COUNTRY BRIEFING Thailand Greg Wallis, Senior Trade Commissioner Australian Embassy Bangkok June...
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Transcript of COUNTRY BRIEFING Thailand Greg Wallis, Senior Trade Commissioner Australian Embassy Bangkok June...
COUNTRY BRIEFINGThailand
Greg Wallis, Senior Trade Commissioner
Australian Embassy
Bangkok
June 2013
Australia Unlimited
Thailand at a glance
› 66 million people
› GDP per capita US$5,848
› 30th largest economy
› 2nd largest in ASEAN
› 17th largest manufacturer
› 10th largest motor vehicle producer
› Growth 2013 – 4.7% (average predicted)
Sources:
National Economic and Social Development Board www.nesdb.go.th
Bank of Thailand www.bot.or.th
Board of Investment www.boi.go.th
Department of Foreign Affairs and Trade www.dfat.gov.au
International Trade Centre www.trademap.org
Selected Thai exports
Product World ranking - export s (2011)
Share of world exports(2011)
Rubber 1 9.9%
Rice 1 29.3%
Sugar 2 7.4%
Meat, fish, seafood 2 16.2%
Hard disk drives 2 N/A
3Australia Unlimited
Thailand and Australia – Commercial Ties
› Australia’s 9th biggest trading partner
› Bilateral trade (2011-2012) worth A$ 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)
4Australia Unlimited
Thailand: Common Views
• Poor and undeveloped
• Good place for a holiday
• Language barrier
• Natural disasters
• Corruption
• Political instability
5Australia Unlimited
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
6Australia Unlimited
Great Place for a Holiday
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Great Place for a Holiday
• 952,000 Australian visitors– one in 25 Australians
• Over 99% have a trouble-free stay
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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
9Australia Unlimited
Natural Disasters
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Floods
• Floods showed Thailand is critical to supply chains
• Forced Japan to reassess Thailand– Verdict: nowhere better– New Japanese
investment boom
11Australia Unlimited
Corruption
• Corruption risk is mostly in government sector
• Massive private sector is largely corruption-free
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
Source: Transparency International
12Australia Unlimited
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
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Political Instability
2011 Tsunami and floods
2008 GFC
1997-98 Asian Financial Crisis
Source: GDP Data from Thailand’s National Economic and Social Board
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
p
2013
e
Coup
Attempted coup
Major protests
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
%
14Australia Unlimited
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
15Australia Unlimited
Ease of Doing Business
1. Singapore1. Singapore
12. Malaysia
18. Thailand
79. Brunei
91. China
99. Vietnam
128. Indonesia
132. India
133. Cambodia
138. Philippines
163. Lao PDR
ASEAN + China/India
Source: The World Bank’s Doing Business 2013
2. Hong Kong, China
3. New Zealand
4. United States
5. Denmark
6. Norway
7. United Kingdom
8. Korea, Rep
9. Georgia
10. Australia
11. Finland
12. Malaysia
13. Sweden
14. Iceland
15. Ireland
16. Taiwan, China
17. Canada
18. Thailand
19. Mauritius
20. Germany
16Australia Unlimited
17Australia Unlimited
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.”
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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
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
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Thai pragmatism - What colour is this car?
This car is red.
This car is green.
This car is black.
This car is blue-red.
Questions?