00:00You know, there's a lot of hope that the next government will reset the economy.
00:05How hopeful are you that might happen?
00:09Well, I think we always need hope, but the reality may be something different.
00:14And clearly, the new government has a lot of its plate.
00:19And in your previous interviews, we all know how the Thai economy has underperformed relative to its Asian peers.
00:26And I think that's really the big issue that the next government needs to address,
00:30is how they can accelerate and improve the overall economic growth of the country.
00:41The question is really who best to put Thailand's economy on a reset path.
00:47Currently, 60 political parties are vying for that spot.
00:52But we know it's down to Bum Jai Thai or People's Party for the most part of it.
00:58I mean, who's well-placed to do this job?
01:02Well, the People's Party's manifesto looks very encouraging.
01:07But they perhaps lack the experience and have never been in power.
01:11I think most political pundits think that it's going to be a coalition.
01:16And, of course, one of the problems with the coalition, it's compromise.
01:21And when you have compromise, everyone's trying to please everyone else in order to go forward.
01:28But we don't have a strong policy.
01:31Or that's ultimately what ends up typically when there's a coalition government.
01:35How are you looking at the potential of that outcome, Richard?
01:42I mean, this is a country settled with 19 percent terrorists from the U.S.
01:47Essentially, it is on par with the rest of Southeast Asia.
01:50The problem is there is a great reliance on the U.S. market.
01:54And therein lies the issue for Thailand.
01:57I mean, what can the next government do to help allay those concerns and those additional costs?
02:02Well, dealing with the U.S. obviously is a separate issue.
02:07And every Asian country or every country has had to do that.
02:10As you point out, Thailand is in line with pretty much every other Asian country other than Singapore at around 19, 20 percent.
02:19So we're pretty much pari-passu on that basis.
02:23In our particular case, a lot of the parts that we produce for our customers are exempt.
02:29So it hasn't been a major issue for us.
02:33But for the country, I think they're pretty much even with everybody else.
02:37And as long as that stays that way, I think the country can manage.
02:43Actually, the actual trade agreement hasn't been finalized, as is, I believe, the case with many other Asian countries.
02:50So I don't think that's a major issue at this point in time.
02:53More of the bigger problems is how the government are going to support the development of new technologies.
03:02Because one of the, you know, every time it's an election, governments are promising populist policies.
03:12One of the most obvious ones is we want to increase the minimum wage.
03:15And in dollar terms, because of the strength of the Thai bar versus the U.S. dollar, we've had about a 22 percent increase in minimum wage over 2025.
03:29That is a lot for any company to absorb.
03:33And, you know, these are sort of problems that the country faces, because essentially it's very much an export-driven economy.
03:42And tourism is, of course, an export as well.
03:44So when you have that kind of impact and cost increase, it's very difficult to grow.
03:54What assumptions are you making about the inflows of FDI into the country, into the tax space?
04:00How confident are you that can be sustained?
04:05You know, the Board of Investment has done a tremendous job in attracting FDI.
04:09As you may know, its key policy, which was to offer tax incentives, has now been significantly blunted by the Global Minimum Tax Initiative, which is Thailand's party too.
04:20But they've done a fantastic job so far.
04:25But what I think they need is a lot more support from the government in order to compete with other countries in attracting FDI.
04:35And the focus on higher technologies is clear, because those are the ones that can pay the higher wages.
04:42We can't keep increasing wages and do the same thing, because ultimately we will not be able to reinvest in the future and companies will not be profitable.
04:53We have to go up the value curve.
04:55And I think that is a big challenge for the country.
04:57Of course, it is about AI.
05:03The rest of the world is investing a lot in ensuring that its people are on par in terms of skills for the AI world.
05:11How far back, how lagging is Thailand compared to the rest of Asia?
05:18So, you know, it goes back to education again.
05:21You know, fundamentally, you know, if we don't have the right talent coming through, that's going to be a problem.
05:27That's the first thing.
05:28Secondly, we do have a lot of talent, but a lot of it leaves because there aren't the industries to attract them and keep them.
05:36And a lot of Thais go overseas and many of them don't come back.
05:41They usually do come back, you know, to look after their aging parents, but their productive years are behind them.
05:46So we need to invest in the industries which are growing, which will retain and attract the talent that the country has.
05:57Richard, even as we talk about a sluggish economy, we talked earlier about how the Thai baht has remained strong and that is impinging and causing hurt for exporters in Thailand.
06:12Is there a need for the likes of the Bank of Thailand to step in to stabilize the currency?
06:19So there's a lot of discussion about why the Thai baht has been so strong.
06:25I mean, it's been the strongest currency versus US dollar, bar the ringgit, up until recently anyway.
06:31And, you know, it's attributed to gold trading and many other issues.
06:35But if we just look at interest rates, definitely that is something the Bank of Thailand will be looking at.
06:42And there's a lot of debate about whether our interest rate is too high and whether there's pressure from the banking system to maintain that or not.
06:53Whatever they need to do, unless we have a more competitive currency, Thailand, which frankly relies on exports predominantly, is going to struggle.
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