According to the results of the inaugural Business Barometer: OBG in ASEAN CEO Survey, in which we surveyed business leaders in Indonesia, Malaysia, Myanmar, the Philippines, Thailand and Vietnam, business sentiment is buoyant in the region. This is the first time we have collated our proprietary data from individual ASEAN markets, allowing us to provide commentary and analysis on investor sentiment both across the region and by country. In this edition we have compared the responses of C-suite executives in Thailand with those from the other five ASEAN nations surveyed. For more information on the OBG Business Barometer, please visit

What is the outlook of CEOs as Thailand 4.0 gains traction?

Perhaps more than any other emerging ASEAN market, Thailand has succeeded in crafting a coherent blueprint for adaptation to the rapid technological advancements that are transforming lifestyles and professions in very profound ways. In 2016 the government unveiled Thailand 4.0, an overarching vision that aims to develop a vibrant digital economy and ensure the nation is not left behind in the fourth industrial revolution. This is supported by the Eastern Economic Corridor (EEC), a plan to develop the industrial base along the Eastern Seaboard as an integrated hub for advanced manufacturing and high-value services, intended to catalyse some $45bn in investment.

In outlining a national strategy for adaptation to artificial intelligence, robotics, the internet of things, virtual reality and 3D printing, Thailand has pulled ahead of other emerging markets in ASEAN, most of which have been slow to adopt industry 4.0 strategies. However, becoming a high-income, value-based economy will require that investment in education and skills keeps pace with infrastructure and manufacturing development. This would ensure the workforce is equipped with the expertise and mindset to adapt to emerging technologies, supported by an ecosystem conducive to innovation.

In our inaugural Business Barometer: OBG in ASEAN CEO Survey, published in the first quarter of 2018, we collected the data from our CEO surveys across six ASEAN markets into one sample, allowing us to observe regional and national perceptions on key indicators. Recognising that human resources development was a key area of concern in an era of rapid technological change, we asked executives to pinpoint the skills in greatest need in their respective labour markets. Interestingly, the results show Thailand as something of an outlier, with engineering, research and development, and computer technology emerging as the top-three choices for local business leaders. In comparison, leadership was the top choice in the collective sample from the remaining countries: Indonesia, the Philippines, Myanmar, Vietnam and Malaysia. The top-three Thai choices would build the foundations of the high-income, value-based economy envisioned by Thailand 4.0, showing that although the country has outlined a clear vision for the cultivation of next-generation industries, more work is needed to prepare for the coming innovation race.

Favourable Business Environment

A mixed response was observed across countries when it came to direct questions about the business environment. This suggests that despite ongoing efforts towards the harmonisation of laws, standards, regulations and practices, significant development disparities and competing fiscal regimes remain obstacles to the ASEAN Economic Community’s envisaged smooth integration into a cohesive single market and production base.

Some 60% of Thai respondents describe credit access as easy or very easy, against 55% in the sample of other ASEAN countries. The combined response was negatively affected by Myanmar, where prohibitive interest rates, onerous collateral requirements, a lack of credit history and restrictions on the operations of foreign banks contribute to a less-than-robust lending environment in the formal sector.

When asked to rate business transparency in their country compared to the wider region, 70% of participants in Thailand describe it as high or very high, while this rate was only 43% in the other countries. However, this does not necessarily indicate that business transparency in Thailand meets the highest international standards. With the exception of Singapore, ASEAN states generally score poorly in reputable global corruption rankings. For example, Thailand ranked 96th globally in Transparency International’s 2017 Corruption Perceptions Index focused on the public sector. This placed it on a par with Indonesia and ahead of Vietnam, Philippines and Myanmar, where 69% described transparency as low or very low in our survey. Although Thailand ranked 26th out of 139 countries in the World Bank’s “Doing Business 2018” report, tax payments and property registration were areas in clear in need of improvement.

Sentiment in Thailand is also higher than in the other five countries regarding tax competitiveness, with just under 57% of executives describing the business and personal tax environment as competitive or very competitive on a global scale, compared to 39% in the combined ASEAN sample, where CEOs from the Philippines and Myanmar were the most negative.

As Thailand faces up to the costs of an ageing population and an extensive public infrastructure pipeline, the military-led government has been keen to broaden the tax base away from its reliance on income and consumption taxes. It has also worked to reduce chronic income disparities and enhance economic competitiveness. Since the early 2010s the top tax bracket for personal income has been reduced from 37% to 35%, allowances and deductions have been expanded and the corporate income tax rate was slashed from 30% to 20%. The land and buildings tax, land windfall tax and e-business tax have all been proposed for 2018, which the government hopes will generate significant revenue without affecting competitiveness or economic activity.

Investors Confident Despite Political Uncertainty

Somewhat surprisingly, given the uncertainty around the date for the country’s return to democracy and the slowdown in foreign direct investment in recent years, respondents in Thailand are more likely than their regional peers to make a significant capital investment within the next 12 months. Indeed, some 75% of Thai business leaders say they are likely or very likely to make such an investment, compared to a collective 72% in the other countries. From the individual countries, only Indonesian executives were more likely to make a significant capital investment, at 76%. Breaking down the Thai results, executives in retail, automotive manufacturing, construction and energy all display a strong inclination towards making significant investments, with these sectors set to benefit from Thailand 4.0 and enhanced transport and logistics infrastructure in the EEC and beyond.