COUNTRY BRIEFING
Thailand
Greg Wallis, Senior Trade Commissioner
Australian Embassy
Bangkok
June 2013
Thailand at a glance
Selected Thai exports
› 66 million people
World ranking export s (2011)
Product
› GDP per capita US$5,848
› 30th largest economy
› 2nd largest in ASEAN
› 17th largest manufacturer
› 10th largest motor vehicle
producer
› Growth 2013 – 4.7% (average
predicted)
Share of world
exports
(2011)
Rubber
1
9.9%
Rice
1
29.3%
Sugar
2
7.4%
Meat, fish, seafood
2
16.2%
Hard disk drives
2
N/A
Sources:
National Economic and Social Development Board www.nesdb.go.th
Bank of Thailand www.bot.or.th
Board of Investment www.boi.go.th
Department of Foreign Affairs and Trade www.dfat.gov.au
International Trade Centre www.trademap.org
Australia Unlimited
Thailand and Australia – Commercial Ties
› Australia’s 9th biggest trading partner
› Bilateral trade (2011-2012) worth A$ 17.7 billion
› Bilateral trade (1989-2011) has grown 3.6 times faster
than Australia’s global trade
› TAFTA in place since 2005
› And…. an important education relationship
› 20,000 student enrolments (6th biggest globally)
Australia Unlimited
3
Thailand: Common Views
• Poor and undeveloped
• Good place for a holiday
• Language barrier
• Natural disasters
• Corruption
• Political instability
Australia Unlimited
4
Thai Economy: Sophisticated
• 10th biggest car maker
(>2m cars)
• Regional hub for auto,
electronics, consumer
goods, processed food.
• Middle class: 12 million
- Malaysia (12m)
- Indonesia (2.6m)
- Vietnam (1.6m)
• Dynamic retail sector
Australia Unlimited
5
Great Place for a Holiday
Australia Unlimited
6
Great Place for a Holiday
• 952,000 Australian visitors
– ≅ one in 25 Australians
• Over 99% have a trouble-free stay
Australia Unlimited
7
But I don’t speak Thai ….
• You don’t have to
• Money and English are the languages of business
• English is more widely spoken than before
– and its use will continue to spread
• Bilingual professional help easy to find
Australia Unlimited
8
Natural Disasters
Australia Unlimited
9
Floods
• Floods showed
Thailand is critical to
supply chains
• Forced Japan to
reassess Thailand
– Verdict: nowhere better
– New Japanese
investment boom
Australia Unlimited
10
Corruption
Country
Ranking
Singapore
5
Brunei
46
Malaysia
54
China
80
Thailand
88
India
94
Philippines
105
Indonesia
118
Vietnam
123
Cambodia
157
Laos
160
Myanmar
172
• Corruption risk is mostly in
government sector
• Massive private sector is
largely corruption-free
Source: Transparency International
Australia Unlimited
11
Corporate Governance
2007
2010
2012
1. Hong Kong (67)
1. Singapore (67)
1. Singapore (69)
2. Singapore (65)
2. Hong Kong (65)
2. Hong Kong (66)
3. India (56)
3. Japan (57)
3. Thailand (58)
4. Taiwan (54)
4. Thailand (55)
4. Japan (55)
5. Japan (52)
4. Taiwan (55)
4. Malaysia (55)
6. Korea (49)
6. Malaysia (52)
6. Taiwan (53)
6. Malaysia (49)
7. India (49)
7. India (51)
8. Thailand (47)
7. China (49)
8. Korea (49)
9. China (45)
9. Korea (45)
9. China (45)
10. Philippines (41)
10. Indonesia (40)
10. Philippines (41)
11. Indonesia (37)
11. Philippines (37)
11. Indonesia (37)
Source: Asian Corporate Governance Association, September 2012
Australia Unlimited
12
Political Instability
Coup
4,000
%
3,500
Attempted coup
2011 Tsunami
and floods
Major protests
3,000
2008 GFC
2,500
2,000
1,500
1997-98 Asian
Financial Crisis
1,000
500
0
Source: GDP Data from Thailand’s National Economic and Social Board
Australia Unlimited
13
Meritocracy, Money and Virtue
• Uneven government, strong administration
• Workplaces are not politicised
• All politicians are pro-market, pro-business
• Virtue in Thailand to be rich or richer
• Thais are pragmatic
Australia Unlimited
14
Ease of Doing Business
ASEAN + China/India
1. Singapore
11. Finland
2. Hong Kong, China
12. Malaysia
12. Malaysia
3. New Zealand
13. Sweden
18. Thailand
4. United States
14. Iceland
79. Brunei
5. Denmark
15. Ireland
1. Singapore
91. China
99. Vietnam
6. Norway
16. Taiwan, China
7. United Kingdom
17. Canada
132. India
8. Korea, Rep
18. Thailand
133. Cambodia
9. Georgia
19. Mauritius
138. Philippines
10. Australia
20. Germany
163. Lao PDR
128. Indonesia
Source: The World Bank’s Doing Business 2013
Australia Unlimited
15
Australia Unlimited
16
What are these 23 Australian Companies in
Thailand Saying?
› “We are here because Australia isn’t big enough.”
› “It is a good business environment; much easier than
China, Vietnam, India & Indonesia”.
› “think about your ROE”
› “ Business is good, with strong growth & profitability.”
› “Our engineering and R&D is still done in Australia.”
Australia Unlimited
17
What are these 23 Australian Companies in
Thailand Saying?
› “There is a shortage of skilled labour.”
› “Thailand is no longer a low cost labour market.”
› “Productivity needs to be improved.”
Australia Unlimited
18
Thailand’s Strengths
› Favourable business environment
› Highly sophisticated manufacturing sector
› Low unemployment
› Relatively peaceful labour relations
› Large and growing middle class
› Centre of ASEAN
› Positioned to capitalise on growth of Myanmar
Australia Unlimited
Thailand’s Weaknesses
› “Middle income trap” – decreasing relative productivity
& middling competitiveness
› Perceived political instability
› Poor education standards – including English
› Populist schemes (e.g. rice-pledging) distort market and
inflate prices
› Critical shortage of skills for industry
(auto sector and others)
› Lack of transparency in government & legal processes
Australia Unlimited
Thai pragmatism - What colour
is this car?
This car is
green.
This car is black.
This car
is red.
This car is blue-red.
Australia Unlimited
21
Questions?