2012.10.08.cpp.sess1.2.sirivunnabood.thailand.attracting.fdi

8/11/2019 2012.10.08.Cpp.sess1.2.Sirivunnabood.thailand.attracting.fdi

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Outlines

1. Thailands FDI Performance

2. Thailands FDI Policies

3. Challenges Ahead

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Thailands FDI in Global Economy

Source: UNCTAD and ASEAN FDI Database

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Unit: USD billion, %


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Source: UNCTAD, 2012

Unit: USD millions

Thailands FDI inflows has increased since the global financialcrisis in 2008, which caused a sharp increase in FDI stock.


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FDI Projects Approved by BOI

Source: Thailands Board of Investment

The rate of approval has stayed at the average of 80 90 percent,except in 2009 (64 percent) that the authorities were cautious

about the global condition after the subprime crisis in 2008.


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Thailands FDI Inflows and Outflows (USD Million, %)

Source: Bank of Thailand

A new trend of Thailands FDI has emerged as the FDI outflowshas grown consistently since 2009.

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FDI by Sector (% of Total FDI Inflows)

Source: ASEAN FDI Database


Manufacturing sector has always held the biggest proportion since

2000; however, an increasing trend has shown in services sector inrecent years.

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Set aside financial sector, FDI mainly flows to automotive products

and computer, electronic products and electrical equipment.

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Source: Bank of Thailand

Thailands Total Value of Export by Selected Sectors (USD million)

Same as sub-sectors that FDI flows into, the export values of suchsub-sectors have held a major proportion and increased over the

years.


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Source: UNCTAD, ADB


GDP growth, export growth, manufacturing growth have movedin the same direction with the inward FDI growth.

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Thailands Growth Rates (%)


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ASEAN LPI Map in 2012


Thailands LPI score is in the high range, which gives Thailand

advantages in terms of FDI attraction.

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Countries 2007 2012 2007 2012 2007 2012 2007 2012 2007 2012 2007 2012 2007 2012 2007 2012

Brunei Daru n.a n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Cambodia 2.5 2.56 2.19 2.3 2.3 2.2 2.47 2.61 2.47 2.5 2.53 2.77 3.21 n.a. 3.05 2.95

Indonesia 3.01 2.94 2.73 2.53 2.83 2.54 3.05 2.97 2.9 2.85 3.3 3.12 2.84 n.a. 3.28 3.61

Lao PDR 2.25 2.5 2.08 2.38 2 2.4 2.4 2.4 2.29 2.49 1.89 2.49 2.13 n.a. 2.83 2.82

Malaysia 3.48 3.49 3.36 3.28 3.33 3.43 3.36 3.4 3.4 3.45 3.51 3.54 3.13 n.a. 3.95 3.86Myanmar 1.86 2.37 2.07 2.24 1.69 2.1 1.73 2.47 2 2.42 1.57 2.34 2.08 n.a. 3.29 2.59

Philippines 2.69 3.02 2.64 2.63 2.26 2.8 2.77 2.97 2.65 3.14 2.65 3.3 3.27 n.a. 3.14 3.3

Thailand 3.31 3.18 3.03 2.96 3.02 3.08 3.24 3.21 3.31 2.98 3.25 3.18 3.21 n.a. 3.91 3.63

Singapore 4.19 4.13 3.9 4.1 4.27 4.15 4.04 3.99 4.21 4.07 4.25 4.07 2.7 n.a. 4.53 4.39

Vietnam 2.89 3 2.89 2.65 2.5 2.68 3 3.14 2.8 2.68 2.9 3.16 3.44 n.a. 3.22 3.64

ASEAN 2.92 (64) 3.02 (63) 2.76 (61) 2.78 (67) 2.71 (67) 2.82 (73) 2.92 (62) 3.02 (62) 2.88 (63) 2.95 (65) 2.90 (66) 3.11 (59) 2.97 (62) n.a. 3.37 (63) 3.42 (64)

Brazil 2.75 (61) 3.13 (45) 2.39 (74) 2.51 (78) 2.75 (49) 3.07 (46) 2.61 (74) 3.12 (41) 2.94 (49) 3.12 (41) 2.77 (65) 3.42 (33) 2.58 (126) n.a. 3.10 (72) 3.55 (49)

Russia 2.37 (99) 2.58 (95) 1.94 (136) 2.04 (138) 2.23 (93) 2.45 (97) 2.48 (94) 2.59 (106) 2.46 (83) 2.65 (92) 2.17 (119) 2.76 (79) 2.40 (131) n.a. 2.94 (87) 3.02 (94)

India 3.07 (39) 3.08 (46) 2.69 (47) 2.77 (52) 2.90 (42) 2.87 (56) 3.08 (39) 2.98 (54) 3.27 (31) 3.14 (38) 3.03 (42) 3.09 (54) 3.08 (46) n.a. 3.47 (47) 3.58 (44)

China 3.32 (30) 3.52 (26) 2.99 (35) 3.25 (30) 3.20 (30) 3.61 (26) 3.31 (28) 3.46 (23) 3.40 (27) 3.47 (28) 3.51 (31) 3.52 (31) 3.13 (72) n.a. 3.95 (36) 3.80 (30)

LPI Customs InfrastructureInternational Tracking & Domestic

TimelinessShipments Tracing Logistic Cost

Logistics Quality

Competence


*Table refers to score in each category (1-5; 5, best). The table in parentheses represents rank out of 150 countries surveyed in2007 and 155 countries surveyed in 2012; n/a = not availableSource: World Bank, Connecting to Compete reports (2007 and 2012)

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2. Thailands FDI Policies*

To enhance efficiency and effectiveness, the tax privileges will begranted to projects that benefit the economy while good governance will beused to manager and supervise the application of tax and duty privileges.

To promote development of quality and production standards toenhance competitiveness in the world market, every promoted project thathas an investment capital of THB 10 million or more (excluding cost of land

and working capital) must obtain ISO 9000 certification or similarinternational certification.

Previous conditions on exports and use of local materials are repealedso that the criteria for promotion will be in line with international trade andinvestment agreements.

Special investment promotion will be given to regions or areas with lowincome and inadequate investment facilities.

Priority is given to small and medium industries.

Priority is given to agricultural activities and agricultural products, projectsrelated to technological and human resource development, public utilities,infrastructure and basic services, environmental protection and

conservation and targeted industries

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*source: Board of Investment, Thailand


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Investment promotion policy for sustainabledevelopment

Investment promotion measures for target

industries Measure to promote energy conservation,

alternative energy utilization or reduction ofenvironmental impacts

Measure to promote production efficiencyimprovement by technology upgrade formanufacturing of new products

Measure to solve environmental problems

2. Thailands FDI Policies*

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*source: Board of Investment, Thailand


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Development of Thailands Social and Economic Master Plans

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Source: National Economic and Social Development Board of Thailand

The 11th five-year Master Plan (2012-2016) by Thailands NationalEconomic and Social Development Board (NESDB) is now achieving

the stage of sustainable industry.



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Economic Restructuring to

Green Economy

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Utilization of incomecreation measures:PEDD, PES, Biodiversityoffsets

Source: National Economic and Social Development Board of Thailand

Environmental friendlyservices, includinghealth care services

Mitigation of natural-resource and

environmental damages

Industrial restructuringto green/ low carbonproduction andalternative energy

Agriculturalrestructuring for

sustainable production

Energy and transport

policy reforms towardsclean and effective

energy

Development of carboncredit market and CDM

utilization

Utilization of AEC


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Recent Investment Policy Measures

The BOI announced that all areas throughout the country, exceptBangkok, shall be designated as Investment Promotion Zone until31 Dec. 2012.

The BOI announced an additional tax measure to rehabilitate flood-affected investment to stimulate investment within the industrialestates or promoted industrial zones in Ayutthaya and Pathumthaniprovinces.

Thailand allowed foreign banks operating branches in the country toconvert such branches into subsidiaries with a maximum of 20branches and 20 off-premise ATMs, without limitation on thelocation.

BOT promulgated a new law related to regulation of operations ofTreasury Centers for Enterprises (CTE) to assist internationalcompanies with HQs in Thailand and import-export companies,

allowing them to better manage their funding.


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3. Challenges Ahead

An upgrade for physical and softinfrastructures

TransparencyPublic and investors confidenceIncome distributionAEC impacts

Green growth economyPolitical stability

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THANK [email protected]

2012.10.08.cpp.sess1.2.sirivunnabood.thailand.attracting.fdi

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