Thai companies face a challenging future with regional competition expected to intensify under the Asean Economic Community (AEC) starting in late 2015.
Speaking at the "Monitoring Thailand's Industrial Economy 2015" forum held yesterday by the Federation of Thai Industries (FTI), Kosit Panpiemras, executive chairman of Bangkok Bank, said Thailand today was not viewed as a major investment destination in Asean but merely a choice, mainly due to increasingly competitive neighbours like Indonesia, the Philippines and others.
He said investment in infrastructure megaprojects alone would not lift the country's competitiveness, and the private sector must boost efficiency and productivity to compete.
"Thai business operators must upgrade their own efficiency and capability through better cost management, focusing on high-value products and developing their own markets," Mr Kosit said.
"Business operators won't be able to grab the AEC market of 600 million people without these changes."
Ekniti Nitithanprapas, deputy director-general of the Fiscal Policy Office (FPO), said Thailand would be challenged by increased competition fostered by the AEC.
He expressed concern about the long-term competitiveness of Thailand, stressing the need for investment in cross-border provinces and especially infrastructure such as railway and road projects.
"Government spending on infrastructure development is the key, as it will benefit the country's long-term growth," Mr Ekniti said.
He gave the example of the Eastern Seaboard, the government's main investment project two decades ago.
"It is the main project driving the country's economic growth even today," he said.
The FPO has forecast GDP growth of 4.1% next year.
"Thailand right now is surrounded by fast-growing neighbouring countries," Mr Ekniti said.
"Thus, developing infrastructure in provincial areas to boost cross-border trade is one of the keys to tapping these rising opportunities."
FTI vice-chairman Chen Namchaisiri remains optimistic about the country's exports next year despite a lukewarm outcome in 2014.
He said Thailand's positive factors included reform measures under the interim government and the easing political conflict.
"The lifting of existing martial law would also improve investment sentiment and regain foreign investors' confidence," Mr Chen said.
He said the impact of populist
policies imposed by the previous elected government, such as the first-car tax rebate, would pose a lesser impact next year.
"People's purchasing power should return and consumer confidence should be regained," he said.
Moreover, the government could encourage Thai businesses to enter new markets such as the BRIC countries — Brazil, Russia, India and China — as they hold strong growth potential.
Manoon Siriwan, an energy analyst, said Thailand would be forced to increase imports of crude oil by 80% in the next two years if the country failed to increase the number of coal-fired power plants and biomass plants.
Looking ahead to next year, Mr Manoon expects the price of West Texas Intermediate (WTI) crude oil to fall to $US70 a barrel from $75-79 this year, with Brent crude dropping to $75-77 a barrel from $78 now.