The Gentle Tiger

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the gentle tigerThailand woos foreign businesses with an investor-friendly approach and a stable economic environment. The prosperous South East Asian country boasts a range of investment opportunities in various sectors after it got over its political crisis last year. With a new investor-friendly government, chances are abound. Inside Investor takes a look at the current economic environment and the key sectors for foreign direct investment and will launch a special report, Inside Thailand, in April 2012.

All eyes were on Thailand when violent anti-government protests in April 2010 threatened to destabilize the country. Commentators wondered if the nation, not known for frequent political unrest, might fall into a stage of civil war and feared one of the most stable economies in South East Asia could take a hit. However, nothing of the sort happened.  Thailand came quickly on its feet again, followed by a much-noticed general election landslide win by Yingluck Shinawatra of the populist Pheu Thai Party in July 2011, who now heads a coalition government as Thailand’s first female Prime Minister, reshuffled the cabinet and seems to be able to give the country the political backing to reemerge as a South East Asian tiger economy that stands firm even in a global financial turmoil.

Indeed, Thailand’s economy looks promising given the current figures:  GDP real growth was 7.8 per cent in 2010, and the forecast for 2011 stands at 3.7 per cent, according to the World Bank. These are highly encouraging figures, as they indicate that the pace of economic activity is gradually returning to levels before the global financial crisis struck in 2008. After a bumpy ride of drops and rebounds during that period, Thailand’s GDP is now close to normal levels again.

Frederico Gil Sander, the World Bank’s country economist for Thailand, said in his comprehensive report “Thailand Economic Monitor” published in April 2011, that the country’s growth was “broad-based, with significant contributions from external and domestic demands.”

While consumption of domestically produced goods and service expanded, investments into the sectors grew as well. Rising world food prices had a rather positive effect on agricultural incomes in Thailand, which, however, also pushed up wages in related sectors. “Along with low deposit rates and a renewed appetite for lending on the part of the banks, higher household incomes stimulated consumption of durable goods such as vehicles and housing,” the report said.

Though the country is not invulnerable to the current economic woes that plague the economies of the European Union and the US, it seems that Thailand’s export mix (the Thai economy is heavily export-dependent, with exports of goods and services equivalent to nearly 70 per cent of the GDP in 2010), a changing export mix is offering some resilience against higher oil prices and sluggish growth in advanced economies. Furthermore, Thailand can reduce its vulnerability to oil price shocks by raising fuel standards, improving tax incentives for conservation and relying more on rail for cargo transport.

The Thailand Board of Investment (BOI), an agency of the Government of Thailand to promote investment in the country, said recently that new foreign direct investments grew by 31 per cent in the first four months of this year, with 53 per cent growth in project numbers and 31 per cent growth in investment value. Given the fact that FDIs already grew by 35 per cent throughout the year 2010 over 2009 to a total value of 236.03 billion baht (approximately $8.2 billion), the figures indicate the rising attractiveness of the country as an investment destination.

“We see a large variety of businesses making investments in Thailand and there are many medium to large-sized projects. This reflects investors’ strong confidence in Thailand and its potential as a distribution hub for export to the global market,” says Dr Atchaka Sibunruang, Secretary General of the BOI.

Top industries attracting FDIs were metal products, machinery and transport equipment projects as well as public utilities and services, and chemicals, paper, plastic, electronic goods production and car parts. Most of these investment projects have been medium-large in scale with investment values between 200 million and 1 billion baht ($7 to $35 million), the BOI says.

On several occasions lately, the Thai government has emphasized that it is seeking to expand trade and investment with the Middle East. Besides the oil sector, the two regions have located investment opportunities in Islamic banking, the halal food industry, tourism projects, construction, infrastructure, technology, and private health care. Thailand is also addressing Sovereign Wealth Funds of Middle East nations to support joint investments.

Inside Investor will launch a special report on Thailand, Inside Thailand, in April 2012 that will feature in-depth overviews on major industries and key investment opportunities, geared to the needs of Middle East investors.

Thailand statistics
GDP (PPP): $587 billion (2010)
GDP per capita: $8,700 (2010)
GDP growth: 7.8% (2010)
GDP by sector: Agriculture 12.4%, Industry 44.7%, Services 42.9%
Population: 66.7 million
Labor force: 38.64 million
Unemployment rate: 1.1% (total), 4.26% (youth)
Inflation rate: 4% (2011 est.)
Exports: textiles and footwear, fishery products, rice, rubber, jewelry, automobiles, computers and electrical appliances
Imports: capital goods, intermediate goods and raw materials, consumer goods, fuels

Source: CIA World Factbook, World Bank

 

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Reading Time: 3 minutes

Thailand woos foreign businesses with an investor-friendly approach and a stable economic environment. The prosperous South East Asian country boasts a range of investment opportunities in various sectors after it got over its political crisis last year. With a new investor-friendly government, chances are abound. Inside Investor takes a look at the current economic environment and the key sectors for foreign direct investment and will launch a special report, Inside Thailand, in April 2012.

Reading Time: 3 minutes

the gentle tigerThailand woos foreign businesses with an investor-friendly approach and a stable economic environment. The prosperous South East Asian country boasts a range of investment opportunities in various sectors after it got over its political crisis last year. With a new investor-friendly government, chances are abound. Inside Investor takes a look at the current economic environment and the key sectors for foreign direct investment and will launch a special report, Inside Thailand, in April 2012.

All eyes were on Thailand when violent anti-government protests in April 2010 threatened to destabilize the country. Commentators wondered if the nation, not known for frequent political unrest, might fall into a stage of civil war and feared one of the most stable economies in South East Asia could take a hit. However, nothing of the sort happened.  Thailand came quickly on its feet again, followed by a much-noticed general election landslide win by Yingluck Shinawatra of the populist Pheu Thai Party in July 2011, who now heads a coalition government as Thailand’s first female Prime Minister, reshuffled the cabinet and seems to be able to give the country the political backing to reemerge as a South East Asian tiger economy that stands firm even in a global financial turmoil.

Indeed, Thailand’s economy looks promising given the current figures:  GDP real growth was 7.8 per cent in 2010, and the forecast for 2011 stands at 3.7 per cent, according to the World Bank. These are highly encouraging figures, as they indicate that the pace of economic activity is gradually returning to levels before the global financial crisis struck in 2008. After a bumpy ride of drops and rebounds during that period, Thailand’s GDP is now close to normal levels again.

Frederico Gil Sander, the World Bank’s country economist for Thailand, said in his comprehensive report “Thailand Economic Monitor” published in April 2011, that the country’s growth was “broad-based, with significant contributions from external and domestic demands.”

While consumption of domestically produced goods and service expanded, investments into the sectors grew as well. Rising world food prices had a rather positive effect on agricultural incomes in Thailand, which, however, also pushed up wages in related sectors. “Along with low deposit rates and a renewed appetite for lending on the part of the banks, higher household incomes stimulated consumption of durable goods such as vehicles and housing,” the report said.

Though the country is not invulnerable to the current economic woes that plague the economies of the European Union and the US, it seems that Thailand’s export mix (the Thai economy is heavily export-dependent, with exports of goods and services equivalent to nearly 70 per cent of the GDP in 2010), a changing export mix is offering some resilience against higher oil prices and sluggish growth in advanced economies. Furthermore, Thailand can reduce its vulnerability to oil price shocks by raising fuel standards, improving tax incentives for conservation and relying more on rail for cargo transport.

The Thailand Board of Investment (BOI), an agency of the Government of Thailand to promote investment in the country, said recently that new foreign direct investments grew by 31 per cent in the first four months of this year, with 53 per cent growth in project numbers and 31 per cent growth in investment value. Given the fact that FDIs already grew by 35 per cent throughout the year 2010 over 2009 to a total value of 236.03 billion baht (approximately $8.2 billion), the figures indicate the rising attractiveness of the country as an investment destination.

“We see a large variety of businesses making investments in Thailand and there are many medium to large-sized projects. This reflects investors’ strong confidence in Thailand and its potential as a distribution hub for export to the global market,” says Dr Atchaka Sibunruang, Secretary General of the BOI.

Top industries attracting FDIs were metal products, machinery and transport equipment projects as well as public utilities and services, and chemicals, paper, plastic, electronic goods production and car parts. Most of these investment projects have been medium-large in scale with investment values between 200 million and 1 billion baht ($7 to $35 million), the BOI says.

On several occasions lately, the Thai government has emphasized that it is seeking to expand trade and investment with the Middle East. Besides the oil sector, the two regions have located investment opportunities in Islamic banking, the halal food industry, tourism projects, construction, infrastructure, technology, and private health care. Thailand is also addressing Sovereign Wealth Funds of Middle East nations to support joint investments.

Inside Investor will launch a special report on Thailand, Inside Thailand, in April 2012 that will feature in-depth overviews on major industries and key investment opportunities, geared to the needs of Middle East investors.

Thailand statistics
GDP (PPP): $587 billion (2010)
GDP per capita: $8,700 (2010)
GDP growth: 7.8% (2010)
GDP by sector: Agriculture 12.4%, Industry 44.7%, Services 42.9%
Population: 66.7 million
Labor force: 38.64 million
Unemployment rate: 1.1% (total), 4.26% (youth)
Inflation rate: 4% (2011 est.)
Exports: textiles and footwear, fishery products, rice, rubber, jewelry, automobiles, computers and electrical appliances
Imports: capital goods, intermediate goods and raw materials, consumer goods, fuels

Source: CIA World Factbook, World Bank

 

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