Thailand -- the second-largest economy in Southeast Asia -- is seeking new partners for a sustainable future. Similar to Korea, the country has been striving to reform its economy and strengthen its competitiveness amid slowing global growth.

“These challenges also present us with opportunities to work together, to reach new heights in our cooperation,” Thai Ambassador Sarun Charoensuwan said in a speech at a seminar titled “Thailand: Moving Forward Toward Sustainable Growth” on March. 24. “Thailand is eager and ready to do more with Korea.” 

Over 300 Korean companies operate in Thailand, covering manufacturing, sales, logistics, services, cosmetics, ICT and food and beverages. Bilateral economic cooperation has remained relatively low over the years, recording $11.2 billion last year.

According to the Korea Trade-Investment Promotion Agency, Korean investment in Thailand has been relatively weak, due to the strong presence of Japanese firms, Korea’s preference of Vietnam, Indonesia and Myanmar, the perception of Thailand mainly as a tourism destination, the lack of symbolic projects and the absence of Korean banks.

Thai Minister of Industry Atchaka Sibunruang noted that her country -- in line with its 12th National Economic and Social Development Plan -- aims to avoid the “middle-income trap.” The plan covers shoring up the services sector; incorporating globalization into regional development; reducing socioeconomic inequality; preparing for an aging society; investing in new technologies; foster green growth; and improving bureaucratic efficiency.

Hiranya Sujinai, the secretary-general of the Thailand Board of Investment pointed out various benefits for foreign investors: affordable office occupancy costs, the most competitive in the Asia-Pacific; low corporate taxes, the second lowest in ASEAN after Singapore at 20 percent; low-cost public utility rates for electricity and hydro; high infrastructural connectivity; internationally competitive 12 airports and eight deep seaports; 26 industrial clusters; and a well-trained work force.

As promising sectors for investment, Sujinai called attention to automobiles and auto parts, electronics, metal parts and mechanical goods, agriculture and agro-food, medical equipment, pharmaceutical and rehabilitative medicine, biotechnology, renewable energy and software and information communications technology.

Bangkok has unveiled a series of innovative policies designed to make the country more business-friendly. The “Supercluster Policy” grants corporate tax exemptions up to 15 years in a bid to buttress high-tech industries, such as next-generation vehicles, artificial intelligence and information communications technology.

The “Digital Economy Policy” aims to bring investment in knowledge-based industries of cultural production, electronic commerce and social networking services.

“Despite a prolonged slowdown in the global economy, the economies of the Association of Southeast Asian Nations have shown outstanding growth,” Woo Tae-hee, Korea’s Vice Minister of Trade, Industry and Energy, underlined in a speech.

Starting this year, he stressed, the launch of the ASEAN Economic Community will give an additional boost to the region, which will have “a single market and a single production base.” ASEAN is home to over 633 million people, and has the seventh-largest gross domestic product in the world at $2.1 trillion.

As Thailand leads manufacturing in the region and is home to more than 70 million people, Bangkok’s efforts to attract foreign investment can inspire its neighbors, Woo claimed.

He recommended investing in infrastructure projects, such as hydro, water and railroads; enhancing cooperation between the Thailand Board of Investment Seoul Office and the Korea Trade-Investment Promotion Agency Bangkok Center; and further liberalizing the ASEAN-Korea free trade agreement as well as facilitating negotiations on the Regional Comprehensive Economic Partnership.

Acknowledging soaring social ties -- with 1.37 million Koreans visiting Thailand last year, and 20,000 Koreans living in Thailand and 70,000 Thais residing in Korea –- he also advised bolstering tourism through traditional and popular culture.

“The strengths of Thailand as an investment destination are its hospitable and open culture toward foreigners, high-quality living, strategic location in the region and top infrastructure,” head of the KOTRA Bangkok office Kim Moon-young said. “As weaknesses, Thailand depends overly on foreign investment, lacks political stability and its economy has grown marginally since 2008.”

Potentially lucrative sectors include those receiving government policy backing, information communications technology, home shopping, home appliances, cosmetics and logistics, Kim argued. He added that investors could target the untapped markets in the southeastern cities of Chonburi and Rayong, Bangkok and its vicinity, as well as Special Economic Zones throughout the country.

The event was organized by the Thailand Board of Investment, the Korea Trade-Investment Promotion Agency and the Korea Chamber of Commerce and Industry.

By Joel Lee (joel@heraldcorp.com)