Page 23 - Introduction to Investment Laws in Thailand

crisis in 1997. Despite the fact that it recovered quickly from the crisis,
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Thailand’s economic growth has become more modest since then .
In the agriculture sector, Thailand has shifted the development model
to an industry emphasising export promotion and an investor-friendly
industrial policy. Nevertheless, about one-third of the population remains
in the agricultural sector, and agriculture remains important especially in
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food security . As an upper-middle-income country, Thailand’s economy
currently relies on electronics, automobile manufacturing, and the health
sector. Its main export products include hard disk drives, rubber tyres,
computer devices and automotive products. Nonetheless, Thailand has
faced competition from Vietnam, Myanmar, Laos PDR, and Cambodia
with lower wages and more financial attractiveness in foreign direct
investment. At the same time, Thailand has not yet been able to compete
with other countries in Asia, such as South Korea and China, with more
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advanced innovation and technologies, and a higher-skilled labour force .
Thailand 4.0
The Thai government has set an ambitious 20-year strategy and a
“Thailand 4.0” plan to bring Thailand out of the middle-income trap.
Thailand 4.0 is an economic model that aims to make Thailand an

innovative-driven economy, progressing through models 1.0 agriculture,
2.0 light industries and 3.0 heavy industries. Thailand 4.0 relies on four
objectives. The first objective is “economic prosperity” by creating a value-
based economy. The government plans to increase Research and
Development expenditure to 4% of GDP to support innovation, technology,
and creativity. Another goal is to increase national income per capita from
5,470 USD in 2014 to 15,000 USD by 2032. The second objective concerns
“social well-being” with the goals to reduce social disparity from 0.465 in

22 OECD, OECD Investment Policy Reviews: Thailand, Paris: OECD
Publishing, 2021
23 Ibid.
24 Peerasit Kamnuansilpa, "Thailand's 'wicked' development trap", Bangkokpost,
19 September 2019.

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