Thailand’s GDP totaled US$123 billion in 1999. Compared to some of their neighbors, Thai citizens enjoy a comparatively rich per capita income of US$2,370. In Thailand’s largest city, Bangkok, residents enjoy a per capita income of US$6,000 and in this country of abundant food and natural resources, a level of purchasing power parity exceeding that of many countries with higher income levels. According to the World Bank, Thailand is expected to attain its pre-crisis level of output in 2002, and its pre-crisis level of welfare in 2003.
Thailand was the United States’ 25 th largest export market in 1999 with US exports totaling more than US$4.9 billion. In the fourth quarter, American exports finally displayed a sustained rebound from the drop resulting from the economic crisis and year-on-year growth exceeded 30 percent in the first quarter of 2000. The U.S. is Thailand’s single largest trading partner (ahead of Japan) with 1999 two-way trade of US$19 billion. The U.S. is Thailand’s second largest foreign investor (following Japan) with a total accumulated direct investment of over US$15 billion, with half of U.S. investments in the energy and petrochemical industries.
Major investments in Thailand by American and third country firms continue to occur on a regular basis. Sectors with long-term planning horizons, e.g., energy, petrochemicals, automotive, continue to find Thailand an attractive location for investment. For example, General Motors opened a $600 million new vehicle assembly plant in mid-2000, joining Ford and other automotive manufacturers in Thailand, solidifying the country’s reputation as the “Detroit of Southeast Asia”. Increasingly, companies investing in Thailand are those requiring skilled but cost-competitive labor. In addition, as Thailand slowly moves ahead with its near to medium term plans to privatize many state-owned enterprises, additional opportunities both for investment as well as sales of equipment should arise in important sectors such as energy, aviation and telecommunications.
In summary, most international companies recognize the long-term potential within Southeast Asia’s regional markets. While the economic crisis of 1997-98 forced companies to re-formulate market development strategies, very few American firms decided to withdraw from Thailand. Thailand continues to provide a cost-effective regional manufacturing and distribution hub for the greater Mekong and ASEAN region and every month sees new investment in Thailand to serve the renewed growth in demand among the Southeast Asian economies. American firms hoping to sell into Thai markets can succeed by offering quality, reliability and value in Thailand’s increasingly productivity-drive and price-conscious marketplace.
