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Thailand urged to woo foreign investors
Publication Date : 24-09-2012
There is no better time for Thailand to develop its business environment and stringently implement plans to prevent flooding amid an influx of foreign investors to rising Asia and the strong integration of the Asean Economic Community, said the president of the American Chamber of Commerce in Thailand.
Thailand is already one of the top destinations for US investors. However, with the current political stability, it now is able to do more to attract investment and promote business expansion, Amcham president Joe Mannix said in an exclusive interview with The Nation.
According to a survey by Amchams in Asean nations this year, Thailand is the only member of the bloc where US businesses have shown concern about political stability.
However, now that politics is stable, the government could do many things to improve the country's competitiveness, Mannix said.
He explained that after the recent quantitative-easing (QE3) measure in the United States, Americans would spend more and look to expand their businesses to Asia, including Thailand.
With strong growth of investment in Asean, Amcham has established a chapter in Laos and is working closely with the US Embassy in Myanmar to organise a chapter to support US companies doing business in and with that country.
QE3 will help ensure that US companies have more cash on hand.
It should help promote production and employment as well as encourage companies to expand investment overseas, he said.
In Thailand, one of the top issues for American and other foreign investors is water management and flood prevention.
Mannix said US firms were closely monitoring water management and had their own plans to ensure business continuity this year.
He is strongly confident that Thailand will not face a repeat of last year's flood disaster.
"Thailand has moved in the right direction to improve prevention of flooding. I have less concern ... as the water level in dam [reservoirs] is quite low and manageable. I do hope the government will keep on its work to improve facilities for business protection," the Amcham president said.
However, if there is repeated heavy flooding, Mannix expects that Thailand will lose its attractiveness for new investors and opportunities for promoting business expansion and reinvestment here.
He explained that while existing businesses might not leave Thailand in the case of another disastrous inundation, newcomers to the region would shift their investment plans to other countries.
To improve the business environment in Thailand, which ranks sixth among Asean countries where American investors have foreseen a very positive outlook for doing business, Amcham Thailand has suggested some ways for the Kingdom to improve its competitive edge.
Although the increase in the daily minimum wage to Bt300 will affect some businesses, labour cost is only one of many factors to be considered by investors, Mannix explained.
Most US companies already pay their workers more than the minimum wage. First, the government should amend the Foreign Business Act to liberalise the service sector.
Mannix, who is also country manager for Thailand and Vietnam of United Airlines, said Thailand has high potential to draw more tourists. Promotion of the tourism sector by creating a level playing field for both Thai and foreign enterprises would help improve the business environment.
The next thing Amcham would like to see is increased transparency and reduced corruption, which the private sector is highly tempted to indulge in to cope with red tape.
The customs laws should also be reviewed. Mannix said Thailand's customs laws are not yet considered to be up to world standards.
Thailand has room to develop customs regulations and procedures to facilitate trade growth.
The Kingdom should also stringently promote awareness on intellectual-property rights, continue its infrastructure development plan, and promote industries' growth.
He noted that many US companies were looking at starting new investments and expanding business in the Kingdom. They include businesses in the automobile industry, heavy machinery and agriculture equipment, healthcare and other services.
Additionally, as the representative of more than 700 US companies in Thailand that employ of more than 215,000 Thai workers, the Amcham president encouraged Thailand to join the Trans-Pacific Partnership negotiation among nine countries in the Asia-Pacific region.