Last week the Board of Investment of Thailand (BOI) has expanded its 2016 investment value target to 550,000 million baht ($ 16 Bln), an increase of about 20% from the previous target of 450,000 million baht.

This is indeed a modest increase compared to previous performances announced by the BOI.

Foreign investment has fallen off a cliff since the military takeover and the latest figures from Thailand’s Board of Investment (BOI) show very little hope of let up in that fall.

Approved foreign investment applications plunged in the first half of 2016 compared to the same period last year.

Investment from Japan, Thailand’s largest overseas investor, dropped from $2.7 billion to $810m.

North American investment plunged tenfold, from $660 million to $67 million while the European Union fell from $1 billion to $260 million. Less pronounced falls were seen across South East Asia.

Thailand’s finance minister on Thursday (18 August) brushed off concerns about plunging foreign investment under junta rule, saying “there is light ahead” now that voters have approved a military-crafted constitution.

Generals seized power in 2014 vowing to end years of political instability and kickstart the lacklustre economy.

Instead, the EU put on ice negotiations for a Free Trade Agreement, pushing ahead with Vietnam and Singapore instead, and Thailand’s key seafood export sector has been under threat of an import ban to the EU, due to illegal fishing and labour abuses.

The junta have largely succeeded in bringing calm to the politically turbulent nation – but only by stamping out dissent and banning political rallies.

The economy remains the junta’s weak point.

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High household debt, weakening exports and low consumer confidence have cramped growth for the last few years in what was Southeast Asia’s flagship economy.

China seized the opportunity

China was one of the few countries to increase its approved investment footprint over the same period, from $159 million in the first half of 2015 to $723 million so far this year.

At a briefing with reporters on Thursday, Finance Minister Somkid Jatusripitak said he was unphased by the drop.

“I think we shouldn’t look back at the past, there is light ahead,” he said.

He added that political uncertainties were reduced following this month’s charter referendum, with elections scheduled for the end of 2017.

“The climate for investment is now better, both for locals and foreigners,” he said.

“Domestically, since the referendum has passed, the political uncertainties are decreasing in a good way.”

Thais approved a new constitution — the country’s 20th — by a comfortable majority although turnout was 59 percent and independent campaigning was banned.

The military says the document will bring stability and root out corruption among civilian politicians.

Critics say it entrenches the military’s hold over civilian politics, but political turbulence is only partially behind Thailand’s foreign investment fall.

The country is rapidly ageing and it faces increased competition from neighbours like Vietnam and Cambodia, countries with large young populations, increasing education standards and lower wages.