1. COUNTRY BRIEFING Thailand Greg Wallis, Senior Trade Commissioner Australian Embassy Bangkok June 2013

2. Australia Unlimited Thailand at a glance ›66 million people ›GDP per capita US$5,848 ›30th largest economy ›2nd largest in ASEAN ›17th largest manufacturer ›10th largest motor vehicle producer ›Growth 2013 – 4.7% (average predicted) Sources: National Economic and Social Development Board www.nesdb.go.thwww.nesdb.go.th Bank of Thailand www.bot.or.thwww.bot.or.th Board of Investment www.boi.go.thwww.boi.go.th Department of Foreign Affairs and Trade www.dfat.gov.auwww.dfat.gov.au International Trade Centre www.trademap.orgwww.trademap.org Selected Thai exports Product World ranking - export s (2011) Share of world exports (2011) Rubber19.9% Rice129.3% Sugar27.4% Meat, fish, seafood216.2% Hard disk drives2N/A

3. Australia Unlimited Thailand and Australia – Commercial Ties ›Australia’s 9th biggest trading partner ›Bilateral trade (2011-2012) worth A$ 17.7 billion ›Bilateral trade (1989-2011) has grown 3.6 times faster than Australia’s global trade ›TAFTA in place since 2005 ›And…. an important education relationship ›20,000 student enrolments (6 th biggest globally) 3

4. Australia Unlimited Thailand: Common Views Poor and undeveloped Good place for a holiday Language barrier Natural disasters Corruption Political instability 4

5. Australia Unlimited Thai Economy: Sophisticated 10 th biggest car maker (>2m cars) Regional hub for auto, electronics, consumer goods, processed food. Middle class: 12 million - Malaysia (12m) - Indonesia (2.6m) - Vietnam (1.6m) Dynamic retail sector 5

6. Australia Unlimited Great Place for a Holiday 6

7. Australia Unlimited Great Place for a Holiday 7

8. Australia Unlimited But I don’t speak Thai …. You don’t have to Money and English are the languages of business English is more widely spoken than before –and its use will continue to spread Bilingual professional help easy to find 8

9. Australia Unlimited Natural Disasters 9

10. Australia Unlimited Floods Floods showed Thailand is critical to supply chains Forced Japan to reassess Thailand –Verdict: nowhere better –New Japanese investment boom 10

11. Australia Unlimited Corruption Corruption risk is mostly in government sector Massive private sector is largely corruption-free CountryRanking Singapore5 Brunei46 Malaysia54 China80 Thailand88 India94 Philippines105 Indonesia118 Vietnam123 Cambodia157 Laos160 Myanmar172 Source: Transparency International 11

12. Australia Unlimited Corporate Governance 200720102012 1. Hong Kong (67)1. Singapore (67)1. Singapore (69) 2. Singapore (65)2. Hong Kong (65)2. Hong Kong (66) 3. India (56)3. Japan (57)3. Thailand (58) 4. Taiwan (54)4. Thailand (55)4. Japan (55) 5. Japan (52)4. Taiwan (55)4. Malaysia (55) 6. Korea (49)6. Malaysia (52)6. Taiwan (53) 6. Malaysia (49)7. India (49)7. India (51) 8. Thailand (47)7. China (49)8. Korea (49) 9. China (45)9. Korea (45)9. China (45) 10. Philippines (41)10. Indonesia (40)10. Philippines (41) 11. Indonesia (37)11. Philippines (37)11. Indonesia (37) Source: Asian Corporate Governance Association, September 2012 12

13. Australia Unlimited Political Instability 2011 Tsunami and floods 2008 GFC 1997-98 Asian Financial Crisis Source: GDP Data from Thailand’s National Economic and Social Board 13

14. Australia Unlimited Meritocracy, Money and Virtue Uneven government, strong administration Workplaces are not politicised All politicians are pro-market, pro-business Virtue in Thailand to be rich or richer Thais are pragmatic 14

15. Australia Unlimited Ease of Doing Business 1. Singapore 12. Malaysia 18. Thailand 79. Brunei 91. China 99. Vietnam 128. Indonesia 132. India 133. Cambodia 138. Philippines 163. Lao PDR ASEAN + China/India Source: The World Bank’s Doing Business 2013 2. Hong Kong, China 3. New Zealand 4. United States 5. Denmark 6. Norway 7. United Kingdom 8. Korea, Rep 9. Georgia 10. Australia 11. Finland 12. Malaysia 13. Sweden 14. Iceland 15. Ireland 16. Taiwan, China 17. Canada 18. Thailand 19. Mauritius 20. Germany 15

16. Australia Unlimited 16

17. Australia Unlimited What are these 23 Australian Companies in Thailand Saying? ›“We are here because Australia isn’t big enough.” ›“It is a good business environment; much easier than China, Vietnam, India & Indonesia”. ›“think about your ROE” ›“ Business is good, with strong growth & profitability.” ›“Our engineering and R&D is still done in Australia.” 17

18. Australia Unlimited What are these 23 Australian Companies in Thailand Saying? ›“There is a shortage of skilled labour.” ›“Thailand is no longer a low cost labour market.” ›“Productivity needs to be improved.” 18

19. Australia Unlimited Thailand’s Strengths ›Favourable business environment ›Highly sophisticated manufacturing sector ›Low unemployment ›Relatively peaceful labour relations ›Large and growing middle class ›Centre of ASEAN ›Positioned to capitalise on growth of Myanmar

20. Australia Unlimited Thailand’s Weaknesses ›“Middle income trap” – decreasing relative productivity & middling competitiveness ›Perceived political instability ›Poor education standards – including English ›Populist schemes (e.g. rice-pledging) distort market and inflate prices ›Critical shortage of skills for industry (auto sector and others) ›Lack of transparency in government & legal processes

21. Australia Unlimited Thai pragmatism - What colour is this car? This car is red. This car is green. This car is black. This car is blue-red. 21

22. Questions?