The first 11 months of 2015 saw foreign investment into Thailand drop by 78 percent year-on-year.
While the local, regional and global economy saw a difficult 2015, these figures are the latest in a long line of blows to Thailand’s spluttering economy.
Perhaps the most worrisome statistic is that concerning Japan – while the Japanese still lead the charge on Thailand’s capital inflows, the amount they invested in 2015 dropped by 81 percent to ฿28.3 billion (US$780 million), reports Nikkei Asian Review.
Chinese investment took a similar path, declining 21 percent to ฿13.3 billion (US$370 million).
These results come in the wake of the reforms to foreign investment incentives at the start of last year where the government took steps to focus on value-added industries like technology and petrochemicals, rather than on businesses that rely on labour. Rising labour costs and a general worker shortage were cited as the reasons behind the reforms.
The number of industries that thus qualified for the investment incentives dropped from 243 in 2014 to just 190, and saw businesses in the metal working and garment industries, for instance, now out of the running.
Consequently, the number of applications for investment projects from abroad declined by over 50 percent to just 1,038 last year, from 3,469 in 2014, according to Reuters.
The target total set by the Board of Investment for approved applications was set at ฿1.4 trillion (US$39 billion) but reached just ฿800 billion (US$22 billion) for the year.
“We did not meet the target because sometimes these are large projects and require approval from committees,” explained Hirunya Suchinai, secretary general of the BOI.
The BOI are hoping to clear the backlog of applications currently sat with committees during 2016.
Pichai Naripthapan, former energy minister for the Pheu Thai Party, has expressed concerns that 2016 may continue to be hard on the Thai economy, reports The Nation.
Reasons for this include the recent international attention given to allegations of slave labour in Thailand’s ubiquitous seafood industry. As a consequence of the allegations, the US and the EU have apparently removed Thailand from their Generalised System of Preferences and will be encouraging citizens to avoid buying seafood from Thailand.
Featured image is by DeeMakMak and used under a Creative Commons licence
