For several years the Eastern Seaboard has been attractive to big business especially those connected with the automotive industry. However, some people have started to question if Thailand and indeed the Eastern Seaboard is still the exciting proposition that it was previously. Questions have been asked about the effect of the strong Thai on exports and if other countries such as Myanmar and Cambodia are now more attractive.
So, are these concerns warranted and is the Eastern Seaboard still attractive to big business?
Whilst some of the concerns maybe genuine, there is little doubt that Thailand’s economy and infrastructure are far better established and stable than many neighbouring countries in ASEAN. This, of course, puts Thailand on the front foot. Although the kingdom seems to be constantly evolving, the vast majority of these changes are for the better or at least have little impact on foreign businesses looking to invest in Thailand.
The country, although still having an unelected government, appears to be as politically stable as it has for a long time. Naturally, this stability is what these business look for and therefore they should have confidence. The currency is strong and the economy is continuing to grow on an annual basis. This can only be positive and for new companies looking to invest in Thailand a strong economy regardless of the exchange rate issues is a bonus.
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Although some people question how much the government actually wants to actively encourage foreign investment these claims would appear unfounded. Of course, Thailand would want to encourage foreign investment, this is the same if the country regardless of if it is a developed nation or a Third world country. It is probably cynicism and negativity that leads people to jump to these conclusions rather than anything based on fact.
In fact, most of the evidence points to the contrary. The government has put forward a number of schemes to actively encourage overseas investment. The Board of Investment (BOI) for instance offer some very attractive incentives to encourage big business to move some if not all of their operations to Thailand. This again destroys any argument that Thailand doesn’t want foreign companies to invest in Thailand.
Many large companies such as Ford, for example, are now well-established in Thailand. They have invested heavily and any decision to move operations elsewhere would cause major upheaval so, why wouldn’t the Eastern Seaboard remain attractive to them? As a result of these major players remaining or even moving to Thailand, this creates opportunities for other businesses to feed off their presence. This again proves that the Eastern Seaboard is a place to invest and remains attractive.
It addition, the Eastern Seaboard will also play an important role in the Eastern Economic Corridor, a 13,000 square kilometre area covering areas including Laem Chabang, Chachoengsao and Map Ta Phut. This is something that will be going ahead after the proposal was agreed by the Thai government back in 2016. This will see huge investment in the area that will encourage big business.
The EEC will drive Thailand’s economy into what is said to be a “value-based, innovative economy”, surely this is something that big business will want to buy into? Indeed, Thailand’s Office of National Economic Development Board refers to the region as “Thailand’s major industrial production base, especially for petrochemical, energy, and automotive industries.”
The impact of the Eastern Seaboard and EEC on Thailand’s GDP
The new EEC, in which the Eastern Seaboard plays a major role, is expected to contribute to around 20% of the country’s GDP by the start of the next decade. In order to achieve this, Thailand needs to make the area attractive to big business and the $43 billion investment certainly suggests that this is exactly what is being done. Again, to stress, this makes the area arguably more attractive than it has ever been.
What does the area bring to the table?
Much of the infrastructure that companies require is already in place. The road network in the region is excellent and constantly being improved. The airport at nearby U-Tapao has recently undergone major expansion which not only attracts more tourists but also makes business travel far easier. The new rail link will also reduce travelling times between the region and Bangkok and with further expansions planned connecting the country with China things are steadily coming together.
The major port at Laem Chabang again provides the perfect gateway for large business. It is fast becoming one of the main transportation hubs with ASEAN and has formed strong links with other major seaports such as the Dawei deep-sea port in Myanmar, Sihanoukville Port in Cambodia, and Vung Tau Port in Vietnam.
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Who does the Eastern Seaboard target?
The Eastern Seaboard is trying to attract all major businesses but there are, of course, some sectors that are favoured. As we discussed the Eastern Seaboard already attracts the automotive industry on a large scale. Electronics companies such as Samsung have been established in the area for many years and it is hoped that this will lead to those in the robotics business and aviation sector follow suit.
Medical tourism has played an increasingly prominent role in Thailand’s economy in recent years and indeed more pharmaceutical companies are being encouraged to move to the area to support this. Of course, if there is demand for their products and they can be easily shipped overseas then the Eastern Seaboard must be an attractive proposition. Almost every business is primarily interested in their bottom line and if the Eastern Seaboard facilitates this is it will always remain attractive.
How will this affect Pattaya?
Pattaya is the preferred base for many of those working on the Eastern Seaboard. It has plenty to offer in terms of housing, medical facilities, education and activities. It has fast become a family-orientated city and that is bound be increasingly appealing. Greater investment is proposed for Pattaya and the city along with the Eastern Seaboard are sure to remain attractive for years to come.