Vietnam second for investors
Thailand will be an ideal place for investors in Asean next year, according to Board of Investment secretary-general Sathit Sirirangkamanont, but there is a critical competitor _ Vietnam.
Based on the inflow of foreign capital for investment in Asean in the first half of this year, Thailand was the most attractive destination compared with its Asean neighbours, according to the BoI.
Thailand has the edge in terms of political stability, attractive investment promotion policies, its geographical location, developed infrastructure network and its position as a goods distribution centre in Asean, Mr Sathit said.
However, Thailand must keep improving investment promotion policies.
Mr Sathit said foreign capital inflow in Vietnam was on an upward trend, and could prove a threat to Thailand due to cheaper labour costs, particularly in labour-intensive industries. As a result, Thailand should focus on value-added output or industries using skilled workers.
Dating back to 2000, foreign investment was valued at US$7.61 billion, which declined to $4.1 billion in 2001 and $2.41 billion in 2002, but recovered to $4.43 billion in 2003 and $5.31 billion baht in 2004.
In the first half of this year, foreign investment in Thailand was valued at $2.66 billion.
In Vietnam, foreign investment has risen continuously every year from $651 million in 2000, to $1.26 billion in 2001, $1.63 billion in 2002, $2.15 billion in 2003 and $2.74 billion in 2004.
Foreign investment in the first half of this year was recorded at $1.9 billion.
Key factors that wooed foreign investors were Vietnam's annual economic growth of 7%, its abundant natural resources, supply of raw materials, cheap labour costs and high purchasing power.
Suriya Jungrungreangkit, the industry minister, said that for Thailand to retain its lead, it should concentrate on producing quality personnel to match foreign need and make more effort to promote its mould and dye industry to reduce dependence on foreign technology and start substituting for imports.
By Yuthana Praiwan - The Bangkok Post - December 13, 2005.
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