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BOI Relaxes Zoning Regulation to Promote Cluster Development |
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In order to encourage the development of clusters, and hence improve industrial competitiveness, the Board of Investment (BOI), chaired by Deputy Prime Minister and Minister of Finance Somkid Jatusripitak, has approved a relaxation of conditions governing location of projects eligible for investment promotion. |
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By lifting restrictions on where projects could locate, the Board felt that industry-specific clusters would develop according to a variety of factors (e.g. manpower, utilities, and infrastructure) that will vary from industry to industry. The development of clusters is part of the government's overall economic development program, as clusters have historically led to new product development and development of niche markets. |
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The Board further announced that new and expandsion projects would be covered by this relaxation, so that projects that previously were required to locate in Zone 2 or 3 would now be free to expand wherever they deemed appropriate. |
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Six activities will be covered. Four of the activties (tanneries, bleaching and dying, heat treatment using cyanide, and recycling and the reuse of unwanted materials) exempted from the provisions of the announcement must still be located in industrial estates or promoted industrial zones for environmental protection reasons. |
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Projects involved in the repair of vehicle parts and electrical or electronic equipment must be located in Export Processing Zones (EPZ) or bonded warehouses and industrial zones and bonded warehouses for free trade zones must not be located in Bangkok or Samut Prakan province, in order to receive BOI promotion. |
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BOI Secretary General Somphong Wanapha noted that the announcement will not affect the government's decentralization policy, as incentives will still be awarded according to the zone in which the project is located, with the greatest incentives being offered in the least-developed provinces in Zone 3. He also pointed out that similar actions, designed to help export industries, were undertaken on a temporary basis during the 1997 financial crisis. |
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The interpretations and conclusions given represent those of the authors. They
do not necessarily reflect the view of the Royal Thai Government, its
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