Recovering Thai economy makes inroads into the United Arab Emirates
The United Arab Emirates and Thailand are working on joint private sector initiatives expected to involve a total investment of Dh184 million.
"There will be a reciprocity of ventures, with some UAE entrepreneurs setting up projects in Thailand with Thai partners, while some of our own businessmen will establish projects in the UAE," remarked Sutisak Laohachewin, the Commercial Minister of the Dubai-based Thai Trade Centre.
The projects are expected to be related to consumer goods, in which Thailand boast a competitive advantage. Medical supplies and fishing equipment opportunities will also be explored. Thailand continues to hold a trade deficit with the UAE and the Middle East at large, due to oil imports. Nonetheless, trade levels have been increasing, with Thai exports to the UAE reaching Dh1.26 billion in the first seven months this year compared with Dh1.14 billion in the equivalent period last year. Total exports in 1999 were valued at Dh2.09 billion.
"It has also been decided in principle to establish a permanent trade exhibition in Sharjah," he commented. "This project is expected to go operational within two years."
The four-day Thailand Exhibition opened at the Sharjah Expo Centre on September 19, 2000. Over 120 Thai companies are expected to display their products at the trade fair, Gulf News reported. It represents the largest display of Thai goods in the Middle East.
Although the UAE comprises only a small portion of Thailand's global trade (the UAE ranks 12th on Thailand's list of importing nations), Bangkok is seeking to grow exports to the Middle East region by15-20 per cent by 2002.
"We are quite interested to establish long-term relationships between the UAE companies and businessmen and Thai businessmen. This is the type of business we are looking for in this promising region," Laohachewin noted.
On the domestic front, Thailand’s economic GDP growth is expected to slow in the second half of 2000, despite enjoying a second quarter Gross Domestic Product growth rate of 6.6 percent, Asia gateway reported. Local analysts forecast the overall GDP growth rate for the year at about 4.5 percent, while government figures indicate a rate closer to 5 percent. Meanwhile, the baht weakened to new two-year low Monday, trading past THB42 to the dollar. This exchange rate makes exporting favorable for Thai corporations. Experts peg inflation at 1.8 percent for 2000, as domestic consumption remains low. Food prices are expected to rise later in the year, due to domestic floods.
A recently released World Bank report warned that Thailand's economic recovery was "fragile", with the sluggish pace of financial and corporate restructuring potentially constraining new investments even in sectors nearing full capacity.
"You've got all these issues - political uncertainty, banks still bumbling along, not doing very much," conveyed Sriyan Pietersz, Head of Research for SG Securities in Thailand. "There are no real catalysts to entice people into this market."
The promise of the Thai economy continues to rest in exports, which jumped 15 per cent during the second quarter and are up 18 per cent over the year. Strong demand from export markets for items such as televisions, computers, air conditioners and cars helped push manufacturing production up 9 per cent during the second quarter. –(Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)