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Foreign direct investment collapses

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Biggest fall in 10-years, low-technology, rising wages blamed, but BoI numbers show big jump in investment projects.

FOREIGN INVESTMENT

Foreign direct investment (FDI) collapses: Biggest dip in decade

2/08/2016
Post Reporters

Foreign direct investment (FDI) in Thailand in the first half of the year fell by more than 90% in value to the lowest mark in over a decade at US$347 million, reports the Bank of Thailand (BOT).

The BOT report said FDI declined from $4.2 billion in the same period last year to the lowest value since 2005.

Foreign Direct Investment (FDI) has plunged despite strong campaigning such as this appeal by economy czar and Deputy Prime Minister Somkid Jatusripitak at the Bangkok Nikkei Forum 2016 on July 7. (Post Today photo)

FALLING FOREIGN INVESTMENT DUE TO LAGGING TECHNOLOGY, RISING WAGES

The decline was attributed to the structure of Thai industry, which continues to produce low-technology products even as Thai wages rise relative to neighbouring countries' wages.

The sluggish global economy has also kept foreign investors on the sidelines.

"They are taking a wait-and-see approach until they see solid signs of recovery in major countries," said the report.

POLITICAL UNCERTAINTY ANOTHER FACTOR

Political uncertainty in Thailand may also have discouraged investment.

The country has a referendum on the latest constitution draft on Sunday.

The outcome will likely affect whether a general election takes place as scheduled.

However, the central bank hopes the latter half of the year will see an improvement in FDI as the world economy is projected to improve gradually.

The Thai political environment may be clearer after the referendum also.

INVESTMENT ACTUALLY ROSE IN SECOND QUARTER OF 2016

FDI actually rose in the second quarter of 2016, tallying $1.13 billion compared with a contraction of $789 million the same period last year.

The influx of foreign capital flowing to equity and bond markets should increase FDI again, the report said.

JUNE BREXIT EFFECT

In June, foreign capital inflows into Thailand's equity and bond markets totalled $2.23 billion.

The central bank attributed the June inflow to the Brexit effect.

This Brexit effect should delay any Federal Reserve interest rate hike, and also FDI in particular sectors was a factor, such as telecommunications.

BOI INVESTMENT MEASURE ACTUALLY SHOWS INVESTMENT INCREASE

Hirunya Suchinai, the secretary-general of the Board of Investment (BoI), played down the issue of declining foreign investment.

The nosedive in investment was because of the different way the BoI and the central bank measure investment value, she said.

The BoI calculation of foreign investment is instead based on investment applications the BoI approves.

The central bank figure includes investment value and capital inflow - outflow (FDI and also more volatile portfolio foreign investment in Thailand's stock and bond markets).

If investment is measured in terms of approved investment projects, as the BoI measures it, then investment has actually increased quite a lot recently.

"The BoI measurement was the real investment value from 328 projects [during] the first five months of this year," said Mrs Hirunya, referring to 84.39 billion baht, up 604% from 11.99 billion year-on-year.

HONG KONG, JAPAN & NETHERLANDS BIGGEST FOREIGN INVESTORS

The biggest foreign investors in Thailand are Hong Kong, leading with 23.2 billion baht, followed by Japan at 19.27 billion and the Netherlands at 10.95 billion, she said.

Mrs Hirunya said in the first half this year, foreign investment in Thailand rose substantially thanks to a big jump in June, with 758 new investment projects worth a total investment value of 303.66 billion baht.

That was up 327% from the same period last year, which saw 71.14 billion baht of investment value from 408 projects.

The rise was attributed to government attempts to support investment such as its cluster policy, special economic zones (SEZ's) and the plan to promote the Eastern Economic Corridor.

Mrs Hirunya is still confident FDI for 2016 will reach the BoI's target of 450 billion baht.

OVERSEAS THAI INVESTMENT SKYROCKETS 42.5%

Thai overseas investment in the first half this year skyrocketed by 42.5% year-on-year to $5.95 billion, reported the central bank.

The BoI put the figure at $7 billion for the first five months this year, with deputy secretary-general Chokedee Kaewsang noting it was up from $2 billion in the same period last year.

The rise was attributed to economic expansion and business diversification, particularly for mining and renewable energy businesses.

"This year the BoI expects new investment in other sectors such as manufacturing and banking outside the country to boost the value of Thai investment abroad. We have seen positive signs that these sectors have the potential to grow in overseas markets," said Mr Chokedee.

The BoI projects Thai investment overseas to exceed $14 billion this year.

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Vocabulary:

abroad : in or to a foreign country - ในต่างประเทศ

application (noun): a formal request for permission to do or have something; a piece of paper used to apply for something - การสมัคร, การขอ, ใบสมัคร

approach : a way of doing or dealing with something; a particular way of doing something or thinking about something - การจัดการกับปัญหา วิธีการทำให้ถึงจุดหมาย

approve : to give official permission - อนุมัต

approved : given official agreement or permission - ได้รับการรับรองแล้ว

attributed to : to believe that something is the result of a particular situation, event, or person’s actions - ถือว่าเป็นของ

Board of Investment (BOI) (noun): an agency of the Government of Thailand to promote investment in the country - สำนักงานคณะกรรมการส่งเสริมการลงทุน

bond (noun): a way that companies and the government borrow money from many people each of which owns one or more "bonds" which are usually traded on securities exchanges - พันธบัตร

boost : to increase - เพิ่ม

calculation : the act or process of using numbers to find out an amount - การคาดการณ์

capital : a large amount of money that is invested or is used - ทุน, เงินทุน

central bank (noun): the main government bank in a country that controls the supply of loans (credit) and the supply of money in the country and provides financial services to the government and other banks - ธนาคารแห่งชาติ

cluster (verb): to come together in a small group or groups - ทำให้อยู่รวมเป็นกลุ่ม

compare (verb): to show or state that somebody/something is similar to somebody/something else - เปรียบเทียบ

confident : certain; having trust in people, plans, or the future - มั่นใจ

constitution : the set of laws and basic principles that a country in governed by - รัฐธรรมนูญ

continue : happening or existing for a period of time without interruption - ซึ่งติดต่อกัน, ซึ่งต่อเนื่องกัน

contraction : when something becomes smaller or shorter - การหดตัว

corridor (noun): a long narrow area along which something travels - เส้นทาง, ระเบียง,เฉลียง

decade : a period of ten years - ทศวรรษ

decline : becoming less - การลดลง

deputy : a person whose rank is immediately below that of the leader of an organisation - รอง

discourage : to make someone feel like something should not be done - ทำให้ไม่อยาก (ทำสิ่งใดสิ่งหนึ่ง)

discouraged : feeling that it is useless to try to do something - หมดกำลังใจ, ท้อแท้

diversification : developing a wider range of products, interests, skills, etc. in order to be more successful or reduce risk - การทำให้หลากหลาย

draft : not in a final form and likely to be changed - ร่าง

environment : a place, including all the physical conditions that affect it - สภาพแวดล้อม, สิ่งแวดล้อม

equity (noun): stock shares - หุ้นทุน

exceed : to be more than something; to go beyond a limit - เกินกว่าที่กำหนด

expansion : when something increases in size, number or importance - การขยายออก

Federal Reserve (noun): the US central bank, also called the "Fed" -

figure : a number representing a particular amount, especially one given in official information - ตัวเลข, จำนวนเลข

foreign direct investment (noun): FDI, money that people or companies of one country invest in another country by buying property, building factories, buying businesses, etc -

general election (noun): an election in which all or most members of a given political body are chosen. The term is usually used to refer to elections held for a nation's primary legislative body, as distinguished from by-elections and local elections (Source: Wikipedia) - การเลือกตั้งทั่วไป

gradually : slowly and in small stages or amounts - อย่างทีละน้อย

hike : an increase - การเพิ่มสูงขึ้น

in terms of (verb): measured by -

inflow : the movement of a liquid or of air into a place from somewhere else - การไหลเข้า, กระแสที่ไหลเข้ามา

influx : a large number of people or things coming in to a place - การหลั่งไหล การไหลบ่า  (เข้าไปยังที่ใดที่หนึ่ง)

interest rate : the percentage that a bank or other financial company charges you when you borrow money, or the percentage it pays you when you keep money in an account - อัตราดอกเบี้ย

investment (noun): the act of investing money in something - การลงทุน

investors (noun): people or organisations that invest money, i.e., use money with the aim of making a profit from it, for example by buying property or buying shares in a company - นักลงทุน

issue : a subject that people discuss or argue about - ประเด็น

leading (adjective): among the first and most important in a group - ชั้นหนึ่ง, ชั้นแนวหน้า, ชั้นนำ

major : very large or important - สำคัญมาก

manufacturing (noun): making and producing a product - การผลิต

mark : a level or point that something reaches that is thought to be important - ความสำคัญ

measure (verb): to find the size, quantity, etc. of something in standard units - วัดขนาด (ความยาว, ความสูง, ความเร็ว ฯลฯ)

mining : the process of getting minerals from under the ground; the industry involved in this - การทำเหมือง

neighbouring : located or living near or next to a place or person - ติดกัน, ที่อยู่ใกล้เคียง, ที่ตั้งอยู่ใกล้เคียง

nosedive (verb): decrease quickly (like an airplane falling ("diving") to the ground "nose" first -

note : to notice or pay careful attention to something - สังเกต

on the sidelines : outside of a event, i.e., not an actual part of the event -

outcome : the results of an election - ผลการเลือกตั้ง

outflow (noun): the movement of a large amount of money, liquid, people, etc. out of a place - การไหลออกมา

overseas : in another country - ต่างประเทศ

particular : specific - เฉพาะ, จำเพาะ, โดยเฉพาะ

particularly : especially, or more than usual - โดยเฉพาะ

period : a particular length of time - ระยะเวลา

played down : made something seem less important than it is - ลดความสำคัญของ

policy (noun): a set of plans or action agreed on by a government, political party, business, or other group - นโยบาย

portfolio (noun): a set of investments owned by a company, person or organization - หลักทรัพย์การลงทุน, หลักทรัพย์ในครอบครอง, กลุ่มหลักทรัพย์; หลักทรัพย์ทั้งหมด ในความครอบครองของ ผู้ลงทุนรายใดรายหนึ่ง

positive : good - ที่ดี

potential : what is possible - ความเป็นไปได้

project : a planned piece of work that is designed to find information about something, to produce something new, or to improve something - โครงการ

projected : calculated based on information already known - คาดคะเน, ประเมิน

quarter (noun): three months of the year on the official calendar of the government or companies - ไตรมาส

recently (adverb): not long ago - เมื่อไม่นานมานี้, เมื่อเร็วๆ นี้

recovery (noun): the process of becoming normal and healthy again - การฟื้นตัว, การฟื้นฟู

refer : to mention someone or something - อ้างถึง, อ้างอิง

referendum : an occasion when all the people of a country can vote on an important issue - การลงประชามติ

relative : somewhat; in comparison with someone or something similar - ค่อนข้าง

renewable energy (noun): forms of energy for generating electricity that will not run out such as solar or wind power - พลังงานหมุนเวียน หรือพลังงานใช้ไม่หมด [ได้แก่ พลังงานแสงอาทิตย์ เราสามารถเปลี่ยนพลังงานแสงอาทิตย์มาเป็นพลังงานไฟฟ้าโดยอาศัยเซลล์แสงอาทิตย์ (Solar cell) พลังงานน้ำ เราสามารถแปรรูปพลังงานศักย์จากน้ำเพื่อนำมาเป็นพลังงานกล เช่น ใช้แรงของน้ำหมุนกังหันผลิตไฟฟ้า พลังงานลม โดยการใช้กังหันลมหมุนเครื่องจักรกลต่างๆ เครื่องสูบน้ำ เครื่องบดธัญพืช เป็นต้น พลังงานจากมวล ชีวภาพ เช่น มูลสัตว์และก๊าซชีวภาพ พลังงานจากการเผาไม้ กระดาษ ฟืน แกลบ กากชานอ้อย และ ที่เรียกว่า พลังงานใช้ไม่หมดก็เพราะสามารถหามาทดแทนได้ เช่น ปลูกป่าเอาไม้มาทำฟืน หรือปล่อยน้ำจากเขื่อนมาปั่นไฟ หรือแสงอาทิตย์ที่ได้รับจากดวงอาทิตย์อย่างไม่มีวันหมดสิ้น ดังนี้เป็นต้น [ปิโตรเลี่ยม]]

scheduled : planned to happen at a particular time or day - ตามตารางเวลา

secretary-general (noun): the person who is in charge of the department that deals with the running of a large international or political organisation - เลขาธิการ, เลขาธิการใหญ่

sector : a part of a country’s economic or business activity - ภาค (เศรษฐกิจ)

sign : a piece of evidence that something is happening or that something exists - ร่องรอย

skyrocket : to increase very quickly - ลอยขึ้นสูงอย่างฉับพลัน

sluggish : not performing or reacting as well as usual - (เศรษฐกิจ) ที่ซบเซา

solid : completely good, with no mistakes or bad parts - ซึ่งไว้ใจได้

substantially (adj): by a large amount - เป็นชิ้นเป็นอัน

support : to give help, encouragement or sympathy to somebody - สนับสนุน, เป็นกำลังใจ

tally : a record or count of a number of items - การบันทึกจำนวน

target : a particular number or amount that you want to achieve - เป้าหมาย

telecommunications : the science and technology of sending information by telephone, radio, or television - โทรคมนาคม

thanks to : because of - ด้วยเหตุ, เพราะ

total : including everything; being the amount or number after everyone or everything is counted or added together - ทั้งหมด

uncertainty : something that you cannot be sure about; a situation that causes you to be or feel uncertain - ความไม่มั่นใจ (ต่อเหตุการณ์ ชะตาชีวิต ฯลฯ), ความรู้สึกไม่แน่ใจ

value : how much something is worth in money or other goods for which it can be exchanged - มูลค่า

volatile : of something that may change suddenly or become more dangerous - ที่ปะทุได้ง่าย

wage : an amount of money that you earn for working, usually according to how many hours or days you work each week or month - ค่าจ้าง

year-on-year (adjective): the amount or statistic for a period this year (month, quarter, half-year) compared to last year -

zone : an area that has an important or typical feature; an area where a particular activity is allowed or not allowed - พื้นที่, บริเวณ, เขต

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