THAILAND:

A CASE ANALYSIS
INTRODUCING
THAILAND
 The Land of the Free
 2nd Largest Economy in Southeast
Asia next to Indonesia
 51st biggest country in the world
 Grew its economy as it s fastest pace
in the first 3 months of 2018 after 5
years.

Wat Arun Temple, Bangkok Thailand

BACKGROUND OF THE
COUNTRY AND THE
SECTOR
HISTORICAL.
POLITICAL.ECONOMICAL
HISTORICAL

 The Kingdom of Thailand

 Thailand was formerly known as
Siam
 Land of the Free
 Influenced by the religions and
cultures of India.
POLITICAL
 Thailand was ruled by the Khmer Empire,
which had sturdy Hindu roots
 After the end of the absolute monarchy in
1932,Thailand endured sixty years of
permanent military rule before the
establishment of a democratically elected-
government system.
 Thailand is a constitutional monarchy . It
was a parliamentary democracy until the
May 2014 coup by the National Council for
Peace and Order
ECONOMICAL
 World’s largest rice exporter, the second
largest tungsten and third-largest tin
producer.
 Thailand started out as an agrarian economy.
 The initial move into industrialization in the
1960s was characterized by import
substitution.
 In 1972, a new Industrial Promotion Act
signaled the shift in government policy to an
export-oriented economy.
 ELECTRONICS AND
ELECTRICAL SECTOR
 The favorable place for electronics industry investment
 Thailand became the second-largest exporter of
computer hard drives and makers of other components
used in personal computers. 7

 The Thai Government has launched policies and

measures which attracted investment from
multinational companies & eventually led the electrical
and electronics industry in Thailand to prosperity.
STATEMENT OF THE
PROBLEM
LABOR COST. E-WASTE.
COMPETITION
 LABOR COST
 This economic problem arises from the failure of the
country to adapt in the increasing attractiveness of its
lower-cost neighbors, which led firms to start investing in
other countries in Southeast Asia with cheaper labor 9

costs like Vietnam.

 E-Waste
 Thailand is facing a mounting problem of waste from
electronic and electrical equipment, known as WEEE or
e-waste, with massive amounts being dumped in landfill
across the country because of its weak laws on waste 10

management.
 Thailand is estimated to produce about 3.3 million tons of
hazardous waste from almost 70,000 industrial factories
across the country excluding the 600,000 tons of e-waste
from users of hi-tech electrical equipment, particularly
personal computers and mobile phones..
 COMPETITION
 In recent years, more countries are capitalizing on low cost labor,
agile manufacturing capabilities, and creating favorable
demographic and economic profile which led a tight competition
in the market for Thailand. 11
 Problem in competition can be depicted to the decrease in the
GDP of the country.
 According to reports, Thailand is now the slowest growing country
in South-East Asia. International Monetary Fund (IMF) figures as of
2017 forecast Thailand’s per capita gross domestic product (GDP)
growth at 3.7%, slower than Philippines (6.6%), Vietnam (6.3%),
Cambodia (6.9%), Indonesia (5.2%), Malaysia (5.4%) and Myanmar
(7.2%). Only Singapore is growing slower (2.5%) but it is already a
much more developed economy.
SOLUTION OF THE
COUNTRY
THAILAND 4.0. EEC. SEZ. WEEE
MANAGEMENT LAW
 THAILAND 4.0
Thailand 4.0 is an economic model that aims to to transform
Thai economy into an innovation-driven one. Its vision is to
make Thailand an innovative or value-based high-income
country 13

Objectives
 Economic Prosperity
 Social Well- Being
 Raising Human values
 Environment Protection
 THAILAND 4.0
Agenda
 Agenda 1: Prepare Thais 4.0 for Thailand becoming a first
world nation
 Agenda 2: Development of Technology Cluster and Future
Industries 14

 Agenda 3: Incubate Entrepreneurs and Develop Networks

of Innovation-Driven Enterprise
 Agenda 4: Strengthening the Internal Economy through
the Mechanisms of 18 Provincial Clusters and 76
Provinces
 Agenda 5: Integrating with ASEAN and Connecting
Thailand to the Global Community
 Eastern Economic Corridor
 The Eastern Economic Corridor (EEC) Development Plan
under scheme of Thailand 4.0 aiming to revitalize and
enhancing of the well-known Eastern Seaboard
Development Program that had supported Thailand as a 15

powerhouse for industrial production in Thailand for over

30 years.
 The EEC Development Plan will lead a significant
development and transformation of Thailand’s
investment in physical and social infrastructure in the
area
 Eastern Economic Corridor
 The EEC project will, initially, be focused in 3 eastern
provinces namely Chachoengsao, Chonburi and Rayong.
 The government hopes to complete the EEC by 2021,
turning these provinces into a hub for technological 16

manufacturing and services with strong connectivity to

its ASEAN neighbors by land, sea and air.
 Special Economic Zone
The initial SEZ development covers the five border areas: 1) Mae Sot
district, Tak 2) Aranyaprathet, Sa Kaew 3) Khlong Yai, Trat 4) Mueang,
Mukdahan, and 5) Sadao, Songkhla (Sadao and Padang Besar
checkpoints). 17

The main objectives of this development are

 attract foreign directive investment (FDI)
 generate employment
 improve living conditions through income distribution
 improve border area security
 enhance Thailand's competitiveness to prepare for entry into the
impending AEC in 2015
 help tackle the smuggling of migrant workers and goods from
neighboring countries
 WEEE Management Law
Objectives:
• To establish e-waste collection system;
• To Promote EcoDesign;
• To promote environmentally sound dismantling and 18

recycling facility
• To raise awareness among the public.
EFFECTS
 Special Economic Zone
• The good effects include: increase in the number of small
and medium-sized enterprises, improve the organization
of the border areas that are involved, increase in the
number of employed, and decrease the number of issues 20

such as illegal labor and the smuggling of agricultural

products from neighboring countries.
• On the other side, the bad effects consist of: dramatic
rise in the land prices due to the speculation by land
owners and businessmen, and encounter some
environmental issues.
 Eastern Economic Corridor
 The considered effects are composed of:
corporate income taxation, Personal income
taxation, Property investment, and Public-private
21
partnerships.
 THAILAND 4.0
 The expected good effects includes: increase in the Research &
Development (R&D) expenditures to 4% of GDP, increase
economic growth rate to full capacity rate of 5-6% within 5 years,
and increase national income per capita from 5,470 USD in 2014 to
15,000 USD by 2032, reduce social disparity from 0.465 in 2013 to
22
0.36 in 2032, completely transform to social welfare system within
20 years and develop at least 20,000 households into “Smart
Farmers” within 5 years, raise Thailand HDI from 0.722 to 0.8 or
the top 50 countries within 10 years, ensure that at least 5 Thai
universities are ranked amongst the world’s top 100 higher
education institution within 20 years, develop at least 10 cities
into the world’s most livable cities, reduce terrorism risk, and
increase the proportion.
 On the other hand, the expected bad effect was the risk of being
unemployed due to replacing manual labor with machines.
ALTERNATIVE
SOLUTION
• Ideally, if Thailand could afford to establish a local producer of
electronic products owned by the state or Thai businessmen, they
could help revive the diminishing electronics and electrical sector.
• They have laborers skilled enough to produce electronic gadgets.
• They will also have their local factories unoccupied since foreign
companies are moving their labor out of Thailand. However, these
locally owned companies would need budget for maintenance of
factories. There is also a need to catch up with the latest trends in
global technology.
• In a nutshell, Thailand should encourage its citizens to invest in 24
state-owned or local companies to maintain the manufacturing
sector, in that way, they could rebuild the falling electronics and
electrical sector and they could still improve their low
unemployment rate.
• They also need to continue on developing their education system
to align it to their current goal and produce versatile students
primarily in science and technology.