AFG takes a peek at the future – and is given a sign?

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Andre van Straten.
Andre van Straten.

The very active Automotive Focus Group (AFG) held their May meeting at the Intercontinental Pattaya Resort, providing a stunning buffet taken banquet style on their own beach, while overlooking the Bay of Siam after taking in an amazing sunset.

The main theme of the evening was “Thailand – State of the Kingdom” with speaker Dennis Meseroll, Co-Founder and Executive Director of Tractus Asia, an American-managed, Asia-based FDI consultancy providing assistance to both private and public sectors. Dennis, who has been Thailand based for the past 27 years, covered Politics, Economics and the State of Business. (Dennis Meseroll and Tractus have advised on more than US$5 billion in trade and investment across a wide variety of sectors.)

Dennis Meseroll.
Dennis Meseroll.

Tractus scrutinizes all aspects of business in coming to their decisions and has turned up some interesting (and thought provoking) figures, citing the annual consumption of the Red Bull energy drink is three gallons (11 liters) per person per annum in Thailand (and that should really get the place jumping – Dr. Iain).

Mention was made of “Challenger” companies Charoen Pokphand, Indorama Ventures, PTT, ThaiBev, and the Thai Union Group who are investing in overseas economies, as opposed to Thailand’s push for direct foreign investment into Thailand.

Growth was seen in the Service industry, going strong at 15 percent, followed by the Manufacturing sector at 3 percent, while Agriculture was negative 1.3 percent.

One positive factor in the Thai economy was the ease of doing business here compared to other ASEAN countries, but a negative was in English language capability, where Thailand was lagging behind most of its neighbors. This was a reflection of the Thai education system.

According to the Net Education Enrollment Rate / Program for International Student Assessment, Thailand is 9th in ASEAN for primary education; 6th in ASEAN for secondary and 4th for tertiary education enrollment.

Politics? Always a vexed question, and who would be the next PM? According to an opinion survey by the National Institute of Development Administration (NIDA Poll), the top four most popular choices for the next Prime Minister are current Prime Minister Prayut, Sudarat of Pheu Thai Party, Abhisit of Democrat Party, and Thanathorn founder of the new Future Forward Party.

Thanathorn is an interesting newcomer – Thailand’s answer to Justin Trudeau. He’s the former vice chairman of Thai Summit Group with a clear intention to promote a non-military, participatory democracy.

The current constitution has the parliament structured with:

– 250 military-appointed Senators

– 500 directly elected MPs

While it is highly unlikely that the Democrats would side with the Pheu Thai party, stranger things have happened in Thai politics over the years.

The weaknesses in the Thai model are:

  • Rising labor costs
  • Low productivity
  • High personal debt
  • High export dependence
  • Talent shortages
  • Demographic turning point

However, despite this, Thailand was still a good place for business, and if the system could produce more skilled labor quickly it would continue to go ahead.

The AFG members then were treated to a surprise speaker, Andre van Straten, the Counsellor, Political and Economic Affairs in the South African Embassy. If Dennis’ figures were disappointing, Andre presented a snapshot of the promised land, South Africa.

Andre pointed out for example, that SA was home to 55 car brands and was export oriented. Currently, there are 54 countries in the continent of Africa. This includes all internationally recognized territories and states on the African continent. Sales opportunities perhaps?

With freight travel now becoming faster, easier and less expensive, he suggested that businesses in Thailand should look to SA as a new destination. If Thailand is progressing slowly, SA was going into overdrive!

It had been a good night, both from information and networking aspects with many business card changing hands.

Connection can be made by email to the AFG secretary [email protected]