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By mid-year rewards & incentives to foreign companies will change but Japan says go slowly so existing investors can adjust.

As wages rise, productivity should also increase, ultimately leading to a more competitive Thailand, says Mr Hayashi. (Photo: Pattanapong Hirunard)

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Economics

Jetro to BoI: Ease into changes

Slow approach urged for investment rejig
Nareerat Wiriyapong
25 Jan 2013

The Japanese have suggested Thailand gradually rework its investment promotion policies to minimise the impact on existing investors, saying a sudden change could cause investment to drop.

Yasuo Hayashi, former chairman of the Japan External Trade Organization (Jetro), recommends a gradual transition in terms of investment promotion policies, allowing time for firms to adjust.

The Board of Investment (BoI) is changing the country's investment policies from the current zone-based scheme to one classified by industry preferences. The new regime is expected to take effect by mid-year.

"For companies where investment incentives are important, a sudden change of investment policy might lead them to stop investing here," said Mr Hayashi, now the special adviser to Jetro.

Meanwhile, wage increases and a worker shortage are big concerns for Japanese companies in Thailand, and they face growing competition here.

Wage increases are also a top concern of Japanese firms in Indonesia, Malaysia and Vietnam, according to Jetro's recent survey.

"As wages rise, productivity should increase," said Mr Hayashi. "When productivity improves, Thailand will increase its competitiveness.

Japanese companies can expect greater consumer spending in Thailand as income levels surge.

At the same time, Japanese investors are eyeing greater investment in the Mekong subregion, partly due to the opening up of Myanmar.

Labour-heavy industries in particular will find Mekong nations like Cambodia and Laos attractive, said Mr Hayashi.

The Mekong countries enjoy an abundance of natural resources that would be enhanced by better transport linkage in the region.

A deep-sea port in Dawei, Myanmar will attract Japanese investors, said Mr Hayashi.

The appreciation of the yen will probably spur more Japanese investment abroad. At the same time, Japan's domestic market is being squeezed as the population declines.

Mr Hayashi urged Thai companies to consider investing in Japan, especially in small and medium-sized tech firms.

(Source: Bangkok Post, Economics, Jetro to BoI: Ease into changes, Slow approach urged for investment rejig, Nareerat Wiriyapong, 25 Jan 2013, link) 

 

Foreign Investment Promotion Policy Vocabulary

investment - when someone puts money into a business expecting to make money when the business makes a profit and the money is paid back (debt) or becomes more valuable (capital gains) การลงทุน (See Wikipedia)

investor - a person who makes investments (who puts money into businesses for a future return) นักลงทุน, ผู้ลงทุน

promotion - the activity of attracting people to something and creating interest in it; encouraging and supporting some activity การส่งเสริม, การสนับสนุน, การเลื่อนชั้น

trade promotion - การเอื้อประโยชน์ในการพัฒนาเศรษฐกิจ
investment promotion

policy - a plan of action to guide decisions and achieve outcomes นโยบาย (See Wikipedia)
investment promotion policies

Foreign Direct Investment (FDI) -  a direct investment into production or business in a country by a company in another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds.
(See Wikipedia)

Board of Investment (BoI) - "an agency of the Government of Thailand to promote investment in that country. It provides investment information and services for investors, as well as many incentives" (See Wikipedia)

Japan External Trade Organization (Jetro) - an independent government agency established in 1951, and reorganized as the Ministry of International Trade and Industry (MITI) in 1958 to consolidate Japan's efforts in export promotion, initially "JETRO's activities focused mainly on promoting exports to other countries. As exporters established themselves in world markets and the balance of trade turned from deficit to surplus, however, JETRO's role shifted to encompass more varied activities. These have included the furtherance of mutual understanding with trading partners, import promotion, liaison between small businesses in Japan and their overseas counterparts, and data dissemination. Import promotion services have included publications, promotion of trade fairs, seminars, and trade missions JETRO also provides information and support to foreign companies looking for successful entry and expansion in the Japanese market." (See Wikipedia)

wages - the amount of money earned per hour by a worker
wages rise

productivity - producing more with the same amount of inputs (labour, energy, etc) การผลิตสินค้า
productivity improves
productivity should also increase

competitive - involving competition: many people trying hard to get the same limited things such as customer purchases and spending มีการแข่งขัน
a more competitive Thailand

competitiveness - how well a business can do compared to other firms (does it have lower price or higher quality?can it gain customers?) การแข่งขัน
increase competitiveness
productivity will increase competitiveness

ultimately - finally, in the end; after a series of things have happened ท้ายที่สุด, ตอนสุดท้าย, ในที่สุด
leading to
ultimately leading to

as wages rise, productivity should also increase, ultimately leading to a more competitive Thailand

"As wages rise, productivity should increase," said Mr Hayashi. "When productivity improves, Thailand will increase its competitiveness.

ease - to make or become less severe, difficult, unpleasant, painful, etc บรรเทา ทำให้ง่าย
ease into - make slow changes that are easy for companies to deal with

ease into changes
Jetro to BoI: Ease into changes

approach - a way of doing or dealing with something การจัดการกับปัญหา วิธีการทำให้ถึงจุดหมาย
slow approach

investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
rejig - to change (to organize something so that it is organized in a different way)
investment rejig

urged - requested them to do,  encouraged people to do,   advised someone very strongly about what action should be taken วิงวอน
slow approach urged for investment rejig

rework - to change (same as "rejig" above)
rework its investment promotion policies
gradually rework its investment promotion policies

existing - already here, already doing something ที่มีอยู่
existing investors - investors who are already here; already invested here

minimise - to reduce something harmful or unpleasant to the smallest amount or degree ลดจำนวนลง ลดให้เหลือน้อยที่สุด
impact - an effect or influence ผลกระทบ
minimise impact - reduce the negative effect to lowest possible level

minimise the impact on existing investors

The Japanese have suggested Thailand gradually rework its investment promotion policies to minimise the impact on existing investors, saying a sudden change could cause investment to drop.

investment promotion policies, allowing time for firms to adjust.

gradual - moving slowly
transition - the process of changing from one situation or state to another การเปลี่ยนถ่าย   ช่วงการเปลี่ยนแปลง
gradual transition

allowing time for - give time for something happen; wait for something to happen
adjust - to change something slightly, especially to make it more correct, effective, or suitable ปรับ
allowing time for firms to adjust

Yasuo Hayashi, former chairman of the Japan External Trade Organization (Jetro), recommends a gradual transition in terms of investment promotion policies, allowing time for firms to adjust.

zone - an area where something is allowed or permitted (example: factories are only allowed in industrial zones)
zone-based - using zones; built using zones

scheme - a plan that is developed by a government or large organisation in order to provide a particular service for people แผนการ โครงการ
zone-based scheme

current - of the present time ปัจจุบัน
current zone-based scheme

preferences - things that you want or like ความต้องการ
industry preferences - the industries that you like

classify - to put people or things into groups based on their features จัดกลุ่ม
classified by
a scheme classified by industry preferences

The Board of Investment (BoI) is changing the country's investment policies from the current zone-based scheme to one classified by industry preferences.

regime - a system of rules that control something
the new regime

take effect - start being used, begin to be used
take effect by mid-year

expected - believe will happen คาดว่า (จะเกิดขึ้น)
expected to take effect by mid-year.

the new regime is expected to take effect by mid-year

incentives - giving a reward for acting in a certain way สิ่งกระตุ้น รางวัล ผลตอบแทน
investment incentives
companies where investment incentives are important

investment policy
sudden change of investment policy

"For companies where investment incentives are important, a sudden change of investment policy might lead them to stop investing here," said Mr Hayashi, now the special adviser to Jetro.

wage - an amount of money that you earn for working, usually according to how many hours or days you work each week or month ค่าจ้าง
wage increases

shortage - when there is not enough of something การขาดแคลน
worker shortage

concerns - things that people are worried about ความกังวล
big concerns
big concerns for Japanese companies in Thailand

Meanwhile, wage increases and a worker shortage are big concerns for Japanese companies in Thailand, and they face growing competition here.

concern - a worry ความกังวล
a top concern  - the biggest worry; the thing that they worry about the most
a top concern of Japanese firms

survey - gathering information about what people think about different subjects (public opionion) by asking large numbers of people questions and counting their answers, and then using statistics, graphs, and tables to present results (See Wikipedia) การสำรวจความเห็น
a recent survey
according to Jetro's recent survey

Wage increases are also a top concern of Japanese firms in Indonesia, Malaysia and Vietnam, according to Jetro's recent survey.

consumer - someone who buys and uses goods and services ผู้บริโภค
consumer spending
greater consumer spending

income - money that people receive from work or some other source, used for household consumption and savings
surge - a sudden increase in something การเพิ่มขึ้นอย่างรวดเร็ว
income levels surge

Japanese companies can expect greater consumer spending in Thailand as income levels surge.

eyeing - looking at and thinking about doing something; considering doing something in the future
Japanese investors are eyeing greater investment

opening up of - to allow foreign businesses to enter a country and start doing business there
opening up of Myanmar

At the same time, Japanese investors are eyeing greater investment in the Mekong subregion, partly due to the opening up of Myanmar.

attractive - worth having or doing น่าสนใจ
Labour-heavy industries in particular will find Mekong nations like Cambodia and Laos attractive, said Mr Hayashi.

natural - found in nature (not made in a factory by humans) ตามธรรมชาติ
natural resources - things such as coal, trees and oil that exist in nature and can be used by people ทรัพยากร

transport - to move people or things from one place to another ขนส่ง
transport linkage
better transport linkage in the region

The Mekong countries enjoy an abundance of natural resources that would be enhanced by better transport linkage in the region.

port - an area of water where ships stop, including the buildings around it ท่าเรือ
deep-sea port

attract - to cause someone to be interested in something ดึงดูดความสนใจ
attract Japanese investors
A deep-sea port in Dawei, Myanmar will attract Japanese investors, said Mr Hayashi.

appreciation - when a country's currency becomes more valuable compared to the currencies of other countries (which makes goods exported from the country more expensive)
appreciation of the yen

spur - to cause something to happen ก่อให้เกิด
spur more Japanese investment abroad

domestic - within the country ภายในประเทศ
Japan's domestic market

population - all the animals or plants of a particular type or group who live in one country, area or place กลุ่มพืชและสัตว์ที่อาศัยอยู่ในบริเวณหนึ่ง
population declines

squeeze - reduce in size (in a painful way) ; crush, press, squash บีบ
the domestic market is being squeezed as the population declines

The appreciation of the yen will probably spur more Japanese investment abroad. At the same time, Japan's domestic market is being squeezed as the population declines.

tech firms - technology firms; computer companies, biotech companies, etc
small and medium-sized tech firms
Mr Hayashi urged Thai companies to consider investing in Japan, especially in small and medium-sized tech firms.