Thailand reaches top 20 ranking for FDI interest
Bangkokpost.com | Published April 19, 2017
Thailand jumped two places to 19th in A.T. Kearney’s Foreign Direct Investment (FDI) Confidence Index for 2017, with investors turning bullish on Asia-Pacific.
Although FDI inflows to Thailand fell in 2016, applications for foreign investment tripled in value year-on-year in the first eight months of 2016. That, along with investor’s optimism and continued interest in Thailand, as well as various government projects and initiatives, suggests FDI in the country will pick up again.
The index indicated investors continue to look at Asia-Pacific as a key driver of growth. Five countries from the region feature in the top 10 rankings this year, highlighting the confidence global business leaders have in the region. China ranks third, Japan retained sixth, India was eighth, Australia ninth and Singapore was 10th for a second year running.
The US topped the index for the fifth year in a row. Germany jumped two spots to second with China moving down one position to third. Britain and Canada made up the rest of the top five.
The index is a forward-looking analysis of how political, economic, and regulatory changes will likely affect FDI inflows into countries in coming years. It is constructed using primary data from a proprietary survey administered to senior executives of the world’s leading corporations.
Respondents include C-level executives and regional and business leads. All companies participating in the survey have annual revenue of US$500 million or more.
Since its inception in 1998, the study has reliably pointed toward firms’ top choices globally for FDI, with the country rankings reliably tracking with destinations for FDI inflows.
Investor confidence in Thailand has grown steadily. In this year’s survey, 21% of respondents said they were more optimistic about Thailand’s economic outlook over the next three years, compared with a year ago.
“Executives across the globe are putting a strong focus on governance and regulatory factors when making investment decisions,” said Soon Ghee Chua, head of Southeast Asia at A.T. Kearney. “This year’s index shows factors they look at include efficiency and transparency of government regulations, tax rates and ease of tax payments, and government incentives. Thailand has been ticking the boxes on all of these.
“Thailand’s 12th National Economic and Social Development Plan, which aims to strengthen the economy and enhance the country’s competitiveness, has emphasised its commitment toward foreign direct investment. The country’s Board of Investment has unveiled a detailed plan that provides a series of incentives — both tax and non-tax — to foreign investors in Thailand. These measures, coupled with improved prospects for Thailand’s economy, are making the country an attractive destination for global companies.”
Thailand’s cabinet has approved 36 public infrastructure projects valued at around US$25 billion, all of which are open to bid by foreign investors as the government hopes to engage in public-private partnerships to fund these projects. In addition, the government has pledged about $790 million of technological investment over the next five years in the areas of commerce, entrepreneurship, innovation and content.