Trade and Investment Opportunities in Thailand
Transcript of Trade and Investment Opportunities in Thailand
Trade and Investment Opportunities in ThailandSuwanchai Lohawatanakul Director General Office of SMEs Promotion, Thailand
www.sme.go.th
Ease of Doing Business 2018
Thailand’s Ease of Doing Business 2018 Ranking
#26
Comparing 2017 and 2018 Ranking
Starting a Business
#78 #36Getting Credit
#82 #42Getting Electricity
#37 #13
TAXPaying Taxes
#109 #67Enforcing Contracts
#51 #34Protecting Minority Investors
#27 #16
0 100
Distance to Frontier Pt.
#141 #113 #72 #26
53.01 Lao PDR
58.74 Philippines
62.70 Regional Average (East Asia & Pacific)
66.47 Indonesia
77.44 Thailand
14th Largest Agriculture Output
Thailand’s Globally Established Position
19th Largest Manufacturing Output
20th Biggest Economy by Purchasing Power
23rd Biggest Exporter
27th Biggest Economy
30th Largest Services Output
Thailand: ASEAN’s 2nd Largest Economy
Thailand Plays a Vital Role in the Global Supply Chain
13th Automotive Production
5th Rubber Tire Exports
2nd HDD Exports
7th Computer Device Exports
Thailand’s Strategic Location Offers Many Advantages
“We are surrounded by the world’s economic powerhouses.”
Asia & Oceania ASEAN
Strategic Location: Right at the Center of Mainland ASEAN
Strategic Location: Gateway to ASEAN
Expanding Regional Integration Offers More Opportunities
ASEAN Economic Community
628.9 Million Population (8.7% of World Population)
GDP: US$ 2.4 Trillion (3.3% of World’s GDP)
FLAGSHIP OF ASEAN ‣ Emerging regional architecture‣ A new generation FTA‣ A high ambition agreement
Regional Comprehensive Economic Partnership (RCEP) (ASEAN + China, Japan, Korea, India, Australia & NZ)
3.5 Billion Population (48.5% of World Population)
GDP: US$ 22.4 Trillion (30.6% of World’s GDP)
THE BIGGEST FTA ‣ Market size (16 countries)‣ Regional supply chain‣ FDI (intra-extra region)
What is Thailand 4.0?
‣ A new economic model for Thailand’s national master plan for an innovation-driven society, aimed at pulling Thailand out of the middle-income trap and developing it as a high-income country.
‣ Thailand 4.0 are already being sown through a new emphasis on science and technology; research and development; education that focuses on science, technology, engineering and mathematics (STEM).
Science
Technology
Engineering
Mathematics
Why Thailand 4.0?
From the past up to the present, Thailand has passed through three economic development models.
During this period, Thailand has become stuck in the middle - income trap and faces disparities and imbalanced development.
Thailand 1.0 Thailand 2.0 Thailand 3.0 Thailand 4.0
In the first model, "Thailand 1.0,” emphasis was placed on the agricultural sector.
The second model, "Thailand 2.0,” focused on light industries, which helped upgrade the country’s economy from the low-income to middle-income status.
In the third model, "Thailand 3.0,” the country is currently emphasizing heavy industries for continued economic growth.
Agriculture Light Industry Low Wages
Heavy Industry Advanced Machine
Creativity + Innovation Smart Thailand
Thailand 4.0 focuses on a “value-based economy,” as the country needs to deal effectively with disparities and the imbalance between the environment and society.
Prime Minister General Prayut Chan-o-cha explained that Thailand 4.0 has three elements, which mark a significant change in the country’s economy and production.
Thailand 4.0: Towards a Value-Based Economy
Focus on a Sustainable Growth and Development
Thailand 4.0: Towards a Value-Based Economy
The Three Elements
The third element focuses on “sustainable growth and development,” in order to achieve economic growth and sustainable development without destroying the environment.
Move Toward an Inclusive Society
In the second element, Thailand will move toward an “inclusive society” with equitable access to the fruits of prosperity and development.
Become a High - Income Nation
The first element aims to enhance the country’s standing to become a high-income nation through developing it as a knowledge-based economy. With an emphasis on research and development, science and technology, creative thinking, and innovation.
Thailand 4.0: Towards a Value-Based Economy
“Less for More” vs “More for Less.”
The Thailand 4.0 new model will change the country’s traditional farming to smart farming. Traditional SMEs to smart enterprises, and traditional services to high-value services, under the concept of “Less for More” rather than “More for Less.”
More for Less
‣Commodities ‣Industries ‣Trade in Goods
Less for More
‣Innovation ‣Technology &
Creativity ‣Trade in Services
Thailand 4.0: Towards a Value-Based Economy
New Engines of Growth
Enterprises
‣ Foodtech & Agritech ‣ Healthtech‣ Robotech‣ Fintech‣ Edtech‣ E-marketplace‣ E-commerce‣ Service Enhancing‣ Designtech‣ Lifestyle Business‣ Traveltech
New Industry
‣ Food & Agriculture‣ Health & Wellness‣ Smart Devices &
Robotics‣ Digital & IoT‣ Creative, Culture &
High Value Services
New Technology
‣ Bio-tech‣ Bio-med‣ Mechatronics‣ Embedded
technology ‣ Service Design &
Technology
Thailand’s Infrastructure Development Strategy (2015 - 2022)
Total Investment of 1.9 Trillion Baht (USD 50 Billion)
Expansion of the Inter-City Rail Network
Highway Capacity Enhancement
Development of Mass Transit Systems in Bangkok Metropolitan
Air Transport Capacity Enhancement
Development of the Maritime Transport Network
‣ Upgrade railway networks ‣ Increase double-track railways ‣ Build 1.435-meter standard
gauge
Railway
‣ Extend mass transit railway system in Bangkok and vicinity ‣ Acquire 3,183 natural gas
vehicle (NGV) buses
Mass Transit
‣ Expand highways to 4 or more traffic lanes
‣ Develop facilities along the main roads such as
container yards
Road
‣ Enhance sea ports capacity ‣ Enhance airport capacity
‣ Establish aviation industrial estates with Thailand as a
regional center of the MRO* industry
Water & Air
Remark: *MRO = Maintenance, Repair and Operations
Thailand’s Development Plan in the Bigger Picture
The 12th National Economic & Social Development Plan
Mega Trends for The Industrial Sector
‣ Multi-lateral ‣ Economic Fluctuation ‣ New Global Regulations ‣ Knowledge-based Economy
‣ Digital Economy ‣ Technology Development and
Convergence
‣ Climate Change ‣ Resource Inadequacy ‣ Food & Energy Stability
‣ Power Shifts ‣ Civil Society ‣ Balanced / Inclusive / Sustainable
Development ‣ Reform
‣ Aging Society ‣ Urbanization ‣ Customer Behavior
‣ Prepare Thailand for Globalization in a Regional Level
‣ Overcome the Middle-Income Trap
‣ Reduce Socio-economic Inequality ‣ Prepare for the Aging Society ‣ Age-Based Human Development
‣ Prepare for the Development of Disruptive Technology
‣ Development of Green Society
‣ Improve Public Sector Management Systems
Economic
Social
Technological
Environmental
Political
Thai Industrial Development Policy
Promote SMEs / OTOP
Develop New Industries that Create Values & Respond to Global Trends 01Develop Targeted Clusters
Develop Technological Infrastructure (Labs, Testing Centers & Central Testing Stations)
Promote R&D Activities
02Digital Marketing / Technology
Raise Manufacturing / Good Standards
Create New Entrepreneurs in the Region
Promote SMEs / OTOP
Fund / Venture Capital
Improve Investment, Manufacturing and Export Bases of Current Industries 03Productivity‣ Develop Businesses ‣ Develop Skilled-Labor ‣ Update Machinery
Green Industry‣Green Factory ‣ ECO-Town
‣Government Procurement ‣Manpower Management ‣ Logistics ‣ Big Data Management ‣ Law / Regulations ‣ Infrastructure
Enabling Factor Connectivity‣ Business Matching / Cluster
Linkages ‣ Trading & Investment Center ‣ Connect Production /
Marketing through Digital Technology
Thailand SME Profile Number of SMEs by Business Type
Trade (Wholesale & Retail) 1,251,963Services 1,189,373
Manufacturing 521,041
Agriculture 42,266
Total 3,004,643
Growth of Country’s GDP and SME’s GDP
Year 2011 2012 2013 2014 2015 2016
Country’s GDP 0.8 7.2 2.7 0.8 2.8 3.2
SME’s GDP 1.3 8.4 3.1 0.4 5.3 4.8
Ratio of SME’s GDP to Country’s Total GDP
2014 2015 2016 2017 2020
39.8% 41.1% 42.0% 44.0%* 50.0%*
SME Export 66.3 Bil. USD
SME Export to ASEAN 18.6 Bil. USD
Top 3 SME Export: Jewelry / Plastics / Machinery & Computer
'11 '12 '13 '14 '15 '16
SMEs’ GDPGDP
'14 '15 '16 '17* '20*Remark: * Forecasted
Thailand SME Promotion Plan
Vision
“…Strengthen Thai SME to be the primary driving force of the Thai economy…”
Thailand SME Promotion Plan
Goal
SME’s GDP grows increasingly to 50% of total GDP
2015 2016f 2017f 2018f 2019f 2020f 2021f2014
50%
Thailand SME Promotion Plan
Concept
Focus on creating the ecosystem & developing the capacity of SME so that they may run their business operations by using knowledge, creativity, and innovations.
Thailand SME Promotion Plan
Mission
Competitive Growth
Inclusive Growth
Ecosystem
Startup
Regular
Strong
Turn Around
Thailand SME Promotion Plan
Direction
01/03Promote & Develop SME Based on Particular Aspects (Competitive Growth)
Create High Value-Added Startups including Traditional SME
Increase Competitiveness by Promoting SME Clusters
Strengthen Fundamental Enterprise such as Micro and Cottage Industry
Thailand SME Promotion Plan
Direction
02/03Reinforce Competency Suitable to the Needs of Particular SME Groups
Elevate Productivity, Technology Readiness, and Innovation
Promote Capital Access
Promote Market Access & Internationalization
Develop & Promote Entrepreneurship
Thailand SME Promotion Plan
Direction
03/03Develop the Mechanism to Systematically Propel SME Promotion
Develop Tools for Efficient Implementation of SME Promotion
Revise Laws, Rules, Regulations, and Privileges Supportive to SME Business Conduct while Reducing Obstruction Harming Their Strength
Thailand SME Promotion Plan
Promote Capital Access
Develop Tools for Efficient Implementation
Develop & Promote Entrepreneurship
Promote Market Access & Internationalization
Create High Value-Added Startups
Promoting SME Clusters
Strengthen Fundamental Enterprise
Revise Regulations, Laws, and Privileges Supportive to SME
Elevate Productivity, Technology, and
Innovation
Small & Medium Enterprises