Thailand Sees Foreign Investment Surge to 71.7 Billion Baht in Early 2024
A robust wave of foreign investment hit Thailand in the first five months of 2024, with 317 foreign companies receiving approval under the Foreign Business Act. The total investment reached 71,702 million baht, marking a 58 percent increase in value and a 16 percent rise in volume compared to the same period in 2023. Japan led with 84 projects worth 40,214 million baht, followed by Singapore (51 projects, 5,189 million baht), the United States (50 projects, 1,196 million baht), China (38 projects, 5,485 million baht), and Hong Kong (28 projects, 12,048 million baht). Notably, 99 foreign investors targeted the Eastern Economic Corridor (EEC), contributing 18,224 million baht, or 25 percent of the total foreign investment during this period.
Deputy Government Spokesperson Karom Polpornklang attributed the upward trend to Thailand’s potential and investor confidence, bolstered by government efforts to attract leading global companies. The Thailand Board of Investment (BOI) reported a 31 percent increase in investment promotion applications in the first quarter of 2024, reaching 228,207 million baht (USD 6.2 billion). From January to March 2024, 724 project applications were filed, a 94 percent increase from the previous year, with 460 projects involving foreign investment. The electronics and electrical appliances industry saw the highest investment applications, followed by automotive and parts, petrochemicals and chemicals, digital, and agriculture and food processing sectors.
Editor’s Note: In early 2024, Thailand experienced a significant surge in foreign investment, totaling 71.7 billion baht, driven by increased investor confidence and government initiatives to attract global companies. Key sectors like electronics, automotive, and petrochemicals led the way in investment applications, reflecting Thailand’s appeal as a strategic hub for international business expansion.
Thai Exports Surge by 7.2% in May 2024, Forecasted to Sustain Growth Through 2025
Thai exports in May 2024 experienced a notable 7.2% increase compared to the previous year, driven primarily by agricultural product exports, especially fruits to China. This growth contributed to a trade surplus as imports decreased, marking the first contraction in four consecutive months. Despite the positive year-over-year growth, exports excluding gold and base effects contracted by -1.3% compared to the previous month. Exports to China and India saw significant increases, while those to Australia and the Middle East declined. The decrease in imports was primarily in vehicles and capital goods, although raw materials and consumer goods imports expanded.
SCB EIC projects continued export growth in June and throughout the second half of 2024, with an anticipated positive growth rate of 2.6% for the entire year. This growth is supported by a strengthening global economy, improved manufacturing sector performance, and favorable export product prices. Looking ahead to 2025, similar growth is expected, influenced by global economic conditions and trade volume projections. However, potential risks such as political outcomes and trade conflicts may affect the export growth potential.
Editor’s Note: Thai exports surged by 7.2% in May 2024, driven by strong agricultural exports, particularly fruits to China, which contributed to a favorable trade surplus amid reduced imports. Despite a slight month-over-month contraction in exports excluding gold, the overall outlook remains positive for sustained growth through 2025, supported by a robust global economy and favorable export prices. However, risks such as political uncertainties and trade tensions could impact future export performance.
AI Expected to Have Limited Impact on Thai Employment but Skills in High Demand
The adoption of artificial intelligence (AI) is projected to have a limited impact on employment in Thailand, with less than 4% of employees in the service sector at high risk of being replaced by the technology, according to a report by Kasikorn Research Center. Despite the low risk of job displacement, AI skills are becoming increasingly important in the Thai workforce. A survey by Microsoft and LinkedIn found that 74% of Thai business leaders would not hire candidates without AI skills, and employers are willing to pay at least 41% more to workers with AI expertise, underscoring the high value placed on AI proficiency.
The survey also revealed that 92% of knowledge workers in Thailand currently use AI at work, with 81% employing AI tools of their choice. Furthermore, 91% of Thai business leaders believe that their companies need to adopt AI to remain competitive. In response to this trend, 90% of Thai leaders expressed a preference for candidates with AI skills over those with more work experience. The findings highlight the growing importance of AI skills in the Thai job market and the necessity for businesses to adapt to technological advancements to maintain competitiveness.
Editor’s Note: The impact of artificial intelligence (AI) on employment in Thailand is expected to be minimal, with less than 4% of service sector jobs at high risk of automation, according to Kasikorn Research Center. Despite this, AI skills are increasingly essential in the Thai workforce, as indicated by a survey showing that 74% of business leaders prioritize hiring candidates with AI expertise. This underscores a significant demand for AI skills among employers, who are willing to offer higher salaries to professionals proficient in AI technologies.
World Bank Urges Thailand to Invest in Infrastructure and Green Economy for Sustained Growth
The World Bank has advised the Thai government to boost investment in ageing infrastructure and the green economy to drive the country’s economic potential beyond the forecasted 2.7% medium-term growth. The bank projects Thai GDP growth at 2.4% in 2024 and 2.8% in 2025, emphasizing that revitalizing infrastructure and enhancing the green economy could elevate growth. Kiatipong Ariyapruchya, a senior economist for Thailand at the World Bank, noted that Thailand’s potential growth for 2023-2030 is estimated at 2.7%, lower than previous decades due to an aging population and subdued productivity growth. He highlighted the importance of public investment in secondary cities and fiscal reforms to stimulate long-term growth and support vulnerable households.
Despite concerns about reconciling fiscal sustainability and short-term stimulus, the World Bank suggests that Thailand has room to increase tax revenue and create fiscal space. The government’s planned digital wallet initiative, if implemented, could enhance near-term growth but also impact fiscal and inflationary pressures. Public debt is expected to rise to 64.6% of GDP by fiscal 2025 and potentially reach 68.6% by 2028 due to increased spending needs. However, Mr. Kiatipong indicated that fiscal reforms and targeted social assistance could effectively support economic recovery, with the Bank of Thailand likely maintaining its policy rate in the absence of significant inflationary pressure.
Editor’s Note: The World Bank has advised Thailand to prioritize investment in infrastructure and the green economy to bolster economic growth beyond projected rates of 2.4% in 2024 and 2.8% in 2025. Emphasizing the country’s potential for growth until 2030, the World Bank underscored the importance of revitalizing aging infrastructure and implementing fiscal reforms to support long-term economic resilience. Concerns over fiscal sustainability amid increased spending are countered with recommendations for enhancing tax revenue and targeted social assistance to mitigate economic challenges.
Microsoft Announces Major Investments in Cloud and AI Infrastructure for Thailand
Microsoft has unveiled significant commitments to build new cloud and AI infrastructure in Thailand, provide AI skilling opportunities for over 100,000 people, and support the nation’s growing developer community. This announcement, made by Microsoft CEO Satya Nadella at the Microsoft Build: AI Day event in Bangkok, aims to align with Thailand’s “Ignite Thailand” vision for 2030, which seeks to position the country as a regional digital economy hub. Thai Prime Minister Srettha Thavisin emphasized the importance of this partnership for innovation and growth in his special address at the event.
As part of its commitments, Microsoft plans to establish a new datacenter region in Thailand to expand its hyperscale cloud services, enhance AI proficiency among the workforce, and support various sectors, including tourism and public health. Additionally, initiatives like AI Odyssey aim to help 6,000 Thai developers become AI experts. The collaboration extends to major Thai organizations such as AIS, NHSO, SCBX, and the Office of the Council of State, showcasing the transformative potential of AI across different industries. These efforts are expected to significantly boost Thailand’s economic and technological landscape, positioning the country for sustained growth and innovation.
Editor’s Note: Microsoft has announced substantial investments in Thailand, including the establishment of a new datacenter region and initiatives to train over 100,000 people in AI skills. These efforts align with Thailand’s vision to become a regional digital economy hub by 2030, fostering innovation and economic growth across various sectors.
Taiwan and Thailand Sign Investment Pact, First Under President Lai Ching-te
Taiwan announced a significant investment pact with Thailand on Friday, marking the first agreement of its kind since President Lai Ching-te took office in May. This agreement aims to enhance commercial and economic ties between the two nations amidst growing global supply chain shifts. Taiwan’s Office of Trade Negotiations highlighted Thailand as a key destination for Taiwanese investments, particularly in the electronics and electrical components sectors. The deal, signed by Taiwan’s de facto Ambassador to Thailand, Chang Chun-Fu, and Thai counterpart Narong Boonsatheanwong, emphasizes improved investment transparency and dispute resolution mechanisms, reflecting Taiwan’s increasing investment importance and a strategic pivot away from China.
This pact is part of Taiwan’s broader New Southbound Policy, initiated in 2016 under President Tsai Ing-wen, aiming to diversify economic ties away from China. Thailand is now the fifth country to formalize such an agreement with Taiwan under this policy, joining the ranks of the Philippines, India, Vietnam, and Canada. The new agreement promises enhanced protection and support for Taiwanese investors, updating a previous 1996 pact. Since the policy’s inception, Taiwan-Thailand bilateral trade and investment have surged significantly, with trade growing by 74.6% and investment by 119.8%, underscoring the strategic and economic importance of this renewed partnership.
Editor’s Note: Taiwan and Thailand have signed a significant investment pact aimed at strengthening economic and commercial ties, marking the first such agreement under President Lai Ching-te’s administration. The deal focuses on enhancing transparency and dispute resolution mechanisms, reflecting Taiwan’s strategic shift towards diversifying its economic partnerships beyond China under the New Southbound Policy. This agreement underscores Thailand’s role as a pivotal destination for Taiwanese investments, particularly in high-tech sectors like electronics and electrical components.
Vietnam’s Q2 GDP Growth Accelerates to 6.93%, But Inflation Risks Loom
Vietnam’s economy saw accelerated growth in the second quarter of 2024, with GDP expanding by 6.93% year-on-year, up from 5.87% in the first quarter, driven by robust exports, according to the General Statistics Office (GSO). The economy grew by 6.42% in the first half of the year, supported by a 14.5% rise in exports and a 10.9% increase in industrial production. Despite this positive trend, Vietnam faces significant challenges, including external risks and uncertainties, as it aims to achieve its annual growth target of 6.0%-6.5%.
However, rising inflation remains a pressing concern, with consumer prices in June climbing 4.32% from a year earlier, approaching the government’s ceiling of 4.5%. The International Monetary Fund (IMF) expects Vietnam’s economic growth to be close to 6% in 2024, supported by strong external demand and resilient foreign investment, but warns of high downside risks. Inflation pressures are compounded by recent government decisions to raise base salaries for state employees and pensions for retirees, which are expected to further impact the inflation rate. The GSO emphasized the need for close monitoring of price movements and adjustments in key service prices to manage inflation effectively.
Editor’s Note: Vietnam’s GDP growth accelerated to 6.93% in the second quarter of 2024, driven by robust exports and industrial production. Despite this growth, rising inflation poses challenges, nearing the government’s ceiling of 4.5%, prompting careful economic monitoring and adjustments.
Vietnam Liberalizes Direct Purchase of Green Electricity, Aiming to Boost Renewable Energy Investment
Vietnam is gradually allowing businesses to directly purchase green electricity from power producers, aiming to stimulate the renewable energy sector and attract investment. The government is reviewing a draft decree on direct power purchase agreements (DPPA) for large power users, which has garnered significant interest from foreign enterprises. The DPPA draft outlines two forms of agreements: direct supply, where prices are negotiated between parties, and indirect supply, which uses the national grid and is subject to spot market prices and additional fees. However, the draft targets large users with a minimum monthly consumption of 500,000 kWh, excluding smaller-scale producers and dampening investment enthusiasm in rooftop solar and biomass power.
In a bid to make green energy more accessible, Deputy Prime Minister Tran Hong Ha announced plans to allow local rooftop solar, waste-to-energy, and biomass power to bypass Vietnam Electricity (EVN) and be accessible through DPPA. This move aligns with Vietnam’s National Power Development Plan (PDP8), which does not impose scale limits on renewable energy projects. With over 103,000 rooftop solar projects currently installed and an additional 2,600 MW planned by 2030, the inclusion of smaller projects in the DPPA framework could spark a significant increase in installations and help businesses meet green certification requirements for exports.
Editor’s Note: Vietnam is pushing forward with reforms to allow businesses to directly purchase green electricity, aiming to bolster investment in renewable energy. The draft decree on direct power purchase agreements (DPPA) targets large users initially but includes plans to extend accessibility to smaller-scale producers like rooftop solar and biomass power. This initiative aligns with Vietnam’s goal to diversify its energy sources and enhance sustainability, potentially facilitating a surge in renewable energy installations across the country.
Vietnam’s First AI-Generated Sci-Fi Film Released for Free
Director Phạm Vĩnh Khương has released “Chạm,” Vietnam’s first entirely AI-generated and mobile phone-captured sci-fi film, free of charge. The groundbreaking film features stunning visual effects and an evocative sound design, all crafted using AI tools on a mobile device. Set in a dystopian world on the brink of apocalypse, “Chạm” explores themes of domestic violence and human connections, delivering a profound message about love and community amidst turmoil.
Khương’s ambitious project, which took 3,000 hours to produce, aims to inspire aspiring filmmakers by demonstrating the power of minimal resources and AI technology. By offering “Chạm” for free, the director encourages viewers to reflect on essential values like empathy, connection, and mutual care within family relationships. This non-profit venture not only optimizes production costs but also seeks to foster a positive and cohesive community through impactful storytelling.
Editor’s Note: “Chạm,” Vietnam’s pioneering AI-generated sci-fi film by director Phạm Vĩnh Khương, is now available free of charge, showcasing groundbreaking visuals and an emotive narrative about human resilience. Produced entirely on a mobile device using AI tools, the film explores themes of love and community amidst societal upheaval, aiming to inspire filmmakers and audiences alike with its innovative approach.
Electric Vehicles Boost Green Transportation Efforts in Indonesia: An ESG Perspective
Indonesia is intensifying its efforts to combat climate change through the promotion of electric vehicles (EVs) as a key solution to reduce greenhouse gas emissions, particularly from the transportation sector. With Indonesia being one of the largest contributors to carbon dioxide emissions in the world, the adoption of EVs is crucial to mitigate environmental impact. EVs operate without fossil fuels, significantly lowering CO2 emissions and contributing to improved air quality, a pressing issue in cities like Jakarta. Government initiatives, such as President Regulation No. 55/2019 and new subsidies planned for 2025, aim to accelerate EV adoption, targeting 2.5 million users by 2025 and a 29% reduction in air pollution by 2030.
From a social perspective, the shift to EVs benefits not only public health but also supports drivers in transportation services like Grab and Gojek. These drivers receive subsidies and reduced operational costs, easing financial burdens compared to traditional motorbikes. Moreover, governance aspects are bolstered through supportive policies that incentivize EV purchases and expand charging infrastructure nationwide, though challenges like limited charging stations and regulatory oversight for electric bicycles remain. Through an Environmental, Social, and Governance (ESG) lens, Indonesia’s embrace of EVs underscores its commitment to sustainable development, aiming to enhance environmental stewardship, social welfare, and effective governance in the transportation sector.
Editor’s Note: Indonesia is ramping up efforts to combat climate change by promoting electric vehicles (EVs) to reduce carbon emissions, especially in densely populated urban areas like Jakarta. Government initiatives, including subsidies and supportive regulations, aim to accelerate EV adoption among drivers, benefiting both public health and economic stability for transportation services. These measures reflect Indonesia’s commitment to sustainable development through improved environmental practices, social support for drivers, and enhanced governance in the EV sector.
Indonesia National Data Centre Cyber Attack Disrupts Services, $8 Million Ransom Demanded
Indonesia’s national data centre fell victim to a cyber attack that disrupted critical government services, including immigration checks at airports, Communications Minister Budi Arie Setiadi revealed to Reuters on Monday. The attacker, using a new variant of the Lockbit 3.0 ransomware, demanded an $8 million ransom. The incident caused significant delays at immigration desks, with automated passport machines now operational as efforts to restore full services continue.
The Lockbit cybercrime group, known for its ransomware operations, encrypted data within the national data centre, prompting concerns about data security and operational disruptions across governmental agencies. Digital forensics investigations are currently underway to assess the full extent of the breach and to determine whether any confidential data was compromised. This attack marks the latest in a series of cyber incidents targeting Indonesian entities, underscoring ongoing vulnerabilities despite previous security breaches affecting the country’s banking sector and government ministries in recent years.
Editor’s Note: Indonesia’s national data centre has been hit by a cyber attack using Lockbit 3.0 ransomware, disrupting critical government services such as immigration checks at airports. The attacker has demanded an $8 million ransom, highlighting ongoing cybersecurity challenges faced by Indonesian governmental agencies amid efforts to restore affected services and assess potential data breaches.
MITI: Macrokiosk braces for new heights
KUALA LUMPUR: Digital Minister Gobind Singh Deo made a second visit to Macrokiosk Malaysia recently, highlighting the company’s significant growth and global impact since his last visit in 2019.
Gobind commended Macrokiosk for its achievements over the past five years, emphasising its role as a leading Malaysian enterprise solutions platform company driving digital innovation across Asia and beyond.
Editor’s Note: The recent developments at Macrokiosk signal their ambitious growth and commitment to innovation in the tech industry. By enhancing their digital solutions, they are set to increase market impact and customer engagement. This strategic move exemplifies how tech companies can achieve sustainable growth and stay competitive.
Website: https://www.nst.com.my/business/corporate/2024/07/1072726/macrokiosk-braces-new-heights
Title: 5G-driven smart factories to contribute RM36.8bil to GDP – Tengku Zafrul
KUALA LUMPUR: The 3,000 smart factories powered by 5G which will be in operation by 2030 are expected to contribute RM36.8 billion to the national gross domestic product (GDP).
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the “tech up for a digitally vibrant nation” mission outlined in the New Industrial Master Plan 2030 (NIMP 2030) stresses the importance of adopting digital technology to create 3,000 smart factories by 2030.
“This will generate more than 150,000 high-skilled jobs in fields such as data analysis, artificial intelligence and industrial internet of things,” he said during the memorandum of understanding (MoU) exchange ceremony between the Malaysian Communications and Multimedia Commission (MCMC) and Malaysian Investment Development Authority (MIDA).
Editor’s Note: The recent announcement that 5G-driven smart factories are expected to contribute RM36.8 billion to Malaysia’s GDP underscores the transformative impact of advanced technology on the economy. This initiative highlights the potential for increased productivity, efficiency, and competitiveness in the manufacturing sector. By embracing 5G technology, Malaysia is positioning itself at the forefront of industrial innovation, which can attract further investments and drive sustainable economic growth.
Johor to be new data centre hub in Asia, 50 centres set up over last 2 years – Onn Hafiz
KULAI: Johor’s infrastructure and ample power capacity have seen the state attract more than 50 data centres in the past two years, said Menteri Besar Datuk Onn Hafiz Ghazi. He pointed out that the Sedenak Tech Park (STeP), in Kulai, alone boasts a capacity of over one gigawatt (GW) and provides the necessary power infrastructure to support data centre operations.
“Singapore took over 15 years to establish itself as a data hub with more than 70 data centres, totalling a capacity of 1.4 GW. In contrast, Johor has attracted more than 50 data centres in just the past two years,” he said. Onn Hafiz said the rapid growth in the data centre industry shows Johor’s capability to become a new data centre hub in Asia.
Editor’s Note: Johor is emerging as a new data centre hub in Asia, with 50 data centres established over the last two years. This development signifies a significant boost to the region’s technological infrastructure and economic prospects. The initiative will likely attract more investments, create job opportunities, and enhance Johor’s reputation as a key player in the digital economy.