Thailand’s next government should implement sustainable policies to fortify the cooperation between the EU and Thailand, including an EU-Thailand Free Trade Agreement. In an exclusive interview with Thai PBS World, the leader of the European Association for Business and Commerce (EABC) stressed that political stability and long-term policies are the keys to sustainable growth in Thailand’s economy.

According to the President of EABC, Farid Bidgoli ‘’What we hope is that next month an EU delegation will come to Thailand and, in September, a Thai delegation will go to Europe.’’ In July, the European delegation will fly to Bangkok for discussions on the format of negotiations, while EU and Thailand will begin the first round of negotiations on an EU-Thailand FTA in Brussels in September. By the end of this year, both sides will provide key chapters, including intellectual property rights, sustainability, environmental protection and labour rights, he explained.

While it remains unclear who will become Thailand’s next Prime Minister, for the European business community, political stability is the significant factor in maintaining sustainable cooperation between the EU and Thailand.

‘’I think, irrespective of what happens and how the government is formed, everybody supports the FTA with Europe. In September, or sooner, maybe by the end of July, we will have a government formed in Thailand, hopefully. We hope it’s a sustainable government, which is elected, and that there aren’t any challenges, since that would delay free trade negotiations.’’ Farid added.

In addition to political stability, Farid advised that listening to academic organisations and professionals in each industry would help the Thai government to form long-term policies. ‘’We really need to think about the development over the next 10 to 15 years, in terms of what we need to put in place. Having that long-term plan is important. When we think about sustainability, it includes the sustainability of policies. The government needs to be sure to implement the right policies, which are developed by technocrats, not necessarily politicians.’’

The uncertainty in Thailand also causes turbulence in Thailand’s stock market. In first five months of 2023, foreign investors have sold off nearly 100-billion-baht worth of shares, according to the Stock Exchange of Thailand. Farid says that number does not tell the whole picture.

He said Thailand saw an amazing Q1 this year, because of the return of tourism, including medical tourism, and a reduced influence by COVID-19. Compared to Q1 2022, Thailand had a good quarter in 2023. “We went into an election period after Q1, which causes uncertainties. In European businesses’ perspective, we want to see a government formed quickly and we will see a normalisation of the stock market.’’

According to Thailand’s local news, one of the biggest Japanese automotive companies recently denied that it has a plan to move a factory from Thailand to Indonesia, but this story stirred up concerns over foreign investor confidence in Thailand’s market, in which Move Forward’s new economic policy, a hike of the minimum daily wage, has led to worries from SMEs and local communities. When asked about the impact on European businesses, Farid stated that they would not be deterred by a hike in the minimum wage. What European businesses long for is a skilled workforce. Thailand needs to look at the key area of S curve where it wants to compete. How to develop the educational system from the grass root level, to compete at a higher level, is also significant.

With its geographical location, Farid told ThaiPBS World that Thailand has advantages in growing its economic power rapidly. The next government would, however, need to maintain political stability, provide physical policies and give better incentives for European businesses in terms of foreign investment in Thailand. By reforming policies, including bureaucratic and economic systems, Thailand could attract more foreign direct investment and reinforce its influence on the global stage.

By Franc Han Shih, Thai PBS World