Integrity Legal

In a recent article in the Bangkok Post it was noted that the Prime Minister of Thailand is poised to travel to the United States to attend a summit between the United States of America and the Association of Southeast Asian Nations (ASEAN):

[H]e will join Asean leaders attending the first stand-alone US-Asean summit in the United States on Feb 15-16 in response to US President Barack Obama’s invitation… The meeting was called when Asean and the US upgraded their level of cooperation from dialogue partner to strategic partner in November last year…

This news comes upon the heels of a recent study which found that Thailand has major issues with skilled labor when compared to other jurisdictions in the region. To quote directly from The Nation newspaper:

According to the World Bank (WB), Thailand will face the biggest shortage of skilled labour in the Asean region…Yongyud Wongpiromsarn, director of the committee on education reform, said area-based education was key to redesigning the education system so it meets local demands…

Although it would appear that education reform remains key to creating more appropriately skilled labor in the Thai market, Thai officials also seem to be implementing legislation in order to improve the overall competitiveness of the Thai business sector. To quote from another article in the Bangkok Post:

The cabinet yesterday approved the draft amendments to the Trade Competition Act aimed at enhancing competition and reducing business monopolies and political meddling…

Notwithstanding the fact that Thailand has competitiveness issues it seems to this blogger that the current moment may be an auspicious time to invest or start a new business venture in the Kingdom. Although many news outlets have covered the fact that Thailand has been dealing with political and economic hurdles in recent years, this blogger’s opinion is that Thailand remains one of the best places to conduct business in Southeast Asia. While other countries may have more room for growth, Thailand has the advantage of substantial infrastructure and  can act as a corporate headquarters for a regional operation which could encompass places like: Laos, Myanmar, Cambodia, and even Malaysia or Vietnam. Meanwhile, Bangkok may soon be the entrepot for overland trade between China and the other ASEAN nations. This seems especially likely in light of the fact that a high speed rail system will be put in place linking China, Laos, and Thailand by rail. Bangkok appears set to act as the focal point for the exchange of goods and services between all of ASEAN and Southern China.

Clearly, Thailand has obstacles to overcome economically, but it would be unwise to discount Thailand as a place to do business, especially as getting into this market presently could compound later economic benefits.

Tags: ASEAN, ASEAN Business, ASEAN Business News, ASsociation of Southeast ASian Nations, Thai Business, Thai Business News, Thailand Business, Thailand Business News
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In a recent posting on ThaiVisa.com, this issue of Thailand’s economic situation was discussed. In recent months, Thailand has been the victim of political turmoil, but many are hopeful that the future will bring tranquility and economic progress. To quote the aforementioned posting:

Bank of Thailand (BOT) Deputy Governor Bandid Nijathaworn yesterday listed the five factors as the global economic momentum, tourism recovery, drought conditions, trends in the policy interest rate and access to funding by small and mediumsized enterprises (SMEs). He said businesses, especially SMEs, must monitor these indicators closely, so they can adjust quickly to any situation. Bandid made his remarks at a seminar entitled “Thai SMEs in the Era of a Free Asian Economy”, hosted by Bangkok Bank. He said the first factor was whether the global economy would enjoy a healthy recovery.

The US economy has yet to pick up fully, while some European countries are experiencing public debt problems. However, many Asian countries are seeing strong economic growth, so if the US and European economies do not pick up more in the second half, Thai exports will have to focus more on Asian markets.
The second factor is the tourism industry. It recovered in six months after the 2003 Sars epidemic, five months after the 2004 tsunami and seven months after the 200809 [sic] political turmoil. It is expected to take six months to recover from the latest round of political turmoil, but that will also depend on the global economy and government measures to entice tourists back to Thailand. The third factor is the draught, and it remains to be seen how that will play out. The fourth one is the policy interest rate, which has been kept at a low 1.25 per cent in a bid to boost economic recovery. Many times, the BOT has indicated that if the domestic economy recovers and the global economic crisis abates, it may consider increasing the rate at an appropriate time.

The fifth factor that could affect second half economic growth is SMEs’ loan accessibility. SMEs have yet to enjoy full access to loans, which means they still suffer a high cost burden. Bandid said many commercial banks had stepped in to help SMEs gain easier access to loans. He believes the country’s economy will grow 45 per cent this year. Bandid said while Thailand’s economy showed positive growth in the first quarter, the economy was affected in the second quarter by the political turmoil. Tourism suffered severely from the chaos, but other key sectors were also hurt, such as agriculture, exports and real estate.

Many agree that it will be interesting to watch Thailand’s recovery as many are of the opinion that Thailand is set for further economic growth. Many Expatriates feel that although tourism figures are lower than desired the country’s many natural attractions will act as a catalyst for new growth in tourism. Furthermore, Thailand boasts of better infrastructure relative to many of the other jurisdictions in the region. Also, Thailand’s position as a key actor in the Association of SouthEast Asian Nations (ASEAN) will likely result in a better overall position for the Thai economy moving forward, when compared with other countries in the region.

Finally, Thailand’s positive relationships with countries such as the United States and Japan, as embodied in the US-Thai Amity Treaty and the Japanese-Thai Free Trade Agreement, respectively, are indicative of Thailand’s ability to effectively negotiate longstanding mutually beneficial trade arrangements. Some believe that Thailand’s economic situation remains poised for growth notwithstanding recent disturbances.

For information about business travel to Thailand please see: Thailand business visa.

Tags: Amity Treaty, Thai Business News, Thailand Business News, Thailand Business Visa, US-Thai Treaty of Amity
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