europe and is now considered by some investors as a ‘core’ market • Environmental sustainability has emerged as an important transparency factor with the United Kingdom, Australia and France the most transparent markets in terms of real estate sustainability. The UK has a long history of building energy efficiency systems and introduced the world’s first Green Building rating system. Australia has been the test bed for new environmental laws, regulations and incentives

“Higher transparency in the country’s capital markets, specifically in relation to real estate, continued to be a major factor in improving real estate transparency”, said Suphin Mechuchep, Managing Director of Jones Lang LaSalle in Thailand. “The number of companies listed under the Property Development sector on the Stock Exchange of Thailand rose from 60 in 2010 to 63 at present while the number of property funds which trade on the SET grew from 26 to 38 over the same period. These listed vehicles are subject to strict governance and regulation, as well as regular and standardised reporting, thus providing more transparency to Thailand’s real estate market. “This trend is being reinforced by the introduction of real estate investment trusts into Thailand this year, which will allow for investment in more asset types such as hospital, education and golf course,” she explained.

Chris Fossick, Managing Director of Singapore and South East Asia, Jones Lang LaSalle, added, “The real estate markets in South East Asia have made significant inroads in improving their transparency over the past two years. Three out of the top 10 improvers globally are from this region – The Philippines, Indonesia and Vietnam. All three countries have improved on the back of greater availability of market data and changes in the regulatory and transaction processes. With the exception of Vietnam, most South East Asia markets are either in the transparent (Singapore and Malaysia) or semi-transparent band (The Philippines, Thailand and Indonesia). This finding is echoed by the recent rise in direct foreign investments (FDI) into the ASEAN especially into Indonesia and the Philippines. The rise of FDI into ASEAN is testament of global investors’ confidence of the long term growth potential in this region.”

“While the world economy is still in recovery, the 2012 Index reveals that real estate investors and corporate occupiers are widening their activity across a broader range of markets. This cross-border activity encourages faster rates of transparency improvement in growth and emerging economies as the markets open up further to international competition and their real estate sectors embrace global best practices,” said Jacques Gordon, global head of strategy for LaSalle Investment Management, the investment management arm of Jones Lang LaSalle. Jeremy Kelly, National Director, Global Research at Jones Lang LaSalle, said: “While steady progress in real estate transparency has been made during the past two years, much still needs to be done. The pace of regulatory and legal reform has been slow, and we have seen limited improvement on the transparency of transaction processes, despite recognition by government and industry bodies that transparent real estate markets are necessary.”

New status for St Andrews Miss Lyn Kok, President and CEO of Standard Chartered Bank (Thai),has been named ‘International Company CEO of The Year’ by Bloomberg Businessweek Thailand in recognition of her professional achievement and unique leadership capabilities. Pictured left with Miss Kok is Terry Blackburn, CEO of Ensign Media – the magazine’s publisher.

St Andrews International School Sukhumvit 107 campus has received accreditation as an International Baccalaureate (IB) World School. The school is now offering pre-university IB diploma years programme for students aged 16 to 18 years.

The Brief

Issue 4/2012

Member News

Thailand set to benefit from China’s growing imports H SBC’s Global Connections report predicts growth in India and China’s imports will exceed the value of their exports within the next five years. As a major trading partner with China, Thailand is expected to benefit significantly from this trend. The forecast is consistent with an increasing global shift whereby traditionally export-driven emerging markets are becoming global trading hubs, decoupling their previous dependency on developed markets to become important engines of global economic growth in their own right. Mrs. Juthamas Ruangvanish, Senior Vice President of Global Trade and Receivables Finance, HSBC Thailand, said: “China and India are major trading partners with most of their neighbouring countries – not least Thailand. Substantial import growth in these two biggest Asian economies offers considerable opportunity for Thai companies to grow their international business.” China’s growth in imports will overtake the value of its exports over the next five years, with growth rates of 5.1 percent and 4.7 percent respectively. This is because demand for imported goods and commodities will continue to grow, whilst demand for exports to developed markets will decline. At the same time, India will serve as Asia’s fastest-growing exporter/importer with annualised rates averaging 5 percent and 7 percent respectively. China is important to Thailand. Exports in YTD May this year represented 12 percent of Thailand’s total exports – higher than exports to the EU. China’s substantial import growth will act as a major catalyst to boost Thai exports

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Issue 4/2012

during the second-half of this year, according to the HSBC report. “With its export-driven economy, we remain confident that Thailand is on track for a near-term robust recovery. There is an increasing trend among major Thai companies to make use of their production bases in neighboring countries, shift production to value-added products, or focus attention on improving efficiency. In so doing, they are able to meet the challenges presented by increasing costs and competition for international trade,” added Mrs. Juthamas. HSBC’s Trade Confidence Index shows that the short-term outlook for the global economy has stabilised with a confidence index across Asia at 113, compared to 112 in October 2011. The report revealed 71 percent of traders globally expect trade volumes to increase or stay the same over the coming six months. Noel Quinn, HSBC Head of Commercial Banking Asia Pacific, said: “Businesses in Asia are responding

robustly to global challenges and are poised to enter a dynamic phase over the next five years. Supported by substantial import momentum in India and China, and positive trade sentiment across the region, we remain confident that Asia will continue to drive growth in the global economy.” Automobiles have been identified as a key global growth sector. In Asia, imports of cars are predicted to grow at 6 percent annually up to 2016. Supporting this growth, Chinese car imports are predicted to expand 12 percent annually up to 2016, mirroring its demographic wealth trends. India is the region’s fastest-growing car exporter, with an annual growth forecast of 13 percent. Thailand’s automotive sector is also fast-growing. In terms of both imports and exports vehicles exports are forecast to grow by 10.05 percent; car accessory exports by 7.38 percent annually up to 2016, and rubber tyre exports by 9.91 percent. Imports of engines from Japan are forecast to increase by 6.86 percent.

Former PM Abhisit inspires students at Bangkok Prep F ormer Prime Minister Abhisit Vejjajiva has told students at Bangkok International Preparatory and Secondary School (Bangkok Prep) to ‘think big’ as they prepare for life beyond the classroom. The current Opposition leader in Thailand was addressing the graduation ceremony for the Class of 2012 with a keynote speech on education and social responsibility.

He told students and guests that ‘we live in an age that offers unprecedented opportunities for young people’. In asking the students to ‘think big’ he explained firstly that ‘B’ is for Balance. With many of today’s problems arising from an imbalance of some kind the former PM acknowledged the wis-

and ensure that their success can be shared by those less fortunate and disadvantaged than themselves. The ‘G’ is for Green, he added, stressing the need to be forward-thinking ‘as we face the global effects of climate change and environmental deterioration’. “We must act positively to protect and shape a better, more stable world for future generations.”

dom of His Majesty the King in advocating his sufficiency policy and a life based on moderation. The ‘I’, he said, is for ‘inclusiveness’, stating that those more fortunate in society, such as the students graduating from Bangkok Prep, take responsibility to reach out

Over 260 students from Thailand and the Philippines competed in the 2nd Bangkok Gymnastics Invitational Championships hosted by the New International School of Thailand (NIST).

Bangkok Prep headmaster Keith Wecker commented that the graduation ceremony was a significant event for the school and the students. “We need to inspire and encourage the students to realise their role in and responsibility to society as they move away from their high school environment,” he said.

Standard Chartered Bank (Thai) has recently appointed Ramakrishnan Subramanian as Head of Consumer Banking for Thailand, Vietnam and the Philippines. He replaces Vikram Issar who has moved to the new Singaporebased role of Chief Operating Officer – Retail Banking Segments, Products and Consumer Finance. Prior to this posting Ramakrishnan Subramanian was Head of Retail Banking Products, Hong Kong and North East Asia. He has over 20 years of banking experience in Asian markets.

The Brief

Issue 4/2012

Member News

Plain sailing at TOG regatta for Thai Olympic hopefuls

he Top of the Gulf Regatta, staged at the Ocean Marina Yacht Club on Jomtien Beach, provide to be a useful training ground for Thai sailors planning to compete in the London Olympics. “Our aim is to organise an international-standard yacht race in the Gulf of Thailand, in line with International Sailing Federation rules, explained William Gasson, Chairman of the TOG Regatta organising committee. “For Thai juniors, we incorporated the Thailand Optimist Championships as part of the Regatta and we now provide an opportunity for Thai youngsters to compete alongside international sailors and develop their skills.” After a 12 year hiatus, Thai sailors were set to represent their country again at the Olympics. Current Asian

champion Keerati Bualong has taken part in many TOG Regattas and represented Thailand in the Laser Stan-

dard. He was joined by fellow TOG Regatta regular Kamonwan Chanyim, who competed in the Laser Radial.

Global profits rise at HSBC as bank closes Thai retail branches

SBC has announced its reported profit before tax of US$12.7bn for the first half this year. The figure is US$1.3bn higher than in the first half of 2011. This included US$4.3bn of gains from the disposals of businesses, notably from the sale of the Card and Retail Services business and from the sale of 138 non-strategic branches in the US. Underlying revenues were up by four percent with particular increas-

The Brief

Issue 4/2012

es in faster-growing regions of Hong Kong and the rest of Asia Pacific where profit before tax Pacific rose US$1.3bn and accounted for almost two thirds of the total profit before tax worldwide. Global Banking and Markets profit before tax of US$5.0bn, up 5% compared to 1H11. Commercial Banking increased underlying revenues from faster growing regions by 12% Stuart

Gulliver,

Group

Chief

Executive, said, “During the first six months of 2012 HSBC has recorded underlying revenue growth and continued to make substantial progress in certain key areas. We have continued to make headway in delivering our strategy, helping us to control our costs and to achieve additional revenues from the closer integration of our four different global businesses.” HSBC closed its retail operations in Thailand earlier this summer.

Dataconsult

Chamber Events

By the Numbers Chris Bruton Director, Dataconsult Ltd.

he recently-published UNCTAD World Investment Report indicates some relatively encouraging trends in investment as far as ASEAN in general and Thailand in particular are concerned. Although not yet recovering to levels of the 2008 pre-crisis period, world investment flows have maintained encouraging progress from low 2009 levels. For Asia and Oceania, the regional trends have generally reflected the world trends. But, for Southeast Asia, investment dipped only marginally in 2009 and has subsequently recovered strongly with 2011 inflows almost double the average for 2005/2007. Worldwide, foreign direct investment stocks have grown only modestly over the period from 2009 to 2011 from US$ 18 trillion to US$ 20.4 trillion but investment stocks are nearly three times what they were 11 years ago (2000: US$7.5 trillion). Southeast Asia has progressed somewhat more strongly than the world average from US$ 793 billion in 2009 to US$ 1.1 trillion in 2011 double the overall world growth rate. Foreign investment stocks for Southeast Asia are over four times the 2000 level, compared with under three times for the world as a whole. While foreign investment stocks represent 30 percent of GDP worldwide, they represent 50 percent or more of Southeast Asian GDP. This evidences the great attractiveness of Southeast Asia as an investment destination but also highlights its vulnerability and reliance upon maintaining an

attractive investment environment to ensure continued external investment inflows. Among the individual countries of Southeast Asia, in 2011 Thailand (US$9.6 billion) ranked a somewhat poor fourth to Singapore (US$64 billion), Indonesia (US$18.9 billion) and Malaysia (US$12 billion). Although Vietnam was behind Thailand in investment attractiveness in 2011 (US$7.4 billion) it moved ahead in 2008 and 2009. For outward investment Thailand ranks third (US$10.6 billion) behind Singapore (US$21.2 billion) and Malaysia (US$13.3 billion) but Thailand is now becoming a much more significant player on the regional investment scene, investing especially in neighbouring countries. In terms of foreign investment stocks, Thailand ranks third in ASEAN (US$139.7 billion), behind Singapore (US$518.6 billion) and Indonesia (US$173.1 billion), ahead of Malaysia (US$114.6 billion) and Vietnam (US$72.8 billion). Vietnam’s success over the past 20 years in attracting massive inflows of direct foreign investment has been impressive. It will be interesting to observe whether Myanmar, with already

three times as much foreign investment as a decade ago (US$9.1 billion in 2011 compared with US$3.2 billion in 2000) may overtake Vietnam, although it will surely take more than another decade to do so. UNCTAD also provides details of greenfield projects (new start-ups) and mergers and acquisitions for the countries of Southeast Asia. In terms of new investment, Thailand ranked a poor fifth (US$4.1 billion), compared with Indonesia (US$24.0 billion), Singapore (US$20.4 billion), Malaysia (US$13.6 billion) and even Vietnam (US$10.4 billion). However, it must be noted that these figures are for ‘value of projects’ and not achieved investment. Thailand has a much better record of achieving planned projects, resulting in better investment inflows, than does Vietnam. For mergers and acquisitions, Thailand enjoys a strengthening trend (US$5 billion) second only to Singapore (US$8.2 billion), now pulling ahead of Malaysia (US$3.9 billion). Overall, Thailand is holding its own in investment although the country still has some way to go to achieve the Board of Investment latest slogan ‘Unbeatable Thailand: unparalleled Opportunities’.

The Brief

Issue 4/2012

Foreign Direct Investment: Flows: Regional and World

(Million US Dollars / percentages)

Annual Flows Country / Region

2005-2007 Annual average

2008

Inward

64,313

Outward

35,581

Inward

287,145

382,658

317,178

Outward

155,394

223,211

211,002

Inward

442,915

650,017

519,225

Outward

229,567

328,121

268,476

Percent of Gross Fixed Capital Formation 2005-2007 Annual average

2009

2010

2011

116,559

25.1

12.3

19.2

20.4

59,890

14.0

8.6

9.2

10.8

386,138

424,759

11.2

8.1

8.2

7.4

273,209

280,588

6.1

5.4

5.8

5.0

616,661

684,399

13.0

10.3

8.5

400,144

383,754

6.9

5.4

6.7

4.4

2009

2010

2011

50,254

47,408

92,760

32,255

32,997

44,171

South-East Asia

Asia and Oceania

Developing economies

World Inward

1,473,190

1,790,706

1,197,824

1,309,001

1,524,422

13.1

9.6

9.2

Outward

1,500,545

1,969,336

1,175,108

1,451,365

1,694,396

13.5

9.5

10.7

10.4

Source: UNCTAD, World Investment Report 2012

Foreign Direct Investment: Stocks: Regional and World

(Million US Dollars / percentages)

Stocks in given year

Country / Region

1995

2000

Inward

152,403

266,292

Outward

50,011

84,551

Inward

570,905

1,074,547

Outward

208,974

607,109

Inward

847,292

Outward

329,152

Inward Outward

Percentage of Gross Domestic Product

2009

2010

2011

1995

2009

2010

2011

793,267

973,631

1,077,445

22.4

52.7

52.2

49.8

372,840

448,333

495,704

7.7

27.1

26.1

24.9

3,123,095

3,731,131

4,007,372

16.1

26.5

27.0

24.5

1,967,962

2,282,661

2,573,270

6.0

17.0

16.8

16.0

1,735,488

5,120,182

6,256,066

6,625,032

14.4

29.6

30.5

26.0

857,107

2,834,914

3,313,808

3,705,410

5.8

16.9

16.6

13.8

3,438,082

7,450,022

18,041,009

19,906,662

20,438,199

11.2

31.1

31.6

28.7

3,790,105

7,952,878

19,325,746

20,864,846

21,168,489

12.6

33.7

33.4

30.0

South-East Asia

Asia and Oceania

Developing economies

World

Source: UNCTAD, World Investment Report 2012

Foreign Direct Investment Stocks: inward and outward (1990, 2000, 2011) Southeast Asia

(Million US Dollars)

FDI Inwards Stock

Country

FD Outwards Stock

1990

2000

2011

1990

2000

2011

SE Asia total

64,303

266,292

1,077,445

9,472

84,551

495,704

Brunei

3,868

12,452

512

691

Cambodia

1,580

6,850

193

377

Indonesia

8,732

25,060

173,064

6,940

9,502

Laos

588

2,521

Malaysia

10,318

52,747

114,555

753

15,878

106,217

Myanmar

281

3,211

9,123

Philippines

4,528

18,156

27,581

406

2,044

6,590

Singapore

30,468

110,570

518,625

7,808

56,755

339,095

Thailand

8,242

29,915

139,735

418

2,203

33,226

Timor-Leste

161

Vietnam

1,650

20,596

72,778

Source: UNCTAD, World Investment Report 2012

Foreign Direct Investment Inflows and Outflows 2006-2011 Country / Region

Percentage of Gross Domestic Product

2006

2007

2008

2009

2010

2011

2006

2007

2008

2009

2010

2011

SE Asia total

64,038

85,603

50,254

47,408

92,760

116,559

28,604

59,605

32,255

32,997

44,171

59,890

Brunei

434

260

330

371

626

1,208

-7

Cambodia

483

867

815

539

783

892

Indonesia

4,914

6,928

9,318

4,877

13,771

18,906

2,726

4,675

5,900

2,249

2,664

7,771

Laos

187

324

228

319

333

450

-75

Malaysia

6,060

8,595

7,172

1,453

9,103

11,966

6,021

11,314

14,965

7,784

13,329

15,258

Myanmar

428

715

976

963

450

850

Philippines

2,921

2,916

1,544

1,963

1,298

1,262

103

3,536

259

359

616

Singapore

36,700

46,930

11,798

24,418

48,637

64,003

18,637

36,897

6,812

17,704

21,215

25,227

Thailand

9,501

11,359

8,455

4,854

9,733

9,572

968

3,003

4,057

4,172

5,415

10,634

Timor-Leste

Vietnam

2,400

6,700

9,579

7,600

8,000

7,430

184

300

700

900

950

Source: UNCTAD, World Investment Report 2012

(Million US Dollars)

Stocks in given year

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Issue 4/2012

Value of Greenfield Projects: outward / inward 2005-2011 Country / Region

(Million US Dollars)

Outward Investment

Inward Investment

2005

2006

2007

2008

2009

2010

2011

2005

2006

2007

2008

2009

2010

2011

SE Asia total

18,974

26,958

47,298

53,447

40,438

36,195

28,389

47,893

64,792

131,547

182,441

129,174

94,506

87,108

Brunei

133

721

435

470

156

7,669

Cambodia

149

248

1,240

261

3,581

3,895

1,759

2,365

Indonesia

4,502

800

1,824

393

1,043

415

5,037

13,294

14,351

20,512

41,929

31,271

13,740

24,031

Laos

192

490

567

1,371

1,151

2,118

335

980

Malaysia

6,410

5,806

25,583

19,988

14,904

21,319

4,140

4,294

5,242

10,306

24,054

13,753

15,541

13,621

Myanmar

299

1,378

1,434

1,889

449

667

Philippines

214

367

1,550

563

1,410

1,782

257

3,845

5,322

19,517

15,800

9,719

4,645

2,902

Singapore

6,358

12,125

14,526

21,444

12,985

8,631

12,844

7,165

14,160

23,722

13,995

12,940

16,960

20,384

Thailand

907

3,092

3,149

7,936

8,298

3,128

4,385

6,134

5,592

7,427

15,122

7,678

8,641

4,117

Timor-Leste

1,000

Vietnam

568

4,768

647

2,804

1,651

920

1,643

12,280

18,018

46,333

64,942

45,442

31,280

10,372

Source: UNCTAD, World Investment Report 2012

Number of Greenfield Projects: outward / inward 2005-2011 Country / Region

(Number of projects)

Outward Investment

Inward Investment

2005

2006

2007

2008

2009

2010

2011

2005

2006

2007

2008

2009

2010

2011

SE Asia total

205

260

264

435

349

289

281

724

852

1,072

1,594

1,334

1,214

1,152

Brunei

Cambodia

Indonesia

103

140

121

128

150

Laos

Malaysia

134

112

140

176

222

166

193

188

Myanmar

Philippines

100

144

121

Singapore

114

188

124

106

113

161

210

267

327

348

364

Thailand

128

118

131

334

281

212

137

Timor-Leste

Vietnam

173

204

280

361

257

179

172

Source: UNCTAD, World Investment Report 2012

Value of Cross-Border Mergers and Acquisitions: 2005-2011 Country / Region

(Million US Dollars)

Net Sales

Net Purchases

2005

2006

2007

2008

2009

2010

2011

2005

2006

2007

2008

2009

2010

Brunei

112

2011 -

Cambodia

-336

Indonesia

6,171

388

1,706

2,070

1,332

1,672

6,467

290

-85

826

913

-2,590

256

449

Laos

110

Malaysia

1,141

2,509

6,976

2,781

354

3,443

4,517

1,946

2,664

3,654

9,751

3,277

2,432

3,909

Myanmar

-1

-1,010

Philippines

-5,180

-134

1,165

2,621

1,291

-270

2,586

1,829

190

-2,514

-174

-7

466

Singapore

3,933

2,908

7,426

14,240

9,693

3,941

4,484

5,706

5,566

23,916

6,992

2,762

8,233

7,743

Thailand

-632

3,771

2,372

142

346

443

570

-203

1,416

872

2,731

4,996

Timor-Leste

Vietnam

412

859

230

101

1,460

Source: UNCTAD, World Investment Report 2012

Number of Cross-Border Mergers and Acquisitions: 2005-2011 Country / Region

(Number of deals)

Net Sales

Net Purchases

2005

2006

2007

2008

2009

2010

2011

2005

2006

2007

2008

2009

2010

Brunei

2011 -

Cambodia

Indonesia

Laos

-1

Malaysia

120

117

123

113

Myanmar

-1

Philippines

Singapore

103

134

100

129

139

124

Thailand

Timor-Leste

Vietnam

-2

Source: UNCTAD, World Investment Report 2012

The Brief

Issue 4/2012

British Chamber of Commerce Thailand

Report from BCCT Membership Group T

he BCCT held a meeting for members in a process designed to see what members thought about what the BCCT is doing and to seek suggestions for improvements or enhancements.

is wrong to assume that because only one person expressed an opinion it is not valid. It is a very fine line and we are attempting to represent the expressions in a way that, hopefully, satisfies the majority.

It is quite natural to open such a process and receive many ideas about the way forward, but we were surprised at the range and variety of the suggestions. In order to do justice to the many responses, the Membership Group have analysed them and shared the input with the BCCT Board. The Membership Group will continue further evaluations and liaise with other groups as appropriate in putting some of the feedback into implementation where feasible.

The areas covered by the meeting (and coming from 6 separate groups) have, for the sake of convenience, been focused into the key areas and, for the sake of clarity, have not been over edited.

The Chamber is a membership organisation and, as such, the members run and control it through the AGM, delegating to the Board and through the Board to the Officers and the Executive Director, those areas of responsibility that they see fit. However, it should always be remembered that members have the final say and can, using due process, direct the Chamber in a different direction should they wish to do so. Complacency is the enemy of any organisation and this process, hopefully, shows that the Chamber is in no way complacent. It will come as no surprise that there were contradictory views - some wanting developments in a certain area and others almost the exact opposite. Some were, for example, very happy with the events run by BCCT and others quite critical of the very same events. It is dangerous to assume that any one person’s view is valid simply because it is expressed whereas other contrary views were not. Equally it

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General • Members want to know where their membership fees are spent – or what they go towards • Many are not aware of the facilities in the BCCT offices that member could use • There is little awareness of the working groups and what they are actually focused on delivering • Give the members some sort of feedback on how well the chamber is performing - give some transparency. Are there any KPIs and if so, what are they • Average age of attendees at the feedback session was over 45 (possibly 50). What about the needs of our younger (and up-and-coming) members • It was suggested that there should be a BCCT-UK Alumni with more Thai’s studying in the UK • It was also suggested that: • BCCT host an event to remind people why they are members close to renewal time • We should consider a programme for offering members beneficial rates or discounts from other member companies – a sort of loyalty card • There should be reciprocal membership with regional chambers and access to country-specific information and members’ rates for events organised by other British Chambers in the region

These are issues for the Board, the Events Group and the Policy Group to consider in more detail.

• Panel session with the different sections within the British Embassy to update on new developments and ongoing activities

The Brief and communications • There should be more emphasis on company profiles • Rather than new members writing their own profiles, why not send someone to interview them, take photos etc. • There should be more profiles of people and not just companies • The website needs to be much clearer • Linked-In Group should be accessible for all members to join • Emails should be rationalised to ensure there is not an overload These issues will be passed to the Comms Group for their consideration and feedback. Events • BCCT should find ways to help Thais to integrate at networking events • There is no initial introduction of new members to old at regular BCCT events • BCCT events can appear “stuffy” compared to their chambers’ events • We should seek to communicate the needs of existing and new companies to the chamber for pairing/ matching • BCCT should consider induction events – for new members and new representatives of current members • BCCT should consider more industry specific events, with a focus on SME

The Membership Group will ask the Events Group to consider these matters. SMEs • How could the Chamber do more to offer SMEs support • SMEs make up around 80% of BCCT members so how should we equip them with tips and suggestions on financial support and local regulation; i.e. how to request a credit line, taxes, loans to SME • Possibly a separate mailing list for SMEs The Chamber SME Group has not met for some time. We will consider calling a meeting for all interested parties to see if there are ways for this group to be reinvigorated and to address these issues. Fees (related to SME) • Fees came up in 3 different areas. Suggestions were for lower prices for SME’s or graded pricing depending on company size Each year before the AGM, the Board considers what its recommendation for the fee structure going forward from the AGM should be. The AGM is then asked to endorse that recommendation (or propose an alternative that keeps the BCCT financially stable). It is important to recognise that many of the larger members

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of the chamber make contributions over and above the annual fee through sponsorships (of the chamber, of individual events etc.) and as such their overall contribution subsidises the BCCT to be able to offer our services to all other members at a lower cost.

BCCT mission statement as it stands today is only half the story or possibly even less • We should have joint lobbying with others chambers or other chambers’ working groups Specific advocacy issues raised were:

New Groups/Regions • Legal/Tax group (3 requests for this new Group, which has now been set up since April 2012) • HR Group (one request) • We are doing well covering Bangkok & Easternseaboard networking/activities but should seek ways to expand to other territories in the country; i.e. North, South, Northeast, etc. to visit the areas to meet with local communities – investors, local business chambers, factories, thought leaders, etc The Board is considering ways to achieve this, and consider regional partnership structures Advocacy • How much clout does the chamber really have for lobbying • Members don’t actually know what is being lobbied for at the moment by the BCCT • Could we have sector specific lobbying from working committees • The Chamber should help to lobby on issues related to doing business in Thailand • BCCT should push the Embassy and UKTI to be more active as it used to be • BCCT should be issuing information to members on major commercial issues (e.g. minimum wage) • BCCT is disappointing in its lack of response to major commercial issues. For instance, there was nothing useful that came from BCCT on the minimum wage regulation • Members want to know the basic facts, or where to get them, as the government was sending out mixed signals. Regarding the minimum wage, we should have come out with information on what the new regulations mean, and similarly with tax and visa issues • SME members feel isolated. They need help from the chamber, not just in lobbying but also keeping them updated and helping them deal with government policy issues • Events related to “Working in Thailand - challenges etc.” are recommended • There seems to be a complete detachment from TCC (Thai Chamber of Commerce). Any possible linkage with local provinces through TCC • BCCT should be more explicit in their support for British interests even if that is in-bound from the UK to Thailand. There was concern that for Britain, the

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• UK passport renewals • Thai resident permits • Time-wasting procedures and excessive paperwork for work permits and visas • Queues at airport immigration. BCCT could lobby to get a residents cards for quicker entry, as similar to Singapore • FDA issues with English language labeling on Thai products for export • High BOI targets which foreign companies are required to meet to set up business in Thailand • New developments relating to labour • Customs • FBA • Tax • FTA • Red tape issues • Higher prices for foreigners, dealing with foreigners Many of these issues are currently being addressed or at least considered by the BCCT Board, the Membership Group and other Groups within the BCCT. Some are easy to address – some more difficult. The time scales for each have to be realistic. Chambers of Commerce have to be regarded as non-commercial and as such have to live within their means. Anything that increases costs for the Chamber has to be paid for in some way or another. Usually, this would come in three different ways namely increases in fees paid by members, increases in the costs of attending events or increases in the levels of sponsorship. Only the first two of these are under the direct control of the chamber itself. Overall this is “work in progress” but you, as members, still have a role to play. You may feel there is something significant that has been missed out - you may feel that greater emphasis needs to be put on certain issues - you may simply wish to add your views or feel they have been poorly reported. You can still contribute by sending your comments to the Chamber, either through the Membership group, or the Chamber office. It is YOUR Chamber and as such, it has a responsibility to listen to YOU.

Chris Thatcher Chairman - Membership Group christhatcher1@gmail.com

Chamber Events

Chamber Events Joint Professional Women’s Group Networking 31 May 2012 On Thursday 31st May Bangkok Patana School kindly sponsored the Joint Professional Women’s Group Networking at Plaza Athenee.

01 01 (from left to right) - Simon Matthews, ManpowerGroup Thailand/ BCCT Vice Chairman - Karen Hochhauser, APM Group - Emma Goligher, Bangkok Patana - Toni Weber, Chairperson, Professional Women’s Group

02 02 - BCCT members enjoy the hospitality at Plaza Athenee.

The Queen’s Diamond Jubilee Fête 3 June 2012 On Sunday 3rd June the British Club hosted the Diamond Jubilee Fête marking the 60th anniversary of the accession of Queen Elizabeth II to the throne.

01 01 - British Ambassador H.E Asif Ahmad (far right) making a toast.

02 02 - A day for celebration in honour of her Majesty Queen Elizabeth II.

Thank you to our sponsors and partners. The Brief

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Chamber Events

Joint AMCHAM, AustCham, BCCT & TCCC Speaker Luncheon 13 June 2012 Dr. ChĂŠrie Carter-Scott was speaker at the Joint Luncheon on 13th June at Eastin Grand Hotel Sathorn. The topic was Negaholics: Why people become negative and...What you can do about it.

01 01 - Dr. ChĂŠrie Carter-Scott

02 02 - Guest speaker Dr. Cherie Carter-Scott is flanked by BCCT Board member Chris Thatcher (second from right) and other Chamber representatives.

European and AMCHAM Networking Evening with IKEA 21 June 2012 Lars Svensson, Project Marketing Manager of IKEA Thailand and Ikano (Thailand), was speaker at European and AMCHAM networking evening on 21st June at the Sheraton Grande Sukhumvit.

01 01 (from left to right) - Rolf-Dieter Daniel, EABC President - John Sim, MBMG Group/BCCT Vice Chairman

02 02 - Guests listen to the presentation from Lars Svensson

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Chamber Events

Eastern Seaboard Sundowners Networking 22 June 2012 On 22nd June BCCT joined hands with AustCham and AMCHAM for an Eastern Seaboard Sundowners Networking Evening at Hard Rock Hotel Pattaya.

01 01 (from left to right) - Simon Matthews, ManpowerGroup Thailand/ BCCT Vice Chairman - David Cumming, Amari Orchid Pattaya / BCCT Board Director

02 02 (from left to right) - Greg Watkins, BCCT - Jim Howard

BCCT Site Visit & Networking 27 June 2012 On 27th June Park Ventures Ecoplex and The Okura Prestige Bangkok opened their gates to BCCT members to a site visit. Grateful thanks for their support.

01 01 (from left to right) - Chris Thatcher, Anglo-Thai Legal Co., Ltd/BCCT Board Director - Thanapol Sirithanachai, Park Ventures Ecoplex

02 02 (from left to right) - Sasina Sopeerak, Harrow International School - Samir Wildemann, General Manager, The Okura Prestige Bangkok - Porntip Utsahaphan, Samitivej Hospital

Thank you to our sponsors and partners. The Brief

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Chamber Events

BCCT Half – Day Workshop (Managing Teams) 29 June 2012 On 29th June BCCT Management Development Group, in collaboration with Property Care Services (Thailand) Ltd, offered an interactive workshop on Managing Teams.

01 01 - Facilitator Nopporn Sornsom, Property Care Services (Thailand) Ltd

02 02 - The interactive workshop was well attended.

Special BCCT Luncheon (Lord Marland, UKTI Business Ambassador) 12 July 2012 Lord Jonathan Marland, UKTI Business Ambassador, was guest speaker at the Special BCCT Luncheon sponsored by Allen & Overy on 12th July.

01 01 - Lord Jonathan Marland

02 02 (from left to right) - Heather Suksem, OCS ROH Limited - Graham Macdonald, MBMG Group - H.E. Asif Ahmad, British Ambassador - Stephen Jaggs, Allen & Overy

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- Lord Jonathan Marland - Simon Landy, Colliers/ BCCT Chairman - Matthew Lobner, HSBC/ BCCT Vice Chairman - Lyn Kok, Standard Chartered Bank (Thai) pcl

Chamber Events

Third Thursday Networking Evening 19 July 2012 The T3 – Third Thursday Social Networking at Queen Vic, British Embassy on 19th July was an enjoyable evening. A warm thanks to our sponsors Imperial Queen’s Park Hotel and ManpowerGroup Thailand.

01 (from left to right) - Michal Zitek, Imperial Queen’s Park - Simon Matthews, ManpowerGroup Thailand/ BCCT Vice Chairman - Richard Greaves, Grand Hyatt Erawan/ BCCT Board Director

02 (from left to right) - Brendan John Cunningham, Robert Walters - Sarinthorn Sachavirawong, BCCT - Lloyd Wilson, Berkeley International School

BCCT Site Visit to Tesco Lotus – Asia’s first zero carbon store 20 July 2012 On 20th July BCCT members visited Tesco Lotus Asia’s first zero carbon store at Bang Phra, Chonburi.

01 01 - Presentation by Charkrit Direkwattanachai, Senior Corporate Affairs – Tesco Lotus

02 02 - The visitors heard about Tesco Lotus plans to reduce the company’s carbon footprint.

Thank you to our sponsors and partners. The Brief

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Chamber Events

Joint Eastern Seaboard Farewell Dinner British Ambassador Asif Ahmad 20 July 2012 On 20th July BCCT hosted a farewell dinner for Ambassador Asif Ahmad at the Holiday Inn Pattaya. The dinner was sponsored by Finnair, MBMG, Colliers International, Pattaya Mail, Defence International Security Services and Tesco Lotus.

01 - Ambassador Asif Ahmad

02 (from left to right) - Simon Landy, Colliers/ BCCT Chairman - Joe Cox, Defence International Security Services - Supha Kukarja, Pattaya Mail Publishing Co., Ltd.

- Ambassador Asif Ahmad - Suteeraporn Nutchanart, Finnair - Graham Macdonald, MBMG Group - Suwanthep Malhotra, Pattaya Mail Publishing Co., Ltd.

BCCT Farewell Lunch British Ambassador Asif Ahmad 26 July 2012 BCCT hosted a farewell lunch in Bangkok for Ambassador Asif Ahmad on Thursday 26th July. Thank you to our kind sponsors MSIG insurance and M&C Energy.

01 01 - Ambassador Asif Ahamd

02 02 - Chris Thatcher, Anglo-Thai Legal Co., Ltd/ BCCT Board Director - Simon Matthews, ManpowerGroup Thailand/ BCCT Vice Chairman - Gyorgy Renn, M&C Energy - Chainarong Indharameesup, Boyden Associates/BCCT Honorary Adviser - Simon Landy, Colliers/BCCT Chairman

- Heather Suksem, Property Care Services - Ambassador Asif Ahmad - Arnop Phorndhiti, MSIG Insurance/BCCT Honorary Adviser - Bradley Jones, British Embassy - Richard Greaves, Grand Hyatt Erawan/BCCT Board Director - Andrew McBean, Grant Thornton/BCCT Board Director - Viriya Chongphaisal, GlaxoSmithKline

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Chamber Events

Joint Chambers Luncheon with former Prime Minister Abhisit 27 July 2012 On 27th July former Prime Minister Abhisit Vejjajiva was guest speaker at the Joint Chambers Luncheon on ‘Thai Politics: Friend or Foe of Business?’

01 - Former Prime Minister Abhisit Vejjajiva

02 (from left to right) - Simon Landy, Colliers/BCCT Chairman - Abhisit Vejjajiva

London 2012 Olympics Opening Ceremony 28 July 2012 BCCT hosted a London 2012 Olympics Opening Ceremony event on Saturday 28th July at Grand Hyatt Erawan. Guests enjoyed a champagne brunch while watching the spectacular opening ceremony. Special thanks to our champagne and beer sponsors Diageo Moet Hennessy (Thailand) and Thai Beverage plc.

01 01 - Thumbs up for Team GB.

02 02 - Flying the flag for Britain’s Olympic heroes.

Thank you to our sponsors and partners. The Brief

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Chamber Events

Special BCCT Dinner ‘Future Direction of Thai Economy and Politics’ 31 July 2012 On 31st July BCCT hosted the BCCT Special Dinner with guest speaker Khun Chaturon Chaisaeng on the topic of ‘Future Directions of Thai Economy and Politics’ at the Grand Millennium Sukhumvit.

01 01 - Chaturon Chaisaeng

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02 02 (from left to right) - Rob Hurenkamp - Marzars (Thailand) Co., Ltd. - Simon Landy - Colliers/ BCCT Chairman - Chaturon Chaisaeng - Andrew McBean - Grant Thornton/BCCT Board Director - Dr. Thavirap Tantiwongse - GlaxoSmithKline (Thailand) Limited - Chris Thatcher, Anglo-Thai Legal Co., Ltd/BCCT Board Director

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Comings and Goings The British Chamber of Commerce Thailand welcomes the following new members: AB World Foods Ltd 62 The Millennia Building 15th Floor, Unit 1503, Langsuan Road Lumpini, Pathamwan, Bangkok 10330 Tel: +66 (0) 2651-9905 Fax: +66 (0) 2651-9909 Representative: Mr. Sean Goonan, Regional General Manager – Asia Business Activity: AB World Foods manufactures a wide range of category leading ethnic foods: Indian (Patak’s), Oriental (Blue Dragon) and Caribbean (Levi Roots/ Reggae Reggae).

Innov8 Recruitment (UK) Limited The Recruitment Centre, Midland House 41 Kings Street, Luton Bedfordshire LU1 2DW, United Kingdom Tel: +66 (0) 15-8241-9962 Fax: +66 (0) 15-8245-5608 Representative: Mr. Adrien Bray, Managing Director Business Activity: Specialist Recruitment Business Supplying Drivers, Industrial and Commercial Temporary and Permanent Staff to Commercial Business Magnolia Quality Development Corporation 695, Sukhumvit 50, Prakanong Klongtoey, Bangkok 10260 Tel: +66 (0) 2742-9141 Fax: +66 (0) 2742-7115 Representative: Mr. Iain Hardie, Director - International Projects Marketing & Sales Business Activity: Property Developer. We not only build places for living, we also innovate to achieve the best quality of life.

Sofitel Bangkok Sukhumvit 189 Sukhumvit Road Sukhumvit Soi 13-15, Klongtoey Nua Wattana, Bangkok 10110 Tel: +66 (0) 2126-9999 Fax: +66 (0) 2126-9998 Representative: Mr. Christian Schlegal, Hotel Manager

Business Activity: Sofitel Bangkok Sukhumvit, the new Southeast Asian flagship for Sofitel Luxury Hotels, offers a truly luxurious experience for upscale business and leisure travelers.

The St. Regis Bangkok 159 Rajadamri Road, Lumpini Pathumwan, Bangkok 10330 Tel: +66 (0) 2207-7734 Fax: +66 (0) 2207-7738 Representative: Mr. Krister Svensson, General Manager Business Activity: Hospitality – International Luxury Hotel, Long-stay Residences, Restaurants and Bars, Meeting and Event Facilities Ulrick & Short Ltd Walton Wood Farm, Thorpe Audlin, Pontefract WF8 3HQ, United Kingdom Tel: +66 (0) 19-7762-0011 Fax: +66 (0) 19-7762-0022 Representative: Mr. Andrew Ulrick, Director Business Activity: Food Starches Wragge & Co LLP 55 Colmore Row Birmingham B3 2AS, United Kingdom Tel: +44 (0) 121-233-1000 Fax: +44 (0) 121-214-1099 Representative: Mr. Christopher Michael Whitehouse, Partner Business Activity: Lawyers Resignations: 1. Creative Solutions Thailand Co Ltd. 2. The Great British Pub Company Limited 3. LBG Le Boutillier Group Co., Ltd

New Company Representatives: 1. Banyan Tree Bangkok, changed from Mr. Sriram Kailasam, to Mr. Andrew Federick Langston 2. Finnair Oyj, changed from Mr. Kostermaa Petteri, to Ms. Isaraporn Kongvhana 3. Marriott Hotels & Resorts ThailandLuxury Hotels & Resorts (Thailand) , changed from Mr. Peter Caprez, to, Ms. Anchalee Chamroontaneskul 4. Merck Ltd. , changed from Mr. Amandeep Bhattacharjee, to Mr. Panya Kitcharoenkan 5. Unilever Thai Trading Limited), changed from Ms. Lilly D’Angelo to, Mr. Sher Afzal Khan Mazari Changes of company name: 1. BSI Management Systems (Thailand) Co.,Ltd., changed to BSI Group (Thailand) Co., Ltd. 2. EEC Lincolne Scott Co Ltd., changed to EEC WSP Co., Ltd. 3. Mongkolnavin Law Office, changed to Navinlaw 4. Sofitel Bangkok Silom, changed to Pullman Bangkok Hotel G 5. SyAqua Siam Co Ltd., changed to Topigs International BV. Members with new addresses: 1. International Market Advisor Ltd (IMA) 41a Spring Gardens, Buxton Derbyshire SK17 6BJ, United Kingdom Tel: +44 (0) 129 879 562 2. Prudential TS Life Assurance Public Co., Ltd. 22nd -27th Floor, 9/9 @Sathorn Building South Sathorn Road, Yannawa Sathorn, Bangkok 10120 Tel: +66 (0) 2352-8000 Fax: +66 (0) 2352-8999

Forthcoming events SEPTEMBER

20/9 – Third Thursday Networking Venue: St. Regis Bangkok

4/9 – Special BCCT Luncheon (Bank of Thailand) Guest speaker: Dr Prasarn Trairatvorakul, 21/9 – Joint Eastern Seaboard Governor of Bank of Thailand Networking Evening Venue: Sofitel Sukhumvit, Bangkok Venue: to be advised The Brief

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FINAL WORD

Olympic rings of ire By Dale Lawrence

t took a virtuoso performance on keyboards from Mr Bean and cameo roles by Daniel Craig and Her Majesty The Queen to lift the pre-Olympics gloom and kick start the greatest show on earth. Once Rowan Atkinson had, in his own inimitable style, captured the essence of quintessential British humour there was no looking back. And those four priceless words spoken by Queen Elizabeth 11 when addressing Daniel Craig in her study at Buckingham Palace did as much to set the mood and lift the spirits as any of the more extravagant, selective social and historical elements of Danny Boyle’s opening ceremony. We forgot the debacle over security guards and the humiliation of G4S Chief Executive Nick Buckles by members of the House of Commons Home Affairs Committee. We threw aside worries about public transport meltdowns and the simply dreadful English summer weather that threatened to cast more dark rain clouds over east London and the other Olympics venues. There were, inevitably, some dark forces at work. Marketing busybodies took up arms against butchers, bakers and – quite possibly – candle stick makers as they sought to protect and preserve the integrity of the Olympics symbol. Weymouth butcher Dennis Spurr had a real beef. He tried to generate some pre-Games excitement by creating five rings of sausages. Threatened with legal action, Dennis then produced five squares of Britain’s finest bangers. This failed to satisfy the appetites of the so-called ‘brand police’. ‘I just can’t see the problem with it. I thought it would be a harmless way to start getting people in the mood,” said Dennis. Precisely. 64

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Beach Volleyball at Horse Guards in central London was a smash hit with spectators.

In the best Mexican stand-off witnessed since the 1968 Olympics, Dennis cocked a snook by being equally creative with five frying pans. No word yet on Dennis’ likely plea in mitigation, should this case reached the local Magistrates Court. Meanwhile a baker in Camberwell, south London, had the effrontery to interlock five tasty bagels in a manner not entirely dissimilar to the aforementioned Olympics symbol. ‘Take ‘em down’ roared a jobsworth from Southwark Borough Council. In the wake of the predictable backlash from the more sensible elements of the community in south London, café manager David Adams received an apology from the Council. I should think so. Thankfully, we have our sporting heroes to respect and praise as Team GB once again made us proud to be British. To witness so many medal successes on home soil was the perfect antidote to the continuing economic gloom in Europe. Testosterone levels reached record heights amongst male spectators watching the women’s beach volleyball on the parade ground at Horse Guards in central London. Quite what

the Duke of Wellington would have made of it all, we shall never know. Finally, spare a thought for David Beckham, the people’s pick to represent, and even captain, the Team GB football team but not the choice of team manager Stuart Pearce. Beckham’s consolation prize was a trip down the River Thames on a very fancy speed boat. And he did get to hand the Olympic flame to Sir Steve Redgrave – and that’s probably worth a hat-trick at Wembley on any day. Becks is a very short price with UK bookies to pick up a knighthood. I wouldn’t bet against it.

Job title madness in Salop I am, as ever, grateful to awardwinning Daily Mail columnist Richard Littlejohn for sharing with readers some of the more ludicrous (and often lucrative) public sector job titles, including ‘Portfolio Holder For Service Transformation and Organisational Development’ – a position held at Shropshire Council by a Mr Martin Taylor-Smith. I am, regrettably, unable to share with you the KPIs for this challenging role.

British Chamber of Commerce Thailand

Thailand & UK

– Partners in Progress

Who we are Working to represent members’ business interests in Thailand

Our focus Promoting constructive links for members’ business

www.bccthai.com

What we do Seminars, workshops, training, networking and much more