Thailand becoming a "fly-over" state for foreign investors
The Commerce Ministry's latest attempt to further tighten up the archaic Foreign Business Act is counterintuitive in an economic environment where Thailand desperately needs to encourage foreign direct investment (FDI) in order boost the Kingdom's flaggin
It is well known that FDI has an importance to developing economies that’s out of proportion to its monetary value, since it is a gateway through which productivity gains flow due to the advanced technology and training foreign companies bring to a country.
Far from achieving its goal of becoming the hub of Indo-China investment and regional headquarters, Thailand risks turning itself into a “fly-over” state for foreign companies on their way to the more open emerging economies of Vietnam, Myanmar, Cambodia and Laos, or, at best, a mere rest-and-recreation centre.
Just like foreign investors, Thai firms are usually only interested in investing overseas if they can freely own and manage their own businesses there. However, the Commerce Ministry’s protectionist initiative creates a risk of a backlash from other countries where Thai companies might wish to invest. Already South Korea, Taiwan and Turkey ban Thais from owning land in their countries because their nationals are prohibited from owning land in Thailand.
George Morgan
