Thailand
Japanese firms stay bullish on Thailand
Japanese companies remain upbeat about investment in Thailand, according to a survey by the Japan External Trade Organization (Jetro).
But concerns persist, particularly over a shortage of skilled labour and fuzzy details about investment policies in the Eastern Economic Corridor, leading Japanese businesses to take a wait-and-see stance before deciding whether to invest in the EEC.
Jetro president Hiroki Mitsumata said Japan has been the biggest investor in Thailand over the past three years. He said Thailand will remain the biggest investment hub in Asean for Japanese investors.
“Japan’s total investment value in Thailand is increasing every year, and it is a sustainable investment that continues to add value and growth to the Thai economy,” Mr Mitsumata said.
Factors that have made Japanese investors confident about Thailand are clear policies intended to facilitate foreign investment and strong Japanese supply chains, helping other firms set up shop in the country.
“The major factor is good infrastructure compared with other Asean countries, particularly for basic needs such as power and water supply,” Mr Mitsumata said.
He said the issue of skilled labour, particularly a shortage of engineers in Thailand, has been raised by Jetro in recent months.
“Japan still continues to lend support by setting up training courses to help develop human resources in Thailand,” he said. “But human resource development is a task that cannot be done in a couple of years.”
While the government has shown clear signs of promoting the EEC as a new engine of growth, with plenty of privileges and investment incentives, Japanese investors still want to see clearer regulations before making any decisions.
In a discussion with the Bangkok Post earlier this month, Jetro said appropriate public-private partnership regulations and initiating infrastructure projects to connect the EEC to Asean and the wider world were other key issues.
According to the survey, Japan is Thailand’s top investor, with 79.6 billion baht approved by the Board of Investment in 2016.
China ranked second with total investment of 53.7 billion baht, while the EU ranked third at 38.7 billion.
The survey, conducted from May to September, further showed that 5,444 Japanese companies were registered in Thailand this year, up from 4,567 in 2014 and 3,884 in 2008.
Mr Mitsumata said the trend of Japanese investment in Thailand has changed, as more small and medium-sized enterprises (SMEs) are investing in Thailand instead of big enterprises as in the past.
The survey showed that 53% of the 5,444 Japanese companies were SMEs.
“Japanese companies investing in Thailand are mostly non-manufacturing businesses or in the service sector,” Mr Mitsumata said.
Source: https://www.bangkokpost.com/business/news/1344994/japanese-firms-stay-bullish-on-thailand