The past decade has been turbulent for the Thai economy, after which Thailand has always impressively bounced back economically time and time again. Thailand has recovered from the 1997 economic collapse global financial crises, devastating floods and raging domestic political conflicts and has been markedly resilient to both external and domestic shocks, thanks to strong growth in exports and domestic consumption.
Thailand has also seen its fair share of political transitions. Since 2006, Thailand has had six prime ministers, a coup, seizures by protesters of international airports and the torching of one of Bangkok’s biggest shopping centers, in spite of this, its economic climate remains relatively stable. Each time, Thailand's financial markets typically swoon and rebound. Thai governments tend to be pro-business regardless of political affiliation, and political changes have limited impact on trade or FDI.
Despite the coup in 2006, Thailand managed a growth rate of 5% in 2007. Days of violent unrest in Bangkok in 2009-2010 did not stop the economy from a 7.8% expansion in 2010. The foreign inflows nearly doubled that year and stocks rocketed 40.6 percent. Following the disastrous floods of 2011, the economy surged back to an impressive 6.5% growth rate in 2012.
Such resilience was attributed to strong growth in exports, continuing inward foreign direct investment (FDI), and robust domestic consumption. Despite its ups and downs, Thailand managed to retain the benefit of the doubt from its global business partners.
Over the past few decades, Thailand has successfully established itself as a key production and export hub for many global industries. Automobile, electronics and agribusiness are among the success stories, where Thailand plays an instrumental part as regional supplier and exporter. Favorable investment incentives, reasonable costs of production, clusters of supporting industries, and a sufficient pool of semi-skilled labor contributed to Thailand's success in placing itself on the production map of many multinational firms.
Despite the current situation in Bangkok, the overall investment environment is still unaffected, Protesters are concentrated in certain areas of Bangkok, and general life goes on as usual. Public transportation and banks remain unaffected. This goes to show the resilient character of Thailand, which is what makes Thailand one of the most attractive destinations for investors.
Kiran-Ratri Sindwani
13 February 2014
