oping to build on strong and growing foreign direct investment applications in 2007 (US$20 billion worth, up 33 percent over 2006), Thailand's Board of Investment (BOI) is intensifying efforts to lure capital investment to the Kingdom in 2008 and beyond. Political stability is once again the norm – democratic elections were held in December 2007 – following a September 2006 coup that replaced the government of Prime Minister Thaksin Shinawatra.
      To underscore its commitment to welcoming new investors and making existing industrial players more competitive, the BOI, an agency of the Ministry of Industry, initiated this past spring "Thailand Investment Year 2008-2009," an eight-point plan (see box) to hone Thailand's competitive edge as a destination for direct investment. BOI's goal is to concentrate on attracting not just investment, but smart investment – projects from knowledge-based industry sectors, life science and value creation industries, as well as renewable energy investments. The point is to foster sustainable development so that Thailand and its investors will both benefit.
      "Thailand has consistently maintained its position as a desirable location, if not the most desirable, and has a well-deserved reputation as being much more investor-friendly and a very easy place to do business – much more so than either China, Vietnam or India for that matter," says consultant Dennis J. Meseroll, director of Tractus Asia Ltd., Bangkok, who specializes in foreign direct investment into Southeast Asia. "Also, despite its small domestic market compared to China and India, we have seen that investors are attracted by its location at the center of the ASEAN Free Trade Area as well as numerous FTAs that have been signed with major regional trading partners such as Australia, China, India and New Zealand. We have seen growing interest in companies who had targeted China as their first market to invest in now looking at Thailand as a way to leverage access to the broader ASEAN market."
      Political change is part and parcel of global investment, Deputy Prime Minister & Minster of Industry Suwit Khunkitti reminded attendees at the Euromoney Thailand Investment Forum in May. But the government's Investment Year Plan is designed to be a constant, he says. "Investors can be sure to enjoy extensive benefits despite political alteration," he said, according to a report in the Bangkok Post.
      Even in the weeks following the political upheaval in Thailand in fall 2006, Dow Chemical forged ahead with plans to establish a joint venture with Siam Cement to build an ethylene cracker facility.
      "This investment, which will make Thailand Dow's largest manufacturing site in Asia, reaffirmed the company's commitment to begin in Thailand for the long haul," said Andrew Liveris, Dow Chemical Co.'s president and CEO. "I remain extremely confident in the investment atmosphere and economy in Thailand and still see the country as the most attractive investment destination in Southeast Asia."
      In the automotive sector, Honda Motors has been investing in Thailand since 1980. Honda and many others have production and export operations there, but higher-end automotive functions, such as R&D in Honda's case, can be found.
      "We already have transferred technology from Japan to Thailand," which has served as regional headquarters since 2004, says Adisak Rohitasune, senior vice president, Asian Honda Motors Co., Ltd. "From Thailand, we will both produce [vehicles] and support our subsidiaries in Asia and Oceania."
      Other global companies may soon follow suit as Thailand closes the competitiveness gap with other regional players. The World Bank ranks Thailand 15th in the world in ease of doing business, according to its "Doing Business in 2008" study – well ahead of Malaysia, Korea, the Philippines, China and other Southeast Asia markets.
      "Investors drawn to Thailand's investment promotion incentives say they remain the benchmark by which most other countries judge their own," says Meseroll. "The country is consistently on the short-list of destinations that we see manufacturing and service companies evaluate. The best testimony to investor confidence is that a majority of newly announced investments are being made by companies that have already invested in the country and are committing to further expansion. Western Digital, for example, announced a $1-billion expansion of its hard-disk-drive manufacturing capacity, Honda committed to a second vehicle assembly facility in 2007, doubling its production capacity, while Ford and Mazda have announced plans for an additional $500-million investment in expanding their small-car manufacturing capacity. Foster Wheeler and several other heavy engineering companies have greatly expanded their fabrication capabilities in Thailand to supply offshore rigs and platforms to Australian oil and gas development projects."

      This investment profile was produced under the auspices of Thailand's Board of Investment, Ministry of Industry. For more information on investment opportunities in Thailand, please contact the Marketing Division, 66 2537-8111-55; www.boi.go.th.