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Delays and reconstruction work from 2011’s flooding have left Thailand’s contractors with a backlog of public and private projects in 2012. The construction sector is highly competitive, with major contractors focusing on efficiency and looking for public contracts rather than rely on riskier private sector work. Competition has also led Thai builders overseas, securing projects in Laos, Vietnam, and lately the opening economy of Myanmar. In real estate, condominium demand is growing as economic opportunities in Bangkok increase. Fears that the flooding would lead to an exodus of manufacturers from Thailand and a drop in demand for industrial real estate have proved largely unfounded as well, as the supply-chain benefits to clustering in Thailand generally outweigh the risks. This chapter has interviews with Plew Trivisvavet, President and CEO, CH Karnchang (CK); and Apichart Chutrakul, CEO, Sansiri.

Years of a governmental stalemate on transport investment appear to be over, after a decision by Prime Minister Yingluck Shinawatra to approve borrowing of more than $51bn for infrastructure. High-speed rail will be one major focus: plans call for four lines of several thousand kilometres total, although the project must still be approved by Parliament and pass through environmental impact assessment. Other investments include expansions of Bangkok’s Suvarnabhumi Airport and the deep-water port at Laem Chabang. The airport expansion will not come a moment too soon for Thailand’s crowded airspace, which has forced authorities to divert low-cost carriers to secondary airports.

Thailand’s most critical economic sector was hard-hit by flooding in 2011 that inundated industrial estates northeast of Bangkok, but recovery has been faster than anticipated. Moreover, factories resuming production now face a build-up of latent demand that has allowed them to make up lost ground. The industrial sector is led by electronics and electrical manufacturing, which accounts for some 23% of exports, followed by the automotive and petrochemicals industries. Manufacturers who base their production in Thailand benefit from strong cluster effects, inexpensive labour, and attractive investment incentives. Still, Thailand is hoping to shift its economy to more value-added growth, and the government is pushing reforms such as an increase to the minimum wage as a catalyst for this transformation. This chapter has interviews with MR Pongsvas Svasti, Minister of Industry; Boonchai Chokwatana, Chairman, President & CEO, Saha Pathanapibul (Sahapat); and Thapana Sirivadhanabhakdi, President & CEO, Thai Beverage Public Company (ThaiBev).

The insurance industry was certainly impacted by the unprecedented flooding damage in the second half of 2011, but the disaster is leading to reform and better approaches to risk management in the public and private sectors. The damage is also expected to increase awareness of the value of insurance and raise Thailand’s below-average insurance penetration. At the same time, increased re-insurance costs have driven non-life premiums up considerably. The government has established a catastrophic risk fund that should mitigate these premium rises and safeguard against future natural disasters. Meanwhile, a new risk-based capital framework is expected to rationalise capital adequacy ratios and spur consolidation in the sector. This section has interviews with Pravej Ongartsittigul, Secretary-General, Office of the Insurance Commission; and Sutti Rajitrangson, President, Thai Life Assurance Association.

Thailand’s capital markets are relatively mature, with most major private companies listed on the Stock Exchange of Thailand (SET) or one of three smaller bourses. The SET itself is somewhat unique among regional markets as it is a semi-governmental agency that borrows several features from the mutual structure. Demutualisation has been mooted several times in the past, but the current administration has opposed the concept. Meanwhile, the Thailand Futures Exchanges is seeing more trading in complex instruments like derivatives, with gold the most popular commodity to invest in, although new contracts for silver and oil futures are likely to draw interest. This section has interviews with Vorapol Socatiyanurak, Secretary-General, Securities and Exchange Commission; Asvini Tailanga, Chairman of the Executive Board, Thanachart Securities; and Charamporn Jotikasthira, President, the Stock Exchange of Thailand.

Thailand’s banking sector is well capitalised and highly conservative, a legacy of the 1997-98 Asian financial crisis, which left financiers in the region averse to systemic risk. It is also a very local affair, with less than 15% of assets held by foreign banks. This may change in 2015 when new banking regulations come into force, but little shakeup is expected for the time being. The banking sector is also expecting an impact from new caps on deposit insurance, which are being implemented by the Bank of Thailand in the hopes of pushing commercial clients toward the capital markets. This section has interviews with Prasarn Trairatvorakul, Governor, Bank of Thailand; Chartsiri Sophonpanich, President, Bangkok Bank; and Matthew Lobner, CEO, HSBC Thailand.