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Overview to Thailand and ASEAN Economic
Community (AEC)
3
Thailand is the World’s
•17th largest manufacturer
•23rd largest industrial output
•24th biggest economic by purchasing
power
•28th biggest exporter (as % of total world
goods)
Source: Economist Pocket in World Figures 2014
ASEAN’S 2nd Largest
Economy
Economic Projections 2014f
Economic Projections 2012 20132014f
Ave. Range
Real GDP 6.5 2.9 2.6 2.1-3.1
Export of goods & services
(percent y-o-y)3.1 4.2 4.4 3.4-5.4
Import of goods & services
(percent y-o-y)8.8 2.3 3.8 2.8-4.8
Current account (billion US dollar)
% of GDP
-1.5
-0.4
-2.8
-0.6
4.7
1.1
3.7-5.7
0.8-1.4
Inflation (percent y-o-y) 3.0 2.2 2.5 2.0-3.0
Core inflation (percent y-o-y) 2.1 1.0 1.5 1.0-2.0
Unemployment (percent) 0.7 0.7 0.7 0.6-0.8
Source: Fiscal Policy Office, as of May 26, 2014
Positive Factors Supporting Stronger Economic
Growth during Q3&Q4 2014 and 2015
• Payments to farmers under the rice pledge
scheme (92 billion baht or 1.6 billion GBP
• Approval of large-scale investment projects
by BOI
• Stronger private and public consumption
(acceleration of budget disbursement and
approval of the 2015 budget)
• Implementation of infrastructure projects
The World Bank RanksThailand among the easiest
places to do Business inAsia and 18th in the World
Source: Doing Business 2014, October 2013
UNCTAD Survey
Top Ten Prospective Host Economies for 2013-2015
Country Rank
China 1
USA 2
India 3
Indonesia 4
Brazil 5
Germany 6
Mexico 7
Thailand 8
UK 9
Japan 10
Source: UNCTAD Investment Prospect Survey, based on 159 company responses
2013 Country Manufacturing
Competitiveness Index Rankings
Source: 2013 Global Manufacturing Competitiveness Index by Deloitte Touche Tohmatsu Ltd. And the U.S. Council on Competitiveness
as of April , 2013
* ( ) = rankings
Source: UNCTAD and IMF as of April, 201411
Thailand: the Crossroads of ASEAN
GDP US$ 2.3
trillion
Population 616 million
Foreign
Direct
Investment
US$ 111
billion
GDP Growth 5.7% (2011)
6.4% (2012)
5.2% (2013)
4.9% (2014)
ASEAN’s GDP to double to
US$4.7 trillion in 2020
10 Countries, One Single
Market in 2015
Map is not drawn to actual size
USA
ASEAN-MERCOSUR
Thai-EU
ASEAN-EU
Thai-EFTA
ASEAN-GCC
ASEAN-India
Thai-India
BIMSTEC
ASEAN-China
ASEAN-Japan
Thai-Japan
ASEAN AEC
Thai-Australia
ASEAN-CER
Thai-New
Zealand
Suspended
Pending
Mandate
Under
Study
Ongoing
Negotiations
FTAs
in Force
RCEP
TPP
ASEAN-Korea
Thailand’s FTAs
Thailand Focus
Royal Thai Embassy
Buenos Aires
Basic Data
Basic Data
Total Area: 514,000 sq km
Thailand is the 51st largest
country in the world.
(Approximately 1/5 of Argentina)
Population: 67.8 million
Political Structure
Form of Government: Constitutional Monarchy
Head of State: King Bhumibol Adulyadej
Head of Government: Prime Minister
(For a maximum of 8 consecutive years)
National Legislature:
- House of Representative (500 members)
- Senate (150 members)
Economic Conditions
GDP (2013) : 385 Billion US Dollars
Forecasted GDP of 2014
: 388 Billion US Dollars
Forecasted GDP Growth of 2014
: 3 - 4 %
Sources: World Bank, Bank of Thailand, NESDB, etc.
GDP Composition, By Sector
Services: 44.2 %
Wholesale and retail trade, real estate and construction, transportation
and communication, financial sector, hotel and restaurant
Industries: 43.6 %
Tourism, textiles and garments, agricultural processing, beverages,
tobacco, cement,
light manufacturing such as jewelry and electric appliances, computers
and parts, integrated circuits, furniture, plastics, automobiles and
automotive parts
Agricultural Products: 12.1 %
Rice, cassava (manioc), rubber, corn,
sugarcane, coconuts, soybeans
Inflation: 2.2 % (2013)
Unemployment Rate: 0.9 % (1/2014)
Official Foreign Reserves:
166.7 Billion US Dollars (end of
1/2014)
Thailand background (1)
Political and Regulatory regime: Generally benign neglect
Government generally refrain from intervention and it is written in the
current constitution that the government should promote free markets and is
not allowed to compete with the private sector except for national security
reasons and the provision of public goods.
Minimum wage has become a populist tool to win votes. The government
will raise minimum wage by 40%, applying it throughout the Kingdom
starting 1 Jan 2013. Other populist policies include price support for rice,
debt relief for farmers, easy credit for villagers, and universal health and
free education.
Banks and insurance are regulated with limited room for foreign
participation. Other domestic industries also provide limited access to
foreigners such as retail trade and telecoms. Foreign participation is
welcomed for export industries such as automobiles.
Thailand background(2)
Economic regime: an open economy
Thailand is a middle income country with per capita income of about $5500.
Exports of goods and services account for 70% of GDP. Public debt is low at 43%
of GDP but rising as the budget deficit is expected to average about 3-4% per
year given ambitious infrastructure investment plans estimated to cost about Bt2.2trn
($70bn) over the next 5-7 years.
Good record of fiscal and monetary discipline. Since inflation targeting monetary
policy regime was adopted in 2000, inflation averaged 2% per year. There is
legislation to explicitly protect Bank of Thailand’s independence and core inflation
ceiling set at 3% has been endorsed by the government. Government revenue
amounts to about 18-18% of GDP.
Private consumption has averaged a steady 55-57% of GDP while private
investment about 20% of GDP. Income and wealth distribution is uneven. Agricultural
output is 10% of GDP but employs about 40% of the labor force while
manufacturing is 40% of GDP but employs 15% of the labor force.
Thailand background(3)
Socio-Demographic
Birth rates peaked in 1974 and has since declined to 1.3% at present. It is
estimated that Thailand’s labour force will trough around 2015 after which
Thailand’s dependency ratio will rise steadily.
Social welfare and pension system is not comprehensive, having been
started in the 90s. There is a pension scheme for the 2 million civil servants
and private pension schemes exist for most of the industrial workforce and
other modern sectors (banking, state enterprises). However, no such facilities
exist for the farming sector and informal services sector accounting for 2/3
of the labor force.
Universal health care was introduced in 2001. Costs have been rising
especially for civil servants and the government is working to contain the
rising costs.
Thailand background(4)
Technology and media
Mass media is largely free, particularly printed media. Internet restrictions have
been few except for recent crackdown related to les majeste offences. Expansion of
mobile phones had been constrained by the politicization of the sector. Thailand is
expected to grant 3G licenses to 3 operators by the end of 2012 after many years
of delay.
Radio and television had been largely under the control of the government and the
armed forces because historically it was thought to be critical for national security.
The army still controls many free TV stations and all major radio stations. Cable TV
and the emergence of community radio stations have further dilute the government’s
hold on this media.
Spending on R&D has been marginal, estimated at less than 0.24% of GDP.
Thailand has few well known brands. Only Jim Thomson Silk and Red Bull readily
come to mind.
Thailand statistical highlights (1)
Population
Population: 67,091,089 (July 2012est.), country comparison to the world: 20
Age structure:
0-14 years: 19.5% (male 6,697,165/ female 6,386,840)
15-64 years: 71% (male 23,575,773/female 24,071,836)
65 years and over: 95% (male 2,870,445/female 3,489,030) (2012est)
Median age:
total: 34.7 years
male: 33.7 years
female: 35.6 years (2012est.)
Population growth rate: 0.543% (2012est.), country comparison to the world: 148
Birth rate: 12.81 births/1,000 population (2012est.), country comparison to the world: 154
Death rate: 7.38 deaths/1,000 population (July 2012est.), country comparison to the world: 119
Urbanization: 34% of total population (2010)
Rate of urbanization: 1.8% annual rate of change ( 2010-15 est.)
Source: The World Factbook, IMF, NSO
Thailand statistical highlights (2)Population
Maternal mortality rate: 48 deaths/100,000 live births (2010), country comparison to the world: 110
Infant mortality rate: 15.9 deaths/1,000 live births, country comparison to the world:
108
Life expectancy at birth: 73.8 years (male: 71.4, female: 76.3), country comparison to the world: 114
Total fertility rate: 1.66 children born/woman (2012est.), country comparison to the world:174
Health expenditures: 3.88% of GDP (2010), country comparison to the world: 166
Doctors: 0.35 per 1,000 (2011)
Beds: 2.1 beds per 1,000 (2011)
Literacy: 92.6% of total population (definition: age 15 and over can read and write)
School life expectancy (primary to tertiary education): 12 years
Unemployment, youth ages 15-24: 4.3%, country comparison to the world: 125
Source: The World Factbook, IMF, NSO
Thailand statistical highlights (3)
GDP
At purchasing power parity (PPP):
$602.2bn(2011)
At market exchange rate: $345.6bn (2011)
Real GDP growth rate:
5.4% (2012, Consensus forecast)
0.1% (2011)
7.8% (2010)
-2.3% (2009)
Per capita (PPP): $9,398 (2011)
Per capita (Market rate): $5,395 (2011
GDP - composition by sector:
agriculture: 13.3%, industry: 34%, services:
52.7% (2011)
Labor
Labor force: 40.09 million (July 12)
Labor force - by occupation:
agriculture: 40.7%, industry: 13.2%, services:
46.1% (2011 est.)
Unemployment rate: 0.56% (July 12)
Population below poverty line: 8.1% (2009 est.)
Fiscal
Budget: revenues: $62.85bnn (FY12 target) or 17.2% of
GDP)
expenditures: $75.5bn (FY12 target)
Budget balance: -3.5% of GDP (FY12 est.)
Public debt: 43.3% of GDP (Jun.12)
Inflation and interest rate
Consumer prices index: 3.38% (Sep.12), average (2005-
2011) = 3.3%
Central bank policy rate: 2.75% (Oct.12), average (2005-
2011) = 3.07%
Commercial bank prime lending rate (avg 4 largest banks):
7.126% (Oct.12)
Commercial bank 12months deposit rate (avg 4 largest
banks): 2.856% (Oct.12)
Exchange rate: Bt/US$1
2007 2008 2009 2010 2011 Jan-Sep
2012
Avg over the period 33.68 34.71 33.34 30.01 31.52 30.81
End of period 34.54 33.33 34.3 31.68 30.46 31.19
Source: The World Factbook, IMF, NSO
THE NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT PLAN (NESDP)
A ROAD TO THAILAND’S DEVELOPMENT
Gold Era of Planning Democracy Era Paradigm Shift
Plan 1 (1961-66)
Plan 2 (1967-71)
Plan 3 (1972-76)
Plan 4 (1977-81)
Plan 6 (1987-91)
Plan 9 (2002-06)
Plan 7 (1992-96)
Plan 8 (1997-2001)
Plan 5 (1982-86)Economic Growth and
Infrastructure Development
and the Beginning of Social Development
Economic Growth Led
Development
Economic Stability and Social Development
People Centred Development
Paradigm
Participation Approach
Sufficiency Economy
Political Fluctuation
Plan 10 (2007-2011)
Community Plan
Plan 11 (2012-2016
crisis
crisis
crisis
28
31Six Country’s Capital
(Natural
Capital)
(Physical
Capital)
(Social
Capital)(Human
Capital)
(Cultural
Capital)
(Financial Capital)
Social Capital
(SC)
11th NATIONAL ECONOMIC AND SOCIAL DEVELOPMENT PLAN
Natural Resources
Capital(NC)
Imbalanced in Thai Society
Regimental Imbalance
Source: Dr. Suvit Maesincee
Developmental Imbalance
Governmental ImbalanceCultural Imbalance
32
33
Current Situation ไทยก ำลงผำนพนชวงโอกำสจำกกำรปนผลทำงประชำกร โครงสรำงในอนำคตวยประชำกรวยท ำงำนจะตองแบกรบผสงอำยท เพ มมำกขน
Pyramid of Thai Population
Demographic Dividend2552 2570
Aging PopulationBaby Boom2513
0-45-910-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475+
0-45-910-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475+
0-45-910-1415-1920-2425-2930-3435-3940-4445-4950-5455-5960-6465-6970-7475+
2513 2552 2570
0
10
20
30
40
50
60
70
80
0-14
15-59
60+
Child Age(0-14 years old) tends to decrease
Working Age(15-59 yearsold) has decreased after 2010
Old Age( 60+) continue increasing
1969 2011 2030
Child Age 45.12 20.07 13.50
Working Age 49.99 67.63 61.38
Old Age 4.89 12.26 25.12
Increasing in Dependency Ratio Increasing number of elderly that working age has to responsible for
2000 2011 2030
Old Age
:Working Age7 : 1 5 : 1 2 : 1
Thailand is passing the period of taking advantage from population dividend. In the future, population structure shows that working age will have more burden in taking care of elderly.
Demographic Change in Thailand
Cultural Instability
National Culture
Local Culture
Democracy, focus on right and freedom
Capitalism and Materialism
Trust in human wisdom and capability
Cosmo
Culture
วฒนธรรมอเมรกน
(Americanization)
วฒนธรรมเกาหล (K-Pop)
วฒนธรรมญปน (J-Pop)
National
Culture
Politeness
Respect and Gratutude
EnjoymentLocal Culture
Culture of Minority Group
Culture in 4 Regions
Islam Culture
34
GlobalCulture
35
Population Structure Change
Weak Public Administration
Critical National Security
Vulnerable Economic Structure
Deterioration Social Values
Natural Resources and Environmental Deterioration
Risks
Labor Forces
Younger Thais, are struggling to makes ends meet even as unemployment rates remain consistently low. For many, having more children—or any at
all—isn't going to happen soon.
Opportunity or Threat?
It could help preserve natural resources in nations
that have been taxed by rapid population growth.
But some economists blame a slowdown in
population growth for contributing to such disparate
events as the Great Depression and Japan's
sluggish growth rates in recent decades.
Thailand's Key PlayersView Slideshow
Educating the World
GDP (purchasing power
parity)
$673 billion (2013 est.)
$654 billion (2012 est.)
$614.2 billion (2011 est.)
note: data are in 2013 US
dollars
GDP (official exchange
rate)$400.9 billion (2013 est.)
GDP - real growth rate
2.9% (2013 est.)
6.5% (2012 est.)
0.1% (2011 est.)
GDP Composition by End Use(2013)
household consumption: 53.5%
government consumption: 13.3%
investment in fixed capital: 28.2%
investment in inventories: 0.9%
exports of goods and services: 70.6%
imports of goods and services: -66.6%
GDP - composition by sector
agriculture: 12.1%
industry: 43.6%
services: 44.2% (2013 est.)
ASEAN: A COMMUNITY OF OPPORTUNITIES
ASEAN – Asia’s Economic Powerhouse
A huge market:
625 million+
people
GDP:
USD 2.4
trillion
FDI USD
122
billion+
If ASEAN were a single country, it would already be
the seventh-largest economy in the world, with a
combined GDP of $2.4 trillion in 2013.
It is projected to rank as the fourth-largest economy
by 2050.McKinsey & Co – May 2014
ASEAN
ASEAN
• Highly connected:
Physically, Institutionally
and among the Peoples
• Free trade agreements
with major regional
economies
• Young educated labor
force
ASEAN… DIVERSE
Home to major
religions
Vast natural
resources
Rich culture
Courtesy of ASEAN National Tourism
Organisations
Courtesy of ASEAN National Tourism
Organisations
Courtesy of ASEAN National Tourism
Organisations
10 MEMBER STATES
• Brunei Darussalam (7 January
1984)
• Cambodia (30 April 1999)
• Indonesia (8 August 1967)
• Lao PDR (23 July 1997)
• Malaysia (8 August 1967)
• Myanmar (23 July 1997)
• Philippines (8 August 1967)
• Singapore (8 August 1967)
• Thailand (8 August 1967)
• Viet Nam (28 July 1995)
ASEAN: Association of South East Asian Nations
Overview of ASEAN Economic Community
AECSingle Market and
Production base
To create a stable,
prosperous and highly
competitive ASEAN
economic region
Freer flow of capital
Free flow of goods
services, investment,
and skilled labor
characteristic
objective
Single Market and Production Base
AEC
goods
service
investment
capital
skilled labor
Characteristics of AEC
Objectives of AEC
AEC Blueprint
Single market and production
base
Competitive economic
region
Equitable economic
development
Integration into the global
economy
Ease of doing business
Expected GDP Growth 4.5%
(2011)
Global markets connectivity
Long–established and newly emerging industries
Supporting factors
Economic
Environmental Analysis
Thailand opportunity to become a regional
economic, trade, and investment hub.
Geographic location
Development level
Size of the domestic market and land area
Economic relations with ASEAN
Association with the global economy
Thailand’s weaknesses
Lack of understanding and awareness
Unfamiliar with neighbours
Some inconvenience in business
Higher business costs
Political and administrative problems
SWOT Analysis: Thailand
STRENGTHS
Extensive knowledge and experience in
Agriculture-based industries (e.g. Animals, Animal
feeds, rice, rubber
Global Kitchen
Brand “Thai”
STRENGTHS
Service Superior esp. in Spa, tourism, restaurant, health related services, entertainment
Good Quality Products
Skilled Labor/Value added – GSP esp. in export-oriented processing
Innovative and creative
WEAKNESSES
Lack of Language Competence
No sufficient capital and very hard to get access to
Financial Sources (We need to look at Taiwan PPP
Module and Bangladesh Garmen Bank Model)
Lack of interest and/or capital to acquire new
technologies e.g. automate machines
SME tend to produce OEM Products and has no own
Brand
WEAKNESSES
Lack of opportunity and or interest in live long learning, training on new skills
Lack of Entrepreneurship and have paradigm of “Employee-ism”
No Entrepreneurial/ SME Protection Policy
Lack of Int’l mind “Entrepreneurs” and lack of knowledge of neighboring countries policies and procedures
Low level of knowledge and appreciation of other countries culture, social life and business practices.
OPPORTUNITIES
Bigger Market to GMS to ASEAN to ASEAN +++
More customers intake to Thailand to use Thai
services and products
Thai taste is known and appreciate by others –
more chances to expand market overseas
OPPORTUNITIES
Strategic location – in the central of GMS and ASEAN
United with GMS and ASEAN can gain more bargaining power with other markets
Can move or expand production base to other countries in ASEAN to take advantage of investment law and resources (land and labor)
THREATS
High production cost in Thailand – make it less
competitive
Influx of cheaper goods
Influx of knowledge migrants and skilled HRs
Delay Tactic
Political Disability
THREATS
Thailand still lack of National Direction both at policy and implementation levels
No real integration in the services of Thai Government Agencies
M of Commerce – Export Promotion , Intellectual Property
M of Industry – OSMEP, BOI
M of Finance - Banks
M of Science – Innovation Office
Take over by strong companies from other ASEAN countries
Wrapping it all up!
Rich in resources
Education not a huge problem
Health not a huge problem
Gender inequality isn’t either
Major political instability
Is Thailand really an LDC?
What Can Be Done?
Greater political stability
Corruption
Foreign direct investment
Improve healthcare (rural areas)
Definition of Creative Economy
The thinking of Economic
moving that upon Knowledge
Base , Education , Creative
and Intellectual Property
which
linked to the base of Cultural
Wisdom , Technology and
Innovation.
Thailand and Creative Economy
Thailand government emphasized the important of CE
( Creative Economy) by restructuring the country’s
manufacturing related to service sector , Industrial and
Agriculture on the base of “ Thailand Culture and Wisdom”
Create Niche Qualification for Thai Product and Service
adding Value added and Economic value for Job employment
through Increasing income and Upgrade Citizen life quality.
Classification System for Thailand Creative Industry
Media
- Film
- Publishing
- Broadcasting
- Music
Functional Creation
- Design
- Fashion
- Architecture
- Advertising
- Software
Cultural Heritage
- Crafts
- Historical &Cultural Tourism
- Thai Food
- Thai Traditional
Arts
- Visual Arts
- Performing
The Important of CE in Thailand : GDP
2002 2003 2004 2005 2006 2007 2008
2002 2003 2004 2005 2006 2007 2008
Thailand CE Valuation approximate10-12 % of GDP . Function Creation , Cultural
Heritage and Media ’re the most highest . Triple create a value 9.5 % of total GDP
Economic evaluation of Non- cultural CE :
Software and Digital Content
Total Market Value 2009
20099
Bill
ion B
aht
Bill
ion B
aht
2006 2007 2008 2009
Total market Value of
E –Learning 2006 -2009
CE : Export Value
The Ability of Thailand Export Competition
in CE’s Product
Main Export of Thailand CE’s Product
THANK YOU
