Ambassador: whatever the political situation is, our policy on welcoming foreign investors and tourists remains the same

Ambassador: whatever the political situation is, our policy on welcoming foreign investors and tourists remains the same

Thailand Ambassador to Hungary Sompong Sanguanbun offers his final thoughts shortly before completing his term and returning to Bangkok

The military overthrew the government in Thailand in May after months of political turmoil and now a junta rules the country. What’s going on?

To fully understand the situation one must take into account the context of Thai politics since late 2013. Back then, when the government of former prime minister Yingluck Shinawatra proposed to give amnesty to those involved in past political conflicts, many feared that it would also benefit corrupt politicians. This instigated widespread resentment and demonstration. Although the bill was not passed, public mistrust of the government and protracted protests continue. Meanwhile, supporters of the former government, the so-called “red shirts”, also gathered to show support. Even though both sides managed to avoid direct clashes, there were signs of violence from weapons and further divisiveness was imminent. The government was unable to control the situation. After declaring martial law on 20 May, the military unsuccessfully tried to broker a deal among all parties. Finally on 22 May they decided to take control of the national administration to move the country out of this deadlock.

So is the country peaceful now?

Since the National Council for Peace and Order (NCPO) came to power, the overall situation has been peaceful. It has announced its three-phase roadmap – reconciliation, reform the national administration and finally to hold an election in 2015. The provisional Constitution was promulgated on 22 July and the members of the National Legislative Assembly were appointed on 31 July. The Assembly selected General Chan-o-cha as Prime Minister. A Constitution Drafting Committee will act. While we are “fixing and cleaning our house”, we would appreciate understanding and support from our friends. Thailand remains adhered to the value of democracy but requires time to fix our internal problems at the moment.

How does this affect foreign investors and tourists?

I would emphasise that whatever the political situation is, our policy on welcoming foreign investors and tourists remains the same. The NCPO has appointed the Board of Investment to approve pending foreign investment project applications amounting to EUR 17 billion. For tourists, I can assure you that you can travel to Thailand and enjoy our hospitality as ever. You may notice that the news about Thailand has faded from the TV and newspapers, which means the media finds nothing exciting to report. I consider this a very good sign. The NCPO has been actively promoting measures to stimulate the economy and help alleviate the cost of living.

What do Hungarians really know about Thailand? Some important facts?

Thailand, “the Land of Smiles”, has always been a wonderful and famous tourist destination for Hungarians, featuring Buddhist temples and spectacular islands along with a fascinating history and unique culture that includes delectable Thai food and massage. Thailand, the only South-East Asian nation that has never been colonised, is a constitutional monarchy, whereby the prime minister is the head of government and a hereditary monarch is the head of state. A unified Thai kingdom has existed since the mid-14th century, and Thailand was known as Siam until 1939 when it officially became the Kingdom of Thailand. His Majesty King Bhumibol Adulyadej is the longest-reigning monarch in the world, for 68 years. The country is top five in world ranking of exporting rice, rubber, auto parts and jewellery. Muay Thai is a well-known combat sport of Thailand that uses stand-up striking along with various clinching techniques. It became widespread internationally in the twentieth century, when practitioners defeated notable practitioners of other martial arts. Culinary tours have gained popularity and famous Thai cuisine includes Tom Yum Koong (sweet and sour shrimp soup) and Pad Thai (Thai fried noodles). The Thailand automotive industry was the largest in South-East Asia and the ninth-largest in the world in 2012. The annual output is near 1.5 million vehicles (mostly commercial). Thailand is one of the founders of the Association of South-East Asian Nations (ASEAN). About 80% of Thailand’s nearly 65 million citizens are ethnically Thai. The remainder consist primarily of Chinese, Indian, Malay, Mon, Khmer, Burmese and Lao descent. There is a Muslim majority in the south and hill tribe ethnic groups in the northern mountains.

Do many Hungarian tourists visit Thailand? What is the visa situation?

There were about 17,000 in 2013. Mostly, they visit the beaches in the south (Samui, Phi Phi, Phuket), Bangkok and the north of Thailand. Hungarian citizens are exempt from visa requirement for 30 days. Travellers who do not enter through an airport border crossing point are allowed to stay for 15 days without a visa.

Is Thailand a popular destination for Hungarians wishing to emigrate or retire to the tropics? Is it difficult or expensive?

Thailand has become a destination for retirement of choice for many foreigners. It has a lower cost of living. Retirees do not have to sacrifice the lifestyle that they enjoyed in their home countries. The warmth and tropical climate are one reason. It is a safe country to live in, as crimes committed against foreigners are very low. In healthcare, there are many leading, international hospitals at a much lower cost than you would expect at home. Thailand is a shopper’s paradise, with the world’s best spas and wellness centers as well as having seaside attractions and some of Asia’s finest golf courses. Liberty is another important factor that people enjoy about being in Thailand.

How are Thai-Hungarian relations politically?

Thailand and Hungary have enjoyed friendly relations since diplomatic relations began in 1973. Both countries have a mechanism called the Political Consultations between the Ministry of Foreign Affairs of Thailand and the Ministry of Foreign Affairs and Trade of Hungary to discuss issues of mutual interest and how to strengthen them. Hungary will host the next meeting and we are working on a date. As mentioned, we would like to thank our Hungarian friends for their understanding in what is happening politically in our country.

What are the trade/business links between Hungary and Thailand?

Thailand regards Hungary as a promising gateway for distributing Thai goods and products to Central and Eastern Europe, and Thailand can be the gateway for Hungarian goods and products to ASEAN as well. Hungary is Thailand’s important trading partner in Europe. Our trade volume is on the increase, amounting to about USD 551.7 million last year, with Thailand’s trade surplus around USD 325.5 million. Total exports from Thailand to Hungary are USD 438.6 million and total imports from Hungary to Thailand are USD 113.1 million.  Main exports from Hungary to Thailand are computer devices and components, electric appliances, pharmaceutical products, electric machineries and components, chemical products, auto parts and accessories, and medical science equipments. Main exports from Thailand to Hungary are car parts and components, motor and power generating machines, printed circuits, computer devices and components, garments, canned and processed fruits, and loudspeakers and components. There is one Thai company, Thai President Food Hungary, producing instant noodle, in Esztergom. For Hungarian investment in Thailand, there is one company, Amada Cable and Wire Harness. Hundreds of Hungarians live in Thailand and around 500 Thais live in Hungary. More than 40 married Hungarians and have Thai-Hungarian children (25). Each year we send 20 American Field Service students from Thailand to study in Hungary, since 20 years ago. About 15 students who study hotel management come to Budapest for a three-month training every year and vice-versa.

Are there any business customs or guidelines that Hungarians should know about Thailand?

In Foreign Direct Investment, Thailand ‘s well-defined investment policies focus on liberalisation and encourage free trade. Foreign investments, especially those that contribute to the development of skills, technology and innovation, are actively promoted by the government. Thailand consistently ranks among the most attractive investment locations in international surveys, and the World Bank’s 2014 Ease of Doing Business report places Thailand as the 18th easiest country in the world (and fifth-ranked country in South-East Asia) in which to do business. Regarding government support and incentives, numerous agencies support investors. Through the Board of Investment, the government offers a range of tax incentives, support services and import duty exemptions or reductions to an extensive list of promoted activities. Companies receiving investment promotion privileges from the Board of Investment are not subject to foreign equity restrictions in the manufacturing sector, and there are no local content requirements or export requirements, as Thailand’s investment regime is in total compliance with World Trade Organisation regulations. The government has emphasised attracting investment in six sectors that have been determined to be key to the country’s developmental objectives: agriculture and agro-industry; alternative energy; automotive; electronics and ICT; fashion; and value-added services including entertainment, healthcare and tourism.

How are you promoting Thailand?

Thailand considers Hungary as an important gateway to Central and Eastern Europe, especially the Visegrad Four. By the end of next year, the ASEAN Community will become a reality. It consists of 10 member countries with 600 million people. Region-to-region relations between ASEAN and Visegrad Four will help open up more opportunities for their common interests. Deepening cooperation between both sides through this region-to-region approach will help render more substantive outcome. The Royal Thai Embassy and Thai Trade Promotion Office in Budapest jointly organise the Thai Days event annually in mid-August to promote trade relations between the two countries.

How does Hungary rate on the scale of difficulty (or as an enjoyable posting) for Thailand’s ambassadors?

Really enjoyable. Hungarians are nice people, the country is so beautiful. Hungarian food is excellent.

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