Thailand Board of Investment Mr. Korn Dabharansri Deputy Prime Minister India August 2003 THAILAND...

ThailandBoard of Investment

Mr. Korn DabharansriDeputy Prime Minister

India August 2003

THAITHAILAND OF INVESTMENTLAND OF INVESTMENTTHAITHAILAND OF INVESTMENTLAND OF INVESTMENT


Relationship Between Relationship Between India and ThailandIndia and Thailand

Relationship Between Relationship Between India and ThailandIndia and Thailand

• Indian Business That Have Come to Thailand Have ProsperedPulp and PaperJewelryHotelsSoftware

• Dipak Jain and Narayana Murthy Named to Thai Prime Minister’s Eminent Person’s Advisory Board


Free Trade AgreementFree Trade AgreementFree Trade AgreementFree Trade Agreement

• Process Began a Year Ago When H.E. Thaksin Shinawatra Visited India• Work Has Continued and I am

Meeting with Indian Government to Finalize Details• FTA is Expected to be Signed

When H.E. Atal Behari Vajpayee Pays State Visit to Thailand in October


FTA– Early HarvestFTA– Early HarvestFTA– Early HarvestFTA– Early Harvest

• FTA Will Begin With So-Called “Early Harvest” of Around 100 ItemsTariffs on these items will be

gradually reducedGoal is zero percent tariff by 2010

• Remaining Items to Be Phased In, Following Negotiations


Benefits of FTABenefits of FTABenefits of FTABenefits of FTA

• Bi-lateral Trade in 2002 was Just Over US$1 billion.+32% from 2001

• Our Goal is to Double bi-lateral Trade by 2004


Thai Economic OverviewThai Economic OverviewThai Economic OverviewThai Economic Overview

• 2002Despite Global Uncertainty, Thai

GDP Expanded By 5.2% in 2002• 2003

Early projections for 2003 were 3.5-4.5%, due to concerns about impact of war in Iraq

Ministry of Finance projects 5.1% growth this year

Many in government expect growth to be 5.5-6%, both this year and next


All Segments of All Segments of Economy GrowingEconomy GrowingAll Segments of All Segments of

Economy GrowingEconomy Growing• Domestic

Capacity utilization at 70%• Exports – Our Traditional

Engine of GrowthTurnaround started in 2nd half of

last year+18% in 2003 (Jan-June)Full-year projection raised to

US$76.8 billion, a 10.8% increase from last year, and a new record for the country


Strong Across The BoardStrong Across The BoardStrong Across The BoardStrong Across The Board

• International Reserves Remain Strong• Baht Has Strengthened and is

Trading in Narrow Band• Inflation Remains Low• Clearly, We Are at The Start of

a New Growth Cycle


Foreign InvestmentForeign InvestmentForeign InvestmentForeign Investment

• Investment Figures Confirm Economic Strength, as FDI is a Leading Economic Indicator• Target for 2003 is 200 Billion

BahtFirst 6 months of the year, we

attracted 166 billion baht (+55%)Clearly, then, we will surpass full-

year projection


Importance to Thailand Importance to Thailand of Indian Investmentof Indian Investment

Importance to Thailand Importance to Thailand of Indian Investmentof Indian Investment

• BOI Figures (1993-2003)• India Ranks #14, With 34 Billion

Baht of Investment, Ahead of:AustraliaSwitzerlandBelgiumItaly

• Over That Period, Indian Investors Have Created More Than 12,000 Jobs for Thais


Restructuring the Restructuring the Thai EconomyThai Economy

Restructuring the Restructuring the Thai EconomyThai Economy

• In the Past, Exports Were Our Traditional Engine of GrowthWhile that strategy worked very well,

during 80s, it left is vulnerable to external events

• To Protect Our Economy From External Shocks, We Have Placed Great Emphasis on Strengthening Economy at Grass Roots LevelRetraining of rural poorImproving financing options


A Rising Tide Lifts All BoatsA Rising Tide Lifts All BoatsA Rising Tide Lifts All BoatsA Rising Tide Lifts All Boats

• We Have Offered Hope to Those That Had NoneRevolving FundOTOPPeople’s Bank

• By Enabling Villagers to Utilize ‘Local Knowledge’Increase household incomeStimulate domestic consumptionIncrease economic activity


Supporting SMEsSupporting SMEsSupporting SMEsSupporting SMEs

• Established an SME Bank to Ensure Promising Enterprises Have Access to Necessary Capital• Lowered Corporate Income Tax

on SMEs from 30% to 20%• Offered Additional Tax

Incentives for Companies to List on Market for Alternative Investments (MAI)


Finance Sector ReformFinance Sector ReformFinance Sector ReformFinance Sector Reform

• To Solve Problem of NPLs from 1997 Crisis, We Transferred NPLS to State-Run Asset Management Corporation (TAMC)More Than 500 Million Baht of Debt

(70%) Has Been ResolvedThe balance should be cleared by the

end of this year• As a Result, Banks Are Once Again

LendingProfits Are Up 140% in First Half


Bureaucratic reformBureaucratic reformBureaucratic reformBureaucratic reform

• Government Undertook First Revision of Thai Civil Service in More Than a Century• New Ministries Created• Departments Combined to

Improve Efficiency• Staff Retrained to Function in

“New Bureaucracy”


Open Door PolicyOpen Door PolicyOpen Door PolicyOpen Door Policy

• While Strengthening Domestic Economy and Reforming our Finance Sector, We are Also Looking to Open MarketsFTA With ChinaWorking Towards FTAs with

Australia, Bahrain and USAOur Objectives are to Provide Thai

Manufactured Products with Maximum Opportunities


AFTAAFTAAFTAAFTA

• Thailand Has Also Been One of the Driving Forces in ASEAN and the ASEAN Free Trade Area (AFTA)Progressive implementation

• Once Implemented, AFTA Presents a Unified Market of More than 500 Million


PrivatizationPrivatizationPrivatizationPrivatization

• As You Probably Aware, Thailand is Selling Stakes in Many State-Owned EnterprisesPTT – Listed on Stock Exchange

(SET) and is one of the largest capitalized firms

Soon to come are privatization ofAirport AuthorityPort AuthorityTelephone OrganizationTobacco Monopoly


Thailand: The Heart of AsiaThailand: The Heart of AsiaThailand: The Heart of AsiaThailand: The Heart of Asia

Thailand Board of Investment Mr. Korn Dabharansri Deputy Prime Minister India August 2003 THAILAND...

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