OBG talks to Atchaka Sibunruang, Secretary-General, Thailand Board of Investment (BOI)

Interview: Atchaka Sibunruang

What do you see as the longer-term trend in terms of the origin of investments into Thailand?

ATCHAKA SIBUNRUANG: Japan will continue to be our largest foreign investor for the foreseeable future. However, investment from emerging economies – China, India, Korea and ASEAN members – will increase gradually and will become another main investment source for Thailand within the next 10 years. Unlike Japanese investment, which is focused on the automotive and electronics sectors, this new source will be more like those of the US and EU, which are diversified in many industries: automotive, electronics, food processing, beverages, chemicals, petroleum, alternative energy, services, etc.

What has been the impact of the recent floods on foreign investor confidence in Thailand?

ATCHAKA: The floods have undermined foreign investor confidence immensely, which needs to be addressed immediately. BOI has cooperated with other government agencies to voice its concerns and get the planning and implementation of a master plan on a water management system moving so as to ensure investor confidence. We are also offering very generous incentives both to industrial estate developers for the construction of dikes around industrial estates, which will further boost investor confidence, and to companies that were damaged by the floods for the repair of machinery and equipment and the restoration of production facilities.

In addition, BOI has been appointed by the Ministry of Industry to inform investors about the new water management system. We will be initiating a public relations campaign to boost foreign investor confidence that will involve many channels, including mass media, social networking sites and seminars.

How, in your opinion, will the ASEAN Economic Community (AEC) benefit member countries?

ATCHAKA: I think the AEC countries really complement one another and will benefit greatly from economic integration. Each country has different natural resources. For example, Myanmar and Laos have great hydroelectric potential, while Indonesia has high potential in coal mining and geothermal energy.

The AEC will also be beneficial as production bases are varied. For example, with regards to the electronics industry, wafer production will be concentrated in Singapore and Malaysia, the production of integrated circuits and printed circuit boards will take place mainly in Thailand and Malaysia, and final production will be carried out in countries such as Vietnam, Indonesia and Thailand.

As neighbouring countries like Myanmar seek to liberalise their investment environments, what opportunities and threats are presented for Thailand?

ATCHAKA: The liberalisation of the investment environments will produce plenty of opportunities, with threats remaining limited. It will open up the Thai market through low-level development of all key sectors. At the same time, Myanmar has abundant natural resources and human capital for development, and I am positive it will be one of the economic tigers of Southeast Asia in the years to come. In January 2012 the Japanese Yomiuri newspaper dubbed Myanmar “Asia’s final frontier” because of the many business opportunities there. It will take a lot of investment to upgrade the country’s infrastructure and establish production bases in the next decade, and Thailand is very interested in the development of the Dawei deep seaport.

Given the reduction in corporate income taxes in 2012 and 2013, how significant a role will BOI privileges and incentives play in coming years?

ATCHAKA: BOI’s privileges and incentives, in my opinion, will continue to play a critical role in promoting investment. My vision of the future is that both tax and non-tax privileges will go hand in hand as a package and will be more effective in attracting investment and enhancing industrial development.