Thailand is now being branded as 'the sick man of Southeast Asia' given its low economic growth, unstable politics and lack of investor confidence, the director of University of the Thai Chamber of Commerce said on Wednesday.
Ath Pisalvanich, director of the university’s International Trade Studies Centre, said 480 of 4,000 small and mediumsized Thai enterprises are planning to invest in neighbouring Indonesia, Myanmar and Laos with a total investment of Bt77 billion.
The political turmoil will compel other manufacturers to relocate from Thailand, he said, adding that about 1,440 Thai operators will possibly move their production bases to neighbouring countries.
Thailand will lose investment opportunities equivalent to Bt46 billion from the relocations, which will be three times higher than the original move, he said.
If the political impasse continues until next year, Thailand’s investors overseas will increase to 2,800 operators, at a total value of over Bt200 billion, or seven times higher. With this, Thailand’s loss of investment opportunity will be as high as Bt123 billion.
Those contemplating relocation include food and beverage manufacturers, retailers, finance and insurance operators and manufacturers of electronics products.
Ath said Thailand’s loss of market share to Vietnam has risen from 13 per cent to 23 per cent from products including rice, tobacco, textile, tea, coffee, spices, cereals, clothing, ceramic goods, steel, glassware, electrical appliances and plastic goods.
The loss is about US$943 million, or Bt29.5 billion, partly due to higher manufacturing and labour costs compared to Vietnam.
Thailand will lose also foreign direct investment (FDI) opportunities of up to US$5.541 billion (FDI) over six year, as other Southeast Asian countries switch investment to Vietnam after the launch of the Asean Economic Community (AEC), Ath said.
It is predicted that FDI in Vietnam will increase to US$240 billion and Thailand will gain only US$170 billion in the next six years despite Vietnam’s limitations in public facilities, transportation system, and higher investment and labour costs.