Industry & Retail

On the economic road from farms to factories to services, Thailand has come a long way. Through a combination of low costs, sound policy, a good work ethic and a relative lack of labour activism, the country has managed to make the transition from an economy based on agriculture and commodities to become one of the most industry-oriented nations in the world. Manufacturing makes up 34% of the Thai economy, a larger portion than in all of its regional competitors, and Thailand is the world’s 17th-largest manufacturer and number 14 car maker. Industry value-added in Thailand rose from 18.5% of GDP in 1960 to a high of 44.7% in 2007. Exports grew rapidly over the same period, while agriculture shrank as a portion of GDP. Thailand’s minimum wage law was applied across the country as of January 1, 2013, settling the rate at $9.09 per day. This raised the average wage by 22.4% nationwide, and in some provinces by as much as 70%. Investors in manufacturing are attracted by the prospect of having assemblers and suppliers in multiple ASEAN countries, which would reduce risk as there would be no single bottleneck. If Thailand can move gently to the next generation of production, great rewards await. This chapter contains an interview with Prasert Boonchaisuk, Minister of Industry.