THAILAND ‘Ranked 12th in the World for Ease of Doing Business’ Greg Watkins, Executive Director, British Chamber of Commerce Thailand

INTRODUCTIONS Greg Watkins: lived & worked in Thailand for 19 years; Permanent Resident; > Executive Director, BCCT; Marketing Director, Tara Siam, Bangkok; DTI UK; BCCT: oldest & biggest Britcham in Asia; 650+ members (2x since 1998); 110+ events (3x since 1998); Mission =>

BCCT MISSION STATEMENT "To serve the needs and promote the development of British business in Thailand and as 'Partners in Progress' contribute directly to Thailand's economic advancement"

THAILAND HAS BEEN AND REMAINS A VERY GOOD PLACE IN WHICH TO INVEST Business in Thailand succeeds despite political uncertainty

Asia: Ease of Doing Business Ranking Country Overall Rank Starting Business Construction Permits Employ Workers Register Property Get Credit Protect Investors Pay Tax Cross Border Trade Enforce Contracts Close Business Singapore United Kingdom Thailand Malaysia China Vietnam Brunei Indonesia India Cambodia Philippines Laos Myanmarn.a (ranking out of 183 countries) Source: World Bank: Doing Business Series 2010 (total 183 countries)

DOING BUSINESS “ commitment to a business/investor friendly environment, open access to Thai markets and the rule of law” (+): basic business laws are workable (Foreign Business Act/Board of Investment) – unchanged throughout political instability; good infrastructure; reliable utilities & communications; educated, hard-working & adaptable workforce; Commerce Ministry aim: 12 th to 9 th (-): slow liberalisation of protected industries in recent years; land/property ownership (leases only 30 years); unnecessary red-tape (eg work permits, VAT refund delays); consultation with foreign business community

ECONOMY –Positive trends in private consumption, commodity prices, unemployment (<1%), private investment, exports and business & consumer confidence –Growth in GDP (5.8% in Q409; ~2.8-5% in 2010) –Inflation up 3.7% in Feb YoY => recovery –Export diversity (70% of GDP): over 50% of exports to developed economies (US, EU, Japan), 30% to Asia in 2000; now over 50% to Asia –Fast growth in electronics, auto parts, food, tourism –Thai banks strong; not exposed to banking crisis & all have foreign expertise –20% increase in UK exports to Thailand in Two- way trade strong at nearly £3 billion

INVESTMENT (+): BOI – open environment, excellent package of incentives (& customer service), own land, majority or 100% ownership, duty/tax exemptions/reductions, targeting services & creative sectors; reduce red-tape; need to ease regulations to promote competitiveness; improving investment promotion & protection laws (-): not level playing field - FTA’s (& Treaty of Amity), minority ownership; more restrictive legislation (eg FBA) if not BOI-promoted; bureaucracy; slow resolution of ‘Map Ta Phut’ issues; more labour protests; dependence on oil – poor rail network; danger of losing competitive advantage in the region

Challenge 1: Competitiveness (ranking out of 133 countries) Source: World Economic Forum : The Global Competitiveness Report Country GCI GCI RankScoreRankScore Singapore United Kingdom Malaysia China Brunei Thailand India Indonesia Vietnam Philippines Cambodia Laosn.a Myanmarn.a

Challenge 2: Transparency Country RSRSRSRSRSRSRSRSRSRSRS Singapore United Kingdom Malaysia China India Thailand Indonesia Vietnam Philippines Laos____________ Cambodia____________ Myanmar________ Source: Transparency International: Corruption Perception Index R = Ranking out of 98 countries in 1999, rising to 180 countries in 2009 S = Score out of 10

CONCLUSIONS/CHALLENGES Economic recovery ongoing and accelerating but… competitive advantage in the region eroding as a result of lack of long term economic policies & legislative inertia political instability (since 2006), many Thais fed-up but… Thai politics has never delivered sustained stability Second stimulus package THB 1.43 tn (speed-up rollout) Income gap remains – Land Tax in 2010? bureaucratic reform essential – change regulations positive change at Customs - but stricter enforcement of IP laws needed – desire to address corruption still long-term approach – patience/common sense