Trade and Investment Opportunities in Thailand

Trade and Investment Opportunities in ThailandSuwanchai Lohawatanakul Director General Office of SMEs Promotion, Thailand

www.sme.go.th

Content

01 Thailand Economy 02 Thailand 4.0 03 SMEs as Engine of Growth

Ease of Doing Business 2018

Thailand’s Ease of Doing Business 2018 Ranking

#26

Comparing 2017 and 2018 Ranking

Starting a Business

#78 #36Getting Credit

#82 #42Getting Electricity

#37 #13

TAXPaying Taxes

#109 #67Enforcing Contracts

#51 #34Protecting Minority Investors

#27 #16

0 100

Distance to Frontier Pt.

#141 #113 #72 #26

53.01 Lao PDR

58.74 Philippines

62.70 Regional Average (East Asia & Pacific)

66.47 Indonesia

77.44 Thailand

14th Largest Agriculture Output

Thailand’s Globally Established Position

19th Largest Manufacturing Output

20th Biggest Economy by Purchasing Power

23rd Biggest Exporter

27th Biggest Economy

30th Largest Services Output

Thailand: ASEAN’s 2nd Largest Economy

Thailand Plays a Vital Role in the Global Supply Chain

13th Automotive Production

5th Rubber Tire Exports

2nd HDD Exports

7th Computer Device Exports

Thailand’s Strategic Location Offers Many Advantages

“We are surrounded by the world’s economic powerhouses.”

Asia & Oceania ASEAN

Strategic Location: Right at the Center of Mainland ASEAN

Strategic Location: Gateway to ASEAN

Expanding Regional Integration Offers More Opportunities

ASEAN Economic Community

628.9 Million Population (8.7% of World Population)

GDP: US$ 2.4 Trillion (3.3% of World’s GDP)

FLAGSHIP OF ASEAN ‣ Emerging regional architecture‣ A new generation FTA‣ A high ambition agreement

Regional Comprehensive Economic Partnership (RCEP) (ASEAN + China, Japan, Korea, India, Australia & NZ)

3.5 Billion Population (48.5% of World Population)

GDP: US$ 22.4 Trillion (30.6% of World’s GDP)

THE BIGGEST FTA ‣ Market size (16 countries)‣ Regional supply chain‣ FDI (intra-extra region)

Content


What is Thailand 4.0?

‣ A new economic model for Thailand’s national master plan for an innovation-driven society, aimed at pulling Thailand out of the middle-income trap and developing it as a high-income country.

‣ Thailand 4.0 are already being sown through a new emphasis on science and technology; research and development; education that focuses on science, technology, engineering and mathematics (STEM).

Science

Technology

Engineering

Mathematics

Why Thailand 4.0?

From the past up to the present, Thailand has passed through three economic development models.

During this period, Thailand has become stuck in the middle - income trap and faces disparities and imbalanced development.

Thailand 1.0 Thailand 2.0 Thailand 3.0 Thailand 4.0

In the first model, "Thailand 1.0,” emphasis was placed on the agricultural sector.

The second model, "Thailand 2.0,” focused on light industries, which helped upgrade the country’s economy from the low-income to middle-income status.

In the third model, "Thailand 3.0,” the country is currently emphasizing heavy industries for continued economic growth.

Agriculture Light Industry Low Wages

Heavy Industry Advanced Machine

Creativity + Innovation Smart Thailand

Thailand 4.0 focuses on a “value-based economy,” as the country needs to deal effectively with disparities and the imbalance between the environment and society.

Prime Minister General Prayut Chan-o-cha explained that Thailand 4.0 has three elements, which mark a significant change in the country’s economy and production.

Thailand 4.0: Towards a Value-Based Economy

Focus on a Sustainable Growth and Development


The Three Elements

The third element focuses on “sustainable growth and development,” in order to achieve economic growth and sustainable development without destroying the environment.

Move Toward an Inclusive Society

In the second element, Thailand will move toward an “inclusive society” with equitable access to the fruits of prosperity and development.

Become a High - Income Nation

The first element aims to enhance the country’s standing to become a high-income nation through developing it as a knowledge-based economy. With an emphasis on research and development, science and technology, creative thinking, and innovation.


“Less for More” vs “More for Less.”

The Thailand 4.0 new model will change the country’s traditional farming to smart farming. Traditional SMEs to smart enterprises, and traditional services to high-value services, under the concept of “Less for More” rather than “More for Less.”

More for Less

‣Commodities ‣Industries ‣Trade in Goods

Less for More

‣Innovation ‣Technology &

Creativity ‣Trade in Services


New Engines of Growth

Enterprises

‣ Foodtech & Agritech ‣ Healthtech‣ Robotech‣ Fintech‣ Edtech‣ E-marketplace‣ E-commerce‣ Service Enhancing‣ Designtech‣ Lifestyle Business‣ Traveltech

New Industry

‣ Food & Agriculture‣ Health & Wellness‣ Smart Devices &

Robotics‣ Digital & IoT‣ Creative, Culture &

High Value Services

New Technology

‣ Bio-tech‣ Bio-med‣ Mechatronics‣ Embedded

technology ‣ Service Design &

Technology

Thailand’s Infrastructure Development Strategy (2015 - 2022)

Total Investment of 1.9 Trillion Baht (USD 50 Billion)

Expansion of the Inter-City Rail Network

Highway Capacity Enhancement

Development of Mass Transit Systems in Bangkok Metropolitan

Air Transport Capacity Enhancement

Development of the Maritime Transport Network

‣ Upgrade railway networks ‣ Increase double-track railways ‣ Build 1.435-meter standard

gauge

Railway

‣ Extend mass transit railway system in Bangkok and vicinity ‣ Acquire 3,183 natural gas

vehicle (NGV) buses

Mass Transit

‣ Expand highways to 4 or more traffic lanes

‣ Develop facilities along the main roads such as

container yards

Road

‣ Enhance sea ports capacity ‣ Enhance airport capacity

‣ Establish aviation industrial estates with Thailand as a

regional center of the MRO* industry

Water & Air

Remark: *MRO = Maintenance, Repair and Operations

Thailand’s Development Plan in the Bigger Picture

The 12th National Economic & Social Development Plan

Mega Trends for The Industrial Sector

‣ Multi-lateral ‣ Economic Fluctuation ‣ New Global Regulations ‣ Knowledge-based Economy

‣ Digital Economy ‣ Technology Development and

Convergence

‣ Climate Change ‣ Resource Inadequacy ‣ Food & Energy Stability

‣ Power Shifts ‣ Civil Society ‣ Balanced / Inclusive / Sustainable

Development ‣ Reform

‣ Aging Society ‣ Urbanization ‣ Customer Behavior

‣ Prepare Thailand for Globalization in a Regional Level

‣ Overcome the Middle-Income Trap

‣ Reduce Socio-economic Inequality ‣ Prepare for the Aging Society ‣ Age-Based Human Development

‣ Prepare for the Development of Disruptive Technology

‣ Development of Green Society

‣ Improve Public Sector Management Systems

Economic

Social

Technological

Environmental

Political

Thai Industrial Development Policy

Promote SMEs / OTOP

Develop New Industries that Create Values & Respond to Global Trends 01Develop Targeted Clusters

Develop Technological Infrastructure (Labs, Testing Centers & Central Testing Stations)

Promote R&D Activities

02Digital Marketing / Technology

Raise Manufacturing / Good Standards

Create New Entrepreneurs in the Region

Promote SMEs / OTOP

Fund / Venture Capital

Improve Investment, Manufacturing and Export Bases of Current Industries 03Productivity‣ Develop Businesses ‣ Develop Skilled-Labor ‣ Update Machinery

Green Industry‣Green Factory ‣ ECO-Town

‣Government Procurement ‣Manpower Management ‣ Logistics ‣ Big Data Management ‣ Law / Regulations ‣ Infrastructure

Enabling Factor Connectivity‣ Business Matching / Cluster

Linkages ‣ Trading & Investment Center ‣ Connect Production /

Marketing through Digital Technology

Content


Thailand SME Profile Number of SMEs by Business Type

Trade (Wholesale & Retail) 1,251,963Services 1,189,373

Manufacturing 521,041

Agriculture 42,266

Total 3,004,643

Growth of Country’s GDP and SME’s GDP

Year 2011 2012 2013 2014 2015 2016

Country’s GDP 0.8 7.2 2.7 0.8 2.8 3.2

SME’s GDP 1.3 8.4 3.1 0.4 5.3 4.8

Ratio of SME’s GDP to Country’s Total GDP

2014 2015 2016 2017 2020

39.8% 41.1% 42.0% 44.0%* 50.0%*

SME Export 66.3 Bil. USD

SME Export to ASEAN 18.6 Bil. USD

Top 3 SME Export: Jewelry / Plastics / Machinery & Computer

'11 '12 '13 '14 '15 '16

SMEs’ GDPGDP

'14 '15 '16 '17* '20*Remark: * Forecasted

Thailand SME Promotion Plan

Vision

“…Strengthen Thai SME to be the primary driving force of the Thai economy…”


Goal

SME’s GDP grows increasingly to 50% of total GDP

2015 2016f 2017f 2018f 2019f 2020f 2021f2014

50%


Concept

Focus on creating the ecosystem & developing the capacity of SME so that they may run their business operations by using knowledge, creativity, and innovations.


Mission

Competitive Growth

Inclusive Growth

Ecosystem

Startup

Regular

Strong

Turn Around


Direction

01/03Promote & Develop SME Based on Particular Aspects (Competitive Growth)

Create High Value-Added Startups including Traditional SME

Increase Competitiveness by Promoting SME Clusters

Strengthen Fundamental Enterprise such as Micro and Cottage Industry


Direction

02/03Reinforce Competency Suitable to the Needs of Particular SME Groups

Elevate Productivity, Technology Readiness, and Innovation

Promote Capital Access

Promote Market Access & Internationalization

Develop & Promote Entrepreneurship


Direction

03/03Develop the Mechanism to Systematically Propel SME Promotion

Develop Tools for Efficient Implementation of SME Promotion

Revise Laws, Rules, Regulations, and Privileges Supportive to SME Business Conduct while Reducing Obstruction Harming Their Strength


Promote Capital Access

Develop Tools for Efficient Implementation

Develop & Promote Entrepreneurship

Promote Market Access & Internationalization

Create High Value-Added Startups

Promoting SME Clusters

Strengthen Fundamental Enterprise

Revise Regulations, Laws, and Privileges Supportive to SME

Elevate Productivity, Technology, and

Innovation

Small & Medium Enterprises


Target

High Value Startup

Smart SME Smart Farmer Global SME

Why Thailand ?

Ease of Doing Business

Supportive Government Policies

Strong Supporting Industries

Trade and Investment Opportunities in ThailandSuwanchai Lohawatanakul Director General Office of SMEs Promotion, Thailand

www.sme.go.th

Documents

Trade and Investment Opportunities in Thailand