07/09/2020 – Country Focus / Thailand / Asia
Thailand country focus – Siam strength
From natural disasters to financial crashes, disruptions throughout its history have helped steel Thailand against fall-out from the present-day crisis. Today one of South East Asia’s prime investment destinations, Thailand’s industrial policies are helping the country to carve a resilient path towards a prosperous future.
‘Think Resilience, Think Thailand’ is the new 2020 campaign slogan unveiled by Thailand’s Board of Investment (BOI), as the government-funded body looks to showcase the country’s tested strengths, and reinforce its status as one of the region’s prime investment spots. The campaign comes as Thailand receives international praise for its efficient control of the coronavirus outbreak, showing the country’s ability to cope with crisis and emerge even stronger as it did during the Asian and global financial shocks of 1997 and 2008, respectively.
“The new campaign captures four core competencies that are engrained in Thailand’s strategic positioning as ASEAN’s investment hub and gateway to Asia – Diversity, Ecosystem, Location and Supply Chain,” BOI Secretary General, Ms Duangjai Asawachintachit, told us.
Four decades in the making
Thailand’s robust economic development over the past 40 years, alongside its position as the second largest economy in South East Asia, as well as the country’s status as a leading manufacturer of food, electronics and cars, are all testament to its strong fundamentals and its attractiveness to a diverse array of industries.
Now the country is taking a step further – by implementing the Thailand 4.0 development model, which focuses on developing high-tech, sustainable industries of the future and making Thailand the digital innovation hub of Asia.
Launched four years ago by the Royal Thai Government, the 20-Year Strategy aims to drive Thailand to achieve high-income status by 2036. The strategy includes a wide range of top-down initiatives, especially in infrastructure and people development, to transform Thailand into a nation that can compete against wealthier, more knowledge-based economies.
Thailand 4.0 transformation
Heralding the next stage of sectoral development, Thailand 4.0 pictures the economy transitioning from the present situation – in which heavy industry with advanced machinery (e.g., automobile and chemicals production) is among the most important drivers of the economy – to becoming digitally-oriented and innovation-driven, with a focus on high-value-added manufacturing and services.
To this end, the 4.0 policy will focus on 10 strategic industries. This will include those currently found in Thailand but where value can be added via new technologies – smart electronics, high-income and medical tourism, agriculture and biotechnology, food and beverages, and automotive industries. It will also extend to developing industries that are new to the country – namely robotics, aerospace, digital services, bio-energy and bio-chemicals, and healthcare.
And at the heart of Thailand 4.0 scheme lies the Eastern Economic Corridor (EEC) development. Initially set to span three of the country’s eastern provinces (Rayong, Chonburi, and Chachoengsao), it is hoped the major infrastructural investments earmarked to further develop the EEC will revitalise the well-known Eastern Seaboard, which, for the past 30 years, has acted as the major hub for Thailand’s export-oriented industries.
Gateway to ASEAN
Thailand is certainly well placed geographically speaking: The country’s strategic location at the heart of the ASEAN enables investors to conveniently access a market of more than 630 million consumers – the world’s third largest market, after China and India.
The country’s diverse manufacturing and service industries also place Thailand into a prominent position when it comes to global supply chains. And clearly, past experiences in dealing with various forms of disruptions – ranging from financial crises to natural disasters – have helped Thailand build resilience and efficiency to prepare for new norms regarding supply chains, both globally and regionally.
For many OEMs and utility providers, Covid-19 has exposed the vulnerabilities of depending too much on components solely from one market – namely China. This realisation has led many such firms to accelerate their supply-chain diversification strategy, with Thailand undoubtedly in contention to benefit from the trend, given the myriad new opportunities the shift will likely generate for the country’s well-established and highly prized manufacturing base.
Investors with facilities in Thailand already enjoy a cost-effective and competitive business environment – last year, Thailand ranked 21st for ease of doing business out of 190 countries surveyed by the World Bank. As its associated projects and developments roll out, the infrastructure and incentives ushered forth by the new 4.0 strategy are expected to attract a new wave of FDI in Thailand – in turn, providing a further boost to the country’s manufacturing and high-value-added services sectors.
“While COVID-19 brings to the world unprecedented social and economic challenges, it could also open the way for opportunities awaiting to emerge,” Ms Duangjai said in closing. “Our message is meant to show investors that Thailand’s resilient environment is the perfect place to seize those opportunities.”