Thailand is taking its investment pitch straight to foreign companies to help lure them to an economy facing the threat of a prolonged slowdown amid political uncertainty.
The government will send “direct sales” teams out to meet targeted companies as early as next month to get them interested in investing in Thailand instead of Cambodia, Laos, Myanmar and Vietnam, Finance Minister Apisak Tantivorawong said in an interview Tuesday in Bangkok.
“We would like to go to see many corporates worldwide, all the big corporates, telling them to invest in Thailand,” he said. “If they would like to invest in CLMV, Thailand should be the place.”
Once a leading Southeast Asian manufacturing powerhouse, Thailand is at risk of losing out to its neighbors after years of political turmoil undermined its allure as an investment destination. Prime Minister Prayuth Chan-Ocha’s government is seeking to revive confidence by stimulating domestic demand, approving measures to boost farmer incomes and pledging 1.7 trillion baht ($48 billion) of transport projects.
Neighboring Vietnam has overtaken the country as Southeast Asia’s biggest exporter to the U.S., and Thai growth has slowed in recent years to lag its largest peers in the region.
Since toppling the elected government in a May 2014 coup, the junta has struggled to restore confidence. Applications for foreign direct investment slumped 89.6 percent to 106.5 billion baht in 2015 from a year earlier, while exports have fallen for three straight years.
Gross domestic product is projected to grow more than 3 percent this year, which is still too low for the country to escape the middle-income trap, according to Apisak. His growth forecasts exceed the World Bank’s projection of 2 percent for this year, and less than 3 percent through 2018.
“What we believe is that if we lay good fundamentals for Thailand, Thailand should be able to shift away from this low-growth scenario,” he said. The government is seeking to focus on industries “that are more hi-tech, technology-driven, like robotics, aviation, medical hub,” he said.
With growth of 5 percent a year, the country could shorten its path to high-income status to 17 years from 27 years, he added.
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While the political environment in Thailand is more stable than two years ago, uncertainty over what will happen next is still weighing on investor confidence, Apisak said.
“If you look at the newspaper you see a lot of this kind of thing: What’s going to happen with the constitution? What’s going to happen after the election?” he said. “They don’t know what the future is going to be without this government. So that’s one of the worries that they have.”
He said he was confident the government was working to implement reforms across the country that would “keep this country stable and growth at a reasonable rate.”
While delays in infrastructure projects had hurt confidence, work is now on track, with the government expecting to inject more than 60 billion baht in infrastructure in the second half of this year, Apisak said. That should spur private investment as well, he said.
“When the private sector looks at the government investment like this, they start to invest,” he said. “Government investment is just like a catalyst.”
Apisak said he didn’t agree that Thailand was losing competitiveness to its neighbors or that it should be growing as fast as them.
“They are at a lower level,” he said. “They are just like Thailand 20 years ago.”
–With assistance from Lee Miller To contact the reporters on this story: Suttinee Yuvejwattana in Bangkok at firstname.lastname@example.org, Chris Blake in Bangkok at email@example.com, Yumi Teso in Bangkok at firstname.lastname@example.org. To contact the editors responsible for this story: Stephanie Phang at email@example.com, Nasreen Seria
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