Doing business in Thailand

The greatest advantage are generally low wages. Salaries for workmen are 100 to 200 Baht daily. Unlike for example in the Philippines, labor unrest is not a major concern. Furthermore, the Thai work force has the reputation of being disciplined. While employers, especially foreign employers, should be aware of the fact that Thai people are very face-conscious and therefore easily feel hurt when being criticized, one can normally expect that they try their best to fulfill assignments given them.

Second, as a consequence of low wages, there is a wide range of products, both industrial and handicrafts, that are available at much lower prices than in most countries of the world.

Third, the bureaucracy concerned with business is much easier to handle than in most Asian countries, certainly much easier than in India or Pakistan but also easier than in the Philippines or Indonesia. For years, Thai governments have moved towards deregulation - a fact that has highly contributed to the double digit growth figures the Thai economy has enjoyed over the last few years.

Among the slight disadvantages are that the language barrier is higher than in most Asian countries as Thailand has never been a European colony and therefore, European languages have never been imposed upon the populace.

Another problem are infrastructure deficiencies, mainly in the fields of communication and transportation. Given the magnitude of the required investments in these areas, private sector participation has been encouraged. Several infrastructure projects are currently being carried out by the private sector, such as a huge telephone facilities extension program.

For basic statistical data on the Thai economy, please see the first chapter of this book.

Thailand has undergone a dramatical economical transformation over the past thirty years. From a primary commodity producer and exporter, the Thai economy has grown rapidly into a major regional manufacturing force.

Structural changes have been even more dramatic in the export sector. The share of manufactured exports has more than doubled from just over 30 percent in 1980 to almost 70 percent in 1989. Textiles have overtaken rice, and a number of manufactured products have entered Thailand’s top ten export items, including integrated circuits, canned fish and footwear.

The transformation of the Thai economy has been accelerated in recent years by the extremely rapid growth of the economy. 1990 marked the third consecutive year of double digit growth. Although a slow down was expected in 1991, economic growth that year was finally estimated to have reached a respectable 9 percent.

Thai policy makers have consistently recognized the importance of the private sector for economic growth, with the government playing a supporting role. This approach has been extended to foreign investors, which have contributed significantly to Thailand’s industrialization.

In the macro economic sphere, the management of the Thai economy has led to a monetary and fiscal stability that is the envy of most developing countries. Inflation has been contained well below 5 percent for most of the 1980’s and the balance of payments has been in the black for seven straight years.

The 7th National Economic and Social Development Plan (1992-1997) continues the private sector oriented policies of the past three decades. Specific attention is paid to developing the basic infrastructure, human resources, and the science and technology infrastructure.