Foreign Investment: Can It Save Thailandís Economy?
By Burmese Writer
At a time when foreign investors have taken flight from crisis-torn
Thailand, there is still at least one confident investor waiting for the
"At this moment, Thaiís condition is still promising
and foreign investors still have an opportunity to make money," said
Kenneth S. Brown, the director of Auto Alliance Thailand, a joint venture
between Ford of the US and Mazda of Japan.
The question is
whether foreign investment could be the fuel for the recovery of the Thai
economy. A visit to the Eastern Sea Board Industrial Estate might lead one
to believe that this is possible. There are big auto plants of the world
giant automobile companies such as Mitsubishi and Toyota, in addition to
the Ford and Mazda plant, producing many colourful designs of cars, and
the huge amount of cars.
"We are waiting for the recovery
confidently because the weak point of Thailand is the increase to 80% of
import duty on built up vehicles. So only and strong domestic industry
will have the capability to compete in the highly competitive global
export market," said David L. Snyder, Executive Vice President of Ford.
The Thai government would also like to see foreign direct investment play
a role in the recovery.
The government has implemented a
number of measures to encourage and facilitate foreign capital inflows.
The Ministry of Finance said they were making firm progress with their
privatization programme and had successfully sold shares in PTT
Exploration and Production and the Electricity Generating Company. The
cabinet has also authorized the further sale of a 23% government stake in
Thai Airways International.
The government has also amended
laws to facilitate the sale of assets of 56 closed finance companies by
the Financial Restructuring Authority. These sales have received
considerable interest from foreign investors. Furthermore, the Securities
and Exchange Commission has allowed increased foreign investment in listed
companies. It has also created different types of funds to allow foreign
and domestic investment in the financial sector and real
The government recognises that attracting foreign
inflows requires not only increases in the number of available channels
for investment, but also improvements in corporate governance. Together
with the Securities Exchange of Thailand, we have improved disclosure
standards and strengthened transparency and accountability among listed
The vice president of the Stock Exchange of
Thailand was sure the country would recover Ė but donít expect any more
miracles, said Dr. Surat Palalikit. "If you are talking about 8 percent
growth, never, never Ė and it shouldnít " If you are talking about 5
percent, yes O.K.
A recent rise in share prices on the Stock
Exchange of Thailand (SET) was the result of investors looking for higher
returns than they could get by putting their money in the bank. In the
last September the cabinet had approved the draft of a new foreign
business law, creating a more modern and liberal legal framework for
foreign businesses in Thailand. Mr. Supachai, Deputy Prime Minister of
Thailand said foreigners in the near future would be able to lease for
more than 30 years provided they met certain conditions set by the
government. According to the Thailand macroeconomic framework, exports
between 1996-1998 is US$56.7 billions and imports is 61.3 US$ billions in
1997. Today export earning is 57.5 US$ billions and import is 50.5 US$
billions. Generally speaking, exports were more than imports. If the
government promote foreign investment, Thaiís economy will develop in the
year 2000. Nowadays both foreign and local businessmen are watching the
external effects on Thaiís economy because they are not controlled by the
But the government and the Thai people hope that
foreign investment will continue to play a big role in the Thai economy,
especially now when it is needed more than ever.