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Japanese investors back

By on May 24, 2012 in Property News

But labour shortage, costs remain a worry

Thailand has regained attractiveness in the eyes of Japanese investors, with many new players showing interest.

But the Japan External Trade Organization (Jetro) says Thailand must address the issues of worker shortages and higher labour costs to stay competitive with other Southeast Asian countries.

Setsuo Iuchi, the president of Jetro’s Bangkok office and chief representative for Asean and South Asia, said half the Japanese investors visiting his office for advice and guidance are interested in investing in Thailand.

The number visiting the office is now averaging 100 a month, outstripping the figures before last year’s flooding.

“Most of them are new investors who have never invested in Thailand before,” Mr Iuchi said yesterday at a forum on Asean economic integration hosted by the Technology Promotion Association (Thailand-Japan).

Some exiting Japanese firms have relocated partial production to other Asean countries for production diversification, not necessarily due to the floods.

“Japanese investors are committed to Asean, with more and more coming to invest here,” said Mr Iuchi.

Even so, issues surrounding the business environment need to be addressed.

Jetro’s poll of Japanese companies in Asia Pacific revealed a bigger labour shortage in Thailand than in other Asean countries and India.

Nearly 900 firms in Thailand replied to the survey, which was conducted last August and September.

Another concern is that the cost of doing business has risen after a “huge increase” in the daily minimum wage of 40% last month.

Jetro has advised the Thai government to broaden and deepen intellectual infrastructure for industries by promoting more research and development.

“Especially when Thailand is facing a labour shortage and higher wages, you have to be more competitive in terms of skilled labour, value-added products and knowledge-based infrastructure,” said Mr Iuchi.

He urged better education and vocational training.

The Asean Secretariat said Vietnam replaced Thailand in 2009 as the second-biggest investment destination of Japanese firms in Asean after Singapore.

In moving towards regional integration under the Asean Economic Community in 2015, hard infrastructure should be further developed such as the deep-sea port and special economic zone in Myanmar’s Dawei district.

“Myanmar clearly has big potential including a market of 60 million people,” said Mr Iuchi, adding that more development is needed in terms of electric and water supply to serve Japanese investments.

Source : Bangkok Post 18 May 2012

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