Thailand: Baht, stability key to recovery
The government needs to manage the local currency to become more competitive and ensure political stability, two key tools to help reboot the virus-hit economy, says Boonsithi Chokwatana, chairman of consumer goods conglomerate Saha Group.
“If the government wants the economy to recover within one year after the pandemic ends, the baht should weaken to 35-36 to the US dollar,” he said.
“If it wants the economy to recover within two years or three years, the baht should hit 34 and 31-32, respectively. A weaker baht will help stimulate growth in several sectors and result in better purchasing power for consumers.”
Mr Boonsithi said political stability is equally vital, ruling out a cabinet reshuffle because work on reviving the economy or helping Thais affected by the outbreak will discontinue.
“Though the impact from this pandemic is about 10 times that of the Asian financial crisis in 1997 and has a global effect, one positive is it is setting the global economy to zero,” he said.
This offers an opportunity for Asia to become an economic leader in place of the US and Western countries if we can tackle the pandemic and rebuild regional economic growth.”
“Whether Thailand can become the hub of this region, replacing Singapore, depends on how fast the government can revive the country’s economy and garner cooperation from all parties.”
According to Mr Boonsithi, another area for continued government focus is IT.
“It is quite fortunate that at the early stages of this government’s administration, it highlighted the 4.0 policy centred on high technology,” he said.
“The 4.0 policy enabled the Finance Ministry to deliver the 5,000-baht cash handout to help people within a very short period.”
Mr Boonsithi, who has worked for Saha Group for 65 years, said Covid-19 is the toughest crisis during his tenure.
“But we still believe we can overcome it because we have learned a good lesson from the Tom Yum Kung crisis. After that crisis, our group invested and expanded business on cash flow rather than on bank loans,” he said.
“Nonetheless, one thing we are still worried about is if the conflict between powerful countries turns violent and leads to war. However, even opportunity can be found during war.”
Sales of Saha Group are estimated to contract by 10-20% this year because of declining sales of fashion, shoes and bags. However, with a diversity of businesses, the company still expects to fetch a slight profit at the end of this year.
“We don’t have any big investments for the long term this year,” Mr Boonsithi said.
“We will adjust our business on a day-by-day basis. We want our business to see sustainable growth.”