The cloudy climate of the country's politics and the uncertainty of the Foreign Business Act (FBA) have dented the confidence of foreign investors - including Australians.
Australia-Thai Chamber of Commerce president Gary Woollacott said the FBA has affected Australia investments in Thailand as well as investments from many other countries.
"There has been no change in the status of the FBA bill. If it stays as it is until the new government comes in, then we'll see foreign investment start to return," he said. "If it is changed under the current government, then I don't know what will happen."
He said foreign investors would like to see relaxation and liberalisation, not a further tightening process from the government.
Australian investments in the Kingdom in the first nine months were Bt944 million, down from Bt1.432 billion in the same period last year, according to the Board of Investment's records.
However, Woollacott said Australian companies have continued to invest in Thailand over the past two years, particularly in the automotive and auto-component industries in the Eastern Seaboard.
If Thai politics and the investment environment are stable, he insisted that Australian investors were interested in Thailand and had strong feelings that it is a good place to do business due to cheap labour.
Thanks to the Thailand-Australia Free Trade Agreement (TAFTA) of 2005, he said the two countries had recorded double trade value every year. Australian exports of goods and services to Thailand have grown from 3.7 billion Australian dollars (Bt115.6 billion) in 2004 to almost A$5 billion last year, due mainly to tariff reduction for minerals, pharmaceuticals and auto-parts.
Thailand's exports to Australia have risen from $4.6 billion in 2004 to $7.5 billion in 2006. One major success were motor vehicle exports, which doubled to $2 billion in the first two years of TAFTA. Other products that benefit from the agreement include electronic goods and cosmetics.
Meanwhile, Woollacott said the chamber had co-operated with the Australia Thailand Business Council, the Australian Trade Commission and the Thai Chamber of Commerce to organise a conference called "Asian Growth: The Next Steps 2007" from November 7-8 at the InterContinental Hotel.
"Participants will learn how to adjust their business here and the outlook in other countries in Asia," he said.
The conference will cover all key topics for operators and investors, for example, "Overview of Local and International Business Climate", "Impact of Free Trade Agreements Around the Region", and "Environment -Asia's Inconvenient Truth".
Chalida Ekvitthayavechnukukul
The Nation-->
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