- By Pooky, Thai Intel’s economics journalist
Many foreigners come to Thailand and for one reason or another they go “Silly” all of a sudden. For PR or whatever, many foreign firms think they can say anything, and everyone would say “great news.”
Thailand just emerged from a long bout of political crisis, that have shocked many, and yet, it is business as usual, meaning, having learned nothing from the crisis. that points to a relationship between democracy providing sustainable stability and economic growth.
In politics, many foreigners here in Thailand are against the Red Shirt, struggling for both democracy, the grassroots and their hero, the Shinawatra Family, in what many long-time observer have said was for the selfish reason of keeping Thailand under-developed, froze in time, so they can enjoy the “Uniqueness” of Thailand. To put it bluntly, many foreigners comes to Thailand and ally themselves to the elite rule of Thailand, abandoning their own tradition in Democracy, Liberty and Justice, all to make a buck, with a single mind target keep Thailand easy to exploit, and personally live in-cheaply and “yes” go around Thailand looking at all the Bhutan-like condition and savor the taste of ancient days, and then back to expensive condo in Bangkok.
Like the crazy blogger Absolutely Bangkok, a popular blog for expat, calls itself, a “Connoisseur.”
While others, like Eric, in the following article from the Nation, for some reason says things like Thailand is “Considered” the “Best Place Globally” for foreign firms to locate their operation. Well, Thai Intel will not dove into the many global ranking on that that issue, because it would embarrass poor Eric for making such a statement.
But in fact, “Yes” Thailand is trying now, like in the past few weeks, to be the center for foreign business in the ASEAN region, and passed some laws and regulation to get that done. But first, give Thai Intel a break, it is just so typical Thailand to do things like coming out with a quick little fixes and then hype up the fix for public consumption, then push it through media that are hell bent on kissing the elite rule of Thailand’s butt, like the Nation and the Bangkok Post, and go main-stream with a message that looks strong. So like after the political mess, that obviously the elite rule of Thailand is at a great deal of fault, hurting foreign confidence, then suddenly, it is a quick fix and PR campaign to paint Thailand as a great place for foreigners.
The fact is, many multi-nationals and even Thailand’s own companies, with regional and global operations are threatening to move their operation out of Thailand. “No” Thailand is like very far from being “Considered the Best Place Globally for Foreign Firms.” The real problem, as Tharn Sethakij Business, a newspaper have splattered across its front page, is that there is a 20% tax on foreign earned profit slapped onto companies located in Thailand when they repatriate that foreign profit. “We are just simply going to book our global profit outside of Thailand, said a firm located with a head quarter in Thailand, to Tharn Sethakij.
Then god, within ASEAN there are the likes of Vietnam, Indonesia and Singapore on something of a rocket trajectory, economic and political stability wise. Like just look at the Thai central bank as an example of wishy washy behavior of the establishment elite. Eeeks leading up to the latest out of the US and China, the Thai central bank was so afraid of an over-heating Thai economy it warned of a property bubble and of foreign funds inflow hardening the baht and hurting export. Over-night, when the US and China turned cold, like within 24 hours, it is a totally new picture, in saying Thai property are OK and foreign inflow is still strong, indicating foreign confidence in Thailand.
Like what on earth is going on, is it a hour by hour management of the economy or what? Really, how on earth can a central bank be at such a “lost” of the macro-drift of the global economy? So like what now? What if things do not get all that bad with the US and China, another bout of property bubble warning from the Thai central bank? Like what the hell is going on in the Thai central bank’s brain?
Then the Thai government is even a bigger joke.
It is now like the government economic policies have saved the Thai economy, like just look at the Thai GDP of 6%-7% as proof of the government’s skill at managing the economy. Well in fact, Singapore is projected to grow like 15%, China still at 10%, and Vietnam-another 8%-9%. Indonesia another 7%-8%. The fact is, Thailand strong bounce related to an economy being under distress for a very long time, and benefited from both a total clamp-down on dissent in Thailand, giving rise to a fake and not-sustainable political stability, and secondly a global economy spurt of activity.
So what is all the hype about Thailand by Eric-who works for a trading company in Thailand for a long-time now? Well, who knows why anyone would say Thailand is “Considered the most attractive place for global firms.”
The following is from the Nation:
This, say the executives of a French trading company, says Thailand is most attractive destination for foreign firms to do business, due to Thailand’s sustainable economic growth and good infrastructure development.
The company has recently been licensed to qualify for Board of Investment investment incentives. Its director of operations Eric Vavasseur said Thailand’s high potential to serve as a headquarters location for foreign investors would be realised if the country liberalised its laws to promote investment.
As a trading company specialising in machinery parts and supplying many industries such as food processing, aerospace, packaging, pharmaceuticals and manufacture of PET bottles, Thalis Asia Pacific moved its office from Malaysia to Bangkok in 2002 with an initial capital investment of Bt4.1 million. It generated revenue of about Bt136 million last year. Vavasseur said despite the political turmoil, Thailand’s lower logistics costs, good basic infrastructure development and competitive labour costs continued to draw investors.
“Our firm will keep on investing here as long as there are no serious negative factors to affect our investment,” he said. Compared with other Asean countries, Thailand has lower labour costs with higher labour skills. Logistics operations also have a “better platform” than other countries. He said that although labour costs were lower in China, the country would soon lose that edge because inflation there was on the rise. China has also focused on production volume rather than quality.
Thalis Asia Pacific’s business development director Patrick Bernard said Thailand should amend its Foreign Business Act to liberalise provisions related to service businesses. This would promote and facilitate growth in foreign investment and ensure the country’s adoption as a base for foreign firms. The government should also eliminate custom barriers that have obstructed the growth of trade. Despite the Asean Free-Trade Agreement, complicated rules of origin have obstructed export growth, he said.
Growth in trade is also being obstructed by the strength of the baht compared with other currencies – in particular the euro. At present, more than 99.5 per cent of the company’s trading value has to be conducted in other currencies. If the baht is weaker and more stable, Thailand will attract more investors, he said. As it is, Thaland is Asia Pacific’s quotations to customers must involve higher prices than competitors. However, customers’ trust in quality control and punctual shipments means the company firm stills enjoys sustainable annual growth. Since 2002, the company’s revenue has risen from Bt38 million to Bt136 million.
Bernard said that even during the global economic crunch, the company’s income had grown gradually, thanks to orders from France, the United Kingdom and China. Thaland is currently trying to increase its distribution channels by finding customers in new markets, including the Middle East, Asia and Africa. The company’s key customers include KLM Cargo, Turbomeca, Sidel, Cermax, Mema, Thomson, Lina Pack, Nestle Waters, Novac, Atlas Pacific, Microturbo, Norden and IWKA.