Little confidence foreign investors in Thailand
the confidence of foreign investors in Thailand, especially Japanese, has been hit hard by the floods.
They believe that the consequences were much worse than necessary because of poor crisis management by the government. The government's plan to raise the minimum daily wage to 300 baht also does not stimulate their enthusiasm.
“Foreign investors expect natural disasters should not be a major obstacle for them if the government properly plans to deal with disasters,” said Supachai Suthipongchai, president of the Federation of Thai Industries' electricity and electronics section. 'They feel the government had information about water levels but did nothing with it. And by choosing to continue with the minimum wage hike at a time when companies are hurting, some foreign investors feel Pheu Thai governs only based on popular vote and does not listen to other opinions.'
Both industries suffered a loss of 240 billion baht from the floods, the largest loss since the 1997 financial crisis. Supachai expects the factories to resume production in the second half of next year.
That is, if they stay, because the leadership of many electronics companies based in Pathum Thani and Ayutthaya have already discussed with their parent company in Japan whether they will move or reinvest. This is not difficult for these companies, because they do not use large machines.
What also plays a role: many manufacturers have settled in these two provinces because of the proximity of Don Mueang airport. But international flights now operate from Suvarnabhumi and it is still uncertain when Don Mueang will reopen. "This will be a factor in whether companies choose to stay or move," says Supachai.
A first company has already left. Last week, Sanyo Semiconductor announced that it is closing its doors; not because it can't afford repair costs, as reported, but because it's moving. The 2.000 employees are now on the street.
This is where the old saying comes into play: 'when one sheep is over the dam, more will follow'.
Companies now mainly look (financially) at the long-term prognosis, economic prospects (costs/benefits) in the short term, and the increasing distribution costs. But above all, they can still expect that the Thai government will now actually take decisive measures.
If the Japanese also leave, this could mean a huge loss of face not only economically, but also for the Thai government.
I assume that this will lead, in the coming months, to more posts on this informative Thailand blog.
Dick C .
And it's not just Japanese companies that are considering!
The verbal statements of a minister who felt he had to declare, or assure, that floods will no longer occur, does not really evoke pleasant feelings among companies that are just hesitating against a very considerable investment to get things up and running again.
Also the constant fuss about the POA (Premier Remote), almost giving the impression that the government is really only concerned with me, does not really evoke pleasant feelings among operators and investors.
Investors are severely tested after this flood disaster and countries such as Vietnam and India have responded with very interesting offers to settle with them, not pay taxes for 10 years, etc. The arrogance of the Thais who think they are superior his is a bygone era, especially now that salaries are being raised sharply. On the one hand, it is also urgently necessary because life here is also very expensive and often unpleasant, especially for small entrepreneurs. I regularly receive complaints that the emigration is on the doorstep with recorded films that they are doing something, but the limit is of course that a Dutch entrepreneur was arrested for feeding his fish. These are KGB practices and our embassy must do something about this. Thais are allowed to work with us and have the same rights, and this should also be the case in Thailand, but with the same measure. Equal monks equal hoods !!