Overview of Thailand’s EconomyOverview of Thailand’s Economyand Business Climateand Business Climate

Gross Domestic Product 5% in 2006*Foreign Direct Investment €6.47 billion 2006€32.93 billion State Budget 2007**Current Account at 6-year high €1.2 billionCapacity utilization a steady 73%

*Revised by NESDB

**1.566 trillion baht

Consistent growth and productivityConsistent growth and productivity

€47.55/THB

Strong Net Applications Value

704.5€14.82

319.0€6.71

Total investment applications

Billion Baht with appx. Billion € 656.1

€13.80

514.2€10.81

264.7€5.57

€47.55/bt

2002 2003 2004 2005 2006

Annual Average € 10.3 billion

German Project Approvals 2002- 2006German Project Approvals 2002- 2006

Netherland18% Switzerland

14%

GermanyGermany20%20%

Belgium6%

France 13%

Italy6%

United Kingdom23%

€47.55/THBSector Project

#

€ Mil

Agriculture 6 18.49

Minerals/Ceramics

5 87.42

Light Industry 8 11.35

Auto/Metal

Processing

14 37

E&E 16 16.52

Petro/Chemical 10 36.69

Services/Infra. 24 38.97

Total 83 246.44

World Bank’s World Bank’s Ease of Doing BusinessEase of Doing Business

159143

135

10493

2518

1

126

0 20 40 60 80 100 120 140 160 180

Laos

Cambodia

Indonesia

Philippines

Vietnam

China

Malaysia

Thailand

Singapore

ASEAN/China

ThailandThailand GLOBAL GLOBAL

RANKINGSRANKINGS

Source: World Bank Study: Doing Business in 2007

• UNCTAD survey of world’s 325 largest transnational corporations

• Asian region has most positive FDI prospects

• Overall, Thailand ranked #9 in world VietnamTop 4

South KoreaTop 5

THAILANDTHAILANDTop 3Top 3

IndiaTop 2ChinaTop 1

Ranking of FDI Prospects in Asia

Thailand Rated #3 Most Thailand Rated #3 Most Attractive FDI Location in Attractive FDI Location in Asia by UNCTADAsia by UNCTAD (2005- (2005-2008)2008)

UNCTAD Global Investments Prospects Assessment, Sept. 2005

JBIC FY 2006 SurveyJBIC FY 2006 SurveyWhen asked about profitability for each

region, including Japan, “the percentage of companies answering “higher” was greatest for Thailand”

In E&E, within the ASEAN4, the response to “strengthen or expand” is largest in Thailand.

In automotives, “strengthen or expand” stronger in Thailand than any other region, including Southern China and North America.

Ranked 127 in global “Cost of Living Survey* A lowest cost destination within the region and the world

Avg. general industry wage US$146/mth**Avg. Monthly office rent US$11.67/sqm**

“Thailand’s assets include an entrepreneurial population, abundant natural resources and a wonderful lifestyle and, if these strengths are promoted and supported, the country will continue to be a great place to do business”

Grant Thornton International Business Owners Survey 2006

*Mercer Human Resources Consulting**JETRO Survey March 2006

Quality at Low CostQuality at Low Cost

Increasing Labor ProductivityIncreasing Labor Productivity

0

50,000

100,000

150,000

200,000

250,000

2001 2002 2003 2004 2005

Baht/year

Ministry of Labor

Enhanced InfrastructureEnhanced Infrastructure TransportationTransportation

National highwayNational highway system: 64,000 km connecting all 76 provinces Expanding connections into Cambodia, Laos, Vietnam and southern China

7 international airports Rail system:Rail system: 4,000 km linking to Malaysia & Singapore Citywide light rail

€3.8 billion expansion Communications

Mobile phones:Mobile phones: growing 8 million in 2006 to 39 million users, with a 60%+ market penetration rate

Wi-Fi Wi-Fi and broadband accessbroadband access

Shipping 8 deep sea ports

Including tanks farms and liquid jetties

Ping Thong Industrial Estate

Hemaraj Land and Development PLC

Amata Industrial Estate

Gateway CityIndustrial Estate

Asia Industrial Estate

Padaeng Industrial Estate

Map Ta Phut Industrial Estate

Laem Chabang Industrial Estate

Wellgrow Industrial Estate

Golf Course

International School& University

Hospital

304 Industrial Park

Rojana Industrial Park

Free Trade AgreementsFree Trade AgreementsFTA Concluded

•ASEAN

•Australia

•New Zealand

Early Harvest

•China

•India

FTA under negotiation

•Japan (scheduled to be signed in April 2007)

•USA

•Peru

•Bahrain

•BIMSTEC

•EFTA

•Korea* Some FTAs are negotiated under ASEAN framework.

Strong Market Potential

Thai Graduates by MajorThai Graduates by Major

Source: Commission on Higher Education; includes BA, MA, and post-graduate degrees

Major 2004 2005

Humanities and Social Sciences

229,561 232,704

Science, Technology, and Engineering

77,329 82,415

Health Science 12,942 17,105

Technology and Business Computer (vocational)

9,085 15,037

TOTAL 319,832 332,224

Thai Graduates in Science, Thai Graduates in Science, Technology, and EngineeringTechnology, and Engineering

Source: Commission on Higher Education; includes BA, MA, and post-graduate degrees

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2004 2005 2006 2007 2008 2009 2010

Supportive PoliciesSupportive Policies

• Foreign OwnershipBOI allows foreign majority ownership in manufacturing

Majority foreign ownership is possible in many services

• No export requirement

• Attractive investment incentive package