Thailand unprepared as foreign investors flock back to Asean

MONDAY, JUNE 26, 2023

Foreign investment in Thailand remains weak compared with Asean neighbours such as Vietnam and Malaysia, where it has recovered faster since the pandemic.

Even the 16th World Chinese Entrepreneurs Convention, held in Thailand over the weekend (June 24-26), saw minimal investment from foreign businesses.

The Covid-19 crisis saw a severe contraction in trade and investment across the world, including foreign direct investment (FDI) in Thailand.

As the world rebounds, Thailand is now competing with other Asean countries to attract investment from multinational companies in the technology sector. And it's losing the race.

Even during the midst of the pandemic, other Asean countries continued to attract robust investment. Samsung, for example, decided to invest heavily in Vietnam after lengthy talks with its government to clear away obstacles. The South Korean giant announced in December it was boosting total investment in production of smartphones and electronic devices from US$18 billion to $20 billion (704 billion baht).

As for Malaysia, its foreign direct investment last year reached a record high of 74.6 billion ringgit ($15.91 billion) in 2022, despite the Covid-19 situation. The Malaysia External Trade Development Corporation reports that Malaysia had the fastest-growing economy in Asean, making it a leading emerging market for investment. These factors indicate that the Malaysian economy is rebounding rapidly from pandemic impacts.

Hosted in Bangkok over the past three days, the 16th World Chinese Entrepreneurs Convention (WCEC) was an attempt by the private sector, represented by the Thai-Chinese Chamber of Commerce, to attract investment from Chinese businesses worldwide. It represented a crucial opportunity as both countries normalise operations in the aftermath of the pandemic.

However, it was regrettable that the event took place during a political impasse in Thailand, with the formation of a new government following May’s election still in process.

In recent times, the Thai government has made no significant fresh efforts to attract foreign investment, and support for investment policies has decreased. This can be seen in the slow progress of the Eastern Economic Corridor (EEC), where important infrastructure projects such as the high-speed rail connecting three airports and the development of U-Tapao airport have not yet begun construction. Foreign businesses have witnessed the unpreparedness of Thailand, despite the initial vision of the EEC as a key magnet for investment and national development.

This article is translated from an editorial published in Nation Group’s Krungthep Thurakij business news outlet on Monday (June 26).