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Thailandâ€™s financial sector has proved resilient to global crisis.
Cars are rolling off the belts in a thriving business environment.
Medical tourism is on the government agenda for growth.
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THAILAND The South East Asian powerhouse is booming in the year of opportunity. Written by Niki Thornton
Ready for regional expansion Thailand is embracing its links with the U.K. and investing heavily in infrastructure to make the most of its enviable geostrategic location.
ith a thriving economy, a wealth of resources and a pivotal location within the ASEAN region, Thailand is an excellent choice for British investors looking for lucrative openings. The beautiful, resource-rich country that is home to some 65.7 million people is actively seeking increased private sector investment, a free trade agreement with the E.U. and embarking on a new strategic dialogue with the U.K. Elections held in 2011 saw an end to the political volatility that had shaped the landscape after a military coup d’état in 2006 and left Thailand on the margins of global interests. The appointment of new Prime Minister, Yingluck Shinawatra, who won a landslide victory, has, however, brought renewed international engagement, a commitment to democracy, justice and reconciliation, and a strong sense of getting back to business. Having declared 2013 “the year of opportunity” during a business-luncheon address as part of her official visit to London last November Prime Minister Yingluck Shinawatra described U.K.-Thai relations as “special, with 400 years of close ties and contacts” and outlined her country’s priorities for the year. “Supported by strong economic fundamentals and fiscal space, the Thai government will start implementing key infrastructure and water management projects in 2013 that will help make Thailand a transport and logistics hub in the region and create secure regional supply chains,” she said. “This is in preparation for a more competitive and connected ASEAN Economic Community of more than 600 million consumers by 2015 with Thailand as your gateway to the region.
A sufficiency economy is not about boom or bust but about creating more equality. Dr. Chirayu Isarangkun Na Ayuthaya, Crown Property Bureau
the Straits of Malacca, to three days via the Dawei deep seaport. “We are also investing around £7.3 billion to build a new water-management system. A transparent international bidding process is currently underway and we expect that these projects will be implemented from 2013-2018. With regards to financing of these projects, the government has the capability to raise funds from both
Thailand’s banks have proved remarkably resilient throughout the global financial crisis. Dr. Prasarn Trairatvorakul, Governor, Bank of Thailand
the domestic and external markets. We also encourage private sector participation to promote project efficiency and timely implementation. These investments are also expected to translate into real growth over the medium term, which ensures that the debt to GDP will be maintained at an acceptable level of no more than 50%.” During the London visit, the 45-year-old Prime Minister became the first Thai leader to have an audience with Queen Elizabeth II for two decades, an event she described as “one of the proudest moments in my life. Our two kingdoms’ Royal Families have been very close throughout the ups and downs of history.” Indeed, the two monarchs have much in common. A year younger than the Queen, His Royal Highness King Bhumibol Adulyadej celebrated his 85th birthday on 5th December last year, with a reported 200,000 Thais gathering in Bangkok to celebrate. The King, another long-serving monarch, celebrated his Diamond Jubilee in 2006 and was given the United Nations Development Programme’s first Human Development Lifetime Achievement Award, for his promotion of rural development projects across the country the same year.
The Sufficiency Economy “On infrastructure development, we are investing around £42 billion from 2013 to 2019. This includes four high-speed rail lines that will link Thailand with China to the north and northeast, Malaysia and Singapore to the south and Vietnam to the east. This will not only enhance investment and trade through faster delivery of products, but, equally importantly, will lead to greater distribution of wealth to other areas of Thailand and neighbouring countries. As you can see Thailand is the strategic centre of connectivity in mainland Southeast Asia. “Furthermore, we are pursuing the twin strategy of expanding the Laem Chabang deep seaport and the development of Myanmar’s Dawei deep seaport. We are planning road and rapid rail links between these two ports, creating efficient land bridge linking the Gulf of Thailand to the Indian Ocean. This will cut transportation time of goods from Bangkok to the Indian port of Chennai by half—from six days through
King Adulyadej is a keen advocate of the “sufficiency economy”, which he says “applies to conduct and a way of life at individual, family and community levels. At the national level, this philosophy is consistent with a balanced development strategy, which will reduce the nation’s vulnerability to shocks and excesses that may arise during the effects of globalisation. At the same time, it is essential to strengthen the nation’s moral fibre so that everyone, particularly public officials, academics, business people and financiers, adhere to principals of honesty and integrity.” The Crown Property Bureau is responsible for protecting and managing royal assets and property as well as supporting other activities for the benefit of the Thai people. Working with its subsidiaries, the Bureau has overseen the building of 30,000 dams throughout the country in the last year alone.
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PHOTO: ARIADNA BASTART
As Dr. Chirayu Isarangkun Na Ayuthaya, director-general of the CPB, says, a sufficiency economy is not about boom and bust but about creating more equality. Referring to a quote from King Adulyadej, he said: “Being an Asian tiger is not very important. It is much better to have balanced growth, and that most people have enough to live and to eat. This is a sufficiency economy.” During his reign, King Adulyadej has initiated thousands of development projects within the realms of water resource development, flood management, poverty alleviation, environmental, social and health programmes, farmer and rural development schemes and transport and communications. As Isarangkun says: “When more hands are joined together, more energy and resources pooled, when old and new knowledge obtained from the royally initiated projects and from first-hand experience are integrated, the result should be that Thai people and especially Thai youth will confidently step forward and continue along a path that will lead to sustainable well-being for themselves and for the country.”
A fresh start The election that brought Prime Minister Yingluck Shinawatra to power in July 2011 heralded a fresh start for Thai politics. A young democracy compared to the U.K., Thailand has not been without civil unrest in recent years, but the road to a more peaceful society is being paved. As the Prime Minister says: “We recognise that political stability serves as a strong foundation for investment and economic growth, which translates to a better quality of life for all citizens. Under my leadership, we will move forward in promoting national reconciliation based on the rule of law / and in encouraging dialogue amongst all parties concerned.” Thailand’s potential within South-east Asia makes stability and investment critical factors, particularly with the single market ASEAN community soon to come into effect. As William Hague, U.K. Secretary of State for Foreign and Commonwealth Affairs has noted: “The region deserves serious attention from global partners. The U.K. is fortunate to draw on a foundation of existing relationships and we already enjoy multi-billion pound trade and investment links with ASEAN.
We help narrow or close financing gaps left unfulfilled by commercial banks. Kanit Sukonthaman, President, EXIM
“Our largest businesses in finance, energy, life sciences and food and drink are becoming household names, especially in Thailand. Furthermore, every year more than 30,000 ASEAN students study in the U.K., often returning to positions of influence. The British government has launched the U.K.-ASEAN Business Council to strengthen commercial engagement with the region.” Thailand has done much to attract private sector investment in the last two years. Corporation tax is being lowered to 20% in 2013, and restrictions are being lifted to make it easier for companies to set up regional operating quarters there. Labour skills are being also upgraded. “We have a large pool of skilled labour that is valued by multinational companies,” Yingluck says. There are huge projects under way to improve infrastructure, not least water management initiatives to prevent a repeat of the severe flooding disaster of 2011, which
affected 65 of the country’s 77 provinces, 13.6 million people, and more than 20,000 sq. kilometres of farmland. In terms of roads, the north-south and east-west development corridors will be crucial for the movement of goods and people.
A stable financial sector Thailand rebounded well from the flooding and business confidence is high. Growth reached 5.7% last year, driven by private consumption, government spending and private investment, and is expected to grow by between 4.5 and 5.5% during 2013. The country’s banks have proved remarkably resilient throughout the global financial crisis of 2008, as a result of lessons learnt during Asia’s own crash in 1997. In light of that episode, strict regulations were put in place compelling banks to hold much higher cash deposits to ensure a greater resilience to cyclical shocks. There was very little exposure to derivatives. As Prasarn Trairatvorakul, the governor of the Bank of Thailand says: “Since 2009, we have seen upward pressure on prices from the domestic economy, both on the supply side and in inflation expectations from businesses and consumers. The balance tilted towards controlling inflation and we started to normalise the policy interest rate. We raised the rate from 1.35% to 3.5%, closing the gap with the central bank rates of our peers. Then came the last quarter of 2011, when developments in the Eurozone and the U.S. brought a sharp global slowdown. “Coupled with the worst floods in 70 years, this hit the Thai economy very hard. So the Monetary Policy Committee cut the policy rate by a total of 50 basis points to shore up domestic demand and confidence, in line with our fiscal policy, which provided the stimulus needed. Thanks to this, and the fundamental strength of the economy, a swift recovery occurred.” Since 1997, several foreign banks have entered the Thai market, including Standard Chartered, CIMB, UOB, Bank of Nova Scotia, and ING. Although there are limits on the number of branches banks are allowed to operate at the moment, the sector is moving forward all the time due to the government’s master plan. Trairatvorakul expects a surge in arrivals when the ASEAN market is fully liberalised in 2020. The Krungsri Bank is one example of a private bank with strong credentials. The bank, which has rebranded from Bank of Ayudhya to Krungsri Bank since being taken over by GE finance five years ago, boasts one of the most balanced asset bases in the market place, according to former president and CEO Mark Arnold, who says: “There is no point in doing corporate loans if you want to make a big return. They give you scale, comfort and a lower loss rate, which balances the books, but lower
PHOTO: ARIADNA BASTART
returns. Retail is the fastest-growing sector so we expect three times the GDP—15% growth per annum—as government policy in terms of minimum wage, government spending and people growing into a middle class which didn’t exist before. “People want wealth management—cars, motorbikes and consumer goods—and the business that we have on the retail side serves all of those. That is a big growth area and all the other banks are moving into that space. I believe SME growth will outgrow corporate in a number of years. We can adapt the knowledge we have in retail to excel in this segment as the scoring models of assessing a candidate are similar. This is also an area the government is pushing. Thailand has a very entrepreneurial culture; you can see it as soon as you get off the plane.” Arnold believes the discipline in the banking sector is responsible for its relative buoyancy in the global scheme of things. “Most Asian banks have done very well, but I think Thailand in particular has done very well in driving security, sanity and conservatism in its approach. The regulator is very hands-on here, its audits are very thorough and I have to say, Bank of Thailand is recruiting top graduates who reflect the changes in the banking sector: they are commercially-minded people. Dr. Trairatvorakul himself has substantial experience in commercial banking which gives him credibility on both sides of the fence.” GE is one of Thailand’s largest foreign investors with investments of more than US$1 billion in the fields of infrastructure business, which most notably includes energy, aviation and healthcare. The company believes these solutions will play important roles in helping to improve living standards across the country and prepare Thailand to take on new, emerging challenges. GE’s single largest investment in ASEAN is the 33% strategic investment in Krungsri Bank. Since the takeover 2007, the bank has grown around 12% year-on-year, coverage is 141% with net interest margins of $4.4 and it has done five acquisitions. “We are aiming to achieve top three status in return on equity,” Arnold says. “I don’t want us to be the biggest bank, I want to be the bank with the biggest shareholder return. We have done a lot of things here to transform the technology and the team and the brand and things are moving forward.”
Boosting SMEs Meanwhile, EXIM Thailand is enjoying its role as the bank of choice for Thai exporters and investors. Established in 1993, Export-Import Bank of Thailand is a stateowned, financial institution under the Ministry of Finance’s supervision with prime responsibilities in promoting international trade and investments. Its vision is to become a fully-fledged development bank that promotes and supports Thailand’s export, import, domestic and overseas investments, actively pursuing the government’s policy while ensuring sustainable growth. “As a specialised financial institution, we are required to fulfil the government’s national development policy while simultaneously maintaining a strong business position,” says Kanit Sukonthaman, the bank’s president. “Our achievements, therefore, lie in our ability to strike a sound balance between our policy-based and commercialbased missions.”
The bank aims to provide Thai entrepreneurs with better access to trade and project finance. “We act as a catalyst to help narrow or close financing gaps left unfulfilled by commercial banks while not competing with them,” Sukonthaman says. “At the end of 2010, our credit to total asset ratio stood at 83%, (compared with Indonesia EXIM Bank’s 67% and Export-Import Bank of Malaysia Berhad’s 37%.)” The government increasingly relies on EXIM Thailand as its financial arm to help Thai entrepreneurs cope with global uncertainties. “Our role has become more pronounced during times of crisis,” says Sukonthaman. “For example, during the Asian financial crisis, while commercial banks slowed down their lending activities, our loan extension, both directly to exporters and indirectly via commercial banks, surged by 70%,” Sukonthaman says. “The bank is also the sole SFI to provide merchant marine financing.”
I don’t want us to be the biggest bank, just the bank with the biggest shareholder return. Mark Arnold, Former President and CEO, Krungsri Bank
In the midst of the current volatilities, EXIM’s key mandate lies in the strengthening of SME potential via various SME financing and insurance products and a series of seminars to highlight export opportunities, risk mitigation and well-trodden export business protocols. SMEs are being heavily promoted and supported by the government as the artery of development—at present they account for around 80% of total employment and 30% of the gross domestic product. “Of particular relevance are export credit insurance and foreign buyer’s risk assessment services which aim to boost exporters’ confidence and relieve pressures arising from the present situation,” Sukonthaman says. “Another example is EXIM4SMEs, which is a credit-cum-insurance facility to furnish SMEs with the liquidity they need and protection from international trade risks. Additionally, for the intensified exchange risks relating to export businesses based in Thai Bhat under the current global crisis, EXIM Thailand offers loans in foreign currencies that are matched to the exporter’s revenue stream.” In order to harness cooperation from public and private agencies and nurture SME exporters, EXIM Thailand is looking to work more closely with the state’s investment promotional agencies as well as engaging in direct dialogue with SMEs. “We have also played a key role as the lead bank, facility agent and syndicated lender in major regional investment projects, most notably hydropower and infrastructure, in Lao PDR, Myanmar and services and infrastructure projects in Cambodia,” says Sukonthaman. “In all of the above endeavours, EXIM Thailand has taken special care to tailor its products to clients’ specific needs and different circumstances.”
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NBTC leads modernisation in ICT New organisation is the driving force behind ICT and Thailand’s sustainable development.
n the digital world, where better communications equals growth and opportunity and a greater number of players enter the market, it is increasingly important that regulators are efficient and responsive. In October 2011, the National Broadcasting and Telecommunications Commission (NBTC)—formerly the National Telecommunications Commission—was established to be just that. Working independently from the Thai government, the NBTC regulates the two important and ever-changing service sectors by ensuring consumer are charged a fair price, appropriate content is aired, and the newest technology is available. As the chairman of NBTC, ACM Thares Punsri explains: “Effective regulation creates an efficient system which helps boost the economy. Nowadays, you do not have to travel to do business, you can rely on technology. In Thailand, for example, we now have a Third Generation Network (3G) and this will be a huge boost to business users. “Countries adopting 3G have enjoyed higher levels of GDP per capita and more jobs, while businesses have become more competitive. Moreover, these relevant systems can significantly reduce the costs of business as well, and if there is a strong regulator ensuring the fair prices of services, this will have a very positive effect on our overall economy.” 3G also provides consumers with richer and more compelling communications, he acknowledges. “Access to convenient, affordable and highly customisable mobile broadband devices and services makes life more productive, secure and meaningful. It empowers people to transform the way they live, learn, work and play.” As newer applications and smart-phones become available, the need for high speed Internet is higher. For this reason, the Ministry of Information and Communications Technology is rolling out a nationwide network of high-speed Internet over the next five years. Some 37% of Thais accessed fixed-base and wifi services in 2012, up from 10% in 2011. The government plans to hit 80% penetration by 2015 through the proliferation of smartphones and tablets and 95% by 2020. The country’s mobile, broadband and fixed line infrastructure now covers 87% of the total population. Free public wifi services will be rolled out to 30,000 hotspots by the end of the year, trebling the current access. “The Ministry of ICT, in cooperation with the private sector, will provide free wifi in business areas,” Punsri says. “This service will enhance tourism and other businesses, and ultimately open up new business opportunities, as well as narrowing the digital divide. Free wifi will deploy information infrastructure that is a good investment and smart spending for the government.” The forward-thinking chairman is equally convinced that Thailand will be ICTready when the Association of South East Asian Nations’ Free Market is launched in 2015. “Technology has developed very quickly,” he says. “Even though we were a little slow in implementing 3G, we are going to pursue 4G this year and this will ensure we have excellent connectivity. “Thailand is in a position of power geographically to be the hub of ASEAN activity. We are talking about 560 million people with free flows of goods and services. This will mean a huge amount of commercial travelling by people carrying all kinds of communications equipment. Even the logistics companies and high-speed trains
As a regulator, we are ensuring that fair prices are charged, appropriate content is aired and the newest technology is available. Air Chief Marshall Thares Punsri, Chairman, NBTC
will need to use some form of spectrum—they will travel through many countries so we have to have a joint agreement with our neighbours on this. As a regulator, NBTC is at the centre of these activities to ensure the efficient movement of goods and services throughout the country and the region. “Myanmar is starting to open up to investors and needs a lot of development. We met and offered our support and services to the government there. If they need our assistance, we will give it. Telecommunications is one of the major infrastructure services needed, so helping them will ultimately benefit the whole region.”
Switching over The NBTC has also announced plans for a digital switchover for the TV system, that will require investment in around 48 free broadcasting stations around the country. It plans to grant operating licenses for digital terrestrial TV infrastructure and network providers—and licenses for broadcasting terrestrial TV for public use—by the end of this year, and commercial licenses by next spring. “Within the plan, an infrastructure investor would be responsible for building the new broadcasting towers throughout the country and be able to add more if required. Once the analogue era ends, the number of digital TV channels should more than double, and NBTC will be able to add more channels at regional and community-based levels,” Punsri says. “The digital switchover will bring a lot of advantages to consumers. They will have a lot more choice and we can create useful content for people to raise their standard of living and to learn and develop themselves. We need to encourage the distribution of set-top boxes to consumers and will provide some form of subsidy for the poorer elements of society. “The transition will lead to significant developments in the broadcasting spectrum. It will boost the electronics industry, make e-government services available to people in rural areas, stimulate the TV production industry and increase the amount of local content. Digital broadcasting also enables the provision of services in many languages, thus increasing access to information, which is obviously an important tool for socioeconomic development.” Office of The National Broadcasting and Telecommunications Commission 87 Phaholythin 8 (Soi Sailom), Samsen Nai, Phayathai, Bangkok 10400, Thailand. Tel:+66 (0) 2271 - 0151, Call Center : 1200 (Press 2) Fax : +66 (0) 2271 - 3516 www.nbtc.go.th
Building a prosperous future Thailand’s manufacturing base is thriving. Now Asia’s car-making hub is gearing up to exploit its many business and competitive advantages.
hailand boasts a wealth of raw materials, including timber, petroleum, fish and minerals, but unlike its regional peers, has a booming manufacturing industry that adds substantial value to the products. Manufacturing comprises 34.5% of Thailand’s GDP, with automotives making up the largest segment, with around two million units built in 2012—the highest number ever. Despite some industrial bases being hit by the 2011 floods, the sector has proved resilient to the global crisis and has emerged as a powerhouse for pulp and printing, computer components, electronics and jewellery to name a few segments. In order to fully exploit Thailand’s year of opportunity, the Stock Exchange of Thailand (SET) has been on a mission to drum up more investment by empowering business and investors and match them with the right financial opportunities across different sectors. Headed by president and CEO Charamporn Jotikasthira, SET works to international standards to ensure efficiency, effectiveness, flexibility and global connectivity. Working together with Phatra Securities and Bank of America Merrill Lynch, SET organised the “Thai Investor Forum”, aiming to match nine Thai listed companies with foreign funds in London on 10-11 October 2012, to highlight second-half business plans of these firms and their 2013 prospects. The event came as part of a series of road-shows in business hubs around the world last year. Companies taking part were large-sized firms in the SET50 Index, with a combined market capitalization of THB 1.4 trillion (USD 45.16 billion), representing 17.36 percent of total market value. They included Bangchak Petroleum pcl (BCP), Central Pattana pcl (CPN), Charoen Pokphand Foods pcl (CPF), Khon Kaen Sugar Industry pcl (KSL), Minor International pcl (MINT), PTT Exploration and Production pcl (PTTEP), PTT Global Chemical pcl (PTTGC), Thaioil Group (TOP), and TICON Industrial Connection Plc (TICON).
We work to ensure efficiency, effectiveness, flexibility and global connectivity. Charamporn Jotikasthira, President and CEO, SET
TICON, which showcased its array of ready-made factories for foreign companies, also boasts an investment fund that has large interests in industrial real estate. Managing director Virapan Pulges firmly advocates the building of more infrastructure connecting Thailand to the region so that industries can properly benefit from ASEAN trade. “In terms of flood defences, there are long-term plans to divert the excess water out to sea. At the moment, it passes down through Bangkok,” he says. “The industrial estates are taking their own precautions and have built walls of about six metres
high, which will be more than enough to prevent any damage if the floods return. We need better railways to help link the west to the east and the north to the south. “I think Thailand has a natural geographical advantage in the region. Companies like Tesco, Big C, and Makro are positioning themselves here in order to have distribution hubs focused in the northeast for Vietnam, Cambodia and Laos, while
As our factories are pre-built, customers can start production very quickly. Virapan Pulges, MD, TICON Industrial Connection Plc
many more base themselves on the western border to take advantage of Myanmar. Thailand’s growing competitiveness in the region is particularly visible in the automotive business—companies such as GM, Ford, BMW, Honda, Mitsubishi Motors and Toyota are expanding their manufacturing base here, not only for the local market but for the ASEAN region.”
The local know-how TICON is proud to use its vast experience to meet the demands of the market, and is in direct contact with customers. “We receive approximately 400-500 enquiries a year and lease to 10-15% of those,” Pulges says. “This ensures close contact as we keep talking and listening. On top of this, we have built standard factories, the same factory that was producing shoes or garments 10-15 years ago, for example, could be used for electronics manufacturing today. “Our tenants are mainly part of the supply chain sector, so we normally look for good industrial estates and see, for example, if Toyota, Honda or Panasonic are there and this gives us a good idea as to the market we should be providing for. So we build standard factories for their supply chain and this ensures the space is available. “When they first come to Thailand, most companies have a short-term contract for three to five years, so it makes far more sense for them to rent factories, rather than buy land and build their own. We have factories in more than 13 different locations so can help customers choose the ideal spot. As the factories are pre-built, our customers can start production very quickly, within three months usually. If they built on their own, it would take at least a year. “We give our tenants the flexibility for their business expansion or slowdown as they can lease more or less factories from us or swap into larger or smaller premises, depending on demand at the time. We also provide warehouses and can count a number of multinational firms among our customers. Most of them have been in the business a long time and appreciate that location and quality are the two most important considerations when reducing logistics costs. We can certainly be a partner to U.K. businesses who want to set up operations quickly in Thailand.”
In the meantime, Thailand’s Board of Investment pinpoints the Thai advantage over its competitors as follows:
Gateway to Asia Thailand enjoys a strategic location and serves as a gateway into the heart of Asia – home to what is today the largest growing economic market. The country also offers convenient trade with China, India and the countries of the Association of Southeast Asian Nations (ASEAN), and easy access into the Greater Mekong subregion, where newly emerging markets offer great business potential.
Hub of ASEAN Thailand was one of the founding members of ASEAN and has been instrumental in the formation and development of the ASEAN Free Trade Area (AFTA). AFTA entered into force on 1 January 2010 for the six original ASEAN (ASEAN-6) members (Thailand, Singapore, Malaysia, Indonesia, Philippines, and Brunei) thereby reducing import duties to zero; the so-called CLMV countries (Cambodia, Laos, Myanmar and Vietnam) will follow suit in 2015. Thailand is ideally located at the crossroads of Asia, with easy access to the region’s dynamic markets, including its own booming domestic consumer market of 67 million people. Thailand has long been a proponent of free and fair trade and its attractiveness as a production base for leading international companies is enhanced by a number of free trade agreements, and Thailand is certain to be a beneficiary of the ASEAN Economic Community (AEC), which will enter into force in 2015.
Social and political stability Thailand is a foreigner friendly and welcoming Buddhist country. The country’s form of government is a constitutional monarchy, with a high reverence for the Thai Monarchy, and devotion to the teachings of Buddhism. And although the vast majority of the people in Thailand are Buddhist, all religions are welcome, and His Majesty the King is the patron of all religions.
Growing economy Economically, this country of 67 million people is characterised by steady growth, strong exports and a vibrant domestic consumer market. Abundant natural resources and a skilled and cost-effective workforce help attract foreign investors, and enable them to prosper and develop industry in Thailand.
World-class infrastructure In addition to a growing highway system that now connects not only every province in Thailand, but also Thailand to the neighbouring countries of Laos, Cambodia and Vietnam, Thailand also offers: • Seven international airports • Modern city-wide mass transit • 3G/wifi and broadband access
• Six deep sea ports and two international river ports, including containers, tank farms and liquid jetties. Thailand’s development plans for 2012 – 2022 include a high speed rail network that will connect north, south, east and west of Thailand, as well as to southern China. The mass transit system is being expanded into the suburbs and air and marine transportation will be further strengthened to meet the pace of growing demand.
FDI policies The country’s well-defined investment policies focus on liberalization and encourage free trade. Foreign investments, especially those that contribute to the development of skills, technology and innovation are actively promoted by the government. Thailand consistently ranks among the most attractive investment locations in international surveys, and the World Bank’s 2012 Ease of Doing Business report places Thailand as the 17th-easiest country in the world (and second-ranked country in Southeast Asia) in which to do business. Likewise, the United Nations Conference on Trade and development (UNCTAD) ranks Thailand as the 10th most attractive host economy in the world.
Government support and incentives Numerous government agencies support investors. Through the Board of Investment, the government offers a range of tax incentives, support services and import duty exemptions or reductions to an extensive list of promoted activities. Companies receiving investment promotion privileges from the Board of Investment are not subject to foreign equity restrictions in the manufacturing sector, and there are no local content requirements nor export requirements, as Thailand’s investment regime is in total compliance with WTO regulations. The Board of Investment coordinates the activity of the One-Stop Service Centre for visas and work permits, which enables foreign staff of BOI-promoted companies to obtain work permits and long-term visas within three hours or less. The BOI also administers the One Start One Stop Investment Centre, which opened in November 2009 to facilitate a full range of services and streamline investment procedures by bringing representatives from more than 20 government agencies under one roof. Other government organisations, such as the Department of Export Promotion and international chambers of commerce, provide invaluable support and a host of other important services.
Long–established and newly emerging industries With steady economic development and strong support industries, the country’s industrial production has grown and diversified rapidly both in long–established and newly emerging industries. The government has emphasised attracting investment in six sectors that have been determined to be key to the country’s developmental objectives. These six target industries include: agriculture and agro-industry, alternative energy, automotive, electronics and ICT, fashion, and value-added services including entertainment, healthcare and tourism.
PHOTO: ARIADNA BASTART
Getting better and better As well as bustling Bangkok and the tranquil beaches and islands, Thailand is nurturing medical tourism as part of its strong recovery.
hailand’s fascinating blend of culture, beaches, attractions and landscape have always drawn visitors to its shores and the sector is slated to grow above the world average of 4.6% at a rate of 6.4% over the next decade. The World Travel and Tourism Council predicts that Thailand’s Travel & Tourism will account for 3,059,000 jobs directly, an increase of 4.6% per annum over the next 10 years, with capital investments expected to rise by 9.7% pa over the next 10 years to THB531.6 billion in 2022. In 2011, 19.23 million people visited from all parts of the globe, with U.K. visitors the highest in number from Europe apart from Russia, with 771,466 and 1.1 million visitors respectively. Official government figures released for the month of April 2012 showed that the number of U.K. arrivals had risen by 47.9%, and Russia by 20%, compared to the same month the previous year. While sports tourism, particularly golf, and the meetings, incentives, conference and events (MICE) businesses have grown steadily in recent years, medical tourism is also showing excellent potential. The country is seen as a hub for private health care and hospitals within Asia, and the Ministry of Tourism is keen to exploit this by doubling the sector’s contribution to GDP over the next few years. In addition to world-class facilities, technology and international accreditation, the attentive service received by medical staff is a huge draw for tourists wishing to have a procedure done efficiently and cost-effectively in beautiful surroundings. Of the 19 million that visited in 2011, 500,000 were medical tourists. The Bangkok-based RSU Healthcare is a specialised medical clinic, focusing on eye, dental and cosmetic health. Internationally acclaimed, RSU is a subsidiary company of Rangsit University, with a very strong focus on medical-tourism clientele. Being wholly owned by the university enables it to handpick the best staff through international partnerships and affiliations with its global academic network.
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Managing director Apiwat Ourairat, who founded the RSU in 2003, talked to Business Focus about the growing importance of the sector. “While medical tourism sector developed rapidly over the past two decades thanks to the private sector, it has taken off more recently thanks to government backing and sponsorship. Now, it is on the national agenda, so the whole process is moving forward,” he says.
Now medical tourism is on the national agenda, the whole process is moving forward. Apiwat Ourairat, Managing Director, RSU Healthcare
“In Thailand, we have specialist doctors from both the U.S. and European medical boards so patients can rest assured they will get the very best treatment. There are many levels of facilities, with all sorts of accreditations, so it is very important the patient does their research before they come. The government is working hard on an accreditation scheme that will bring these facilities in line with international standards. “At the RSU, we do not have a broad focus, so we are able to excel in eye, dental and beauty procedures. We have the best technology and training in these fields and are continuously investing and developing our core areas. “Rangsit University was the first private school in Thailand to focus on medical provision. We therefore benefit from dedicated faculties for each of our core areas, and this is our foundation. We have an edge in research and technology because of the structure of the business. We have the most modern and up-to-date equipment and technologies, and we send our doctors on exchange programmes to expand their experiences. There is a personal element to the care we provide that cannot be replicated in a large hospital, yet we are large enough to have the highest standards of treatment.” Ourairat is optimistic about future growth within the industry. “Even though the government is full behind growth in the private sector, we have done a lot of work ourselves to improve the facilities, the standards of care, the services and our links with international centres,” Ourairat says. “We have a number of specialised treatments available and have increased our alliances with medical centres to improve technology and knowledge sharing.” Among the many different treatments available are cataract and glaucoma surgery, dental implants, full-mouth reconstruction, orthodontics, root canal therapy, and facial and body beauty treatments. The company offers clients an opportunity to have a package of care, along with general health check-ups as requested. All centres are clean and state-of-the-art, while the patient recovery facilities resemble high-quality hotel rooms. Thailand’s future has never looked healthier.
Thailand country report March 2013