Thailand Economy

The years following the Asian economic collapse in 1997 have been difficult ones for Thailand and Bangkok. Although the Thai government took swift action to control the economy and stabilise the currency which culminated in an upturn in 2000, once again the economy faltered following the events of 11 September 2001. The situation rapidly improved in 2002 and the economy grew once again only to be damaged again in 2003. The out of proportion media coverage of SARS, the war in Iraq and fears of terrorism all resulted in a dramatic downturn of business. However, a steady growth in domestic demand and exports turned the situation around by the end of the year and the economy grew by 6%. It looked as though 2004 would get off to a good start but the outbreak of Avian influenza and soaring oil prices have had a negative influence.

Tourism continues to be a particular success story for Thailand. Following the economic collapse and the flotation of the Baht in July 1997, the government launched its 'Amazing Thailand' campaign, which saw a dramatic increase in the number of visitors, many of whom were keen to take advantage of the favourable exchange rate. However, SARS and travel advisories meant that tourist arrivals in 2003 were down to 9.7 million, over 10% lower than 2002. In 2004, visitor arrivals have increased although they have not yet reached 2002 levels.

As Thailand is perceived to be at the heart of South-East Asia and the gateway to other markets in the region, many multinational companies have a presence in the city. Companies from all industries, such as Toyota, Unilever, Proctor and Gamble, Philips, Sony, Compaq and even Tesco, who bought a 75% share in a retail group, have offices or manufacturing companies in Bangkok. Despite the downturn of business and the erosion of profits for all markets, most foreign investors have stayed put and favour a long-term commitment to Bangkok and Thailand as a whole. There is still a huge difference in the standard of living between city dwellers and those in the countryside. The national rate of unemployment decreased slightly in 2003 to 3%, which is comparable to the figure for Bangkok.

Business Etiquette

Most senior businesspeople in large or international companies will speak English, but it is not common in smaller companies. It is essential to make appointments for business meetings and to exchange business cards. Punctuality is also very important (although the visitor is quite often likely to be kept waiting after arrival), so the Bangkok traffic must be taken into consideration when going to appointments. Thai hosts are quite likely to give small gifts to visitors, so it is a good idea to reciprocate with a typical national gift of one's own. Visitors should never get angry or raise their voice if things are not going according to plan, as this will mean the loss of face on both sides. Much more progress will be made by remaining calm.

Meetings often take place over lunch and these are generally held in a Thai restaurant. Thai businesspeople are quite formal in their dress but, because of the extreme heat, it is quite acceptable and practical to dispense with the wearing of a suit jacket. Office hours are usually 0800-1700 Monday to Friday. There is a large ex-pat community in Bangkok and there is a big after-work drinking scene.