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Business perspective on Singapore-Thai bilateral relations
February 18, 2005
In Business Ideas this week, the future of Thai-Singapore business relations with Thaksin’s re-election.
Welcome to the program, I’m Melanie Yip.
Thai Prime Minister, Thaksin Shinwatra convincingly won his re-election bid to lead the kingdom for the next four years.
Thailand and Singapore have always maintained cordial bilateral relations for many years. With four more years of the Thaksin administration, and Singapore’s political governance under Prime Minister Lee Hsien Loong still in its infancy stage, how do Singapore businessmen view the future bilateral business relations between the two countries?
WD: With Prime Minister Thaksin (Shinawatra) winning the elections and him leading the government, added more prospects to him leading the ASEAN Economic Integration, which Singapore and Thailand are actually leading the pact for doing such an initiative.
You’ve just heard the reaction of Mr Winston Doong (WD) to Thai Prime Minister, Thaksin Shinwatra’s electoral victory.
Mr Winston Doong is the Bangkok-based Honorary Chairman of the Singapore-Thai Chamber of Commerce.
When Thai Prime Minister Thaksin Shinawatra led the country in the 1st term starting in 2000, Thailand was reeling from the aftermath of the Asian economic crisis.
Using his business acumen, Dr Thaksin adopted a somewhat different approach, from previous administrations, in running the kingdom. Thailand, under Mr Thaksin, was governed like a business entity. And Mr Thaksin’s efforts paid off, when many of his Western-influenced political and socio-economic initiatives put Thailand on the world map, even becoming an up-and-coming ASEAN leader. Mr Winston Doong.
WD: This is to compete against emerging economies like China, and also India. I think the two countries already have very cordial relations. Recently, we witnessed the visit of the (Singapore) President (S R Nathan), on the occasion of the 40th anniversary of bilateral relations. And I think the future will be quite good for Singaporean companies coming into Thailand to join the bandwagon, to move on as the economy grows, and as the business investments pick up for Thailand itself.
However, Mr Thaksin faced several challenges during his first term. They included SARS, the bird flu, violence in the Southern provinces of the country and the recent tsunamis. His handling of these problems got mixed reviews.
But 2005 was also a year Thaksin made political history in Thailand. While the opposition complained about his authoritarian style of governing, the Thai voters felt otherwise, and they voted Mr Thaksin, giving his Thai Rak Thai Party a stunning election victory, with more than 370 seats in parliament.
The business communities, both domestic and international have applauded his electoral victory, because it signals political continuation, and economic stability.
Which spells good news for businessman like Leong Choong Cheong (LCC), who is the Managing Director of KPN ST Log, a logistics joint venture between Thailand’s KPN Corp, and Singapore’s SembCorp Logistics.
I spoke with Mr Leong in Bangkok recently.
LCC: I think among the ASEAN countries, I personally feel that Thailand has the best relationship with Singapore. Most of the time, both countries complement each other in the economic arena, although in certain areas like ports, and transportation, we do see some competition but most of the time, we complement each other. I have been working in Thailand for almost 1 year, I see a lot of G2G activities, government to government activities, I feel the relationship between Singapore and Thailand is excellent at all levels.
But which industries in Thailand attract the biggest levels of Singapore investments? Leong Choong Cheong says.
LCC: I think the biggest sector of investment is the electronics sector. The electronics sector started from the hard disk drives, but moving forward to automotive related forms of electronics and components. I think the cars, and computer chips installed in intelligent cars, so I would expect these industries to attract future investments. And no to mention, our financial institutions will continue to invest and acquire financial institutions in Thailand, we will see more of those into Thailand from Singapore.
And despite the recent SARS, bird flu and the tsunami, foreign direct investments into Thailand do not look set to slow down. Leong Choong Cheong, Managing Director from KPN ST Logistics in Bangkok, Thailand.
LCC: I don’t think so because for Thailand, the manufacturing industry has been picking up quite a bit, especially after SARS. In fact, at the pre-SARS period, Singapore companies have been investing, mainly in China. People realized, even for multinational companies in Singapore, after SARS, companies realized that they should not put all eggs into one basket, and some companies are slowly putting investments back in Thailand. Many companies now see Thailand as a manufacturing hub in the ASEAN region, in view of the opening of AFTA, especially in the case of the automotive industry. So that will increase the level of investments from Singapore, especially in the manufacturing area.
A point echoed by Paul Wong (PW), who is the General Manager of Bangkok’s Swissotel Le Concorde, formerly known as Merchant Court.
PW: I think it will grow, as you can see, a lot of Singapore companies have come into Thailand to establish their factories, to carry out their production, and technical expertise. Basically, Singapore can gain that advantage, in the sense of lending the technology expertise, and high tech knowledge which Singapore companies are well-equipped. And you can see a lot of Singapore companies establishing themselves in Thailand’s automobiles, spare parts, electronics etc. I think if both countries go along, hand in hand, I think there will be more to come, and I think they will progress even further, if every joint venture deal is successful. I do no see it as competition between Thailand and Singapore, but it is more like coordination between these countries to move forward, to look at new markets in China. This will be the advantage for both countries to cooperate.
Paul also sees the advantage of both countries cooperating in the area of tourism, instead of seeing Singapore and Thailand as regional tourism competitors.
PW: In any business, there will always be competition. And competition is healthy. Without competition, you cannot move ahead, right? So I think Singapore has a unique style of attracting its clientele, Thailand has another style. You know, with this competition, I don’t even see it as competition, with the differing styles, the best thing is to work together, to bring tourists from all over the world to come into Asia. You have to see this situation as concerning Asia, and ASEAN as a small base, that they can stop here, transit to Singapore, Malaysia or Indonesia before going back home. That sort of global networking, to bring in customers via long haul flights, at least they spend 21 days, or three weeks of their time touring ASEAN before going home. I feel there is a synergy to work on this, as ASEAN consists of countries that differ culturally. If they can work together with the tourism boards, and other countries in Indonesia, you don’t see each other as competitors, you are helping each other in tourism.
Paul Wong, General Manager of Swissotel Le Concorde in Bangkok.
That ends Business Ideas this week. Join me at the same time, next week. I’m Melanie Yip for Radio Singapore International.
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Special thanks to the following organizations for their assistance in the interview arrangements -
SINGAPORE INTERNATIONAL FOUNDATION
for interview arrangements with Mr Winston Doong from the Singapore-Thai Chamber of Commerce in Bangkok.
The Singapore-Thai Chamber of Commerce is one of close to 90 Overseas Singapore Clubs that the Singapore International Foundation keeps in touch with to keep the Singapore spirit alive among them. SIF provides grants for the clubs to celebrate National Day and Singapore festivals; sending videotapes of local productions, the quarterly Singapore magazine and plaques and certificates of appreciation to outgoing executive committee members; and funding the clubs, administration and newsletters.
For more information, please visit Singapore International Foundation
INTERNATIONAL ENTERPRISE SINGAPORE
for interview arrangements with Mr Leong Choong Cheong from KPN ST Logistics in Bangkok and Mr Paul Wong from Swissotel Le Concorde in Bangkok.
International Enterprise Singapore (IE Singapore) is the lead agency spearheading Singapore's efforts to develop its external economic wing.
Our mission is to help Singapore-based companies grow and internationalise successfully. We offer a wide range of services in Singapore and 36 locations worldwide by using a 3C framework of assistance - Competency, Connections and Capital. We provide market information, assist enterprises to develop their business capabilities and find overseas partners. At the same time, IE Singapore works to position Singapore as a base for foreign businesses to expand into the region in partnership with Singapore-based companies.
For more information, please visit IE Singapore
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