Asean governments should aim for every public dollar funded for infrastructure development to translate to an “early double-digit” amount in financing mobilised from the private and institutional sectors, said the Asian Development Bank (ADB) in a new report.

That ratio would be a “tipping point” for public, private, and institutional capital to provide enough resources to close the region’s significant infrastructure investment gap, said the development organisation.

Currently, the governments’ fund sourcing averages three dollars for every one dollar invested. “They should aim for early double-digit ratios if not at least doubling fund sourcing,” said ADB.

ADB launched the report on Tuesday (May 2) as it kicked off its 56th Annual Meeting, a gathering of finance ministers, central bank governors and other stakeholders representing the regional development bank’s 68 member economies at Incheon, South Korea.

The 129-page document took stock of the latest innovative financing approaches deemed as key to private sector participation, with inputs from finance ministers and central bank governors of Asean+3 economies. Asean+3, or the Association of Southeast Asian Nations Plus Three, refers to the 10 Asean member states plus China, Japan and South Korea. 

Second Finance Minister Indranee Rajah was referred to as a key partner in ADB’s collaboration with Asean+3 in coming up with the report, titled Reinvigorating Financing Approaches for Sustainable and Resilient Infrastructure in Asean+3.

Challenging gap

With this being the first time in three years that the meeting was held in person, the lingering effects of the pandemic were in sharp focus. ADB said financing the infrastructure gap has gotten more challenging than before, as debt levels are up, tax revenues down and public spending has ballooned.

The situation severely limits direct public funding for infrastructure, it stressed.

In developing countries alone, the funding gap is US$2.5 trillion a year, as public and private financing of United Nations (UN) Sustainable Development Goals (SDGs) remained around US$1.4 trillion, it said.

The UN Conference on Trade and Development had estimated that US$3.3 trillion to US$4.5 trillion a year is needed for these countries to achieve their SDGs.

Public resources may close to a third of the gap, but private capital needs to cover at least 70 per cent, ADB stated.

Its own assessment of its 45 developing member countries from Asia and the Pacific found that US$26 trillion is needed to meet SDGs by 2030. This translates to about US$1.7 trillion per year, but only about US$880 billion is invested in infrastructure annually, it pointed out.

Asean economies, in particular, need at least US$2.8 trillion in total infrastructure investment by 2030, or US$184 billion annually.

Why banks can’t fill in

While the financial sector in other parts of the world could step in to meet the infrastructure financing requirements, in Asean+3 the sector is too “narrow” to do so.

Banks dominate the space in the region, while pension funds and insurance companies remain small, ADB said. 

“Since banks can provide only short-term financing as they are constrained by their liabilities (deposits), any allocation to long-term investments leads to a maturity mismatch,” it added.

And as Asian banks are largely risk averse to infrastructure projects because of tightening regulations on credit lending, including credit risk measurement as stipulated by the Basel Committee on Banking Supervision, private sector participation becomes key, it said.

But even as more than US$200 trillion of private capital is invested in global capital markets currently, ADB said a major bottleneck lies in the lack of a bankable, investment-ready pipeline of infrastructure projects. The risks and low rate of return are also not attractive.

One leads to 12

Blended finance – an area of focus for the Monetary Authority of Singapore – is among the 12 innovative financing approaches covered in the report. 

The model shows promise, especially as one of its case studies, development finance institution GuarantCo, was able to mobilise as much as $12 for every public dollar put in using it.

GuarantCo is funded by various governments including the United Kingdom, Switzerland, Australia and Sweden through trusts and facilities. Its blended finance solution de-risks investments by providing partial credit guarantees for infrastructure projects in developing countries and receiving first loss equity contributions from public funds.

The 1:12 ratio was possible as GuarantCo designed a funding model that lets it provide guarantees up to three times the value of the equity contribution which, in turn, can, on average, mobilise up to four times private sector investment into infrastructure projects. 

For blended finance to be successful, ADB suggested that it should address market failures to minimise the risk of market distortion or crowded out of private finance. Crowding out takes place when development funders invest in a project that could have secured complete private sector financing without any assistance from the public sector.

Three steps

Offering three practical steps on how to scale infrastructure investments, Indranee, speaking at the report’s launch event, said governments will have to first build capacity in structuring bankable projects.

When that is done, the public sector should connect demand and supply by linking investors to bankable projects, she said.

Finally, the sector should enhance investor confidence, by creating awareness around innovative financing approaches.

The awareness will be key to encouraging greater investments in marginally bankable projects via these platforms, she added.

Source: The Business Times. Link Here.

Inbound Chinese visitors to Thailand are on track to reach 1 million per month beginning in October, a level seen before the COVID-19 pandemic, due to demand during peak season and higher airline capacity.

The Tourism Authority of Thailand (TAT) has reported a growing number of travelers from the Chinese mainland, with arrivals increasing from 91,898 in January to 285,000 recorded in April, as flights resumed between the two countries.

Chinese visitor arrivals are likely to surpass 5 million this year given the over 6 million available airline seats connecting China to Thailand between April and October, according to Chuwit Sirivejkul, TAT regional director of marketing for East Asia.

Depending on the number of flights allocated during the high season between October and March, the annual arrivals could soar as high as 7 million, Chuwit added.

Starting next month, the Civil Aviation Authority of Thailand expects flights from China to reach 430 per week, up from over 100 currently.

Chuwit noted that daily Chinese arrivals peaked at 18,000 to 20,000 during the Labor Day holiday earlier this month and will range between 8,000 and 10,000 a day in May.

This figure is a significant increase from the average of 2,500 visitors per day recorded in February before group travel was allowed from the Chinese mainland following China's optimization of its COVID-19 policy.

According to the TAT, Thailand welcomed 8,596,452 foreign tourists between January and April, with 843,920 coming from the Chinese mainland.

The surge in tourist numbers is a positive sign for the Southeast Asian country's vital tourism industry, which has been hit hard by the pandemic.

In 2019, nearly 40 million international tourists were recorded entering the kingdom, with Chinese tourists accounting for more than a quarter of the total arrivals.

Source Xinhua

The Tourism Authority of Thailand (TAT) wants to attract high-spending visitors from the Middle East in the second half of this year, aiming to use the market as a new tourism growth engine.

According to Apichai Chatchalermkit, deputy governor for tourism products and business at TAT, the authority has been ramping up its efforts to entice high-spending tourists from the Middle East since Thailand restored full diplomatic ties with Saudi Arabia early last year.

He said Middle Eastern consumers have a positive perception about the quality of health and wellness businesses in Thailand.

According to TAT, the number of Middle Eastern tourists travelling to Thailand tallied 314,882 last year, with nearly 100,000 visitors from Saudi Arabia and around 66,000 visitors from the United Arab Emirates (UAE).

Travellers from the Middle East are regarded as a high-spending group that has relatively long stays in Thailand, said Mr Apichai.

In 2019, travellers from the UAE were in Thailand for an average of 11.4 days and spent more than US$220 per day.

In a move to promote Thai tourism in the Middle East, the TAT recently participated in the 30th Arabian Travel Market, which was held from May 1-4 in Dubai.

The TAT expects tourism revenue to reach 2.38 trillion baht this year, about 80% of the pre-pandemic level in 2019. Of the total, 1.5 trillion baht will come from foreign visitors, with the remainder from local tourists.

The authority predicts 25-30 million foreigners will visit Thailand this year.

According to Mr Apichai, the TAT is planning marketing events to encourage travel to Thailand, including tastings of tropical fruit and fruit buffets in Rayong and Chanthaburi.

The authority is also drawing up a schedule to promote durian in Hua Hin.

The TAT joined forces on Wednesday with Central Food Retail, the operator of Tops, to promote "Thailand Amazing Durian & Fruit Fest 2023", which is being held until May 15.

The event showcases Thai fruit in a bid to stimulate tourism among both domestic and foreign tourists.

The festival has three highlights: a Monthong durian buffet, a durian café zone and a fruit market zone.

Tops expects the event to generate more than 200 million baht in sales.

Apart from promoting fresh fruit, the TAT has talked with retail chain stores about helping fruit farmers process their products to sustain their long-term income.

The TAT also pledged to provide fruit farmers with markets to sell their produce.

Source Bangkok Post

The Tourism Authority of Thailand (TAT) hopes the Chinese market can surge to 1 million arrivals per month in October, as occurred in 2019,

thanks to increasing flight capacity and an influx of demand during high season, with e-visa issues resolved by that time.

Chuwit Sirivejkul, TAT regional director of marketing for East Asia, said the agency is confident that Chinese tourist growth is on track to surpass 5 million arrivals this year, generating 446 billion baht.

Flight slots between Thailand and China total 6 million available seats from April to October, an average of 600,000 to 900,000 seats per month. An estimated 840,260 seats are available in October.

Roughly 10,000 Chinese people are visiting Thailand each day, peaking at 18,000 to 20,000 per day during the Labour Day holiday earlier this month.

Airports of Thailand plans to increase ground handling services for two existing providers, Thai Airways International and Bangkok Flight Services, which should help facilitate growing demand, said Mr.Chuwit.

He said Thailand should expect a huge number of Chinese tourists in the second half, especially family trips between June to August during school holidays, followed by incentive business groups in September.

China's National Day, a seven-day holiday in October, should also accelerate travel demand through the end of the year, with more chartered flights, said Mr Chuwit.

Regarding the limited capacity for visa applications for Chinese tour groups, he said TAT will discuss the matter with the Foreign Affairs Ministry next week. The e-visa application system for Chinese tour groups allows 84,000 applications per month.

Following negative comments about safety in Thailand circulating on Chinese social media last month, Mr Chuwit said it resulted in a slowdown in secondary Thai tourist cities. The impact is short-term should not affect overall growth this year, he said.

At the end of May, Mr Chuwit said the TAT plans to invite Chinese influencers to Thailand to increase their confidence in tourism safety, via a press conference co-hosted by the Royal Thai Police.

He said despite promising growth, challenges include a lack of Chinese-speaking staff and financial tech development to cater to Chinese spending behaviour. Of the 8.5 million foreign tourists from January to April, Chinese tourists tallied 843,920.

TAT recently launched an ad campaign titled "Unboxing Thailand" targeting Chinese millennials, tallying 2 million views since April.

Source Bangkok Post

Milieu Insight, Southeast Asia’s foremost consumer research company, recently surveyed 2,500 working individuals aged 20-65 in Indonesia, Thailand, Vietnam, Philippines, and Malaysia to gauge their travel plans for the upcoming summer. The results provide a positive outlook for the region’s tourism industry, with nearly 80% of respondents expressing a willingness to travel domestically.

According to the survey, almost half of the respondents plan to take two to three domestic trips this year, with 40% of Thai respondents planning four or more trips, the highest across the region for domestic travel intent. This suggests that travel companies should consider offering packages and promotions that cater to multiple trips to boost the frequency of travel.

Furthermore, the survey revealed that concerns about COVID-19 safety have diminished in most countries surveyed, except for the Philippines, which recorded the highest level of concern, likely due to the rise in cases in the country.

Regarding key considerations for domestic travel, travel spots and sceneries are top priorities for Indonesia, Thailand, and Vietnam, while safety tops the list for the Philippines. Regarding preferred destinations, Boracay in the Philippines, Bali in Indonesia, Da Nang in Vietnam, Sabah in Malaysia, and Phi Phi Island in Thailand are the top choices among respondents.

In addition, national carriers such as Philippine Airlines, Garuda Indonesia, and Vietnam Airlines are favoured by respondents from the Philippines, Indonesia, and Vietnam. In contrast, low-cost carrier AirAsia is the airline of choice for travellers in Malaysia and Thailand.

When planning activities, Southeast Asians proved to be foodies, with many planning food trips. Beach holiday activities were prevalent in the Philippines, while touring was a favourite activity for Thai respondents. Museum visits were also popular in Vietnam and Malaysia.

Overall, the survey highlights the importance of offering packages that cater to travellers’ preferences and the need for the tourism industry to focus on promoting domestic travel. With a diverse range of activities and destinations, the region has much to offer, and travel companies must take note of these trends to remain competitive.

To read more about the survey, visit the Milieu Insight website.

Source DESTINATION THAILAND NEWS

Chinese car manufacturer SAIC Motor has started construction of a new energy industrial park in Thailand, which is expected to focus on localized production of key auto parts for the company’s new energy vehicles (NEVs).

According to the carmaker, the Phase I construction of the park is estimated to be completed this year, while the complete construction of the park will be finished in 2025.

The new energy park, located in Chon Buri province, will cover 120,000 square meters and boast standard workshops, a container yard, and a logistics warehouse, as well as complete facilities including drainage systems and a parking lot. Several upstream NEV core and key component enterprises have expressed their intention to settle in the industrial park in the future.

As early as 2013, SAIC teamed up with Charoen Pokphand Group to found SAIC Motor-CP, a joint venture, in its bid to develop the vast ASEAN market.

SAIC’s MG brand, which entered the Thai market in 2013, has become an increasingly popular brand among Thai customers. As of April, MG brand’s total sales in Thailand notched up more than 173,000 vehicles. Last year alone, SAIC Motor-CP manufactured and sold about 32,000 whole vehicles - making it one of SAIC’s major overseas production and sales bases.

In 2022, SAIC saw its sales in overseas markets reach over 1 million vehicles, ranking top among Chinese carmakers for the seventh consecutive year and marking the company becoming the first domestic automaker to achieve this milestone.

Source NATIONAL NEWS BUREAU OF THAILAND

Chinese nationals have been seeking out property purchases in Thailand since Beijing opened its borders this year.

Many Chinese are reportedly eager to invest in a residence overseas, keen for a safety net in case of another pandemic, and also to hedge against economic risks.

Data from website Trip.com showed that Thailand was the most popular outbound destination for Chinese travelers during the May Labor Day holiday, followed by Japan and South Korea.

The kingdom’s reputable international schools and quality medical facilities are also drawing increasing numbers keen to acquire a second home.

Thailand expects at least 5 million Chinese visitors this year, with some set to buy property, although the figure is still a far cry from pre-pandemic levels when they made up nearly a third of the 40 million arrivals.

Mesak Chunharakchot, President of the Thai Real Estate Association, said: "There is definitely demand from China for properties in Thailand."

He added that topping buyers’ lists are locations in major cities such as the capital, Bangkok, along with Chiang Mai in the mountainous north, the east coast beach resort of Pattaya, and the northeastern region of Isan.

Although Thai rules limit foreign ownership to just 49% of the units in any condominium development, prospective buyers are pouring in, bringing business to real estate agents who target Chinese buyers.

Source : NATIONAL NEWS BUREAU OF THAILAND

Peerapong Jaroon-ek, chief executive officer of Origin Property, said at a press conference on Thursday that the issuance of digital token "RealX" for investment is aimed at making 361 units of three condo buildings — Park Origin Phrom Phong, Park Origin Phayathai, and Park Origin Thonglor — available as smaller investment units via tokenisation technology.

Digital asset investment firm Real Estate Exponential and TokenX, an initial coin offering portal that offers end-to-end tokenisation services, are partnering Origin Property in this venture.

Peerapong explained that this type of asset fractionalisation, made possible by current financial technology, was created to alleviate the pain points of the new generation and the general public who are interested in investing in the property sector.

He noted that the digital asset form enabled small investors to invest in expensive assets such as real estate. One RealX digital token will be equivalent to investing in a condo area of about 1 square inch.

It may not be the best way to own a luxurious condominium as buyers cannot move into it, but it is a long-term valuable option in the property investment cycle, Peerapong said.

Veraphong Chutipat, CEO of Real Estate Exponential, said that in the past, property investment was only available to the wealthy. Retail investors, however, can now gain access to this industry thanks to blockchain technology and tokenisation.

He emphasised that the RealX token is different from other cryptocurrencies as the token is backed by real luxurious condominium assets.

Jittinun Chatsiharach, CEO of Token X, said RealX was in the regulatory process with Thailand's Securities and Exchange Commission.

The first public initial coin offering is expected in June, with no more than 19,230,769 tokens at a price of 182 baht per token and a total value of no more than 3.5 billion baht, she said.

She explained that the funds would be invested in the Revenue Sale and Transfer Agreement contract, which will generate income from the project's assets for transaction expenses, loan payment from fundraising, and use as working capital of digital token issuers.

According to Peerapong, investment in Real X has a project life of 10 years from the start date of the project.

Holders of digital tokens will receive two types of returns: (1) a quarterly return on the net rental of the condo during the first five years, and (2) a chance to receive 10-25% of the condo price difference that is expected to increase after the sixth year of investment.

Retail investors cannot buy more than 300,000 baht per person in "RealX" digital tokens.

Source THE NATION THAILAND