Huge Comeback by Thailand & Australia’s Quest for FTAs
Following 2010’s devastating floods, Thailand’s economy fell into a slump as the government struggled to piece the country back together. According to AFP, damage caused by the floods were estimated at 328 billion baut, which is equivalent to 3.7% of Thai’s GDP. Today, data released by the National Economic and Social Development Board (NESDB) shows that Thailand’s economy grew by 11% in the first quarter of 2012, above most analysts’ expectations. The growth is largely attributed to reconstruction efforts by the government as well as the pent-up demand for goods made in Thailand. This underscores the investment potential the Land of Smiles can provide to investors, especially at this time of opportunity, when the economy is getting back onto its feet and manufacturing is set to resume pre-flood production levels. Incorporating a Thai company now could prove to be a solid stepping-stone for global investors and entrepreneurs.
Down under, Australia has embarked on a quest to secure free trade agreements (FTAs) with more trading partners. Its latest FTA with Malaysia would remove 97% of tariffs imposed on Australian goods, and Australia would return the favour. This signals Australia’s willingness to open its economy up to international trade. Analysts believe that Malaysia is only the first step for Australia as it is still undergoing negotiations with the huge markets in South Korea, Japan and China. This could greatly reduce operating costs for a lot of businesses in both Australia and its trading partners, as prices of common goods from either country would then be competitively priced against other nations’. It is also great news to potential investors who are considering setting up a business in Australia.
As we head over to Europe, Greece’s potential exit from the European Union has been a popular conversation topic among market analysts, as the cloud of uncertainty surrounding Europe’s future darkens. Following the country’s inability to form a unified coalition, Greek voters would return for another vote on June 17. This failure only prevents the EU from holding Greece accountable for its austerity plans. According to AFP, many Greeks have also begun withdrawing their lifesavings from several banks, a staggering 800 million euros in a period of less than 2 weeks. Many Europeans see this as an attempt by the Greeks to avoid paying their dues and, unfortunately, this issue may not conclude soon.
Looking at South America, Argentina’s currency controls have led to the growth of a huge black market, according to an AP report. Since the country’s public debt default in 2001, international capital markets have shunned Argentina, leading to a shortage of liquidity in its central bank reserve and money to pay off the government’s debt. It has led to policies that aim to keep dollars within the country, and as a result, with extreme inflation levels and frozen bank deposits, most Argentineans have turned to creating a black market. It has also seen more red tape when exchanging pesos to dollars, such that the formal exchange rate of 4.47 pesos per dollar is being changed at a rate of 5.50 pesos per dollar on the street. However, as one of the largest Latin American economies, Argentina still offers plenty of opportunities in its natural resource and agricultural sectors.