Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Bangkok Beefs Up Bid to Become Auto Hub

BANGKOK, Thailand -- Thailand promised on Wednesday to liberalize its tax and tariff regime to help lure foreign investment as Bangkok bids to become a regional hub for the auto, electronics and food industries.

Thai Finance Minister Thanong Bidaya called on foreign businessmen at a luncheon in Bangkok to give him proposals on how the country could better attract their money.

"Our auto industry expects to achieve 1 million-vehicle annual production this year, of which over 30 percent is being exported. We plan to do whatever necessary to raise the output to 2 million in five years," he told the group.

Thailand is the second-biggest producer of one-ton pick-up trucks, after the United States. Its vehicles and auto parts account for nearly 10 percent of its total exports.

Japanese carmakers Toyota, Nissan and Honda have recently announced plans to invest a combined $1.5 billion to expand their production capacities in Thailand in the next few years, Thanong said.

He pledged to review taxes and tariffs on 1,400 categories of electronic parts and products as part of the bid to to make Thailand an electronics production centre in the 10-member Association of South East Asian Nations in three years.

"Our officials have been instructed to look at all the tax bottlenecks with the aim of liberalizing them," he said, without giving further details.

Thanong played down concerns about security problems in Thailand's Muslim south, where more than 1,000 people have died in unrest the government has blamed on Muslim separatists.

He said the violence, which has dragged on for nearly two years, had little impact on an economy expected to grow 4.5 percent this year, albeit down from 6.1 percent last year.

"The problems there have existed for 200 years. Give the government twp to three years, and it can settle the problems," he said.

Thanong also urged foreigners to invest in a planned 1.8 trillion baht ($44 billion) infrastructure program.

Bidding for the projects -- which include new and upgraded transit systems, highways and power plants -- would be transparent and would not compromise the government's fiscal discipline, he said.

The government says it intends to finish its "mega-projects" by 2009, but some economists are concerned the program will exacerbate a yawning current account deficit.