ECONOMY

VEERA PRATEEPCHAIKUL

Despite current political instability, Charoen Pokphand chief executive Dhanin Chearavanont believes Thailand has a bright future. Speaking on ''The Future of the Thai Economy'', the head of the giant agri-business conglomerate said tourism would play an even bigger role, while plans to turn Thailand into a regional medicine hub would boost prosperity.

He is also enthusiastic about the Opec-style Organisation of Rice Exporting Countries (Orec) controlling rice production and prices.

Mr Dhanin expects more tourists from emerging economies such as China, India, Russia and Eastern Europe to visit Thailand, improving on the 540 billion baht earned from tourism in the past 12 months.

These tourists, he said, have greater purchasing power and are likely to spend more than the average visitor at present.

He added that Thailand's total of 300,000 hotel rooms may not be enough to accommodate the anticipated rise in the number of tourists and will have to be increased.

A rising number of visitors are coming to Thailand not just for a holiday, but also for medical services which are of a high quality but cheaper than in developed countries. He envisages Thailand becoming the regional medical hub and encouraged the government to provide support or incentives to local medical facilities.


Dhanin: Tourism will play even bigger role

He is also positive about Orec, despite its critics saying the proposal is impractical, immoral or even impossible. He said that since there are fewer rice-exporting countries than oil-producing countries, rice-exporting nations should form a cartel to control output and to set reasonable prices.

However, he stressed that Thailand, as the world's leading rice exporter, must not undercut other Orec nations by offering its product at cheaper prices.

The idea of a multinational rice cartel has existed for many years, but it gained momentum during Prime Minister Samak Sundaravej's visit to Burma in March. He suggested Thailand, Burma, Vietnam, Laos and Cambodia form a cartel to stabilise rice prices in light of the steadily increasing cost of oil.

Mr Dhanin said the price of rice should be on par with oil, if not higher. He said: ''Rice is the energy that feeds human beings, while oil is the energy that drives engines. Which is more important? If there is no oil, we can ride bicycles, but people cannot survive without food.''

He pointed out that the annual global demand for rice is estimated at 400 million tonnes, but the amount exported is just 27 million tonnes. There is still room for Thailand to produce and export more rice if the yield per rai can be increased through improved rice seeds and better irrigation system, he said.

Mr Dhanin added that a comprehensive irrigation system costs about 300 billion baht, which could be recouped in just two years from the increased revenue.

The Charoen Pokphand chief said that rice prices must not be kept artificially low for consumers, otherwise farmers might shift to more profitable crops, such as rubber.

He cited the case of the Philippines, which was formerly a rice exporter but turned into an importer because the rice price was continually suppressed to appease consumers, prompting farmers to turn to other crops.

In light of high rice prices, Mr Dhanin suggested pay increases for government officials and private sector employees. He dismissed the notion that pay rises would drive up inflation, saying inflation happens when people have money but there are inadequate supplies of consumer goods.

He said the government's rice pledging scheme should have been announced before the planting season, rather than during harvest time.

Apart from rice, rubber also had good prospects due to the rising oil price and anticipated higher demand for natural rubber for the automobile industry in emerging markets such as China and India, he said.

He predicts the price of rubber, which currently fetches 90 baht per kilogramme, will climb to 150 baht per kg in the foreseeable future.

By Bangkok Post On 7 June 2008

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