THAILAND MUST "TRY TO CAPITALISE" ON JAPAN'S ASIA FOCUS

       Thailand needs to present a better investment story to take advantage of the new Japanese government's focus on Asean and emerging Asian countries like India and China in a bid to reduce the country's economic dependence on the United States, the Board of Investment said last week.
       "I believe Japan will not leave Thailand where it has already invested heavily. But it is necessary for Thailand to develop the workforce's skills and promote upstream industries to serve the future trend of ecological and high-valued production," said Chokedee Kaewsang, the BoI's economic and investment adviser.
       Since the Democratic Party of Japan (DPJ) defeated the Liberal Democratic Party in the general election last month, the world has been watching its policies to cope with the economic slowdown.
       "Even though the economic policies of the two parties are not much different, I think the DPJ will give more priority to balancing its economic dependence on the United States and other countries particularly in Asia where the economy keeps up constant growth," he said.
       About 70 per cent of Japan's economy has been tied to the US.
       It can be clearly seen that Asia, particularly India and China, are recovering from the economic crisis sooner than other parts of the world.
       However, Japan will not move all its investment to those two countries because of counterfeiting problems in China and poor infrastructure in India.
       Foreign direct investment (FDI) by Japan plunged 60 per cent this year, but Japanese investment in Thailand declined only 30 per cent, less than the drop of FDI from other countries, he said. According to the BoI's statistics, total applications for investment privileges submitted by Japan in the first eight months were worth Bt33.3 billion, down 35.8 per cent from the same period last year.
       The political instability here had shaken the confidence of Japanese investors, but it was not so serious that they would allocate their investment to other countries, he said.
       "Both Japan and Thailand have similar politics. Most Japanese investors understand what is going on in Thailand. Instead, they pay more attention to the country's free trade policies. But the political unrest definitely concerns the newcomers," he said. "Japanese firms show strong interest in the free trade agreement between Thailand and India.
       Auto-makers, for example, would like to use Thailand as their base to penetrate India's market as well as to outsource parts to reduce costs and serve markets with high potential to grow," he said.
       Suzuki, one of Japan's leading small vehicle makers, became the largest carmaker in India after it decided to establish plants there.
       During Industry Minister Charnchai Chairungruang's visit to Japan this month, it was obvious that Japanese auto-makers were moving forward to develop "green" technologies, for example, Toyota's hybrid vehicles, Mitsubishi's electric vehicles and Nissan's eco cars produced in Thailand.
       Santi Leelawong, a BOI director and investment consul, said more Japanese firms are keen to invest in the service as well as environmental business, such as water management.
       About 90 per cent of Japanese businesses here are SMEs, so the government will provide financial assistance directly to them and also promote activities to boost their competitiveness, he said.