Jun. 24--Thailand is expected to grant other financial aid to Japanese small and medium enterprises (SMEs) operating locally in addition to export credit insurance offered by the Export-Import Bank of Thailand (Exim Bank).

The condition that companies need to be at least 51 percent Thai-owned should be lifted for access to government loans, said Munenori Yamada, president of the Japan External Trade Organisation (Jetro) in Bangkok.

"In Japan, no matter whether you are a Japanese or foreign firm you receive the same treatment on financial assistance from the government," he said.

The Japanese Chamber of Commerce (JCC) recently asked the Thai government to help ease cashflow problems faced by Japanese SMEs.

The JCC has officially presented its proposal to government agencies including the Finance Ministry. It is seeking greater access for Japanese firms to credit from the Thai SME Bank and the export risk coverage from Exim Thailand.

Exim Thailand yesterday signed an agreement with the Nippon Export and Investment Issuance (Nexi) for trade risk coverage for Japanese affiliates using Thailand as their export base.

Under the agreement, Exim Thailand would offer export credit insurance to Japanese firms and Japanese joint ventures exporting products from Thailand to other countries except Japan.

In case of payment default, arising from commercial or political risk, Exim Thailand will pay compensation of up to 90 percent of the loss realised.

"We expect more measures will be introduced, though it will take time. Given the large number of SMEs in two nations, If they survive, both would definitely benefit," Mr Yamada said.

He said Japanese legislators were now debating a supplement budget for stimulating the economy, which would pave way for the Japan Bank for International Co-operation (JBIC) and Japan Finance Corporation (JFC) to financially assist 7,000 Japanese businesses in Thailand.

Japan also will ask Asean members meeting in Jakarta next Monday to step up stimulus programmes in the region through infrastructure development.

"We would propose faster trade and financial liberalisation within Asean under the Asean Economic Community (AEC) blueprint which took effect at the beginning of this year," he noted.

In a related development foreign investors in Thailand have called for services industry liberalisation to make Thailand more attractive for foreign direct investment.

The Joint Foreign Chamber of Commerce in Thailand (JFCCT) has been pressing for service sector liberalisation for some time and will raise the issue again at its next quarterly meeting with the Board of Investment (BoI).

As Thailand faces the impact of the global financial crisis, the JFCCT believes some structural changes in some areas or bold decisions by the government could turn a crisis into an opportunity.

"Thailand need new boost and it could come with liberalisation of the service sector," Nandor von der Lueche, the JFCCT chairman.

He will raise the issue at a meeting between JFCCT members and Prime Minister Abhisit Vejjajiva in mid-July.

Industry Minister Charnchai Chairungruang said he would seek to discuss the request with the Commerce Ministry for further development.

Mr Charnchai also noted that the new One Start and One Stop Service Center for foreign investors was expected to open by September.

The centre aims to be the only facility investors need for dealing with applications involving many agencies, with shorter approval times as a result.

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