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Thailand

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Thailand is one of the modern world’s standout examples of rapid, equitable development. Economically and socially, the country has risen from low-income to upper-middle income status in less than 30 years. The proportion of Thais below the poverty line has decreased from 67% in 1986 to 7.2% in 2015, a change attributed primarily to economic growth. Some of Thailand’s social welfare indicators are equally impressive, not least the 100% primary school enrolment rate achieved in 2015 and the 100% health coverage rate achieved with the government’s Universal Coverage Scheme (with satisfaction rates of over 90% among the insured).

When the long-ruling and deeply revered King Bhumibol Adulyadej of Thailand passed away in 2016, political instability created uncertainty around civilian rule. There was a consequent dip in overseas business interest in the country. Notwithstanding this dip and a domestic climate of low business confidence that has persisted since 2013, foreign businesses continue to be drawn by Thailand’s strategic position between China and India, and its access to the ASEAN Free Trade Area. Foreign direct investment (FDI) inflows reached USD 951 million in 2016, exceeding the target set by the country’s Board of Investment. Japan was the largest investor in Thailand in 2016, followed by China.

The government has embarked on an ambitious reform programme to boost long-term growth and help Thailand achieve high-income status. In addition, problems such as the urban–rural divide, different quality in the public education system, environmental degradation, and changing demographics — although mitigated by overall development — call for innovative approaches and collaboration, involving the state as well as the private sector.

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Thailand’s Fact File

World Giving Index Rank

2016

37 19 in 2015

63%giving money
17%volunteering time
44%helping a stranger

Population

2016

68.2 million

GDP (PPP)

2016

USD 1.16 trillion World Rank 20

Poverty

2012

12.6%

Per capita GDP (PPP)

2016

USD 16,888 World Rank 73

Global Competitiveness Index

2016

34 32 in 2015

Number of Millionaires

2015

25,000 0.036% of the population

Source: CIA, Charities Aid Foundation (CAF, 2016), Credit Suisse (2016), OECD (2016), World Economic Forum (WEF, 2016), World Bank (2017)

Economic Context for Investors

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Factors	Index Score/Rank	Description
GDP Growth 2016	Index Score/Rank 3.2%	The economy advanced 3.2% in 2016, faster than the 2.8% growth in 2015. In 2017, GDP growth is projected between 3.0%-3.5%.
Governance 2015	Index Score/Rank -0.3	Thailand ranked above 43% of all the countries in the 2015 World Bank’s World Governance Indicators.
Consumer Market 2015	Index Score/Rank USD 539 billion	Growth in the consumer markets in retail and e-commerce is steady.
Labour Force 2016	Index Score/Rank 40 million	Thailand’s labour force is characterised by skills gaps as well as gaps in connecting the underprivileged to opportunities, and an ageing society.
Infrastructure 2016	Index Score/Rank 4.4	Thailand ranked 49 of 138 countries in terms of infrastructure by the World Economic Forum. Thailand is the second largest spender on infrastructure in Asia (behind Indonesia) till 2015, with spending projected to reach USD 58.5 billion by 2025 driven by high-speed rail projects.
Financial Access 2014	Index Score/Rank 78% of the population	Access to formal banking increased by 7% from 2011 to 2014.
Digital Access 2015	Index Score/Rank 39% of the population	31.93% of the population are smartphone users and more than 90% of internet users in Thailand access the internet through smartphones.
Ease of Doing Business 2016	Index Score/Rank 46/190	Thailand remained at 46 in the Ease of Doing Business rankings in 2015 and 2016. The government has implemented pro-FDI policies and instituted multiple incentives to create a conducive business environment.

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SDG Dashboard

A handful of factors exert a drag on development in Thailand, including an ageing society, a low level of educational attainment (only 38% of Thais have a secondary education), and environmental hazards. Poverty is a rural phenomenon, with 88% of the poor living in areas distant from the major cities. Thailand 4.0 (2016-2036) is a comprehensive inclusive growth programme formulated by the government to maximise the use of digital technologies in all socio-economic activities. The goal is to develop infrastructure, innovation, data, human capital,
and other digital resources that will ultimately drive the country towards prosperity, stability, and sustainability. The four areas of focus are:

The digital economy — The goal is for all Thais to have access to broadband by 2026.
Physical infrastructure — This includes the initiation of construction on the Thailand-China highspeed rail link.
Agricultural reform — The ‘Smart Farmer’ project focuses on knowledge sharing and skill development.
Local economic development — 18 provincial clusters have been selected for targeted developmental policies in automotive, electronics, tourism, agriculture, and robotics.

Source: sdgindex.org (2016)

Government Focus on Development Gaps

Focus Area	SDG Goals	Gap	Government Focus
Agriculture	SDG Goals	Gap In 2016, agriculture employed 32% of the national workforce but contributed only 9.1% to the GDP. Increasing agricultural productivity is key to reducing rural poverty in Thailand.	Government Focus Thailand 4.0 focuses on producing premium quality agri-produce, with a focus on climate, food processing, and smart distribution.
Education	SDG Goals	Gap The 2016 World Risk Report by the Institute for Environment and Human Security places Thailand in the medium risk category, with a rank of 89 out of 171 countries.	Government Focus The Intended Nationally Determined Contributions (INDC) goal is to reduce greenhouse gas (GHG) emissions by 20% by 2020. The government established the National Catastrophe Insurance Fund (NCIF) in 2012 to provide disaster insurance to both businesses and households.
Energy access	SDG Goals	Gap Although Thailand has achieved 100% primary school enrolment as of 2015, only 1.4% of Thai primary students demonstrate superior problem-solving and analytical reasoning skills, compared to the average of 15% in ASEAN. Only 38% of Thai children obtain secondary school education.	Government Focus The Education Reform Commission was established in 2015 to work closely with the National Legislative Council (NLC) and the Ministry of Education to draft an education reform framework, focusing on teacher and student training, and the use of ICT in education.
Energy access	SDG Goals	Gap While 100% of the Thai population has access to energy since 2012, only 73% of Thais used non-solid fuels as of 2014. The focus is to increase access to cleaner, more efficient energy to help Thailand meet INDC goals.	Government Focus The USD 8.3 billion Clean Technology Fund (CTF) was launched in 2008, dedicated to a portfolio of renewable energy investments and geared toward achieving significant reductions of GHG emissions and accelerating private sector investment in utility-scale clean energy projects.
Healthcare	SDG Goals	Gap Thailand spent only 4.1% of its GDP on healthcare in 2015, less than half of the world average of 9.8%. An average of two people died every hour from multi-drug resistant tuberculosis (TB) as of 2012.	Government Focus Thailand seeks to halve antimicrobial-resistant (AMR) infections by 2021, joining the global battle against “superbugs”.
Small and medium-sized enterprise (SME) growth	SDG Goals	Gap In 2012, there were 2.7 million SMEs contributing to 37% of the GDP and engaging 80.4% of Thailand’s workforce. 58% of SMEs were not eligible to borrow from financial institutions, and 17% viewed access to finance as a major barrier in the same year.	Government Focus A 2016 law permits individuals to establish a company, which will formalise around 2.74 million SMEs that were ‘sole proprietorships’ without legal separation of company and personal assets. The SME Development Bank of Thailand (SME Bank), commercial banks, and the Thai Credit Bureau offer various schemes for SMEs.
Social security	SDG Goals	Gap By 2040, a projected 17 million Thais above 65 years of age will account for more than a quarter of the population.	Government Focus To meet the growing demand for elderly care, the government expanded the roles of the Local Administrative Organisations (LAO) and Village Health Volunteers (VHVs) to include home visits and educational outreach.

Social Economy

The social economy in Thailand is rapidly growing with government backing, a rich tradition of religious giving and strong support of enablers.

There are 400 SEs in Thailand.

Category	Factor	Description
SPOs	Factor Legislative environment	An SE can be registered either as a for-profit or non-profit legal entity, both of which are clearly governed under the Thai Civil and Commercial Code.
SPOs	Factor Government support for SEs	The government has put in place a range of support structures for SEs, particularly with the establishment of TSEO and the National Taskforce on Social Impact Investment in 2010. As of 2016, a draft legislation aimed at formalising SE registration and incentivising investment into SEs was pending finalisation. Accordingly, TSEO has ceased operations since 31 March 2017 and might be restructured as part of the new law.
SPOs	Factor SEs across sectors	SEs in Thailand are active in an array of sectors including Health, Education, Livelihoods, Food/Agriculture and Tourism, with a growing focus on leveraging technology.
SPOs	Factor Presence, size, and maturity of SEs	The TSEO’s effort to foster SEs in Thailand led to the registration of 400 SEs by 2014, mainly in community development.48 A report by ChangeFusion in 2013 reveals that only three out of 30 SEs had revenues of over USD 1 million.
Investors	Factor Philanthropic contributions	Notwithstanding a fair presence of global and local foundations engaged in philanthropy, distrust in SPOs remains widespread, impeding contributions into SPOs. Thailand has a growing share of high net worth individuals (HNWIs) and a long history of family giving based on traditional Buddhist values.
Investors	Factor Presence of social investors	Impact investor presence and overall investment volume are low compared to other ASEAN countries such as Philippines and Indonesia.
Investors	Factor Corporate sector	Despite significant efforts notably by SET, the Thai Business Council for Sustainable Development (TBCSD) and Thaipat Institute to promote CSR through forums and workshops, local companies still demonstrate a limited understanding of the values and practices of CSR.
Enablers	Factor Incubators, accelerators, and capacity-builders	A variety of enablers are active in the country, including: Incubators and accelerators - UnLtd, ChangeVentures, BanPu Champions for Change, AirAsia Foundation; Capacity builders -TYPN, ThaiFund, LGT IV; Competitions - ADB, IIX, and Thammasat University sponsored competitions such as the Global Social Venture Competition.
Enablers	Factor Networks and platforms	Examples of networks include TYPN and the Network of Impact Social Enterprise (NISE). CSR platforms have also been set up by SET, TBCSD and Thaipat Institute.
Enablers	Factor Knowledge and research	There has been a growing number of publications on the social economy by TSEO, ChangeFusion, Thailand Development Research Institute (TDRI) and the Lien Centre for Social Innovation. Thaipat Institute conducts courses on CSR and shared value.
Enablers	Factor Partnerships	ChangeFusion has been the driving force in forging partnerships including B-KIND, TYPN, TSEO and NISE.
Enablers	Factor Impact Measurement	Impact measurement is in the discussion phase.