Thailand's investment market retains its attractiveness

The emerging markets survey indicator - combining size, wealth and growth prospects - shows that Thailand's investment appeal is on a par with Malaysia and Indonesia, but somewhat ahead of the Philippines and Vietnam.

China and India still stand out as the emerging markets with the best opportunities, due to their GDP and population size, growth potential and substantial imports.

Grant Thornton partner in Thailand, Peter Walker, said Thailand has been an attractive investment opportunity for years and many clients are interested in investing in either manufacturing for export or developing a presence in the domestic market.

Thailand combines a reasonable cost structure, a stable economic environment, a skilled workforce, a manageable regulatory system and attractive investment incentives, he said. Given the current economic issues in many developed countries, Thailand would appear a good place to target an emerging market investment strategy.

In Thailand, the survey found that 51 per cent of privately held businesses - up from 48 per cent in 2006 - derive more than one-quarter of their revenues from exports. In one of the highest responses, 68 per cent of all Thai businesses say they are exporters, an encouraging number given the correlation between exports and economic growth in the world's current globalised economy.

"Once again, the IBR survey indicates that, for Thailand to achieve its full inward investment potential on the global economic playing field, the issue of political stability needs to be visibly addressed," Walker said.

The emerging markets index, produced using a weighted calculation of key indicators, shows China, India and Russia still occupying the top three places followed by Mexico in fourth and Brazil in fifth.

In determining the index, the Grant Thornton IBR survey also found that the number of privately held export businesses (PHBs) has increased from 35 per cent in 2003 to 37 per cent in 2008.

However, there are regional variations in the data with the EU (49 to 53 per cent) and Asian countries (30 to 39 per cent) showing marked increases in exports, while the exports of the North America Free Trade Agreement countries have marginally declined (31 to 30 per cent).

The economic upturn in the Eurozone in 2006-2007, coupled with fundamentally strong intra-EU trade, has helped countries in the EU feature prominently at the top of the rankings.

The survey also shows that companies value the "importance of market size and growth potential" more than anything else when determining their investment strategy. This factor was ranked first globally (56 per cent) as well as in all regions except Latin America where it came marginally behind "political and economic stability".

Political and economic stability was a particularly important factor for EU and US businesses. The survey results suggest that businesses in mature economies are more likely to build their investment strategies around a combination of general economic and political considerations, whereas businesses in emerging markets are more likely to focus on political factors and regulatory concerns.