Asean.org, 2014).
As it can bee seen from the table, Singapore has the total net inflow in highest comparing from 2012, it was 72,0883.3, while in Thailand got the total rest inflow for 11,537.9 USD. Foreign direct investment (FDI) that are shined among ASEAN countries are; Indonesia, Malaysia, Philippines, Singapore and Thailand, It was noticeable that Singapore received the biggest share of the region for in 50% in 2013, followed by Indonesia at 15.1%, and Thailand at 10.6%, Due to Thailand has experienced an inward FDI that was driven economy for the past
However, now there are several economic structural changes in Thailand such as shortages of labor supply, 15,000 Baht wage rise policy which highly affect the outward FDI. Nevertheless, comparing to Singapore, Thailand’s outward FDI performance is still at low level. Another reason is that Thailand has a more aging problem than Singapore. The aging problem in Thailand causes a decline in labor forces and shortage of labors. Hence, the
shortage in operational labors and the higher wage rate, has led to an increase in Thailand’s outward FDI (Kornkarun & Juntip, 2014). While, the modern economic history of Singapore is at advantage and it resulted in the per capita GDP of Singapore of US$ 516; in 2010, and it was increased remarkably in only 45 years , this means that the rapid economic growth and strong international trade performance in Singapore have accompanied with an increase of in IFDI flows as well. Additionally, Singapore has long welcomed foreign multinational enterprises and was supported well by its Ministry of Trade and Industry, which resulted in over 7,000 foreign MNEs have operations. However, the natural disaster such as the earthquake and its aftermath in Japan in 2011, the floods in Thailand, the Eurozone debt crisis, and the United State economic downturn are the factors that affect Singapore economy and economic activities. Singapore has a better sustainable development plan than Thailand since 2002, Singapore has its policy consideration for economy including to Environment Agency and Environmental Public Health Division as well as Meteorological Service Department of the Ministry of Transport. These supports have an impact on foreign direct investments (Hsu,2012).
Meanwhile, Thailand has been dealing with political instability, which can be seen from having15 coups in 33 years, and the prolongation of political issues remained up until now. This factor is a concern for Thailand foreign investment. Also, corruption, staff shortages, legal risks and developing infrastructures are the effects of the economic growth and the country FDI as well (Fensom, 2015).
Conclusion
ASEAN countries become more competitive and attractive in the region for investment. Fluctuate foreign investment has an impact in the long term for labor hire, import-export, consumption, and at eventually it may affect the Gross Domestic Product. For Thailand, political concerns would be barrier for foreign direct investment comparing to Singapore. The factors dues to politics will affect Thailand growth in FDI. Meanwhile, Singapore has the supports from the organizations both private and public sectors and less political problems, that’s why Singapore is ranked in number 1 for foreign direct investment inflow, If Thailand can solve its only country problems, plus for the upcoming integrated to be ASEAN as a single market, Thailand can definitely overcome the economic down turn and would also become an interesting country to invest in the future from all the foreign countries,, not only in ASEAN because Thailand geography is good for agricultural activities, transportation has improved, and there are many attractive tourist destinations in Thailand.
Recommendation
The foreign direct investment in Thailand was possible to rise from the FD inflow in 2013 (National Statical Office, 2014). Foreigners have an interest in investing in Thailand but political instability is a concern to bring down the inflows. The government now is trying to boost the consumption by reducing the taxes for houses aiming to allow Thai economy to be stronger and have some movements. For being in AEC members, Thailand should focus on more exports because Thailand has the location based that are convenient to transport comparing to the other countries in ASEAN, Thailand should take advantage from its location and the ability to find potential labors as well as using recourse efficiently to reduce the production cost.