Chiefs debate next step for recovery

       No one doubts the global economy has recovered from the dark days of late 2008. But questions remain about how long the recovery will last, particularly as fiscal stimulus programmes run out of steam and central banks begin to tighten monetary policy.
       For the Japanese motor giant Toyota,the policy today is "wait and see", said Ninnart Chaithirapinyo, vice-chairman of Toyota Motor Thailand.
       The world's largest auto manufacturer will wait to see how economic trends develop as global stimulus programmes ease before committing to any new major investments, Mr Ninnart said at an economics conference held by Sumitomo Mitsui Banking Corporation.
       "We need to see what the results of these stimulus programmes will be. Every country in the world has opened up spending. The question is, once fiscal stimulus stops,what will happen?" he asked.
       Toyota's operations in Thailand are running at 80%of annual production capacity of 550,000 units.
       Without clear signs of further growth,Toyota sees no need for additional investment to expand production at this time, Mr Ninnart said.
       For the year to October, auto sales in Thailand are 18% lower than the same period last year, and sales are projected to contract by 15% for the full year.
       Mr Ninnart noted that many countries in the region had implemented tax incentives to support strategic, labourintensive industries such as vehicle production.
       Chin, for instance, has offered its consumers in the provinces subsidies for purchases of cars and motorcycles,India has cut taxes on new vehicles and Malaysia offers financial support for replacement purchases.
       He rued the fact that Thailand, the largest automobile producer in Asean,had no definitive support measures for the industry to survive the current crisis.
       Kan Trakulhoon, president and chief executive of the industrial conglomerate Siam Cement, said moves to integrate the Asean economies offered strong growth potential for Thai businesses,thanks to the country's favourable location in the region.
       An integrated Asean represents a consumer market of 580 million people, he said, and up to 700 million if including southern China.
       Mr Kan said Thai industries needed to increase their use of technology, creativity and innovation to increase value,and give consideration to global trends such as global warming and environmental protection.
       He said Thailand had the potential to
       serve as a financial and marketing hub for the region to complement its strengths in manufacturing.
       But authorities should also rethink the tax treatment and other barriers to foreign workers, Mr Kan added, estimating that each expatriate worker, in addition to contributing needed skills to the workforce, also spends a considerable sum in the economy itself.Narongchai Akrasanee, chairman of the Export-Import Bank, said Asia would lead global economic growth for the next several years.
       Asia now accounts for 26% of global GDP compared with 23% last year, he said. And the post-crisis landscape will shift away from western models to a more diverse range of democratic governance, while economic policy will shift from free market liberalism towards greater state regulation.
       Ekniti Nitithanprapat, an economist and Finance Ministry spokesman, said Thailand's economic growth next year,projected at 3.3%, would continue to lag the economy's potential growth of 5% to 5.5%.
       But the 1.43-trillion-baht Thai Khem Kaeng infrastructure investment programme, running from 2010-12, will help lift growth and provide the infrastructure needed for medium-term gains.