COUNTRY HIGHLIGHTS THAILAND 2016 The World Bank Group conducted face-to-face interviews with top managers and business owners of 1,000 enterprises in Thailand from November 2015 through June 2016. The Enterprise Survey (ES) sample is representative of Thailand’s formal private sector. The ES covers several aspects of business environment along with measures of firm performance. Below are the main highlights from the survey. Thai firms underperform comparator economies in both annual sales and employment growth Performance of firms in Thailand, in both annual 6 6 sales growth and employment growth, is lower than 4 the average of upper middle income economies. 4 Between 2013 and 2015 the private sector in 2 Thailand experienced negative annual sales growth (- Percentage Percentage 1.4%) compared to 2.7% on average in upper middle 2 0 Real annual sales growth (%) income economies. Similarly, annual employment -2 growth was sluggish (1.9%) compared to 5.1% in 2016 THAILAND ENTERPRISE SURVEY similar-income economies. In terms of real sales 0 Real annual sales Annual -4 growth, small firms (5-19 employees) performed the growth (%) employment growth (%) worst, with an annual growth rate of -4.1% -2 -6 compared to 4.5% and 3.6% for medium size firms Small(5-20) Medium(20-99) (20-99 employees) and large firms (more than 100 Thailand2016 Upper Middle Income Large(100+) employees) respectively. Small Thai firms spend more time dealing with regulations than larger firms The “time tax” imposed by regulations, which is the 8 12 percentage of time spent by senior management 6 10 dealing with regulatory compliance, is higher for 8 Percentage Percentage small firms than larger firms in Thailand. The 4 6 average time tax for small firms is 6% compared to 4 2 3% for medium firms and around 2% for large firms. 2 The time tax in Thailand is also lower than in 0 0 Senior management time spent in Senior management time spent in comparator economies. Senior managers in Thailand dealing with requirements of dealing with requirements of spend 5% of their time dealing with government government regulation(%) government regulation(%) Thailand2016 EAP13 regulations compared to 6% in East Asia and Pacific Small(5-20) Medium(20-99) Upper Middle Income (EAP) and 10% in upper middle income economies. Large(100+) Female participation in ownership or management of the private sector is higher than in comparator economies 80 80 In two measures of gender equality (the percentage of firms with majority female ownership and those 60 60 with a female top manager), Thailand outperforms Percentage Percentage comparator economies: 33% of firms have majority 40 40 female owners compared to 29% and 12 % in EAP 20 20 and in upper middle income economies respectively. In Thailand, 65% of firms have a woman as the top 0 0 Percent of firms Percent of firms manager – more than three times the average of with majority with a female top Percent of firms with a female top manager upper middle income economies (20%) and more female ownership manager than double the EAP average (32%). Across sectors, Thailand2016 EAP13 Manufacturing Services gender disparity is more pronounced: women are Upper Middle Income more likely to be top managers in services firms (61%) as opposed to manufacturing firms (18%). Electricity provision in Thailand is significantly better than in comparator economies Thai firms have fewer electrical outages and are less 6 40 likely to own a generator than firms in comparator economies. Efficiency in the operation of the private 30 sector requires a reliable supply of electricity. Percentage 4 Inadequate electricity provision can increase costs, Number 20 disrupt production, and reduce profitability. Thai firms experience less than 1 electrical outage in a 2 10 typical month compared to 5 outages in EAP economies and 4 outages in upper middle income economies. Also, the percentage of Thai firms that 0 0 Number of electrical outages in a Percent of firms owning or own or share a generator is only 0.4%, significantly typical month sharing a generator lower than the EAP average (33%) and the upper middle income average (28%). Thailand2016 EAP13 Upper Middle Income Firms’ engagement in trade is lower in Thailand than in comparator economies 2016 THAILAND ENTERPRISE SURVEY The level of involvement of the Thai private sector 80 in trade is much lower than in comparator economies. Participation in international trade allows 60 firms to expand, raise standards for efficiency, Percentage import materials at lower cost, and acquire updated 40 and better technologies. The percentage of Thai firms using material inputs or supplies of foreign 20 origin (5%) is remarkably low and significantly trails the average for firms in upper middle income 0 Percent of firms using material inputs Percent of firms exporting directly or economies (61%) and the EAP region (41%). Also, and/or supplies of foreign origin indirectly (at least 1% of sales) only 5% of Thai firms are exporting directly or indirectly, well below the average of 14% in EAP Thailand2016 EAP13 Upper Middle Income economies and 18% in upper middle income economies. Political instability is most frequently cited as the biggest obstacle to private firms’ operations The ES asks business owners and top managers to Political instability name the biggest obstacle that they face in their Electricity Transport everyday operations. In Thailand, political instability Tax rates and electricity are almost tied in terms of the number Labor regulations of firms citing them as the biggest obstacle to Informal competitors Access to finance everyday operations. Political instability is cited by Poorly educated workers 20% of firms while 19% of firms identify electricity Corruption Tax administration as their biggest obstacle. Interestingly, in spite of Licensing and permits Thailand performing remarkably well in electrical Crime, theft and disorder Access to land service, as highlighted above, many firms still cite Customs & trade regulations Thailand2016 electricity as a top obstacle. Transport and tax rates Courts ranked 3rd and 4th, with 16% and 14% of businesses 0% 5% 10% 15% 20% 25% citing them as the top obstacle respectively. Percentage of firms The Enterprise Analysis Unit is a joint World Bank and IFC team of economists, survey experts specialized in private sector development. Surveys implemented by the team reveal what businesses and firms experience across the world by interviewing representative samples of the formal, non-agricultural, non-extractive, private sector with 5 employees or more. The resulting globally comparable firm-level data is used to construct business environment indicators and measure firm performance. The findings and recommendations help policy makers identify, prioritize, and implement policy reforms that support efficient private economic activity. For more information on the survey visit http://www.enterprisesurveys.org Generated using Enterprise Survey data as of June 26, 2017