The draft charter is ditched and Thailand must suffer a military dictatorship for the next two years.
While the docile and dependent business community collectively shrugged its shoulders and said “business as usual,” the new business normal in Thailand is looking very sick.
A reader drew PPT’s attention to a story at Nikkei Asian Review reporting Board of Investment for the first half of the year.
The article begins:
Applications by foreign companies to invest in Thailand have nosedived following the introduction in January of rules that reduce or remove incentives in certain industries.
The graphs picture this plunge. As the article makes clear, this plunge is “largely a reaction to a jump in demand at the end of last year, before the changes took effect.” Take that out and the data still look to have been on a downward spiral since 2012.
An important change noted is the rise of China to top promoted investor status, replacing long-time leader, Japan.
The new rules were determined in order to promote “Thai industry.” This meant that “high value-added industries, such as aviation, electrical appliance design and software development, are exempt from corporate taxes for eight years.”
At the same time, “benefits were reduced for companies engaged in simple metal processing and scrapped altogether for sewing and other labor-intensive operations.” Those job-creating industries have looked elsewhere.
Unaccountably, “Thailand also removed all sweeteners for businesses setting up operations far from the capital.” We wonder if this is punishment for supporting Thaksin Shinawatra or the promotion of sufficiency economy, demanding that the poor put up with their poverty?