Thailand prepares for ASEAN Integration
If ASEAN is to avoid the middle-income trap, each ASEAN country has to invest in infrastructure. This is especially true for the Philippines where basically no major infrastructure projects have flourished for years, if not decades. It has to be understood that inadequate infrastructure is possibly the biggest deterrent to create sustainable growth. Spending on roads, ports, power stations, water and railways increases aggregate demand in the short term and creates a cost-effective and flexible business environment in the mid-term that allows manufacturing and high-yield agriculture as drivers of long-term inclusive growth.
The e-commerce market in Thailand is estimated to be US$ 1 billion in 2014, with a strong predicted growth to US$ 6 billion between 2020 and 2025. Popular online shopping categories:
Travel, hotels and resorts 24%
Fashion accessories23%
Computers and electronic appliances19%
Services 7%
Office equipment 5%
Automotive industry and products 4%.
Three major trends are transforming the financial sector in ASEAN. The first trend – digitization – is likely to have the most impact, as both banks and insurance companies have to improve their technologies in line with changing lifestyles, and the smartphone is the crucial platform for accessing consumers digitally.
The second mega-trend will be the aging population (not so in the Philippines). To tap the trend, insurance companies will become active in annuity insurance programs. The third mega-trend is urbanization. The growing economies upcountry, especially border provinces benefiting from ASEAN integration, has encouraged financial institutions to shift their focus outside Bangkok or Makati. Banks and insurance companies have expanded their outlets in the provinces and offer financial solutions that fit the requirements of urban consumers.
Medical services and beauty care offer the brightest growth prospects for the fifth straight year in 2015, driven by growing awareness of Thailand’s modern healthcare infrastructure. Thai medical treatment, particularly at private hospitals, is now widely recognized by local and foreign patients for its quality and affordable cost. We see the same trend in the Philippines with healthcare services being expanded nationwide.
The Thai Board of Investment plans to set up a business intelligence data system to support business matching between local and foreign SMEs, as foreign investors had often complained that there was no comprehensive information about Thai SMEs, especially those in the car and electronics cluster. In the Philippines, the EU-Philippine Business Network (EPBN) which is co-funded by the EU and implemented by European business organizations active in the Philippines led by the European Chamber of Commerce of the Philippines (ECCP), is actively creating this business intelligence / SME matching system.
The Thai Energy Ministry has announced a new energy-saving campaign and 7 billion Baht incentive package for 2015. The energy-savings push comprises of 148 small projects with a combined budget of 6 billion baht, with the remaining 1 billion baht set aside for new ideas or services that save energy. Regarding renewable energy, the Ministry said that solar power is estimated at 1,000 MW in 2014; an additional 2,800 MW will enter the national grid by the end of next year.
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