On Tuesday, March 8, the International Graduate Studies (IGS) of MUIC organized a knowledge-sharing panel discussion on the Global Business Outlook of Thailand for 2016-2017.
The business talk had the participation of three distinguished keynote speakers: Dr. Kiatipong Ariyapruchya, Senior Country Economist, World Bank; Mr. Kudatara Nagaviroj, Executive Advisor for Corporate Affairs, Big C Supercenter PLC; and Mr. Andrew McBean, Partner, Grant Thornton. The debate was moderated by Ajarn Douglas Rhein from the Social Sciences Division.
The speakers addressed the opportunities and risks for the Thai economy from different perspectives – the global economic context, the Thai retail sector, and Thai Small and Medium Enterprises (SME) within the ASEAN Economic Community (AEC). An overall conclusion was reached that Thailand is going through an initial economic recovery, mostly supported by domestic demand; ASEAN presents valuable opportunities to further strengthen the economic performance, in particular for the retail sector; but there is a need for stronger economic incentives to implement the political attempts of implementing the AEC aspirations.
Dr. Kiatipong Ariyapruchya anticipated the expected gradual recovery of the global economy growth in 2016-17, with emerging and developing countries showing a modest pick-up for the same period. However, there is the risk of an even weaker performance as a result of sharper slowdowns in large emerging countries, such as China, Brazil and Russia. That scenario would negatively impact Thailand. As for now, Thai economy is showing some initial signs of economic recovery, mostly supported by domestic demand, but its performance could benefit tremendously from reforms that would address Thai structural vulnerabilities in the areas of fiscal management and fiscal stimulus, upgrading the value added of exports in the production processes, making private investment more attractive, and addressing the skill shortage in human capital.
Mr. Kudatara Nagaviroj discussed the trends for the retail sector in Thailand, the second biggest sector of the economy. Four main forces are shaping the retail business: changing lifestyle of consumers, who give increasing preference to convenience; changing demographics of the Thai population, where an aging group of consumers is becoming more prominent; more informed consumers; and volatility in macroeconomic conditions that impact the available income of consumers. As a response to this context, the retail sector is giving preference to: blurring of segments, with the appearance of one-stop shops; fragmentation of the market into more niches; upgrading the target customers, from mass to premium, and from premium to luxury; using multi-channels and multi-format options to reach customers, both in Thailand and in ASEAN border regions; always trying to keep final prices for consumers as low as possible.
Mr. Andrew McBean emphasized the tremendous business opportunity that ASEAN represents to Thailand – “the ASEAN’s combined GDP rose threefold between 2000 and 2014 and if the region would continue with current growth rate, as a single trading block could rank 4th in the global economy”. However, individual national issues for each of the ten ASEAN countries and valuable business opportunities influenced by bilateral agreements outside ASEAN are two of the major roadblocks for the realization of ASEAN aspirations.