Macro Economic

Report: Chatrudee Theparat

Government should play more active role in drawing foreign investors amid plant relocation trend

Thai government should play more active role to draw foreign investors amid manufacturing facility relocation trend, especially Chinese investors, to other countries in Southeast Asia.

The investors put the blame for the conflict over China and the US, Covid-19 impact, the prolonged war between Russia and Ukraine on their manufacturing facility relocation to Southeast Asia nations.

Jareeporn Jarukornsakul, chairman and group chief executive officer of WHA Group, the parent firm of WHA Industrial Development Plc, which operates industrial estate development business, said Thailand should work together as a team to draw foreign investors and should have more active role to tap foreign investors.

“Related state agencies should change their mindset by working together as one team to approach the companies that the government wants them to relocate to establish in Thailand,” she said.

Jareeporn Jarukornsakul Chairman and Group CEO WHA Corporation.

She said in an annual meeting to drive the 13th National Economic and Social Development Plan, which spans from 2023 to 2027, aims to transform Thailand’s key five areas. The meeting was held by the National Economic and Social Development Council (NESDC) on September 23.

In addition, she said Thai government should negotiate with investors case by case in order to know increasingly over what the government should support them if they want to relocate as the industrial cluster. State agencies should play a supporting role in building the production supply chain to benefit Thai small and medium enterprises.

The government should do something more than investment promotion as well. For example, it should provide international education facilities with high standard to investors’ children and also should deregulate systems to be in line with investment scenario.

“Investors eye on relocation their plants to Indonesia, Vietnam and Thailand as new production bases in order to avoid any problems which may incur in the future,” she said.

Indonesia and Vietnam has gained an advantage of high population and quick restructuring response, while Thailand is shining out because of implementing the flagship Eastern Economic Corridor (EEC) and the Board of Investment’s incentives, which support for human resource development.

EEC comprised of Rayong, Chon Buri and Chachoengsao, the country's high-tech industrial hub hosting 12 targeted S-curve industries, including smart cars, smart electronics, medical and wellness tourism, agriculture and biotechnology, food, robotics for industry, logistics and aviation, biofuels and bio-chemicals, digital, medical services, defense and education development.

She said the infrastructure development including mass transit, high speed rails, and dual track rails is expected to reduce a proportion of logistics cost to GDP to meet 11% within 2-3 years from the previous 13.4%. However, Thailand should promote further infrastructure development to cut logistics cost to GDP to 9%, the figure which could attract more foreign investment.