US businesses' shrinking optimism towards Thailand

[webfact]

US businesses' shrinking optimism towards Thailand
The Nation

BANGKOK: -- US businesses' satisfaction with the business climate in Thailand has decreased across 14 out of the 16 indicators of the business environment, according to a survey.

In some indicators, the satisfaction has decreased by more than 20 per cent, according to the annual Asean Business Outlook Survey, released today by the US Chamber of Commerce and the American Chambers of Commerce in Asean member countries.

In comparison, investor confidence has been steadily increasing in some of Thailand's neighbouring countries, such as Malaysia, Vietnam and Cambodia. For example, investor satisfaction with new business incentives offered by the government has risen by 25 per cent over the past five years in Malaysia and decreased by 5 per cent in Thailand.

"These results indicate that competitiveness is not something you achieve once and enjoy forever; remaining competitive is a process that requires a firm commitment and continuous tweaking and adjusting of laws and regulations to build and support a favourable business environment.

In order to remain attractive to investors, Thailand will have to keep in step with neighboring countries as they open their economies and entice investors with attractive incentives," says Darren Buckley, president of the American Chamber of Commerce in Thailand.

Source: http://www.nationmultimedia.com/breakingnews/US-businesses-shrinking-optimism-towards-Thailand-30267488.html

-- The Nation 2015-08-26

[chainarong]

Not surprising, optimism is shrinking everywhere for those who deal with China , you just cannot believe their figures , Thailand is like a lot of other countries and maybe dropping a few extra points on the reliable scale for getting more friendlier with China, that on it's own certainly wouldn't do you much good.

[zaphod reborn]

I can't blame them. It's becoming increasingly difficult for them to comply with the FCPA (Bribery Act of 2010 for the Brits) in their Thailand operations. If you have to disclose that your Thailand operations are doing business and it involves any Thai shareholder with more than a 5% ownership in your company, your disclosure statement looks like a battlefield. While Thailand has good tax incentives, the corruption, higher labor costs and difficulty of complying with government regulations has made Thailand a less desirable country in which to invest.

[noitom]

It's just unimaginable to strike a deal with Thais and be able to rely on the content of that contract for its duration.

[englishoak]

Its also a trust issue as much as anything.... Business isnt as gullible as people and far more pragmatic.

[phoenixdoglover]

I can't blame them. It's becoming increasingly difficult for them to comply with the FCPA (Bribery Act of 2010 for the Brits) in their Thailand operations. If you have to disclose that your Thailand operations are doing business and it involves any Thai shareholder with more than a 5% ownership in your company, your disclosure statement looks like a battlefield. While Thailand has good tax incentives, the corruption, higher labor costs and difficulty of complying with government regulations has made Thailand a less desirable country in which to invest.

Exactly. A lot of companies will avoid the risk and the hassle.

[DLock]

Full report can be read here. Interesting, but I don't think Thailand comes out as negative the press release makes out.

Certainly some issues, and other countries have their act together with regards to business incentives, but Thailand still scores reasonably well.

http://www.amchamthailand.com/ACCT/asp/reports.asp?SponsorID=1284&DocCatID=29&OrderBy=DocDt&Available=All

[useronthenet]

As an investor, I would have to weigh up the risks, and unfortunately they seem to outweigh the benefits. Thailand's draconian laws are just too alien when it comes to reaching 'real' business objectives. There is so much competition out that, that unless the government starts revising the rules in favour of foreigner's and their rights, it seems most will veer away from the land of smiles.

[webfact]

US investors now less satisfied with Thailand
THE NATION

BANGKOK: -- US investor satisfaction with the business climate in Thailand has decreased across 14 of the 16 indicators, sometimes by more than 20 per cent, according to the annual Asean Business Outlook Survey, released yesterday by the US Chamber of Commerce and that country's chambers in Asean countries.

THE The survey has been tracking US investor satisfaction with 16 aspects of the business environment from 2006 to 2015 and in the past five years.

While satisfaction with Thailand has declined, investor confidence has been steadily increasing in some neighbouring countries, such as Malaysia, Vietnam and Cambodia. For example, investor satisfaction with new business incentives offered by the government has risen by 25 per cent over the past five years in Malaysia and decreased by 5 per cent in Thailand.

US companies identified a variety of concerns and impediments to their growth in the region.

As in previous years' surveys, corruption was the top issue across Asean, cited by the majority of respondents in all countries except Brunei and Singapore.

In Thailand, respondents identified the Customs Department as the government agency that most impedes growth, in line with findings from previous years. Moreover, 63 per cent of polled executives in Thailand said the government rarely or never considered input from the private sector on new laws and regulations (up from 45 per cent in last year's survey).

Meanwhile, US companies remain generally optimistic about business prospects in Asean. In a poll of 471 senior executives representing US companies in all 10 Asean countries, 72 per cent reported that their company's level of trade and investment in Asean had increased over the past two years, and an overwhelming 86 per cent expected it to increase over the next five years.

Despite the high degree of investor confidence, there has been a downturn in the level of optimism over the past few years. More than half (53 per cent) of respondents said Asean markets had become more important in terms of their companies' worldwide revenues over the past two years, but this is 10 percentage points lower than reported two years earlier.

In addition, two-thirds (66 per cent) of respondents this year expect Asean to become more important in terms of worldwide revenues over the next two years; while still high, this is 7 percentage points lower than two years earlier. In Thailand, 44 per cent of respondents said Asean markets had increased in importance in the past two years and 61 per cent expect this importance to increase in the next two years. In terms of business expansion, 57 per cent of the polled executives in Thailand reported that their companies planned to expand in the country, while half expected their workforce to increase in 2016.

"These results indicate that competitiveness is not something you achieve once and enjoy forever; remaining competitive is a process that requires a firm commitment and continuous tweaking and adjusting of laws and regulations to build and support a favourable business environment," said Darren Buckley, president of the American Chamber of Commerce in Thailand.

"In order to remain attractive to investors, Thailand will have to keep in step with neighbouring countries as they open their economies and entice investors with attractive incentives," he said.

US companies also highlighted burdensome laws and regulations, lack of transparency, poor quality of infrastructure, and the difficulty in moving products through customs in some countries as obstacles to greater investment.

More than 77 per cent of respondents to this year's survey reported that exchange-rate volatility had a "significant" or "somewhat significant" impact on their business operations in the region.

Source: http://www.nationmultimedia.com/business/US-investors-THE-NATIONnow-less-satisfied-with-Tha-30267520.html


-- The Nation 2015-08-27

[oneday]

To Mr. P and his loyal junta,

You reap what you sow.

[DLock]

To Mr. P and his loyal junta,

You reap what you sow.

Whilst I am not a supporter of the Junta, these issues supersede the Junta.

The antiquated laws stretch back several administrations when Thailand thought their shat don't stink and foreigners would sell their soul to set up a business and live here.

Unfortunately for them, other countries, particularly Vietnam, Cambodia and Malaysia (and Singapore long before them) realized the benefit foreign skills, training and $$$ bring to the country, and they though about how best to attract it...and they are doing a reasonable job, and will improve further over time.

Thailand, on the other hand, clings to the past ridiculous laws on foreign investment...especially at the lower end.

Fast forward 10 years and the investment landscape is going to very different in Asean.

[kerrysum]

It's just unimaginable to strike a deal with Thais and be able to rely on the content of that contract for its duration.

I agree, everything is subject to change in Thainess.....

[yellowboat]

We have found Cambodia a better base of operation. You can service Thailand without the visa headaches and there is easy access to south Vietnam. Cheap flights to Singapore and KL are available also. Only getting to Hong Kong is not as easy without having pass through Bangkok. That may be changing with greater Chinese investment.

[sungod]

A couple of days ago in another newspaper they were cautiously optomistic

[Cake Monster]

It is not only the US that has shrinking business optimism toward Thailand.

With a falling export market MOM, and falling FDI, there must be many other countries with the same sentiments toward Thailand.

[yellowboat]

It is not only the US that has shrinking business optimism toward Thailand.

With a falling export market MOM, and falling FDI, there must be many other countries with the same sentiments toward Thailand.

Most informed people know the Thai elites want to remain in charge, so they really do not care what happens to the economy, sadly. The shiny veneer of Thailand is wearing off and the cracks are showing. Was looking at setting up in Thailand, but China and Cambodia are far far easier to deal with. Still am lucky enough to sell to and buy from Thailand. Just will not set up there and will tell others to stay away as well.