1999 should be the Year of Recovery for Thailand's IT Industry like all industries in Thailand, the information technology industry suffered from the economic crisis that swept through Asia in 1997. Weakened by an unstable private sector projects, the Thai Industry suffered through two years of negative growth (see chart below)

But 1999 dawned with optimism that has steadily grown. By mid-1999, government and private sector economists were cautiously pointing to signs of economic recovery. Why the optimism? For one thing, the baht has stabilized, trading of 1999 (compared to 47.11 for the first quarter 1998).

The inflation rate fell to 1.6 percent in March 1999, its lowest level in 15 years. That put the inflation rate for the first quarter 1999 at 2.6 percent. Sign in the second quarter 1999 indicated that the inflation rate could go even lower in 1999.

The money market in flooded with excess liquidity helping push interest rates down to their lowest level in 30 years. By mid-1999 the minimum lending rate has dgropped to 9.5-10 percent. The one-day repurchase rate has fallen to 1 percent. By the second quarter 1999, deposit rates for savings and fixed-term accounts have also fallen to 5-5.70 percent, compared the midteens a year ago.

Furthermore, the government intervened in the economy in March with a 53.4 billion baht stimulus package (13 billion baht for job creation, 40 billion for direct purchase of goods and services), lowered the VAT from 10 percent to 7 percent, increasing the personal income tax exemption to 50,000 baht and reduced other taxes for small and medium-sized enterprises.

Source: ATCI, ATSI and CAT-VG
*Outlook

These signs have translated into encouraging growth forecasts for the market, In 1999, market research conducted by the Association of Thai Computer Industry (ATCI) The Association of Thai Software Industry (ATSI) sees revenues growing by 27 billion baht, a 4 percents in crease in US dollar terms and by 14% in baht shipped in 1999 to creep up to 195,200 while maintaining a multinational-PC-to-local-assembly ratio of 45:55 The survey report predicated Thailand will spend 15.57 billion baht on PCs and peripherals in 1999. The report predicted value in the other product categories: large scale systems 1.5 billion baht, workstation 1.16 billion baht, special purpose equipment 374 million baht, and data communication equipments 950 million baht.

The total value of the information services industry was estimates to be around 12.38 billion baht, 5.13 billion baht for software and 7.25 million for information services.

The public sector, which include enterprises, will be the largest   buyer of IT goods and services in 1999, accounting for 21 percent of the total IT sector. This spending is spurred by government agency and state enterprise budgets for millennium bug (Y2K) solutions and an IT education plan for people made (who) unemployed by the economic crisis.

Manufacturing industries are also expected to invest 4,880 million baht, a 18 percents increase over 1998, to improve their efficiency and competitiveness. Telecoms and home users market segments are expected to see (access) Internet service is also a major driving in demand for the domestic IT industry.

Value in Million Bahts.

Software development is an emerging opportunity that holds great promise for the Thai IT industry. A Software Park project supported by the government and major global software companies has been established to support Thai software houses to develop their competencies to match the needs of the world market. In 1999, we will see the launching of the project's first phase: an 8,000-square-meter Incubator Center that will be fully equipped with computer and high speed communication equipment and included a Services and Training Center, a Software Training Centered a Market Intelligence Office. This Incubator Center aims to eulitivate the talents and skills needed to succed in the software development business.

Meanwhile, to aid the launch of Thai software companies into the global marketplace, the Department of Export Promotion (DEP) is supporting high potential software companies to attend international trade show, such as, COMDEX in Las Vegas and Germany's Cebit.

* Outlook

The prime reason for this is NII requires heavy investment, innovative programs and technologies. These requirements are difficult to come by under the government's sole effort. They can only be met through open competition, non-restrictive market access and market driven environment with government acts as a catalyst.

Amendment of Thailand's telecommunication laws must be expedited to liberalize telecom services. Open competition and bottleneck services must be encouraged to create market opportunities and better service to all users. Appropriate safeguard to protect competition should be put in place. Independent body to oversee national telecommunication policies and practices should be revisited and formed.

1995 amended Copyright law is being tested for its effectiveness. Positive result will enhance NII's growth. Continuous efforts to improve and maintain harmony with worldwide intellectual legal framework is essential as protects work multiplies and the complexly of protection escalates. Thailand's positions on Berne/WIPO Diplomatic Conference on Certain Copyright and Neighboring Rights, applicability of copy right law to digital environment, the balance of fair use between content users and producers should be communicated and mode known to parties concerned, Education programs for policy makers and public about the value of strong intellectual property protection must be emphasized.  

The fact that Thailand has no law about electronic transaction can be detrimental to NII's development Trust, security, privacy consumer protection and crime in the electronic environment must be assures to individuals and businesses by laws. New laws that balances the interests of protected party and the cost to be abided by the new rules will strengthen NII.

The underlying at NII from government's standpoint is to improve the quality of Thai life. Unless the government is ready to lay heavy investment on IT and relates expenses along with fast decisions. The expected interest connect be met. Government's investment and implementation must come under the existing procurement regulations which work counter to the nature of NII programs where flexibility and decisiveness are mandates, Government's procurement process, terms and conditions, standard agreements must be revised to empower users to make fair deals and exercise fair flexibility.

World IT standards are making good progress. Governments of industrial countries are participating in standard setting that will serve end users. Industry-led-standards have proven to be best means to achieve interoperability. NII clearly depends on there standards. Local standard must be carefully examined and worked with the industry. Mandates standards should be avoided.

Finally, Thailand's critical issues on IT human resource and promotion of IT industry should be given very high priority. IT human resource development has captured high attention and the issue is being addressed but IT industry which should include manufacturing, software development and services needs more attention. Countries that have promoted IT as strategic industry are making strong headway on Information infrastructure and reaping benefits for their economic growth.

Thailand's open economy, least regulated computer Industry, and strong private sector leadership are assets to NII's development, Creation of favorable regulatory environment will add the true value to the infrastructure. I.e. how people use it and benefit from it.

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