www.mahidol.ac.th

Since the end of 1986, Thailand has been a favourite location for foreign firms escaping appreciating currencies and escalating labour costs. The flow of foreign firms has been matched by local investors who, stimulated by lower interest rates and a booming economy, have also increased investment activities.

Manufacturing has been the longest recipient of FDI. Despite a decline in other sectors, FDI in manufacturing continues to expand, with the petroleum sector attracting the largest amount of FDI.

The government continues to take a very positive stance towards foreign direct investment in the manufacturing sector. The Thai government has consistently welcomed foreign investment, recognizing the important role played by foreign technology, management and marketing skills as dynamic forces contributing to Thailand's economic development. Investment is encouraged whether from domestic sources of abroad. The emphasis is on increasing the role of the private sector in Thailand's economic development.

Since 1990, the government has been exploring a variety of measures to promote the supporting industries. Sub-contracting activities are actively encouraged and a special incentive package has been implemented to promote their development to facilitate the growth of the electronics and other industries. As a result, Thailand's supporting industries have grown rapidly in the past five years.

The private sector has played (and will continue to play) a crucial role in the industrial development of Thailand, while the government has played a promotional role to construct and create the physical and institutional infrastructure and to design measures to support the growth in the industrial sector. However, the private sector needs to join with the government to co-operate in solving economic problems and tackling development problems.

Consequently, the Joint Public-Private Sector Consultative Committee was set up in 1981 to mobilize the private sector to work together with the government in addressing a wide range of economic and social issues.