Japanese won't quit Thailand

Thailand is the top Asean destination for Japanese foreign direct investment despite the political unrest and will remain so in the foreseeable future, according to a survey by Japan's external trade agency.

But Thailand needs to think about the development of human resources, particularly at management level, as many Japanese firms are seeking Thai managers to run regional headquarters here, said Setsuo Iuchi, president of the Japan External Trade Organization (Jetro) Bangkok.

"From our recent survey, 60% of respondents need more managers, who are people who can run a company here," said Mr Iuchi, who is also the agency's chief representative for Asean and South Asia.

The survey was conducted with 412 Japanese Chamber of Commerce Bangkok members in November and December last year.

It confirmed that Japanese investors not only plan to stay even if the political turmoil drags on but also expect to use Thailand as a regional headquarters.

Apart from a shortage of skilled labour, which has been a concern for the past few years, the lack of people at management level is also becoming an important issue.

"It is not that easy for us to move out. There is no way that Japanese firms with business established here for decades would just simply move bases to Vietnam or Cambodia," said Mr Iuchi.

Thailand became established as a production base for Japan when it began relocating production from its homeland to cost-competitive countries.

Even though emerging neighbouring countries such as Vietnam, Cambodia, Indonesia and Myanmar are also gaining higher investment from Japan, Japanese industrialists plan their investment in locations according to the strengths of each country, Mr Iuchi said.

For example, car makers mostly ship their parts and components made in Thailand to be assembled in Cambodia, which has lower wages, before sending them back to Thailand for quality inspection and export to targeted markets.

Some 7,000 Japanese companies are registered in Thailand, with many having set up regional hubs for the manufacture of high-quality products.

Mr Iuchi said many Japanese investors have been waiting for the political tension to ease in order to move their business plans forward, including projects awaiting Board of Investment approval for privileges.

The plans are in limbo because the caretaker government has no authority to appoint new board members.

But Mr Iuchi said that while the recent Bangkok shutdown and emergency decree affected sectors such as tourism, Japanese manufacturing here has not been significantly affected.

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