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The Board of Investment of Thailand is cele-brating four decades of service to the kingdomand people of Thailand. It was on 21 July,

1966 that the announcement was made heralding thebeginning of a successful government venture toattract investment into the country.

Celebrations of this four-decade milestone beganauspiciously on July 21 with a blessing of the BOI’sheadquarters on Viphavadee Road.

That same evening, the Board of Investment host-ed a small gathering of several hundred people atthe Thai Military Club. The invitation was to allBOI staff members, associates and friends. A l s oamong the celebrants was former Secretary Generalof the Board, Chakramon Phasukavanich, who ispresently the Permanent Secretary at the Ministry ofI n d u s t r y.

To mark the event and contribute to the historicalrecord of the BOI and its many accomplishments, abook of approximately 150 pages has been preparedthat offers the reader a truly interesting pictorialessay of the BOI, past and present.

Included within the pages of this publication arephotographs giving the reader a glimpse of daysgone by, and a perspective on how the Board ofInvestment has evolved over the decades into its cur-rent role as one of T h a i l a n d ’s premier investmentservice centers.

In looking at this notable montage, the reader willalso look back to a city that has changed immeasur-ably in the intervening years, in large part due to thework and success of the BOI.

F o rty years and still going stro n g

Page 2 News bites Page 2 BOI net applications Pages 5-6 History, policies and role of the BOI Page 7 Business outlook: Why Thailand

Page 8 Company spotlight: Ajinomoto Thailand Page 9 Resonance of the chambers Page 10 BOI investment missions Page 11 The cost of living in AsiaPage 12 Thailand economy at a glance

I N S I D E

C o n t i nued on Page 3

T H A I L A N DI N V E S T M E N T R E V I E W

BOARD OF INVESTMENT July/August 2006 ■ Volume No. 7 15

The BOI Investment Review

N E W S B I T E S

BOI2 I N V E S T M E N T R E V I E WTHA ILAND BOAR D OF INVESTMENT

BOI opens new office in Los A n g e l e sThe Board of Investment,which has long had ano ffice in New York, hasexpanded to the We s tCoast, with a new office inLos Angeles. At the open-ing ceremony, BOISecretary General SatitChanjavanakul announceda new incentive packagefor the electronics industry that was specifically designedfor this target sector, and one with which the LA o ffice willno doubt be very busy. More than 70 local businessmen,politicians, diplomats and media attended the opening cere-m o n y, including CEOs from companies that had recentlyreceived investment promotion privileges, such asDucommun Te c h n o l o g i e s .

60 years of Thai-UK part n e r s h i pThe British Chamber of Commerce Thailand (BCCT) wasfounded 60 years ago and is today the largest non-Asianchamber of commerce in Thailand, with a membership ofover 620 companies and 1,600 representatives. Britain isT h a i l a n d ’s largest European export market and the larg e s tEuropean investor in the country. To mark the occasion, acelebration was held at the Queen Sirikit NationalConvention Centre in Bangkok from 7-9 September 2006.

A N C A / Ti n f i s hLess than one year after applying for BOI investment pro-motion privileges, A N C A Pty Ltd, an A u s t r a l i a n - o w n e ddesigner and manufacturer of high-tech computer numericalcontrols for the machine tool and metal-based industries,and its supplier company Tinfish, have begun manufactur-ing in Rayong province. This is A N C A’s first operationoverseas. It joins a growing list of Australian companiestaking advantage of the Thai-Australia Free Tr a d eAgreement which entered into force last year.

Extensive selection criteria were followed by the compa-ny to determine the location of this facility. “At the end ofthis process, Thailand won the selection for a number ofstrategic reasons, including a long history of stability, a cul-ture of openness, honesty and respect, a hard-working andknowledgeable workforce, excellent infrastructure, and agovernment that warmly and openly encouraged overseasinvestment,” said Group General Manager Mr. Linsey Siede.

Ducommun Technologies (Thailand) LtdDucommun Technologies, the second-largest supplier ofelectromechanical illuminated push button switches for theaerospace industry in the United States, and a major suppli-er of microwave switches and components used in the aero-space and wireless communications industries, has set up anew facility in Thailand. Within one year of applying forBOI investment promotion privileges, initial production hasbegan to support the company’s high performance and highreliability commercial microwave switches. The site, locat-ed in Saraburi, is also being developed to accommodatefuture expansion as required by growing market demand.

BOI Secre t a ry General Satit (center) atthe opening of the Los Angeles office.

7,675

563

1,612

207

1,286

1,985

1,169

853

2,546

802

233

881

65

557

943

5,100

1,631

849

51

21

85

250

173

126

143

387

121

54

52

25

82

236

459

154

12,472

396

3,137

297

3,534

2,066

1,871

1,171

4,383

893

286

197

280

353

1,666

9,640

1,165

749

82

18

61

223

152

107

106

340

94

61

39

18

81

194

37

180

Total foreign

investment

By sector

Agricultural products

Minerals/ceramics

Light industries/textiles

Auto/metal processing

Electrical/electronics

Chemicals/paper

Services

By Country

Japan

Europe

Taiwan

USA

Hong Kong

Singapore

By Zone

Zone 1

Zone 2

Zone 3

470

28

10

49

115

111

53

104

201

67

41

33

11

46

148

226

96

3,775

150

180

117

641

1,147

849

670

1.528

208

203

642

355

480

633

2,166

976

2004 2005

ValueValueValue ProjectsProjectsProjectsUS$ = 40 THB

2006Jan-July

Unit = US$ Million Note: Investment projects with foreign equity participationfrom more than one country are reported in the figures for

both countries.Source: International Affairs Division

B O I N E T A P P L I C AT I O N S

The BOI Investment Review is published everymonth by the Thailand Board of Investment.

BOI Working GroupMs. Duangjai AsawachintachitMs. Jutatip KriengkraisakulMs. Busayaporn WuthicharnMs. Dhinapa Apaivongse

Editorial ConsultantsMr. Joe FeinsteinMr. Tony AllisonMr. David FawcettMr. Barent Springsted

Layout and DesignJLF Associates Ltd.

PrintingSukhumvit Media

BOI 3I N V E S T M E N T R E V I E WTHAILAND BOARD OF I NVESTMENT

BOI T U R N S 4 0

Complementing the BOI’s retrospective, theBangkok Post also issued a special publication entitledthe 40th BOI A n n i v e r s a r y, which includes many inter-esting photos of the BOI’s early location and the dedi-cated staff members who contributed their talents tomake it such a success. Included as well is a good his-torical review of the BOI and its predecessors, and thecontribution that has been made to the economic devel-opment of T h a i l a n d .

Rounding out the celebratory season was a semi-nar and video presentation on the investmentprospects in Thailand today and in the future. T h i sinformative event was held at the enormous ImpactArena, Muang Thong Thani, and attended by BOIs t a ff members and guests.

Introducing the event to the 900 or so attendeeswas Secretary General Satit Chanjavanakul, whospoke eloquently on the economic conditions inThailand and the current and future investment cli-mate, underlining the role that the BOI has played inthe nation’s economic development.

The secretary general astutely noted the need toadjust investment policies to the demands imposedby competition, to reduce the country’s dependenceon raw materials and to advance the use of technolo-gy as the BOI moves forward.

Deputy Prime Minister and Minister of CommerceD r. Somkid Jatusripituk gave an inspiring keynoteaddress, recalling his early days as a recent graduate

when he chose academia over a position at the Boardof Investment, but with great respect for the boardand the quality of its work.

He noted the changes that Thailand has underg o n eover the 40-year history of the BOI, moving from anagricultural-based economy towards industrializationand now further to becoming knowledge-based.

Wo rking for a bright futureC o n t i nued from page 1

Deputy Prime Minister and Minister ofC o m m e rce Dr. Somkid Jatusripituk delivers

the keynote speech.

C o n t i nued on Page 4

In t e r e s t i n g l y, Deputy PrimeMinister and Commerce MinisterSomkid remarked on the need tofocus on what is really important inthe life and health of the country, andnot merely a blind pursuit of higherG D P figures. Thailand, he under-lined, should pursue the suff i c i e n c yeconomy espoused by His Majesty theKing, and needs a balanced sustain-able development that will build acapable and moral society.

Speaking next was Deputy PrimeMinister and Minister of Industry, Mr.Suriya Jungrungreangkit, who spoketo the strategic direction of the coun-t r y, the economic growth levels in then a t i o n ’s economy and the contributionthat is being made by the manufactur-ing sector.

He spoke of the changes that the manufacturing sec-tor is undergoing and that in the future Thailand can-not continue to rely on low wages to attract invest-ment. The country needed to ensure that it had a moreconducive business environment, with the tax struc-ture to support investment policies. Industry needed tofocus more on value-creation and be innovative. At thesame time, small and medium-sized enterprises need-ed to be promoted, and a logistics infrastructurei m p r o v e d .

The insightful remarks of these two political lumi-naries was followed by an informative discussion thatincluded four distinguished panelists and which wasmoderated by Dr. Thanavath Phonvichai, Director ofthe Center for Economic and Business Forecasting,University of the Thai Chamber of Commerce.

The first panelist to speak was the PermanentSecretary of the Ministry of Industry, Mr. ChakramonPhasukavanich, who addressed the topic “Economicand Investment Outlook”. The permanent secretarynoted that Thailand needed to restructure industryamid rising competition and to increase the transferof technology. He also spoke of the need to enhancehuman resources in Thailand.

He was followed by the President of the JapaneseChamber of Commerce Bangkok, Mr. Tetsuji Banno,speaking on “Is Thailand Still Attractive forInvestment?”. Mr. Tetsuji recalled a recent survey ofJapanese manufacturers and remarked that many

Japanese firms have adopted what is referred to as a“China +1” policy, whereby a company will invest inChina and also one other country to minimize risks.Many Japanese companies consider that Thailand isthe better “other country”.

The next panelist to address the BOI audience wasthe Vice Chairman of the Federation of T h a iIndustries, Mr. Mangkorn Dhanasarnsilp, who spokeon “Trends of Investment in Manufacturing andIndustrial Sectors”. In his remarks, he noted the needto capitalize on technical expertise and quality pro-duction over quantity.

The fourth speaker, the Chairman of the Board ofDirectors, Kasikorn Asset Management CompanyLtd, Dr. Piyasvasti Amranand, touched on the topic“ Trends of Energy Industries”, offering a goodoverview of T h a i l a n d ’s energy needs and the growingrole of alternative energy sources.

The seminar was a fitting event to round out the40th anniversary celebrations, as it offered an appro-priate occasion to credit the BOI with the manyaccomplishments it has realized thus far, but also toprovide some direction for the future.

C l e a r l y, in celebrating its birthday, the BOI hasagain struck a balance between the need for spiritualguidance and reflection, and responding to the imper-atives of modern society. There can be little doubtthat by accepting and celebrating its past, the futureof the BOI can only hold greater success.

A steady guiding hand

BOI4 I N V E S T M E N T R E V I E WTHAILA ND BOARD OF I NVESTMENT

B O I T U R N S 4 0

“The BOI has again struck a balance between the need for

spiritual guidance and reflection, and responding to the

imperatives of modern society. ”

C o n t i nued from page 3

A look at the towering glass structures formingB a n g k o k ’s skyline, threaded by the elevated expresswayand newly constructed mass transit rail system, and it isd i fficult for any visitor to consider Thailand as a devel-oping country. It is, in fact, an image that reflects thecommitment to economic and social progress inspiredand led by His Majesty the King, 60 years on the throne,and the now 40-year contribution made by T h a i l a n d ’sBoard of Investment (BOI).

Established in 1966, the BOI was given a mandate toattract and stimulate foreign investment in the country.Since that time, the BOI has helped to transition thecountry from trade policies of the 1960s and 1970s thatwere focused on import substitution, to becoming one ofthe world’s leading export-dedicated economies.

The first Investment Promotion Act dates back to1954, but the form and structure of the BOI can be tracedto its predecessor, the Board of Industrial Development,which was established in 1960 under the chairmanship ofthe Prime Minister. With no staff of its own, and havingto rely on the cooperation of other government agencies,the Office of the Board of Industrial Investment wasestablished in 1962, within the Office of the Prime

M i n i s t e r, to provide for administration.S i m i l a r l y, the BOI today operates under the chair-

manship of the Prime Minister, with the Minister ofIndustry at his side, and other economic ministers andnotables who together form the policymaking board.The Office of the Board of Investment itself, popularlyreferred to as the BOI, administers policy and interactswith the public in providing investment services andmonitoring compliance, although it is now within theMinistry of Industry.

It was really with the adoption of the InvestmentPromotion Act of 1977 that the powers of the BOI’sinvestment promotion regime were sufficiently broad-ened, by enabling it to offer fiscal and non-fiscal incen-tives to investors who met certain criteria. These includ-ed exemptions or reductions of corporate income taxesand import duties for machinery and raw materials.

With these powers in hand, the BOI has been able toimplement a more coherent and rational investmentscheme. And while at times the BOI may target certaincountries for their investment potential, due to the liber-

The investor always comes firs t

BOI 5I N V E S T M E N T R E V I E WTHAILAND BOA RD OF INV ESTMENT

H I S TO RY, POLICIES A N D R O L E O F T H E B O I

C o n t i nued on Page 6

al nature of T h a i l a n d ’seconomy and its market-oriented outlook, the 1977l a w, which has been amend-ed several times over theensuing years, does not dis-criminate among investorsand is intended to fosterbroad-based investment.

Far from ever being arigid bureaucracy, the BOIhas several times over thepast four decades adapted tothe realities imposed byglobal events, be it the oilcrisis of the late 1970s, thecurrency fluctuations ofmajor trading partners, orthose within Thailand itself,and it has changed policiesand operating methodsa c c o r d i n g l y.

When in the early 1990sthe government strengthenedits policies for economic lib-eralization and deregulation,the BOI responded by decen-tralizing its internal decision-making structure and increas-ing its focus on providingservices to investors, in addi-tion to tax and duty incen-tives. It adopted the T h a i l a n dStandard Industrial Classification system for industrysectors, which allowed respective departments to attaina level of proficiency and expertise that increased eff i-ciency and service.

C o n s e q u e n t l y, the organization has evolved frombeing a regulator of foreign investment into its currentrole as a modern investment services center. The BOIassists potential investors in Thailand with a range ofinformation on investment opportunities, costs andsupporting industries, in addition to providinginvestors help in working through any red tape andb u r e a u c r a cy.

In its current role as aservice provider, the BOImaintains an InvestmentServices Center andMarketing Division, whichcan provide informationon investment opportuni-ties in Thailand. The BOIUnit for Industrial LinkageDevelopment (BUILD),set up in 1992, promotesand develops supportingindustries, and bringstogether large assemblersand local parts suppliers,and helps eliminate obsta-cles that may arise in sub-contracting.

The BOI also offers aninvestment matchmakingservice, runs an InvestorClub Association that

facilitates networking andinformation sharing, and hasa One-Stop Service Centerfor visas and work permits,which processes visa andwork permit applications inthree hours or less.

As Thailand advances intothe 21st Century, the BOI isagain responding to the newrealities of a technology-driven age, and evolvingwith the times. It has been

tasked with improving promotion policies and activitiesthat will transition Thailand from having a resource-based economy to one that is knowledge-based.

To begin that task, the Skills, Technology andInnovation policy is being implemented to attract busi-nesses and services that will impart advanced methodsand technologies to the country.

As in the past, the BOI will continue to work toattract those industries that will play a larger role in thenew age. Today they include such cutting-edge areas asalternative energ y, ICT, genomics, nanotechnology andmany others.

BOI changing with the times

BOI6 I N V E S T M E N T R E V I E WTHA ILAND BOAR D OF INVESTMENT

C o n t i nued from page 5

The BOI has been tasked with

improving promotion policies

and activities that will

transition Thailand from a

country with a resource-

based economy to one that

is knowledge-based.

BOI 7I N V E S T M E N T R E V I E WTHAILAND BOA RD OF INV ESTMENT

The American Chambers of Commerce in Indonesia,Malaysia, the Philippines, Singapore, Thailand andVietnam have released their annual ASEAN RegionalBusiness Outlook Survey 2006, along with a separatedocument detailing feedback received from memberssurveyed in Thailand.

The AMCHAM survey, now in its fifth year, was con-ducted between 27 April and 24 May 2006, and aims tomeasure the outlook of its members on business growthand their perceptions on a series of local factors. T h eresponses reflected are those of executives who workwith a company that is held by an American interest,with the results weighted to the actual proportion ofeach country’s voting members’ p o p u l a t i o n .

Of the survey participants, 62% held the view that theASEAN market will be more important for their respec-tive company revenues over the next two years; an opin-ion shared by 59% of those located in Thailand.

The main reasons cited for this positive outlook arerecovery of the economy, improvements in infrastruc-ture and limited growth opportunities in other regions.The separate report detailing responses from T h a i l a n d ’smembers also lists increased availability of trained per-sonnel and favorable government policies among thereasons for optimism.

The numerous questions posed to the executivesincluded whether they expect the world economy in2006 to perform much better, about the same or much

worse than it did in 2005. Nearly one third of the respondents from T h a i l a n d

said much better, and about half indicated that theythought it would perform about the same as last year,which was on par with regional views.

H o w e v e r, nearly three quarters of T h a i l a n d ’s respon-dents thought their own business would expand in thenext two years, with 60% being optimistic of profitgrowth in 2006.

When it came to displaying expectations of work-force expansion this year, Thailand, at 67%, was secondonly to Vi e t n a m ’s 71% in its positive outlook. And, afull 70% of the regional members surveyed expected theexpatriate workforce to remain the same.

Touching on local issues that American companiesconsidered important, Thailand ranked second toSingapore in terms of personal security, with 82% and88% respectively.

While Thailand has always achieved high marks forpersonal safety, it is interesting to note a 6% increasefrom both 2004 and 2005, despite risks globally. It hasalso earned high marks for housing costs, low laborcosts and positive sentiments towards the United States.

Concern was expressed over regulations, and theongoing political situation is obviously reflected in con-cerns over the political system, but overall T h a i l a n dremains a very positive, safe and attractive location forAmerican business.

AMCHAM regional survey

The annual Taitronics trade show in Taiwan has grownto become one of the premier events and internationalplatforms in Asia, through which Taiwan reveals to theworld its latest advances in electronics and communica-tions technology.

This year, however, the venue was different, asThailand was honored to host the first-ever overseasTaitronics, along with the “2006 Taiwan A u t o m o t i v eElectronics Forum -Bangkok”, from 27-30 July.

The decision is part of a strategy to use Thailand as agateway into the Southeast Asian market, and also inrecognition of T h a i l a n d ’s status as a lead manufacturerof electronics and automotives.

The event organizers, Taipei World Trade Center andTaiwan Electrical and Electronics ManufacturersAssociation, brought together over 200 companies atmore than 300 booths to display a vast array of high-tech products at the Bangkok International Trade andExhibition Center.

Hand-held devices, liquid-crystal display (LED)lighting and consumer goods were just a few of themany products unveiled for the thousands of visitors.

Equally successful was the auto-electronics forum,held concurrently with Taitronics, with the theme“Competitive Advantages of the Taiwanese A u t o -Electronics Industry and Collaboration Opportunitiesbetween Taiwan and Thailand”.

The event highlighted the sourcing opportunities fromTaiwan and the synergies that exist in meeting currentmarket demand for such products as global positioningsystems (GPS), third-generation (3G) telecommunica-tions, and audio-video entertainment systems for auto-motives. And as Thailand begins its move from the 14th-l a rgest auto manufacturer in the world towards a top 10ranking, the opportunities are many.

Like Taiwan, Thailand is diligently pursuing a strate-gic goal to remain Southeast A s i a ’s electronics power-house. From January to June of 2006, the Board ofInvestment of Thailand received applications for 98 for-eign investment projects in this field, to the amount of44.5 billion baht.

In 2005, electronics were the number one export,contributing one third of annual export revenue, withintegrated circuit exports ranking third.

B U S I N E S S O U T L O O K : W H Y T H A I L A N D

Ta i t ronics comes to Bangko k

The Ajinomoto Company, (Thailand)Ltd. has been a primary investor inThailand for 46 years and was the firstforeign company to receive Board ofInvestment investment and promotionprivileges.

It began operations here in 1960with the construction of a monosodi-um glutamate (MSG) plant located inPrapadang, Samutprakarn, which wasthe company’s first MSG plant outsideof Japan. Since then, Thailand hasbecome the base of ASEAN opera-tions for this global company.

M r. Kanji Mimoto, ManagingDirector of Ajinomoto Co. (Thailand)Ltd., explains that Thailand was origi-nally chosen for several reasons.First, since before World War II thecountry had been importing theAjinomoto brand of MSG and there-fore there was an existing and provendomestic demand for the product.Also, he notes that Thailand possessescassava, which is the raw material thatgoes into making the tapioca flour thatis necessary to process MSG.

M r. Mimoto adds that Thailand wasseen as a peaceful and politically sta-ble country and the BOI was off e r i n gcorporate tax incentives and exemp-tions on the import duty of machinery,all of which went into making the ven-ture a success from the start.

The Prapadang plant initially pro-duced 600 tons of MSG, but has since increased produc-tion by a factor of 100. Ajinomoto later built a secondMSG plant, Kampangpetch I, in the province bearing thesame name, which produces 35,000 tons per year andnow buys 20 percent of T h a i l a n d ’s cassava, making thecompany that product’s largest consumer in the country.

In 1986, Ajinomoto built on its original success and setup a plant at Pratum Thani for the production of feed-grade Lysine, which is an amino acid used to add proteininto animal foods.

With an original production of 30,000 tons, this wassubsequently increased to 50,000 tons.

In 2003, Kampangpetch II was set up with an annual pro-duction of 3,500 tons of Ribonucleotides, a seasoning prod-

uct under the brand name Ajitides Plus G. This product isused in the food industry, together with monosodium gluta-mate, for enhancing the taste of products such as instantnoodles, canned foods, seasoning sauce and fish sauce.

A plant was also founded at the Nongkhae IndustrialEstate in Saraburi province, where Ajinomoto producesthe Rosdee brand of seasoning. This plant is one of thel a rgest of the company’s food production bases in A s i a ,and in the future will also produce other food products.

Investments in all five of A j i n o m o t o ’s Thailand plantsreceive promotion from the BOI, contributing to the com-p a n y ’s continued success. Tr u l y, Ajinomoto exemplifiesthe opportunities and profits that await investors in theThai food industry.

Ajinomoto Th a i l a n dA history of s u c c e s s

BOI8 I N V E S T M E N T R E V I E WTHAILA ND BOARD OF I NVESTMENT

C O M PA N Y S P O T L I G H T

From a modest beginning in 1960, Ajinomoto has steadily expanded

its presence in Thailand.

B O I meets with JCCOn 20 July, representatives and direc-tors of the board of the JapaneseChamber of Commerce (JCC) metwith BOI officials in Bangkok.Representatives of the BOI and JCCtypically meet together once or twiceevery year. With the last meetingheld in October 2005, many issueswere on the agenda.

The Japanese investment commu-n i t y ’s outlook on Thailand remainspositive. A Spring 2006 report by theJCC found that 71% of Japanesefirms surveyed predicted an increasein sales for the year. Other recent sur-veys by the Japanese External Tr a d eO rganization found Thailand to beregarded as the top-ranked choice ofJapanese firms for overseas produc-tion, marketing and sales bases over the next five to 10years.

Thailand is the top-ranked destination for automobile pro-duction, and the second-highest ranked destination for pro-duction of electronics and electrical appliances. JCC treasur-e r, Hideyuki Nimura, pointed out that many Japanese firmsthat already have production bases in Thailand are also veryinterested in setting up regional operating headquarters here.

In fact, the electronics sector is a BOI target sector forpromotion. Along with the petrochemical and automotive

rubber industries, additional tax incentives for electronics-producing companies were announced by the BOI in May,and additional applications from firms in the electronics sec-tor are expected soon following the BOI-JCC meeting.

The JCC, founded in 1954 with 30 member- c o m p a n i e s ,serves to promote the development of trade between Japanand Thailand and to foster the industrial growth of JCCmembers in T h a i l a n d ’s economy. Japanese foreign directinvestment (FDI) currently accounts for about 40% of allFDI in T h a i l a n d .

On 5 June, a delegation from the BOI, led by SecretaryGeneral Satit Chanjavanakul, met at the headquarters ofthe American Chamber of Commerce in Thailand withleading U.S. business representatives to discuss theinvestment environment in the country.

Amcham president Steven Green ofChevron, along with Amcham Vi c ePresidents To m White from AIA, PornlertLattanan from General Electric andCharles Blocker of Gannon Internationalwere present, along with Judy Benn,Executive Director of Amcham, and otherAmCham members.

Some concern was expressed over thepace of the talks for a free trade agreement( F TA) between the U.S. and T h a i l a n d .With neighboring countries actively pur-suing FTAs with the United States,Thailand could be placed at a consider-able competitive disadvantage if it fails

to sign an agreement. The FTA talks have gained addedimportance in the light of a lapsed Treaty of Amity andEconomic Relations that has governed the respectivebusiness interests of the two countries for many years.

It was, however, the general consensus of the AmChammembers that the current political situation in Thailandwould be satisfactorily resolved within six months andpolitics would then return to normal.

BOI 9I N V E S T M E N T R E V I E WTHAILAND BOARD OF INVESTMENT

R E S O N A N C E O F T H E C H A M B E R S

Catching up with AMCHAM

Representatives of the Japanese Chamber of Commerce pictured with

officials of the BOI at the BOI headquarters.

AmCham President Steven Green and several A m C h a m

Governors dicussed the investment climate in Thailand with BOI

Secretary General Satit Chanvanakul (center) and BOI s t a f f .

Destination: New York

Board of Investment Secretary General SatitChanjavanakul accompanied Deputy Prime Minister andMinister of Commerce Somkid Jatusripituk to the UnitedStates in July 2006. The team met in Washington, D.C.with the US-ASEAN Business Council and members ofvarious trade groups. Also on the agenda was a stop inNew York, where Deputy Prime Minister Somkidaddressed members of the U.S. business community andkey investors at the Asia Society.

As part of their mission to the United States, SecretaryGeneral Satit and BOI Executive Advisor A j a r i nPattanapanchai named Dow Chemical CEO A n d r e wLiveris an Honorary Investment Advisor in recognition ofDow’s significant contributions to Thailand’s industrialdevelopment.

Destination: Australia

Assistant Secretary General Mrs. Vibulphan Juntarashoteled a team of BOI investment officers to Australia.

In Sydney from 24-25 July, they participated in a sem-inar with officials of the Royal Thai Consulate inAustralia, arranged by ABL State Chamber. The partici-

pants were briefed on the current status of the Thai-Australia Free Trade Agreement (TAFTA) and the mostup-to-date investment benefits in Thailand. Mr. Gavin

Green, MD of Barnal, Australia, presented a case studyfocusing on his company’s joint venture in Thailand.

The next day they went to Melbourne and met with rep-resentatives of the AUS automotive and mining industries,and with the Shadow Minister of Finance of Australia, avisit to the Melbourne Exhibition Centre and a lunch spon-sored by the Australian mining giant Oxiana Ltd.

On 27 July, a half-day investment promotion seminarwas conducted at the Melbourne Exhibition Center inconjunction with senior executives from the T h a iDepartment of Export Promotion and the Thai Export-Import Bank. A network reception, co-sponsored by ICNVictoria/VTBN and William Buck, with presentations byrepresentatives from the BOI, the Thai Department ofExport Promotion, the Thai Export-Import Bank and theRoyal Thai Embassy in Australia was held in the evening.The event was attended by over 130 delegates from 83different companies and government organizations.

The next day, a half-day seminar and panel discussion– “Thailand: Opportunities and Challenges for AustralianBusiness” – was held with leading Australian businessrepresentatives. The mission held discussions with poten-tial Australian investors involved in food production,automotive products, manufacturing and plastics.

Destination: Taiwan

Deputy Secretary General Thamrong Mahajchariyawongled an investment mission to Taiwan from 2-7 July, fol-lowing up a recent visit to the island by Secretary GeneralSatit Chanjavanakul. The BOI team met with executivesof several industries, including ship building, plastics andpower generation, and were pleased with the interestexpressed in Thailand. The team visited several projectsites during their stay and gave a presentation on invest-ment opportunities in Thailand.

BOI10 I N V E S T M E N T R E V I E WTHAILA ND BOARD OF I NVESTMENT

B O I I N V E S T M E N T M I S S I O N S

BOI Secretary General Satit Chanjavanakulmet with investors in Washington and NY.

Deputy Secretary General ThamrongMahajchariyawong in Taiwan.

Members of the BOI delegation visit PlanticTechnologies Ltd.

BOI 11I N V E S T M E N T R E V I E WTHAILAN D BOA RD OF INV ESTME NT

L I V I N G I N A S I A

The 2006 Cost of Living Surv e y conducted byMercer Human Resource Consulting revealed thatat the same time costs in many Asian capitals wereincreasing, the cost of living in Bangkok declined to127th of the 144 cities surveyed, an improvement oftwo slots from the 2005 ranking.

Moscow replaced Tokyo as the world’s mostexpensive city, with a cost of living 24 percent high-

er than New York, whichhas a score of 100, making itthe 10th most expensive cityin the world. Four cities inAsia ranked among the 10most expensive cities,including Seoul (No.2),Tokyo (No. 3), Hong Kong(No.4) and Osaka (No.6).

With an index of 64.9,the cost of living in Bangkok was 35 percent lessthan costs in New York, and compared favorablywith costs in Beijing, Singapore, Shanghai, Hanoi,Ho Chi Minh City and Jakarta, all of which saw theircosts rise significantly in the global rankings.

The Mercer Cost of Living Survey covers 144cities across six continents and measures the compar-ative costs of more than 200 items in each city,including housing, transport, food, clothing, house-hold goods and entertainment.

B a n g kok oneo f wo rl d ’s

least ex p e n s ive

c i t i e s

While the traditional sights of Seoul (above) and Moscow (left) capture

the imagination, these two cities are now the most expensive in which to

live in the world.

Moscow

Seoul

Tokyo

Hong Kong

London

Osaka

Geneva

Copenhagen

Zurich

Oslo

New York

Beijing

Singapore

Shanghai

Hanoi

Ho Chi Minh City

Jakarta

Guangzhou

Kuala Lumpur

Bangkok

Manila

1

2

3

4

5

6

7

8

9

10

10

14

17

20

32

37

48

54

114

127

141

4

5

1

9

3

2

6

8

7

10

13

19

34

30

50

56

71

65

117

125

143

119.0

115.4

134.7

109.5

120.3

121.8

113.5

110.0

112.1

105.3

100.0

95.6

88.0

90.4

84.9

83.8

78.9

80.6

67.1

65.3

49.8

123.9

121.7

119.1

116.3

110.6

108.3

103.0

101.1

100.8

100.0

100.0

94.9

92.0

91.2

85.4

84.2

82.4

81.5

69.3

64.9

56.0

Source: 2006 Mercer HR Consulting Cost of Living Survey.

2005rank

2006rank

City 2005index

2006index

How the cities fare

555 Vibhavadi-Rangsit Road, Chatuchak Bangkok 10900, Thailand. Tel: +66 (0) 2 537 8111, +66 (0) 2537 8555Fax: +66 (0) 2 537 8177. Website: www.boi.go.th E-mail: head@boi.go.th

Product1) Computer and parts2) Automobiles and parts3) Electronics4) Rubber5) Plastic pellets6) Jewelry7) TVs and radios8) Garments9) Chemical goods10) Oil

Top 10 Exports H1 2006

% growth (y-o-y)29.0429.4026.7253.40

8.4022.74

4.137.44

17.6891.40

Value (US$ bn)6.874.493.312.432.171.801.631.541.511.46

Head Office, Office of the Board of Investment

NEW YORKThailand Board of Investment New York Office61 Broadway, Suite 2810New York, N.Y. 10006, U.S.A.Tel: +1(0) 212 422 9009Fax: +1(0) 212 422 9119E-mail: boiny@aol.com,nyc@boi.go.th

LOS ANGELESThailand Board of Investment Los Angeles Office611 North Larchmont Boulevard, 3rd Floor Los Angeles CA 90004, U.S.A.Tel: +1 (0) 323 960 1199Fax: +1 (0) 323 960 1190E-mail: boila@sbcglobal.net

PARISThailand Board of Investment Paris OfficeAmbassade Royale de Thaïlande8, Rue Greuze, 75116 Paris,FranceTel: +33 (0) 1 5690 2600, +33 (0) 15690 2601Fax: +33 (0) 1 5690 2602E-mail: par@boi.go.th

SHANGHAIThailand Board of Investment Shanghai OfficeRoyal Thai Consulate-General2nd Floor,7 Zhong Shan Dong Yi LuShanghai 200002, P.R. ChinaTel: +86(0) 21 6321 9621, +86(0)21 6323 4679Fax: +86 (0) 21 6321 9383E-mail: boishanghai@sh163.net

FRANKFURTThailand Board of InvestmentFrankfurt OfficeRoyal Thai EmbassyBethmannstr. 58, 5.OG60311 Frankfurt am Main, GermanyTel: +49 (0) 69 9291 230Fax: +49 (0) 69 9291 2320E-mail: fra@boi.go.th

TOKYOOffice of Economic and Investment AffairsRoyal Thai Embassy8th Floor, Fukuda Building West2-11-3 Akasaka, Minato-ku, Tokyo 107-0052 JapanTel: +81(0) 3 3582 1806Fax: +81 (0) 3 3589 5176E-mail: tyo@boi.go.th

OSAKAThailand Board of Investment Osaka OfficeRoyal Thai Consulate-GeneralBangkok Bank Bldg, 5th Floor1-9-16 Kyutaro Machi, Chuo-Ku, Osaka 541-0056, JapanTel: +81 (0) 6 6271 1395Fax: +81 (0) 6 6271 1394E-mail: osaka@boi.go.th

TH AI LA ND ECO N OMY AT A G L A N C E

Facts about ThailandPopulation (2005, est)65.97 millionASEAN population570 millionLiteracy rate96%Minimum wage (Bangkok)US $4.92/day (184 baht/day)

GDP (2005)US$176.2 billionGDP per capita (2005)US$2,825Projected GDP growth (2006)4.2-4.9%GDP growth (2005)4.5%

Trade balance (June 2006, projected)US$424.5 millionCurrent account balance (June 2006, projected)US $489 millionInternational reserves (July 2006)US$58.8 billionCapacity utilization (June 2006, projected)75.2%

NESDB five-year targets 2007-11Current Account Deficit within 2% of GDPPublic Debt not over 50% of GDPUnemployment 2% or lessInflation 4% or less3% productivity growth/year

Corporate income tax10-30%Withholding tax10-15%Value added tax7%

Sources: Bank of Thailand and NESDB, August 2006US$ 2005 = 40.27 baht. US$ Aug. 2006 = 37.37 baht

Exchange Rate Trends

0

10

20

30

40

50

60

2001

-01

2001

-07

2002

-01

2002

-07

2003

-01

2003

-07

2004

-01

2004

-07

2005

-01

2005

-07

2006

-01

2006

-07

Source: Bank of Thailand

$USEuro100 Yen$A

Monthly Closing Values of the SET

600

620

640660

680

700

720

740

760780

2005-02

2005-03

2005-04

2005-05

2005-06

2005-07

2005-08

2005-09

2005-10

2005-11

2005-12

2006-01

2006-02

2006-03

2006-04

2006-05

2006-06

2006-07

Source: Stock Exchange of Thailand

Industrial Capacity Utilization (%)

55

60

65

70

75

80

2002 Q2

2002 Q3

2002 Q4

2003 Q1

2003 Q2

2003 Q3

2003 Q4

2004 Q1

2004 Q2

2004 Q3

2004 Q4

2005 Q1

2005 Q2

2005 Q3

2005 Q4

2006 Q1

2006 Q2

Source: Bank of Thailand

International Reserves/Short-term Debt (%)

100

150

200

250

300

350

400

450

2002 Q2

2002 Q3

2002 Q4

2003 Q1

2003 Q2

2003 Q3

2003 Q4

2004 Q1

2004 Q2

2004 Q3

2004 Q4

2005 Q1

2005 Q2

2005 Q3

2005 Q4

2006 Q1

Source: Bank of Thailand

Source: Department of Export Promotion