THE swearing-in of a new government in Thailand on Sep 5 marked a positive step for the country’s economy – it ensures that the nation will move forward in a good direction and is set to help enhance investor confidence and boost foreign direct investment (FDI).

However, succeeding in the current regional and global macro-economic environment comes with challenges. Geopolitical tensions, slowing growth in China, and the end of ultra-low interest rates in some of the world’s largest economies are just some of the factors that will weigh on Thailand’s prospects.

It is therefore heartening that Thailand’s new government has a multi-pronged strategy for overcoming these challenges and achieving sustainable growth, bolstered by the country’s already-strong position economically.

First, with a GDP of US$535 billion in 2022, Thailand is one of the leading players in the 10-member Association of Southeast Asian Nations (Asean) bloc.

The country is strategically located in a fast-growing region with excellent infrastructure, strong logistics (Thailand is currently ranked second in the Asean Logistics Performance Index) and widespread digital connectivity.

To effectively leverage Thailand’s numerous advantages and enable businesses to unlock greater opportunities in Asean, collaborating with partners that have a wide network and understand the region well is critical.

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For that, Standard Chartered is the go-to bank. As the only international bank with a presence in all 10 Asean markets with a keen focus on cross-border trade, Standard Chartered is also betting big on the bloc.

All-round promising prospects

Asean is set to outperform when it comes to export growth, thereby bringing tremendous opportunities. By 2030, we foresee that the intra-Asean export corridor will see annual export growth of 8.7 per cent, far above the 5 per cent global average.

That brings the value of this corridor alone to US$800 billion, while the Asean-South Asia corridor will record 8.6 per cent average annual growth (totalling US$300 billion), and the Asean-East Asia corridor at 6.3 per cent growth (worth US$2.1 trillion).

Second, Thailand’s healthy financial status and sound fiscal and monetary policies provide a conducive environment for firms to thrive. The country has US$220 billion in gross international reserves, a low policy interest rate of 2.25 per cent, a robust financial system and a well-developed stock market.

Third, its business environment is highly accommodative towards FDI, with policy measures promoting investment that cover tax incentives, property ownership and long-stay visas for foreign nationals. This, combined with the country’s strong fundamentals, increasingly attract foreign firms to set up operations and offices in Thailand.

Big plans for the future

As South-east Asia’s second-largest economy and a key export manufacturing market, Thailand has big plans.

From supporting investments in innovative, high-tech and green industries to being a mega-connector in linking industries to growth opportunities, the nation offers favourable prospects for organisations with a forward-thinking approach, regional mindset and entrepreneurial spirit.

Core to this is the Eastern Economic Corridor (EEC), Thailand’s flagship development programme in the three eastern seaboard provinces of Rayong, Chonburi and Chachoengsao. The EEC aims to boost Thailand’s competitiveness and drive exports, boosted by several large infrastructure projects including a high-speed rail link, an airport, a revamped seaport and an industrial port.

To that end, the EEC focuses on driving investments in a dozen sectors with significant growth potential.

This comprises the “5 First S-Curve” industries (electric vehicles, intelligent electronics, high-value and medical tourism, food for the future, and advanced agriculture and biotechnology); and the “7 New S-Curve” sectors (biofuel and biochemical, medical and comprehensive healthcare, education and human resources development, automation and robotics, digital, aviation and logistics, and defence).

Thailand’s approach has already begun to pay off. Investments in the EEC from 2018-2022 totaled 2.2 trillion baht (S$83.1 billion), with a further 10.7 billion baht in additional investments from 61 firms in the first six months of 2023.

By incentivising foreign investment and business partners to set up in the EEC, Thailand aims to strengthen its production base for value-added industry and, in a virtuous circle, further boost exports and inward investment.

All these serve to help the country in its goal of reaching 5 per cent annual GDP growth . Should Thailand succeed – and there is every reason to believe it will – the EEC will mark a step change for decades to come.

Sustainable development

At the heart of the EEC, and of Thailand’s overall economic development plan, known as Thailand 4.0, is sustainability. Thailand’s proactivity is evident.

In late 2022, Thailand announced it had brought forward its plans to become carbon neutral by 2050 and achieve net zero emissions by 2065 ; the previous goals had been 2065 and 2090 respectively. And by 2035, Thailand will allow the sale of zero-emission vehicles only.

Last year, Standard Chartered, acting as joint lead manager and joint bookrunner, successfully assisted Thailand in pricing the sovereign government sustainability bonds with a 35 billion baht, 14.75-year issuance.

Thailand’s sustainable approach to development resonates strongly with Standard Chartered. Our approach to net zero is underpinned by our Group’s US$300 billion commitment in green and transition financing by 2030 – to help accelerate the carbon emissions reduction through innovative financing solutions, and ensure projects are sustainable and have a positive impact on communities and environments.

As a market leader in climate financing, Standard Chartered is well positioned – having operated for nearly 130 years in Thailand – and across Asean where we are present in all 10 markets.

Our market knowledge helps clients achieve what is crucial when succeeding abroad: blending the culture of a company with its teams in other countries. Having a partner that can offer local insights makes it easier for firms to expand beyond their domestic borders – whether they are Thai companies looking abroad or global firms seeking opportunities in Thailand.

While Thailand’s focus on sustainability, inward investment and higher-tech industries is no fool-proof guarantee of success (it must address challenges like an aging population, labour costs and a need for more skills), it does put the nation at the forefront in Asean, the world’s most dynamic economic engine.

For the new government, then, the approach to boosting Thailand’s economy augurs well. Standard Chartered is ready and committed to play a positive role in supporting the country’s ambitions in Asean and beyond.

The author is CEO of Standard Chartered Thailand & Representative Offices