LEADING THAILAND’S ECONOMIC TRANSFORMATION


[ad_1]

“BOI’s activities go far beyond providing tax and non-tax incentives to attract investment. With the technological disruption going on and the world very uncertain, Thailand needs to be resilient.

One of the goals of the BOI in this regard is to ensure that our incentive policies are used as a tool to transform the economic structure of Thailand in the face of these rapid changes.

Ms. Duangjai Asawachintachit

BOI General Secretary

The emergence of new digital technologies such as big data, Internet of Things (IoT), artificial intelligence (AI), machine learning, robotics, 3D printing and biotechnology, as well as concerns growing in the face of climate change, have shaped the lifestyles of both people. and business operations around the world, causing rapid changes in consumer behaviors, product innovations and business productivity. As the country’s main investment promotion organization, the Thai Investment Board (BOI) has so far played an important role in every stage of development of the country’s modern economy. Now, BOI is orienting its investment promotions to help the country take advantage of opportunities arising from global mega trends, while coordinating with other government agencies to strengthen Thailand’s position in the new global economic landscape.

With many global challenges disrupting global trade and investment such as the COVID-19 pandemic since early 2020, the BOI has introduced new investment privileges aimed at promoting the adoption of digital, automation and green technologies. as well as the adoption of sustainability certification among those eligible. Industries. Ms. Duangjai Asawachintachit, Secretary General of BOI, explained that BOI’s goals are that its incentives, targeting both foreign and local businesses, will help drive Thailand’s economic transformation into a more competitive player on the global stage with stronger local supply chains. , making it a key investment destination within the Association of Southeast Asian Nations (ASEAN).

What are Thailand’s main competitive advantages?

Thailand offers a wide range of competitive advantages. First, to be located in the heart of Southeast Asia, Thailand enjoys a strategic location enhanced by connectivity across mainland Indochina. The Thai government has invested significantly in infrastructure facilities for many years to come and will continue to do so for years to come. With an equivalent of $ 68 billion, the government’s investment plan covers all types of infrastructure and will lead to excellent connectivity with neighboring countries and beyond.

Second, we have a very strong supply chains in many key sectors, with more than 10,000 companies operating in the food industry and 2,000 companies in the automotive supply chain. In the electronics industry, Thailand is one of the world’s largest manufacturers of hard drives and storage devices. We are also working hard to develop our digital infrastructure. In recent years, Thailand has invested in eight submarine cables connecting us to the rest of the region and to the world. Thailand is probably the most interconnected of all the ASEAN countries, which makes us the perfect fit to serve as a digital hub. Meanwhile, the Thai government is focusing on developing the Eastern Economic Corridor (EEC) to be the new growth pole, not only of Thailand but of ASEAN, attracting high tech and foreign talent.

The government’s focus on the EEC includes significant investments and activities in a number of projects, including the high-speed train connecting the EEC to Bangkok, the expansion of high seas ports and airports, as well as the development of an innovation cluster, or EECi, which will increase competitiveness and support high-tech industries.

What are the target industries of BOI?

The BOI has identified a number of sectors to target for investment. In addition to the previously mentioned advantages of Thailand’s strategic location as a regional trading hub, well-established infrastructure and strong supply chains facilitating efficient, resilient and profitable business operations, we are also enhancing the ecosystem. legal to ensure that we provide a very conducive business environment to attract multinational companies to use Thailand as a regional hub.

One of the important sectors is the so-called BCG (Organic, Circular and Green), the concept that the Thai government has announced as the main driver of the Thai economy in the coming years. This initiative makes a lot of sense as Thailand is one of the very few net food exporters in the world. The country is also a major producer of agricultural products, to which we can add more value by incorporating more technology. The BCG initiative will unlock Thailand’s potential in this and other sectors.

In terms of a circular economy, Thailand has a lot of raw agricultural waste that can be turned into value-added products. Finally, we want to make sure that we can create and develop industries and services that apply greener technology so that we can pass on a good environment to the next generation. As part of our promotion of new technologies, Thailand has become ASEAN’s center of the bioplastics industry.

Another key sector is medical industry, the country having established itself as a medical center in terms of medical tourism. The value of medical tourism in Thailand reached around $ 600 million in 2018, ranking Thailand as the fourth most popular country in the world for medical tourism. Today, thanks to the effective management of the pandemic by the country, this position as a medical center has been further strengthened and the government has taken steps to ensure that we can further harness this potential. Among the initiatives put in place are recent BOI support measures for clinical research because we believe that there are very promising prospects for this activity in Thailand.

the Electronics industry has served as a key sector for Thailand for decades. Over the past two years, Thailand has played an even bigger role in the supply chain with the relocation of smart electronics operations to Thailand.

Finally, while the automobile industry has been playing an important role in the growth of the country’s exports and GDP for many years now, we see that there is still huge potential to unlock in this sector, especially with the new trend towards electronic vehicles (EVs) .

What roles have the Thai government and BOI played in supporting the electric vehicle industry?

The automotive industry has been high on the BOI agenda for many decades, in fact, since the industry started in Thailand in the 1960s. Thailand has succeeded in creating product champions, in producing vans. of a ton and to develop automotive clusters with a strong localization. Now, with the rise of EV technology, the challenge is to transform the existing automotive cluster into an EV cluster to ensure we maintain our position as the region’s leading automotive producer.

The BOI recently introduced a second set of support measures for electric vehicles. We have also broadened the promotional reach of our incentives to cover even more types of vehicles. We now cover two-, three- and four-wheeler as well as ships and trucks, in recognition that these types of vehicles can also be electrified. We aim to promote the transformation of the automotive industry from ICE clusters to EV clusters, as the incentives are designed to attract new entrants and support existing players. We are also working with government agencies such as the Ministry of Finance to ensure that we are offering the right ecosystem to support the development of electric vehicles.

What are the main orientations of the BOI’s investment promotions?

BOI’s activities go beyond providing fiscal and non-fiscal incentives to attract investment. With the technological disruption underway and the world very uncertain, Thailand needs to be resilient in terms of policy measures.

One of the goals of the BOI in this regard is to ensure that our incentive policies are used as tools to help companies adapt to rapid change. In doing so, we have inspired businesses to transform with our Productivity Improvement Program, which allows existing businesses to apply for tax incentives even if they do not increase their production capacity. The program encourages companies to take actions that lead to improved productivity. This includes investing in (1) reducing energy consumption or reducing environmental impacts or the use of renewable energies (2) adopting automation / robotics systems (3) adopting digital technology (4) obtaining sustainability certifications such as FSC and PEFC (5) undertaking R&D activities / technical designs. We believe that investing or spending for these purposes will lead to more productive and efficient operations, resulting in increased competitiveness. If existing companies invest in any of these goals, they can apply for this program, whether they have already been promoted by the BOI or not, provided that they are engaged in manufacturing or in services eligible for the promotion of the BOI. A quick example of such actions is the installation of solar power systems and the replacement of existing machines with more efficient machines or automation systems such as Automatic Storage and Recovery System (ASRS).

In view of its goal of attracting investment in superior technologies, BOI administered the so-called “smart visa” system which was launched in 2019. This program is part of our efforts to attract foreign technology and talent into the targeted sectors. We are constantly working on coordination between government agencies and the private sector and we talk to all our counterparts and relevant stakeholders so that we can get opinions that we can use to improve the business environment.

Is there a final post you would like to share?

Thailand has continuously improved its investment environment, including through the development of its infrastructure, legal system including trade regulations, industrial ecosystem and support measures, as well as its hand -working thanks to major requalification and skills building efforts. With all of these factors combined, I think Thailand offers a very competitive location for current and future investors. The future is here in Thailand.

[ad_2]

About Emilie Brandow

Check Also

Banking in the Metaverse – The Next Frontier for Financial Services

Banks have long known that if they can capture customers’ attention when they’re young, they’re …

Leave a Reply

Your email address will not be published.