Financial markets have so far been accommodative of the government’s borrowing plans. The expansion of expenditures stemming from the stimulus packages combined with a decline in revenues due to the economic crisis has led to an increase in the fiscal deficit and, consequently, government debt ratios, which have reached 45 percent of GDP in September. Because Thailand entered the crisis with a relatively strong fiscal position, the cyclical increase in debt levels is not by itself a concern as long as Thailand’s historical fiscal performance is maintained in the future.
Thailand enjoys a strategic location and serves as a gateway into the heart of Asia – home to what is today the largest growing economic market.
The country also offers convenient trade with China, India and the countries of the Association of Southeast Asian Nations (ASEAN), and easy access into the Greater Mekong sub-region, where newly emerging markets offer great business potential.
Thailand plans to be the Hub of ASEAN
Thailand was one of the founding members of ASEAN and has been instrumental in the formation and development of the ASEAN Free Trade Area (AFTA).
AFTA entered into force on 1 January 2010 for the six original ASEAN (ASEAN-6) members (Thailand, Singapore, Malaysia, Indonesia, Philippines, and Brunei), thereby reducing import duties to zero; the so-called CLMV countries (Cambodia, Laos, Myanmar and Vietnam) will follow suit in 2015.
Thailand has forged close economic cooperation with other ASEAN member nations, and Thai manufactured products and services have access to their markets, which includes all 10 ASEAN countries. ASEAN is home to more than half a billion people, GDP in excess of US$1.5 trillion and total trade of well more than US$1 trillion per year.
The size of the work force in Thailand now exceeds 34.1 million, with the majority of the workforce under 30 years of age. Each year about 800,000 people join this force. Many standard labor practices apply, including mandatory severance packages, and overtime payments for work in excess of the normal workday.
The minimum wage in Thailand is currently 203 baht per day in Bangkok and slightly less in the provinces. While not the lowest labor market in the region, Thailand’s workforce is among the most cost-efficient in the world, as they have earned a reputation for diligence and adaptability.
In Thailand, the King is head of state, while the leader of the government is the Prime Minister. Other chief executives also include cabinet members and ministers, together with high-ranking government officials in ministries, bureaus and agencies. As head of state, the King has the authority to exercise sovereign power through the National Assembly, the Council of Ministers, and the Courts. The Prime Minister functions in the name of the King, and is responsible for all royal commands regarding the affairs of the State.