Bangkok: FETCO has proposed a comprehensive plan to reinvigorate Thailand's capital market, aiming to bolster domestic savings and decrease reliance on foreign capital. The chairman of FETCO has outlined 10 strategic guidelines to enhance Thailand's capital market, aligning with the government's objective to boost national investment from 25% to 30% of GDP.
According to Thai News Agency, Mr. Paiboon Nalintrungkur, Chairman of the Federation of Thai Capital Market Businesses (FETCO), emphasized the urgency of increasing domestic savings and encouraging Thai investments to return from abroad. This approach seeks to mitigate the risks associated with excessive dependence on foreign capital. Mr. Paiboon's Facebook post outlined the "10 Big Wins for the Thai Capital Market," highlighting the government's intention to create new economic engines, which is a widely supported direction.
Mr. Paiboon noted the challenges of achieving growth beyond 2% annually if Thailand continues relying on traditional economic drivers. He stressed that building new economic engines demands substantial investment, cautioning against an over-reliance on foreign capital, which could lead to a significant current account deficit and threaten economic stability. Currently, with domestic savings at about 25% of GDP, and the government's investment target at 30% of GDP, there exists a 5% GDP gap between savings and investment.
He further explained that while global savings could bridge this gap, an over-reliance on foreign capital might result in a persistent current account deficit of approximately 5% of GDP, posing potential vulnerabilities to the economic system. Therefore, Mr. Paiboon proposed dual policies: increasing domestic savings and retaining Thai savings within the national economy to reduce foreign dependency. Simultaneously, strengthening the Thai capital market is crucial as it plays a key role in mobilizing savings and channeling funds to promising businesses.
The "10 Big Wins" proposed by Mr. Paiboon include: elevating the Thailand Individual Savings Account (TISA) as a core national savings policy, providing incentives for repatriating investments, amending laws to support Family Offices and Dual-Class Shares, enabling trade associations to invest in the capital market, upgrading provident funds to mandatory status, creating a comprehensive investor ecosystem, establishing an SME Credit Scoring agency, enhancing KYC processes, and setting up a Capital Market Litigation Division in the Criminal Court.
These proposals aim to create a capital market with long-term liquidity, robust infrastructure, and diverse investment products, thereby facilitating efficient mobilization of savings and allocation of funds to promising businesses.