Thai prime minister Yingluck Shinawatra spent the first leg of her three-day visit to Japan urging investors to return to Thailand, after last year’s flooding disrupted supply chains for hundreds of Japanese manufacturers in the country.
The Thai government “is committed to ensuring that the devastation caused by such disasters will never happen again,” Yingluck said Wednesday at a joint news conference with her Japanese counterpart, Yoshihiko Noda.
Thailand, one of Asia’s key manufacturing hubs, is trying to reassure investors that it is safe to return to the country and is offering financial incentives in a bid to secure continued investment inflows.
Yingluck said her government set up a fund to support disaster insurance and is building a levy around the industrial park where manufacturing plants operated by Japanese firms were submerged in the October flooding.
“Please rest assured that my government will manage our water resources in a clear and effective manner,” she said.
At a meeting with members of Japan’s Chamber of Commerce earlier in the day, Yingluck stressed the importance of small and medium-size Japanese businesses for the Thai economy, saying that her government “must continue to support owners [of the firms].”
A drive to seek cheaper manufacturing overseas and escape the grind of the strong yen pushed Japan into the position of the leading foreign investor in Thailand.
But Japanese firms saw their fourth-quarter earnings take a hit from the flooding as the disaster caused severe disruption to their supply chains.
Japan’s Nikkei business daily on Tuesday reported that Japanese companies’ operating profits in the Asia region fell 23 percent on year in the October-to-December period, based on a survey of 142 major Japanese firms.
In a meeting with Japan’s Trade minister Yukio Edano, Yingluck said her government has taken steps to prevent future disasters including strengthening dams ahead of the coming rainy season, as well as lifting import tariffs for companies affected by the flooding.
Some Japanese companies have recently made further commitments to invest in the country. Toyota Motor Corp. said last month it will ramp up its engine production capacity in Thailand. Like many of its Japanese rivals, the auto maker sees the country as a global hub where many competitive suppliers operate.-By TOKO SEKIGUCHI