Plan from Thailand’s Energy Minister and Deputy Prime Minister at the Centre for Economic Situation Administration (CESA) highlights the need to attract foreigners with capital, spending power and expertise to come and live in Thailand as the World Bank urges the government to deploy the country’s latest database-driven platforms used to distribute economic supports during the COVID-19 crisis as the basis to kickstart a more ambitious social welfare programme targeted at those most in need in Thailand. It suggested such a policy would help fight inequality in the country and boost domestic consumption.
The Centre for Economic Situation Administration (CESA) is pressing ahead with plans agreed by the cabinet in June to offer a long term 10-year visa to elite foreigners who can bring both investment and valuable economic expertise to assist in the development of the Thai economy. The new visas will also come with extended property ownership rights. It comes as the World Bank has called on the government to redeploy support infrastructure used during the COVID-19 crisis towards a more ambitious social security support plan for the least well off in Thailand.
Deputy Prime Minister Supattanapong Punmeechaow has announced a plan, agreed by the cabinet in principle on June 4th last, to allow wealthy and skilled foreigners access to long term visas to live in Thailand for up to 10 years depending on their background, skills set, income and ability to invest in the kingdom.
This project was first reported in March and later in April. It is understood to be the brainchild of former JP Morgan boss in Thailand Mr Chayotid Kridakon.
7% rise in GDP alone on the expenses of 1 million well-heeled foreigners living in Thailand
In March, Mr Chayotid highlighted the potential economic growth for Thailand if 1 million visitors could be attracted to live in the kingdom.
He predicted a 7% rise in GDP alone based on their day to day living expenses in the country.
This, he explained, was quite apart from the economic contribution that they could bring in terms of investment and value-added skills needed to power the Thai economy of the future.
Four separate groups targeted by the new plan to attract the kind of people to come and live in Thailand
On Thursday, Minister Supattanapong gave more details on the proposed scheme and explained that four separate groups would be targeted by the new initiative.
These were wealthy, high net worth individuals, wealthy or high earning professionals, wealthy retirees and executives or people with highly developed skill sets who had the potential to offer industry and universities in Thailand a competitive advantage as it seeks to move towards becoming an advanced economy.
First target group – wealthy people with a net worth over $1 million willing to invest $500,000 in Thailand
The criteria for the first group is that each qualifying person must be able to demonstrate $1 million in assets. They must also demonstrate an income over the last two years of $80,000 and be willing to invest $500,000 in Thailand either through property or government bonds.
A qualifying candidate in the second group would need to have obtained a master’s degree or equivalent or have intellectual property rights or the equivalent in terms of research experience while also having an income of at least $40,000 per annum.
Wealthy retirees willing to invest $250,000
For wealthy retirees seeking a long term visa, the requirements are that the applying person must be over 50 years of age, have an income of at least $40,000 a year and be in a position to invest $250,000 in Thailand whether in property or government bonds.
The last category of individual would have to be a person with experience in the digital industry and would be required to work for a Stock Exchange of Thailand (SET) firm or have already had three years of experience working with a similar foreign firm in that area which has a turnover of more than $50 million a year.
The fourth category does not have an age requirement. However, it does require that the person concerned works within target industries of significance to the Thai economy or Thai universities or academia.
New visas come with extended property rights including the right to own land and real estate
The minister also revealed that the new plan will involve allowing foreigners who hold these long term visas extended property rights to own land and real estate in the kingdom in addition to the limited rights in respect of condominiums currently afforded under the law in Thailand.
He linked this new initiative to bring in new talent and investment into the badly damaged economy with a plan he said would be unveiled in 2022 which would aim to develop the kingdom’s position as a hub for electric vehicles.
Thailand’s bright idea to become an EV vehicle production centre linked with Japanese hybrids
Worldwide, there were 3.2 million electric vehicles sold in 2020 but the number in Thailand was limited to 30,000 leaving a reported 190,000, mostly specialised service vehicles as well as hybrids, on Thai roads last year.
Krungthai Research recently reported that it expects that Thailand will see 1 million EV vehicles on its roads by 2028 but most of these will be hybrid EVs which are being developed by Japanese car producers based in Thailand.
Thai government committed to the industry as a key ‘decarbonisation’ measure to fight climate change
Minister Supattanapong, this week, however, emphasised the government’s commitment to the industry as part of Thailand’s decarbonisation efforts to help the fight against climate change.
‘Infrastructure will be the main attraction and we will encourage leading players in the supply chain to relocate their production sites to Thailand,’ he said.
He further explained that plans were being worked out to set up more battery production facilities and the government would be prioritising infrastructural support for this industry as part of a plan to usher in a post-pandemic recovery.
World Bank downgrades Thai growth prospects
The announcement from the Centre for Economic Situation Administration (CESA) which is also spearheading efforts to reopen Thailand’s foreign tourism industry from mid-October this year, comes as the World Bank downgraded Thailand’s growth prospects for 2010 from 3.4% earlier this year to 2.2%.
The figure is still in excess of the Bank of Thailand’s current estimate of 1.8% which is based on achieving a recovery in the fourth quarter with the relaunch of the foreign tourism industry.
Financial supports for the most vulnerable in the kingdom to create a healthier domestic economy
The World Bank, in its report, urged the Thai government to prioritise the development of a social support system or infrastructure for the less well off as it estimated that at least 780,000 Thai people fell back into poverty in 2020 alone when the economy contracted sharply.
The World Bank team for Thailand, led by senior economist Birgit Hansl, had some praise for the government in respect of its efforts to bring together a state platform and database profile of the Thai population to assist in the government’s support programmes since last year.
Government is in a position to offer more economic supports to the vulnerable says World Bank
The financial institution also suggested that it had formed the view that the government’s fiscal position still left room to assist the poor in the coming months.
The bank particularly identified the plight of millions of informal workers whose lives have been disrupted by the stalled foreign tourism industry as well as the poorest and less well off who have not had the resources to cope with the economic downturn in a country with scant social welfare supports.
Thailand praised for developing strong database platforms to trace and help support the population
While praising Thailand’s efforts towards developing database-driven platforms to manage pandemic specific social supports last year and this year, the bank, through senior economist Francesca Lamanna, highlighted this as an opportunity for the kingdom to set up a permanent social support infrastructure that would be a key step towards fighting inequality and improving the domestic economy.
This was a theme added to by Kiatipong Ariyapruchya who has long studied the Thai economy for the World Bank.
He said that such a platform could also be used to improve traceability and execute the vaccine rollout.
Support for the less well off should be a priority as it encourages social mobility and consumption.
The World Bank economic team also urged the government to look at the country’s chronic debt burden among households and to see if more could be done to reduce it.
Thai economy right now is dormant
The report admitted that, right now, the Thai economy is dormant.
Mr Kiatipong saw the reopening of foreign tourism also as a key priority for planners but urged them to also look at efforts to remove barriers to free trade so that Thailand’s export industry continues to benefit from the upturn in the world economy.
The bank predicts that 600,000 foreign tourists will enter the country in 2021 as part of the government’s ongoing efforts to refloat the foreign tourism industry even amid the huge surge in virus infections and deaths driven by the Delta wave and its struggling effort to roll out a vaccination campaign.