Thailand FDI Analysis: Emerging Market, Investment, and GDP Growth

This report provides a comprehensive country analysis of Thailand, focusing on its potential as an emerging market for foreign direct investment (FDI). It examines various factors influencing Thailand's GDP growth, including political stability, economic policies, socio-cultural benefits, technological advancements, and natural resource endowments. The analysis also covers foreign currency exchange influences, existing trade policies, systems, incentives, and barriers, along with current levels of FDI. The report highlights Thailand's strengths, such as its strategic location, skilled workforce, and pro-investment policies, while also addressing challenges like political tensions. It concludes with recommendations for other countries to adopt similar trade policies and foster socio-cultural environments conducive to economic growth, making it a valuable resource for students. Desklib provides access to this and other solved assignments to aid students in their studies.

Country Analysis: Thailand
Executive summary
The paper performs a country analysis of Thailand as a new emerging market where rapid
Gross Domestic Product growth creates attractive investment opportunities. The country will
be analyzed regarding political, economic, socio-cultural benefits, natural resource
endowment, foreign currency and exchange influences, its existing trade policies, systems,
incentives, and barriers as well as the current levels of direct foreign investment. The results
of the research show that the GDP of Thailand is booming over the last few years as a result
of utilization of natural resources and right economic policies that it embraces.
According to the report, the rise in the GDP in Thailand is as a result of both internal and
external factors. Acquisition and implementation of functional strategies and economic plans
as well as proper utilization of natural resources are among the factors resulting to increased
GDP. Some of the recommendations in this report are the adoption of the trade policies,
systems and incentives of Thailand by other countries and molding cultural values towards
economic success.
Introduction
Globally, increased rate of Gross Domestic products increases the rate of both local and
foreign investment. An increase in the amount of GDP of a particular country is a clear
indication that the economic growth and development of that country is booming. Usually,
foreign investors often research the level of the Gross Domestic Product of a state before
making investment decisions (Bown, 2014). Increase in per capita income and the GDP
shows the productivity of a given country, their motivation towards work and how aggressive
the inhabitants of that particular country are as far as working is concerned.

Country Analysis: Thailand
This report performs a country analysis of a selected country whose Gross Domestic product
is rapidly increasing to create attractive investment opportunities for foreign investors. This
report will deal with Thailand as the case study because it has an increasing GDP that has
attracted investment opportunities and hence meets the selection criteria. For complete
assessment, the report will look at the general overview of the country, its political,
economic, socio-cultural and technological influences as far as the increase in the level of
GDP is concerned. The report will also look at natural resource endowment of the country
that creates its competitive advantage as well as foreign currency and exchange influences.
The report will lastly look at the existing trade policies of the state as well as the current
levels of direct foreign investment in Thailand. From the discussions, the report will conclude
and give recommendations.
Discussion
General overview of the country
Thailand is a country that is located in Northern Asia which borders Lao, Cambodia, and
Malaysia. It came into being the mid 14th century initially under the name Siam. It was later
named Thailand meaning land of the free in 1939. Thailand is a democratic country, and it is
the second largest economy of Southeast Asia after Indonesia. Its infrastructure is well
developed, and it has a free enterprise economy as well as pro-Investment policies. From
history, Thailand has had a strong economy. Thailand is one of the countries that have
experienced a rapid GDP growth over the last few years. Its economic growth in the first two
quarters of the year 2017 was found to be the strongest in the previous four years. This rapid
growth resulted from an increase in export, agriculture and other key production sectors such
as manufacturing, hotels and restaurants, construction among others.

Country Analysis: Thailand
Political, economic, socio-cultural and technological benefits
Indisputably, political, economic, cultural and technological factors significantly affect the
level of GDP in any given country. In this case, Thailand is no exception. These factors have
positively impacted the GDP level in the Thailand economy. Between the year 2013 and
2015, Thailand experienced a slow GDP growth as a result of domestic political disorders
that led to sluggish global demand (Petri, 2016). This turmoil dropped the Thailand strong
exports such as electronics, processed foods, automobiles as well as agricultural products.
However, after the resumption of democratic rule in 6th April 2018, the GDP of this country
has been booming thereby attracting foreign investors.
Economically, the country has been doing well over the last four decades. It has managed to
migrate from a low-income country to an upper-income country within a period less than a
generation. It has been one of the countries cited with successful development stories with
strong economic growth and reduction of poverty (Salacuse, 2015). This benefit has been
gotten from sturdy and functional economic policies exhibited by this country. It has well laid
long-term economic goals for development which address issues such as economic stability,
environmental sustainability, competitiveness, human capital, equal economic opportunities
and effective government bureaucracies. This step has bolstered its economic growth hence
increased foreign investment.
As far as socioeconomic factors are concerned, Thailand has various benefits attested to this
factor. Firstly, even though there are various ethnic groups in Thailand, there is no
discrimination. Discrimination negatively affects the economic growth of a given country.

Country Analysis: Thailand
Again, both genders are motivated towards work (Chunhawong, 2016). Their culture is such
that everyone is in a position to work hence reducing the dependency ratio. Thailand has also
enjoyed technological benefits as far as the increase of GDP is concerned. This country
makes use of new production technologies for agricultural products, food processing,
manufacturing among others. This move has increased the level of productivity thereby
boosting GDP. This aspect has lead to increased foreign investment attraction.
National resources and factor endowments that create competitive advantage
In any given country, natural resources and factor endowment act as a competitive advantage.
When natural resources are located in a particular country, the country uses them free of
charge as factors of production thereby reducing the cost of production. This step results in an
increased economic growth hence boosting the GDP (Bown, 2016). Contrary to this situation,
whenever a country lacks or does not have enough natural resources, it is forced to purchase
them from other countries hence increasing the cost of production.
Thailand is one of the countries endowed with quite a good number of natural resources.
Some of its mineral deposits are tungsten, tin, lead, gold, coal, zinc, manganese and other
precious stones. Another major natural resource in Thailand is the rich alluvial soil that is
found along Chao Phraya and other rivers (Teeraananchai, 2017). In 1970, natural gas was
discovered in Thailand thereby reducing its reliance on imported petroleum (Tanna, 2014).
Thailand also has other precious resources such as beautiful natural plants and many species
of wild animals which serve as tourist attraction sites. Other resources are fishing that
constitutes roughly 10% of the country’s earnings.
As a result of proper natural resource endowment, Thailand has experienced fast economic
growth. The natural resources found in this country have served as a competitive advantage
against other countries because it uses cheaper production resources. Other countries have to

Country Analysis: Thailand
buy these resources for them to produce (Samah, 2015). As a result, Thailand has enjoyed a
steady economic growth that has boosted the country GDP hence inviting foreign investors.
Foreign currencies and exchange influences
The foreign currency has a significant impact on the economic growth and the GDP of any
country. Thailand's most significant percentage of GDP comes from the export of agricultural
products, electronics, and processed food among others. This fact implies that foreign
currency gotten as a result of export affects the country’s level of GDP so much. Thailand is
associated with the gross export of products to all other parts of the world (Khaenson, 2017).
Tourism also earns the country a considerable amount of foreign exchange. All these income
sources combined increase to the level of the country's GDP, and this attracts foreign
investors because they believe that that country has a right business environment ranging
from raw materials to human resources.
The country’s existing trade policies, systems, barriers and incentives
The trade policies stipulated by a particular country as well as available incentives determine
the business environment. It determines whether investors will be attracted to the industry or
they will shy away from investing in that given country (Gheewala, 2014). For instance,
Thailand has favorable trade policies that have enabled it to exploit a wider market. It
prioritizes in making strong international relations and partnerships for development through
regional economic associations. Thailand also exploits international relationships for the
enhancement of national competitiveness.

Country Analysis: Thailand
Thailand makes use of a fully computerized trading system which began in April 1991
through the Automated System for the Stock Exchange of Thailand usually abbreviated as
(ASSET) (Supasa, 2015). This move brought about trade fluidity, transparency, and
effectiveness. Due to the changing nature of the business environment, this system changed
to Advance Resilience Matching system which featured increased risk management and
redundancy of the system.
In the zeal to protect domestic industries as well as the balance of trade, Thailand has several
trade barriers which are achieved through various ways such as high licensing and import
requirements, price controls and excise tax (Regnier, 2017). In Thailand, incentives are given
to those projects that are expected to bring new technologies to the country especially those
that are ready to invest in provinces that are less developed.
Existing levels of direct foreign investment
Thailand has enjoyed direct foreign investment for quite some time now. This investment has
been one of its essential elements in economic prosperity (Tulevech, 2016). This country
offers a legal framework that is attractive and modern and regional dynamism has given it a
lot of benefits as far as economic prosperity is concerned. As spelled out by the Bank of
Thailand, the level of foreign investment drastically declined from USD 15.5 billion to USD
3 billion in the year 2016. This decrease was as a result of political tension (Todoc, 2015).
However, the foreign investment level increased to USD 8 billion in 2017.
This country is experiencing an increased level of direct foreign investment due to some
reasons. The presence of a skilled workforce and a strategic placement of the country in the
heart of Asia are some of the factors that have led to increased direct foreign investment
(Fujiwara, 2014). Other factors which increase the level of direct foreign investment in
Thailand are excellent government policies promoting free trade and investments, presences

Country Analysis: Thailand
of several government agencies that help visitors, and the presence of an investment
supporting the regime.
Summary and recommendations
From the above research, it has been found that the Gross domestic product of a given
country is an attractive force for foreign investors. Political stability and good socio-cultural
practices favor economic growth. Natural resource endowment leads to low costs of
production improving the productivity of the host country. Foreign currency resulting from
exports and foreign exchange increases the Gross Domestic Product of any given country.
Following a detailed assessment of Thailand as the case study in this report, I would
recommend that other countries adopt the trade policies, systems, and incentives exhibited by
Thailand. I would also recommend other countries to ensure that they are politically stable
and that their socio-cultural patterns boost economic growth.

Country Analysis: Thailand
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Country Analysis: Thailand
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Country Analysis: Thailand