afg thailand 2011 11-12

Automotive Focus Group Thailand

Opportunities and Challenges: An Investment Risk Rating for Thailand

Friday 12 November 2010

Royal Cliff Beach Hotel, Pattaya

Christopher F. Bruton

Dataconsult Ltd, Bangkok, Thailand

(Tel: 662-233-5606/7, Fax: 662-236-8143, Email: [email protected])

1.1 Thailand ranking by GDP, Population and Per Capita GDP

Sources: International Monetary Fund, World Economic Outlook Database, 2010

GDP (US$ billion 2010) (current prices) Population (million 2010) Per Capita GDP (US$) (current prices)

695.1

Note: •  Second largest economy (17.4% of ASEAN total) •  Fourth largest population (11.3% of ASEAN total) •  Fourth largest per capita GDP (54% above ASEAN average)

Part 1: How Thailand rates in an ASEAN context

Automotive Focus Group Opportunities and Challenges: An Investment Risk Rating for Thailand

Thailand

AFG Pattaya 12 Nov 10

Thailand

234.6

Thailand

Total 1,800.5 600.3 3,000

Source: International Monetary Fund Database

(US$ with forecasts from 2010)

US$

China

Thailand



Part 1: How Thailand rates in an ASEAN context 1.2 Thailand: GDP per capita, compared with China

Note: China overtakes by 2012?



Part 1: How Thailand rates in an ASEAN context 1.3 Thailand ranking for Ease of Doing Business

Sources: World Bank: Doing Business Series, 2011

(ranking in 183 countries)



Part 1: Ease of doing business: How Thailand rates in an ASEAN context 1.4 Rankings for Thailand and main ASEAN investment Competitors in 2011

Sources: World Bank: Ease of doing 2011


Ease of doing business factors

Thailand

Singapore

Malaysia

Vietnam

Indonesia

Philippines

Protecting investors Trading across borders Dealing with construction permits

12 12 12

2 1 2

4 37

108

173 63 62

44 47 60

132 61

156

Registering property Enforcing contracts Closing a business

19 25 46

15 13 2

60 59 55

43 31

124

98 154 142

102 118 153

Getting credit Paying taxes Starting a business

72 91 95

6 4 4

1 23 113

15 124 100

116 130 155

128 124 156

Total ranking

19

1

21

78

121

148

Sources: World Economic Forum: Global Competitiveness Report s

Note: •  Thailand slipping for past 10 years •  Vietnam, Indonesia improving •  Malaysia, Singapore stable




Part 1: How Thailand rates in an ASEAN context 1.5 ASEAN Competitiveness rankings (2010/2011 compared with 2001/2006)

Source: Transparency International Survey 2010

Singapore

Malaysia

Thailand

Indonesia

Vietnam

Philippines

Cambodia

Laos

Myanmar

9.2 (1)

4.4 (56)

3.5 (78)

2.8 (110)

2.7 (116)

2.4 (134)

2.1 (154)

2.1 (154)

1.4 (176)



Part 1: How Thailand rates in an ASEAN context 1.6 Transparency: the perception of corruption

Ranking among 176 countries shown in brackets

Brunei 5.5 (38)

Scores:

Sources: UNDP Human Development Index 2009, 2010

(ranking among 169 countries)

•  Human Development emphasizes education, health, social development •  Only Singapore, Brunei and Thailand improved ratings •  Thailand a middle ranking country •  Poor education and health: biggest handicap to development

Thailand


2010 2009


1.7 ASEAN: Human development indicators Part 1: How Thailand rates in an ASEAN context

Sources: World Economic Forum: 2010-2011

Note: •  Main defects relate to politics and government •  Education and work ethic of workforce not major factors


Part 2: Thailand Economic and Political Risk Factors 2.1 Thailand: Most problematic factors for doing business


Political stability

Accountability

Corruption control

Rule of law

Gov’t effectiveness

Regulatory Quality

Scores (out of 100)

Source: World Bank: Aggregate Governance Indicators 2009

(354) (361) (366) (344) (334) (318) (318) (280) (261) (263)

Notes: •  Thailand has enjoyed acceptable levels of government effectiveness, regulatory quality (hitherto also rule of law, but now declining) •  Corruption control, accountability declined but now stable •  Political stability now nearing anarchy

(272) Total scores



2.2 Governance factors in Thailand: 1996-2009 Part 2: Thailand Economic and Political Risk Factors



Part 3. Thailand Economy: present situation and outlook 3.1 Thailand: GDP Growth (constant prices) and inflation

Sources: National Economic and Social Development Board

(% change with 2010 forecast) % change

3.2 Net Flow of Foreign Direct Investment (billion baht)

Source: Bank of Thailand

Baht billion

Note: Figures relate to all foreign investment, BOI promoted or otherwise

450

400

350

300

250

200

150

100

50

0

(Baht billion inflow per full year)



Part 3. Thailand Economy: present situation and outlook



Part 3. Thailand Economy: present situation and outlook 3.3 Thailand’s GDP and foreign trade

Sources: National Economic and Social Development Board

(US$ billion)

US$ billion

(forecast)


Part 3. Thailand Economy: present situation and outlook 3.4 Thailand’s principal export markets


(% of total exports)

Source: Ministry of Commerce

Note: •  East Asia 55% •  North America / W. Europe 20%

ASEAN

Other

Taiwan

S. Korea India

Middle East Australia

Hong Kong

EU

USA

Japan

China %

%

%

%

% % % %

%

%

%

%



Part 3. Thailand Economy: present situation and outlook 3.5 Foreign Tourist Arrivals / Hotel occupancy

Sources: Department of Tourism, Ministry of Tourism and Sports

(Hotel occupancy %) Million

persons

(9 months)

Stock Exchange Index

Source: Stock Exchange of Thailand

Index April 1975 = 100

(SET Index at month-end)



Part 3. Thailand Economy: present situation and outlook 3.6 Thailand Investment and Financial Flows

Note: •  November 8 reach 1050

1050

Foreign Trading on Stock Exchange of Thailand: Monthly Buy/Sale (Billion Baht)

Source: Stock Exchange of Thailand

Baht billion

250

200

150

100

50

0

(Baht billion monthly total buy / sell transactions)



Part 3. Thailand Economy: present situation and outlook 3.7 Thailand Investment and Financial Flows


Baht per US$

(Baht per US$)



Part 3. Thailand Economy: present situation and outlook 3.8 Baht Currency against US$: Year-end Exchange Rates


US$ billion

(Oct)

(US$ billion reserves at year-end)



Part 3. Thailand Economy: present situation and outlook 3.9 Thailand: International Reserves (year end figures)

•  Risks at “Elite” Level:   Transitions are not easy in Thailand   Role of Privy Council has been a vital factor for stability behind the scenes   Military are determined to maintain decisive role in politics   Constitutional amendments are unlikely to produce acceptable ground rules

•  Risks at “Political Operational” Level:   Democrat Party: dissolved or not dissolved - either way will cause conflict   Democrat / Bhumjaithai coalition is heading for break-up   Transparency campaign mounted by National Anti-Corruption Commission and

Chambers will add to instability   Election has been promised “sooner rather than later” by Prime Minister   Thaksin Shinawatra is now back on campaign trail

•  Risks at “Social Evolution” Level:   Red Shirt / Yellow Shirt conflicts remain unresolved   National Reconciliation Campaign has been ineffective   No significant moves towards equal opportunities, closing of income gaps


Part 4: Thailand’s Challenges to Economic Progress 4.1 Political Risks Affecting Investment


afg thailand 2011 11-12

Travel

thailand rates

thailand tel

china thailand source

investment risk rating

asean context1

asean totalafg pattaya

asean average

business ranking