Delving into the details of Thailand Plus One

The Japanese scheme requires a tweak to position Thailand as a regional hub for R&D, digital and green industries

- PHUSADEE ARUNMAS

The “Thailand Plus One” initiative has stimulated investments in Thailand and its neighbouring countries for several years. However, as dynamics evolve in the region and on the global stage, the viability of this approach has come under scrutiny.

Aat Pisanwanich, an economic analyst and Asean affairs advisor at Intelligence Research Consultant Co Ltd, said Thailand needs to adapt to these changes to maintain its pivotal hub status amid transformations.

WHAT IS THAILAND PLUS ONE AND WHAT ARE ITS OBJECTIVES?

The initiative was mentioned in a survey carried out by the Japan External Trade Organization (Jetro) concerning the business sentiment of Japanese corporations in Thailand in the first quarter of 2013.

In the chapter entitled “Business Base for Thailand-Plus-One Policy’, Jetro defined this initiative.

Mr Aat said the term gained further recognition in Jetro’s 2014 report on global trade and investment to make Japan a base for business circulation, with Jetro’s headquarters in Tokyo and the Ministry of Economy, Trade and Industry endorsing and promoting the term at the national level.

The primary goal of this initiative is to position Thailand as a centre for significant Japanese industrial investments in Southeast Asia, leverages its strengths in logistics while incorporating neighbouring countries such as Cambodia, Laos, Myanmar and Vietnam (CLMV) into the industrial supply chain.

This approach takes advantage of the competitive labour costs and abundant workforces in these neighbouring countries.

Among the major sectors using the Thailand Plus One approach are automotive and auto parts, with Thailand serving as a vital production hub in the region. The electronics and electrical sectors in Thailand focus on the production of hard disk drives and semiconductor packaging.