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Years of political conflict and recent floods may be cause of reduced foreign investment in Thai economy. Electronics at 25% is important sector to watch.
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ECONOMY: Thailand lags in Asean investment, Electronics firms could move overseas by Chatrudee Theparat
Thailand urgently needs to upgrade its investment attractiveness, as the decline in foreign direct investment here contrasts sharply with a rise in neighbouring countries.
According to a study by the Economist Intelligence Unit, Thailand’s share of FDI in the region fell to 6% during the 2010-11 period, compared with 17% during 2004-09 (see chart).
Prasert Bunsumpun, a member of the Strategic Committee for Reconstruction and Future Development (SCRF), said the statistics underscore the problem for Thailand as FDI shifts to Indonesia, Malaysia and Vietnam.
Speaking at the “GDP Decoding” seminar, the former PTT president said the downward trend in FDI may be rooted in years of political conflict and the impact of the recent floods.
“The survey also showed that some electronics industries are likely to move to other countries and that we need to implement measures to retain existing investment,” said Mr Prasert.
Electronics investment accounted for 25% of FDI in Thailand over the past four years; but Samsung and Toshiba established their new research centres in Vietnam and India respectively.
Mr Prasert warned that Thailand must upgrade now or fall behind in the next 15 to 20 years
“We need serious talks about what sector we should develop and pursue,” he said
The ability of the government to manage water will be a key factor in determining whether foreign investor confidence returns, he added
He also urged the government to stand firm on its commitment to allow energy prices to reflect market prices because intervention would damage the economy in the long term.
“If the government continues to subsidise energy prices, it should prepare a budget of 800 billion baht for five years,” he said
At the same event, Prime Minister Yingluck Shinawatra said the three risks threatening the Thai economy were the EU and US economies, baht fluctuation and natural disasters.
Thailand is focusing more exports toward the Asian market and hoping domestic consumption will grow as corporate tax cuts and infrastructure upgrades help the economy.
Ms Yingluck also promised swift negotiations of free-trade agreements with India, Switzerland, Iceland and Norway
She assured investors that economic growth this year would reach 5% based on government measures to prevent floods and boost consumption.
Phayungsak Chartsuthipol, chairman of the Federation of Thai Industries, shared his view that 5% was attainable, pending completion of infrastructure to prevent flooding.
(Source: Bangkok Post, ECONOMY, Thailand lags in Asean investment, Electronics firms could move overseas, 2/02/2012, Chatrudee Theparat, link)
Foreign Direct Investment Vocabulary
Foreign Direct Investment (FDI) – money that people or companies of one country invest in another by buying property, building factories, buying businesses, etc (See Wikipedia)
lags – is behind others, is slow ล้าหลัง (moves or advances so slowly that you are behind other people or things)
investment – taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
Thailand lags in Asean investment: Electronics firms could move overseas
urgently – needing to be dealt with immediately อย่างเร่งด่วน
upgrade – improve a system; make new, modern, and up-to-date; raised to a higher and better status or level
attractiveness - make something look good (so people will want to do it)
upgrade investment attractiveness – make investments more attractive to investors
X contrasts sharply with Y - there is a big difference between X and Y
Thailand urgently needs to upgrade its investment attractiveness, as the decline in foreign direct investment here contrasts sharply with a rise in neighbouring countries
Economist Intelligence Unit (EIU) - part of the same company that owns The Economist magazine, “offers forecasting and advisory services to its clients. It provides country, industry and management analysis worldwide” (See Wikipedia)
share - the small part of some larger whole that you have
Thailand’s share of FDI in the region - the percentage of total FDI in Southeast Asia (ASEAN) that Thailand has
chart - the display of data in a way that can be seen and understood quickly with the eyes (See Wikipedia) แผนภูมิ
According to a study by the Economist Intelligence Unit, Thailand’s share of FDI in the region fell to 6% during the 2010-11 period, compared with 17% during 2004-09 (see chart).
statistics – facts about something, described by counting them สถิติ
underscore – to emphasise something or to show that it is important เน้นย้ำ
statistics underscore the problem – statistics show how bad the problem is, make the problem easier to see
Prasert Bunsumpun, a member of the Strategic Committee for Reconstruction and Future Development (SCRF), said the statistics underscore the problem for Thailand as FDI shifts to Indonesia, Malaysia and Vietnam.
GDP – Gross Domestic Product, the total value of all the goods and services produced by a country in one year (See Wikipedia)
decode - change or translate something complicated (a code) into ordinary language
GDP Decoding – explaining GDP in ordinary language (so ordinary non-economists can understand what is happening)
trend – a gradual change or development over time that produces a particular result ทิศทาง แนวโน้ม
downward trend in FDI
conflict – an angry disagreement between people or groups ความขัดแย้ง ความไม่ลงรอยกัน
political conflict
rooted in – caused by
rooted in years of political conflict - caused by years of political conflict
impact – an effect or influence ผลกระทบ
impact of the recent floods
Speaking at the “GDP Decoding” seminar, the former PTT president said the downward trend in FDI may be rooted in years of political conflict and the impact of the recent floods.
survey – gathering information about what people think about different subjects (public opionion) by asking large numbers of people questions and counting their answers, and then using statistics, graphs, and tables to present results (See Wikipedia) การสำรวจ
implement – put a plan into action, make a plan work นำมาใช้ นำ แผนหรือนโยบายมาปฏิบัติ
measures – actions taken to deal with a problem มาตราการ
implement measures - put a plan to solve a problem into action
retain – to keep รักษา
retain existing investment - keep existing investment
The survey also showed that some electronics industries are likely to move to other countries and that we need to implement measures to retain existing investment.
established – create something new
Electronics investment accounted for 25% of FDI in Thailand over the past four years; but Samsung and Toshiba established their new research centres in Vietnam and India respectively. Mr Prasert warned that Thailand must upgrade now or fall behind in the next 15 to 20 years
talks – negotiations, formal discussions of problems between different sides in a conflict in order to solve the problem
sector – a part of the economy ภาคเศรษฐกิจของประเทศ (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,…) (See Wikipedia)
pursue – to work at something or carry it out ทำให้ลุล่วง to try to achieve something ดำเนินตาม, พยายามเพื่อให้ได้มาซึ่ง
We need serious talks about what sector we should develop and pursue.
key – important คนสำคัญ
factor – a fact or situation which influences the result of something ปัจจัย
key factor
investor – a person or organisation that puts money into a company in exchange for a future profit นักลงทุน
foreign investor
confidence – feel sure about something; trusting and believing in something ความเชื่อมั่น ความมั่นใจ
foreign investor confidence
foreign investor confidence returns
The ability of the government to manage water will be a key factor in determining whether foreign investor confidence returns.
urged – advised someone very strongly about what action should be taken วิงวอน (requested them to do, begged them to do, encouraged people to do, tried to get them to do)
commitment – a promise to continue doing something การใ้ห้คำมั่น
stand firm - not change
stand firm on its commitment - not change its promise, not break its promise
reflect – to show สะท้อน แสดงถึง
allow energy prices to reflect market prices
intervention – a situation in which someone becomes involved in a particular issue, problem, etc., in order to influence what happens การแทรกแซง
intervention in energy markets
He also urged the government to stand firm on its commitment to allow energy prices to reflect market prices because intervention would damage the economy in the long term.
subsidise – when the government pays part of the costs of an activity เงินช่วยเหลือจากรัฐ ชดเชย ให้ความช่วยเหลือด้านการเงิน
subsidise energy prices
budget – the amounts of money that an organisation has available to spend on different things during a period งบประมาณ (See Wikipedia)
If the government continues to subsidise energy prices, it should prepare a budget of 800 billion baht for five years.
fluctuation – moving up and down over time
baht fluctuation – when the baht moves up and down over time, making business difficult for Thai exporters and importers
natural – found in nature (not made in a factory by humans) ตามธรรมชาติ
natural disasters – events like storms, earthquakes, tsunamis,
At the same event, Prime Minister Yingluck Shinawatra said the three risks threatening the Thai economy were the EU and US economies, baht fluctuation and natural disasters.
consumption – 1. money spent by households and families on goods and services (See Wikipedia) การบริโภค; 2. using, eating or drinking something
boost – to increase; to strengthen เพิ่ม; ทำให้มีกำลังมากขึ้น
boost consumption – increase consumption
domestic – inside the country ภายในประเทศ
domestic consumption – consumption inside the country
infrastructure – the high-cost facilities that everyone in the economy shares (water, roads, electricity, trains) สาธารณูปโภค
infrastructure upgrades - improving infrastructure
Thailand is focusing more exports toward the Asian market and hoping domestic consumption will grow as corporate tax cuts and infrastructure upgrades help the economy.
She assured investors that economic growth this year would reach 5% based on government measures to prevent floods and boost consumption.
swift – happening quickly อย่างรวดเร็ว โดยด่วน
negotiations – formal discussion in which people or groups try to reach an agreement การเจรจาต่อรอง (See Wikipedia)
swift negotiations
trade – the buying and selling of goods การค้าขาย
free trade – a system of international trade in which there are no restrictions or taxes on imports and exports (See Wikipedia)
Free-Trade Agreement (FTA) - an agreement between a group of countries to lower or end taxes (tariffs), quotas and other barriers on goods traded between the countries (See Wikipedia and list)
Ms Yingluck also promised swift negotiations of free-trade agreements with India, Switzerland, Iceland and Norway
attainable – can reach, can attain or achieve goal
pending – waiting to be dealt with, settled or completed ยังค้างอยู่, ซึ่งยังไม่จบสิ้น, อยู่ในระหว่าง
Phayungsak Chartsuthipol, chairman of the Federation of Thai Industries, shared his view that 5% was attainable, pending completion of infrastructure to prevent flooding.
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About the author
Writer: Jon Fernquest
Position: Assistent Manager Educational services
