Japanese companies, Thailand’s biggest foreign investors, may spend more to build factories in neighbors including Indonesia and Vietnam after the worst flooding in 70 years disrupted global production.
“Executives recognize the concentration risk after the floods,” said Takahiro Sekido, chief Japan economist at Credit Agricole CIB in Tokyo.
Prime Minister Yingluck Shinawatra has proposed spending 130 billion baht ($4.2 billion) on reconstruction and steps to prevent future floods. She seeks to reassure investors that Thailand remains a safe place for business, as companies including Pioneer Corp. (6773), Honda Motor Co. and Toyota Motor Corp. (7203) scrapped profit forecasts after the floods shut factories.
The disaster has rippled through the supply chains of Japanese auto and electronics makers, as parts shortages affected operations across the globe.
Honda plans to extend output reductions at six plants in the U.S. and Canada until next week because of deficiencies caused by the Thai floods, Japan’s third-largest carmaker said in a statement on Nov. 9.
Honda Chief Financial Officer Fumihiko Ike said on Oct. 31 that he hopes the Thai government will improve infrastructure, including water-drainage systems.
With a well-developed infrastructure, a free-enterprise economy, generally pro-investment policies, and strong export industries, Thailand enjoyed solid growth from 2000 to 2008 – averaging more than 4% per year – as it recovered from the Asian financial crisis of 1997-98. Thai exports – mostly machinery and electronic components, agricultural commodities, and jewelry – continue to drive the economy, accounting for as much as three-quarters of GDP. The global financial crisis of 2008-09 severely cut Thailand’s exports, with most sectors experiencing double-digit drops.
On the other hand Vietnam is a magnet for foreign direct investment. The success of doing business in Vietnam is greatly facilitated by the ability to put through effective corporate structure and financial management system to deal with foreign investment laws, taxation, accounting and foreign exchange issues in Vietnam.
The investment registration process and tax management in Vietnam is decentralized, with the municipal and provincial authorities having significant discretions on how businesses are established and managed from a tax and accounting angle. Having a good local partner, experienced staff and localized professional support would greatly assist in the initial start-up stage.
Chinese vote 14 Thai tourism favourites
The 2017 People’s Choice Awards Thailand were based on 3.7 million votes cast during a two-week period.
Thai baht hits new record high in two years
The Thai baht is one of the best-performing currencies in the region this year, rising about 5% against the dollar.
We’ll Live to 100, but Can We Afford It?
As the quality of healthcare has increased during the past century, so too have global life expectancies – but new generations will pay a high price for living longer.
The world’s six largest pension systems will have a joint shortfall of $224 trillion by 2050, imperiling the incomes of future generations and setting the industrialized world up for the biggest pension crisis in history. (more…)
Subscribe via Email
3 Reasons to Be Optimistic About the Baht Right Now
Probably one of the most important factors for the rise of the Baht is the continued weakness of the US...
Will Thailand’s plan for quarantine-free tourism set a global trend?
According to the Tourism Authority of Thailand, the quarantine-exemption measures implemented in Phuket will be extended to five other key...
Thailand Approves Latest Economic Relief Package for Businesses
Some 250 billion baht (US$8 billion) was allocated for soft loans while the remaining 100 billion baht (US$3.2 billion) will...
Southeast Asia remains a hot spot for plastic pollution
The use of plastics is deeply embedded in our daily lives, in everything from grocery bags and cutlery to water...
Thailand BOI approves Biotech Projects Worth 2.4 Bln Baht ($78 million)
The biotechnology sector is part of the so-called BCG model (Bio, Circular and Green economy) which the Thai government has...
Diamonds are forever but “James Bond Island” in Phang Nga Bay may not
Thailand’s Department of Mineral Resources will assess the stability of the limestone karst towers, which make up the chain of...