Remarks by U.S. Ambassador to Thailand Michael George DeSombre
for Indo-Pacific Business Forum Panel Discussion
“Business Opportunities and Outlook in the Mekong Countries”
Ladies and gentlemen, welcome to the panel discussion ‘Business Opportunities and Outlook in the Mekong Countries.’
I am Michael George DeSombre, U.S. Ambassador to the Kingdom of Thailand. It is a privilege to join you today as part of the Indo-Pacific Business Forum, the premier U.S.-sponsored business event in Asia. This year, the Forum is co-hosted by the Vietnamese Government, and I would like to thank the organizers and hosts for putting on such a successful event under difficult circumstances.
I am honored to be joined on this panel by U.S. Ambassador to Cambodia Patrick Murphy, U.S. Ambassador to Laos Peter Haymond, U.S. Ambassador to Vietnam Daniel Kritenbrink, and the Charge D’Affaires of the U.S. Mission to Myanmar, Gwen Cardno.
By way of format, my fellow Chiefs of Mission and I will each speak for approximately five minutes about the current business climate and outlook in our respective countries and the significant benefits U.S. investment can bring to the Mekong region. We will then have about 15 minutes for Q&A.
I encourage you to please submit questions as we move along through the chat window in the platform and we will answer as many of them as we can within the time allotted. I would ask that when you submit a question please make clear which of us you are addressing.
Finally, I would just like to note that obviously we would prefer to be together on one stage for this discussion, and I am sure we will discuss the many challenges and hardships the pandemic has brought.
But we intend to focus more on identifying positive opportunities as we collectively emerge from the pandemic into a new normal, asking questions such as: How will supply chains realign? Which new industries will thrive? What long-ignored structural changes can we now make? How will innovators and entrepreneurs address our most pressing challenges?
With that, I would now like to hand it over to Ambassador Kritenbrink to kick us off in Vietnam.
Thank you. Again, I am Michael George DeSombre, U.S. Ambassador to the Kingdom of Thailand.
Over the next five minutes or so, I want to share with you a brief overview of the Thai investment climate and why companies choose Thailand; highlight some of our efforts to help Thailand become even more attractive to foreign investors; and talk about the unique advantages U.S. investors and companies bring to the Thailand and the region.
First, a little about myself: I came to government service after more than 20 years in the private sector, helping companies invest and grow their businesses around Asia.
After being appointed by President Trump, I arrived in Thailand in late January, looking to bring my expertise to bear.
I had barely begun when the pandemic hit, which as you can imagine had a huge impact both on Thailand’s economic outlook and on my short-term priorities as Ambassador.
Fortunately, Thailand handled the pandemic well and has been able to relax nearly all of the most restrictive lockdown measures, which I will talk about in a minute.
And now, the government, private sector, and the Thai people are actively working out what comes next. What does the new normal look like for Thailand?
At the request of our Thai government partners, since June I have developed specific recommendations to help Thailand attract more U.S. investment, capture supply chains relocating from China, become a regional financial services hub, foster a venture capital and start-up ecosystem, and more.
To develop these recommendations, I spoke to numerous U.S. companies and financial experts both inside and outside Thailand. In doing so, I learned a lot about why the companies that are here chose Thailand, and why the companies that are not chose somewhere else.
One thing I have learned is that the pandemic has led many companies to reexamine their global business operations, investments, and supply chains to ensure they are safe, reliable, and secure.
Safe supply chains run through countries that are friends and allies that share a commitment to transparency, individual opportunity, and markets free from domination by the State.
Reliable supply chains run through countries with a free and robust media, and an independent judiciary, that share a commitment to the rule of law and sanctity of contracts.
And secure supply chains exist in countries where companies are protected from cyber theft and violations of their intellectual property rights.
One reason U.S. companies choose Thailand, therefore, is because the U.S.-Thai relationship is strong and based on mutual commitment to these shared values.
The U.S. and Thailand have enjoyed an unbroken close commercial relationship since the 1833 Treaty of Amity and Commerce, which still affords special privileges to U.S. companies operating here.
Many U.S. companies have been operating in Thailand for generations. American companies have collectively invested tens of billions of dollars in Thailand, and the United States remains Thailand’s top export market.
I also want to specifically highlight our health cooperation, which is particularly relevant given current circumstances.
The Armed Forces Research Institute of Medical Sciences, or AFRIMS, has been cooperating with Thai scientists for over sixty years, developing cutting-edge vaccines that have saved countless lives.
The U.S. Centers for Disease Control and Prevention has its largest office outside of the United States in Bangkok and has been working closely with the Ministry of Public Health and other Thai officials on pandemic response.
I am confident that our cooperation contributed to Thailand’s strong public health response to the COVID-19 pandemic.
We have had essentially no domestically transmitted cases since May, and in many ways daily life has returned to normal. Thailand is one of the world’s success stories in this regard.
The Thai government is now working to capitalize on this success to attract companies and supply chains to Thailand.
Furthermore, U.S. companies broadly give Thailand’s pandemic response strong marks for prioritizing the preservation of commerce and industry.
Many U.S. factories continued to run at or near capacity even at the height of the lockdown, and some companies even moved operations to Thailand during the pandemic to escape restrictive lockdowns in other countries.
Thailand has a strong manufacturing base, particularly in the automotive sector and other mid-range manufacturing.
Under its Thailand 4.0 development strategy, Thailand is now focused on attracting next generation, high-value-added manufacturing and services in 12 key sectors, among them next-generation automobiles; smart electronics; robotics; and logistics and aviation.
The Thai Board of Investment, or BOI, supports this strategy by offering a broad range of investment incentives to foreign investors, depending on sector, type of investment, and other factors.
BOI also offers special incentives for companies looking to establish regional headquarters in Thailand.
U.S. companies report that BOI’s incentive packages are very competitive. They rate BOI highly for professionalism, support, and transparency.
BOI can offer a flexible menu of incentives including: corporate income tax exemptions for up to 10 years; exemptions to import duties for machinery, raw materials, and other inputs; and many other tax and non-tax exemptions depending on type, sector, and location of investment.
For more information, contact the BOI directly. The BOI maintains offices around the world, including in New York and Los Angeles. My team is also happy to make connections for interested investors.
Thailand’s signature economic development initiative is the Eastern Economic Corridor, or EEC, an area-based development project that covers three provinces and involves the construction of industrial estates and next-generation support infrastructure in the form of new roads, high-speed rail, airports, and seaports.
The EEC Office has the authority to offer special incentives and regulatory concessions above and beyond those offered by the BOI.
I recently toured the EEC, and I am pleased to report that all the U.S. companies I visited there were in the process of expanding operations, moving into R&D, and innovating onsite. It appears the EEC project is moving in the right direction.
Thailand is located at the heart of ASEAN, has superior infrastructure, and is therefore a natural fit as a logistics and transportation hub for mainland Southeast Asia.
We are currently working to help Thailand integrate its existing infrastructure and optimize intermodal transport and logistics capabilities.
We are encouraging reforms to customs procedures to allow cargo to be efficiently transferred from one mode of transport to another, for instance from air to truck.
I have heard that one of the major challenges in this regard is red tape and bureaucracy at regional land border crossings.
I would like to use this platform today, therefore, to invite my fellow regional Ambassadors to facilitate cross-border infrastructure upgrades and more efficient customs agreements and procedures to ensure seamless regional logistics.
Earlier this week, the United States and Thailand took an important step forward in our collaboration on energy issues by holding our first ever Energy Policy Dialogue.
During this high-level event, the United States reaffirmed its commitment to help Thailand realize its vision of becoming a regional energy hub.
This will create commercial opportunities for both American and Thai companies and improve the business operating environment in the region through broader access to more reliable, less expensive sources of energy.
One of the silver linings of the pandemic has been the acceleration of the development of the digital economy.
We are working to help Thailand in this regard as well, through the digitization of financial services, the development of smart cities and digital infrastructure, and other areas.
In my travels throughout Thailand and my conversations with Thai officials, I have seen the specific benefits U.S. companies can bring to Thailand.
U.S. companies are leaders in technology and innovation, but also in often overlooked areas such as workforce development, labor relations, corporate social responsibility, transparency, and workplace safety.
These factors not only give U.S. companies a competitive advantage, they contribute to Thailand’s achievement of its development goals.
This is why Thai officials are eager for U.S. investment.
And we at the Embassy are likewise eager to help you explore how you can contribute to our long-standing economic and commercial relationship, which has brought so much benefit to both our nations.
If you want to learn more about the opportunities here, and please do not hesitate to reach out to me and my economic and commercial team at the Embassy.