Over the past 15 years, successive governments have sought to make Thailand’s business climate more agreeable to foreign investors.
Although reforms have not fully overhauled Thailand’s protectionist approach to domestic industry, it is still easier to conduct business in Thailand than most of south-east Asia. The country once known as Siam is structurally, technologically and administratively ahead of many of its neighbours.
One of the most popular destinations in the region, Thailand attracts not just backpackers, but increasingly package-holiday tourists as well
Thailand, which has a population of 64.1 million, has recovered well since its nadir – the south-east Asian financial crisis of 1997. Growth is averaging around 6% at present, a healthy growth rate aided by the dramatic economic growth of its neighbour China.
High technology
Once an agricultural economy, Thailand industrialised rapidly during the 1980s, during which time the emphasis was placed on labour-intensive industries such as textiles. Since the 1990s, however, growth has centred on high technology areas like computer equipment and automotive components. Other major industries include hospitality, food and beverages, jewellery and furniture.
Tourism is a significant component of GDP – about 5%. One of the most popular destinations in the region, Thailand attracts not just backpackers, but increasingly package-holiday tourists as well.
Agriculture, though diminished as a proportion of economic output, is still central to the economy.
Winning favour, recognition or contracts in Thailand is often contingent on the payment of bribes. And despite a high-profile campaign by former Prime Minister Thaksin Shinawatra to rid the country of corruption, government officials seem to be among the worst offenders – companies with links to government officials tend to have an edge in winning public works contracts, for instance.
Historically, Thailand has been politically unstable. Between 1947 and 1992 the military intermittently ran the country, a time punctuated by coups and periods of martial law.
After an uncharacteristically lengthy period of stability the military mounted a bloodless coup in 2006. After fresh elections the following year a new party with links to Shinawatra was voted into office.
Separatist Islamic violence flares up in the south of the country periodically, and fundamentalist factions have even scared retailers into closing on Fridays, the Muslim holy day. Aside from this stark exception, however, Thailand is a relatively safe place to do business.
The country’s economic hub, Bangkok, is blighted by more prosaic problems: congestion and poor air quality. The addition of overhead and underground rail systems has eased the problem slightly, but Bangkok remains a difficult place to drive around.
