The rapid spread of Omicron infections and the escalating Russia-Ukraine conflict are expected to affect the country's investment prospects this year, but the government remains optimistic that investment in its flagship Eastern Economic Corridor (EEC) can reach 2.2 trillion baht over the next five years as projected.
According to a report by the EEC Office, scheduled for submission to the EEC Policy Committee meeting chaired by Prime Minister Prayut Chan-o-cha on Wednesday, the country's investment prospects in 2022 are tepid because of Omicron infections and the war in Ukraine.
The Russia-Ukraine crisis is expected to last a long time and will definitely affect the capital market, resulting in soaring energy prices and higher inflation, eventually deterring the pace of economic recovery globally and in Thailand, according to the report.
Yet Kanit Sangsubhan, secretary-general of the EEC Office, said his office is maintaining its investment target of 2.2 trillion baht in the EEC over the next five years.
The EEC Office is establishing a special team to attract foreign investors after the cabinet last Tuesday granted permission for the office to offer privileges to investors in the seven EEC economic zones on a case-by-case basis to make Thailand more enticing to potential investors.
The EEC is going to serve as a pilot project for these special incentives.
The seven economic zones comprise: the EEC for aviation (EECa); EEC for innovation (EECi); EEC for digital (EECd); EEC for the medical hub (EECmd); EEC of genomics (EECg); EEC of high-speed rail (EECh); and Digital and High Technology Centre, Ban Chang, Rayong.
"The special incentives we will offer for the seven economic zones are unlikely to exceed the Board of Investment's [BoI] privileges, but the difference is the EEC Office will offer special incentives to a group or cluster of industries, while BoI offers its incentives to individual companies," he said.
According to Mr Kanit, the special incentives in the seven zones will be offered primarily to five groups of sectors: robotics, logistics, medical, digital industry, and the bio-, circular and green (BCG) economy.
Investors are required to display how their investments can strengthen Thailand to become a hub in those five sectors, such as the existing project to strengthen U-tapao airport to become a regional aviation hub or a centre of logistics in Asean, he said.
According to the BoI, the EEC attracted investment applications worth a combined 220 billion baht in 2021, accounting for 34% of the total value of investment applications submitted to the BoI last year.
The EEC, which is the country's prime industrial area, comprises parts of Chon Buri, Chachoengsao and Rayong provinces.
Among the three EEC provinces, Rayong attracted the most applications in terms of investment value last year, representing 44% of the total investment in the EEC.
The combined value of foreign and local applications for investment promotion in 2021 tallied 643 billion baht, an increase of 59% over 2020.
A source from Government House who requested anonymity said the EEC Policy Committee's meeting on Wednesday is scheduled to acknowledge the investment roundup in the EEC last year and approve the EEC Office's report.
