BANGKOK -- Thailand aims to woo foreign companies through a large-scale economic zone developed with 1.5 trillion baht ($42.8 billion) in public and private infrastructure funds.
The country's continued economic growth requires modernizing domestic industry, Prime Minister Prayut Chan-ocha said Wednesday at a business seminar, where many of the 3,000-strong attendees were managers from foreign-owned corporations. The government seeks investments in 10 highly technical sectors, including robotics and medicine.
Those funds will be directed toward the Eastern Economic Corridor, a zone in the eastern seaboard provinces of Chachoengsao, Rayong and Chonburi. The government is devising legislation to let foreigners own land in the corridor and receive other benefits, with the measures to take effect by the second quarter of this year.
The EEC will be the most advanced industrial zone within the Association of Southeast Asian Nations Economic Community, Prayut pledged.
The area already serves as Thailand's leading manufacturing region, dotted with auto and electronics plants. The location is ideal, near the nation's capital of Bangkok and facing the Gulf of Thailand.
Thailand plans to build a new highway and expand ports to enhance the area's competitive advantage. An airport, formerly a military base, will receive a face-lift. Officials are especially keen to attract research and development centers as well as educational institutions formed by partnerships among industry, government and academia.
Business incentives are being sweetened. Thailand decided in January to waive corporate taxes for investments targeting high-tech industries and R&D for up to 13 years, extended from the previous eight-year maximum. Companies doing business in the corridor will have their tax rate cut in half for an additional five years.
Under legislation enacted Monday, investments seen as contributing to the industrial innovation are eligible for up to 15 years of tax exemptions.
Thailand looks to raise its economic growth rate to 5% by 2020, up from the estimated 3%-plus in 2016. But concerns run high that Thailand will remain trapped as a semideveloped nation with soft economic expansion, particularly in light of high labor costs compared with neighboring countries.