A Brief History of the Economic Relations between Thailand and Japan

A Brief History of Thailand-Japan Economic Relations

In November 1972, the Thai government and leading business members expressed concern over reports of anti-Japanese campaigns in Thailand and they said it would definitely bring changes in Japanese economic penetration in the country.¹In March 1974, the Japanese Foreign Ministry spokesman said Japan has asked the Thai government to establish a joint committee to address the problems posed by Japanese investments in Thailand.²In October 1975, the Prime Minister of Thailand, Kukrit Pramoj criticized Japan for investing in Thailand due to cheap labor in the country. The Thai government sees it as a wrong investment motive.³

In June 1976, business leaders of Japan said that Japan is willing to increase investment in Thailand since there is tremendous improvement in the political situation in Thailand.⁴In July 1976, the Ministry of Commerce of Thailand, Damrong Lathapipat said several private banks in Japan have offered the Thai government a loan of 10 billion yen.⁵In September 1977, Japanese Prime Minister, Takeo Fukuda said the Prime Minister of Thailand, Thanin Kraivichien during a visit to Tokyo that Japan is ready to provide further economic assistance to Thailand.⁶In August 1978, a Thailand Japanese joint venture has been granted government promotion privileges to produce diesel engines with a capital of US$ 5 million.⁷

In February 1979, the President of the Japanese Chamber of Commerce, Ikuya Hayashi said Japanese investors in Thailand are not disturbed by recent developments in Cambodia and they are expected to invest more into the development of the industry in Thailand.⁸In August 1981, Prime Minister of Thailand, Prem Tinsulanonda will focus on key trade sectors and spur foreign investment in his upcoming visit to New Zealand, Australia, the United States and Japan.⁹In May 1982, while aid from the Japanese government will continue to come to Thailand in such increased quantities, Japanese private businessmen cautious about the prospects of investment in the country. Japan is still the main foreign investor in Thailand at the time.¹⁰

In January 1983, the Ambassador of Japan to Thailand, Motoo Ogiso said Japan considers Thailand as a strategic country in the forefront of opposition to the communist threat in Southeast Asia. For that reason the Japanese give greater assistance to Thailand compared to other countries in the region.¹¹In the same month also, a delegation of the Japanese economy has begun discussions with Thai officials in Bangkok on the possibility of increasing Japanese investment in Thailand. The mission of the nine-day tour will also discuss economic topics with the Prime Minister of Thailand, Prem Tinsulanonda.¹²In October 1983, Mitsubishi Corporation and a consortium of Mitsui Co Ltd, Sumitomo Corporation and Marubeni Corporation have offered a total of 40 percent of foreign equities that were designed for Thailand’s liquefied natural gas (LNG) export project.¹³

In May 1984, the four major Japanese trading companies, Mitsubishi, Mitsui, Sumitomo and Marubeni have agreed to help develop liquefied natural gas in Thailand in a joint venture with Thailand. They expect to produce and deliver to Japan by 2 million to 3 million tons of liquefied natural gas.¹⁴In July 1984, Japanese Foreign Minister, Shintaro Abe and Prime Minister of Thailand, Prem Tinsulanonda sign a loan agreement in the Government House in Bangkok. Shintaro Abe has signed loans worth 6.963 billion baht.¹⁵In August 1984, the Thai government has set up three working groups to discuss ways to improve relations between Japan and Thailand in the fields of trade, investment and economic assistance.¹⁶

In May 1985, Thailand asked Japan to help expand trade, especially more tariff cuts and the use of Japanese marketing network all over the world to promote the products of Thailand.¹⁷In February 1986, a Thai government economist said the Japanese business leaders have pledged to increase investments in small and medium industries in Thailand and will send experts to help improve the quality of exports from Thailand.¹⁸In May 1986, the Deputy Prime Minister of Thailand, Air Chief Marshal Siddhi Savetsila said Japan may create an industrial center in Thailand to manufacture products to be exported to other Asian countries.¹⁹

In October 1986, officials of Thailand and Japan said the decision to build a major deep-water port in the Gulf of Thailand can lead to more Japanese investment in the construction industry in the east coast of Thailand.²⁰By December 1986, new waves of Japanese interest to invest in Thailand have been triggered by the appreciation of the yen. Japanese conglomerates that have long existed as well as smaller and specializing companies have increased their presence in Thailand.²¹In January 1987, Thailand claims that it became the main beneficiary of the increase in Japanese investments triggered by the rising yen. Low labor costs, medium market, consistent economic growth and Thailand political stability are making it one of the best places to invest in Southeast Asia countries.²²

In February 1987, Nippon Steel Corporation from Japan made a joint venture with Italian Thai Development Co Ltd to produce offshore oil platforms and other structures in Bangkok.²³In April 1987, Sony Corporation from Japan plans to launch projects worth US$ 15 million in Bangkok soon to produce video and audio cassette tapes, especially for export. Chairman of the Board of Investment of Thailand, Chira Phanupong said Sony may receive investment tax incentives.²⁴ In October 1987, the Prime Minister of Thailand, Prem Tinsulanonda leaving for Tokyo for a three-day visit for talks with Japanese leaders on bilateral issues,including ways to expand trade and economic relations between Japan and Thailand.²⁵He is expected to ask Japan to increase investment in his country when he met with Japanese Prime Minister, Yasuhiro Nakasone.²⁶In Tokyo, he urged the Japanese government to help Thailand companies absorb technology and knowledge management provided by Japan. In a lecture in Osaka, he also expressed the hope that Japan will buy more goods produced by the domestic industry in Thailand.²⁷

In December 1987, the Government Public Relations Department of Thailand said Japanese investment in Thailand is growing due to the appreciation of the yen and likely to be focused on small and medium industries.²⁸In February 1988, the Ambassador of Japan to Thailand, Akitane Kuichi expressed concern over the growing criticism against Japan's influence among the people of Thailand as a result of the increase in Japanese investment.²⁹In March 1988, Nikko Securities Company plans to set up an international trust fund for investment in the Thailand stock market as part of the proposed recycling Japan’s trade surplus.³⁰

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¹Anonymous, Thai boycott worries Japanese inThe Straits Times, 17 November 1972, p. 2.

²Anonymous, Japan's call to Thailand inNew Nation, 16 March 1974, p. 4.

³Anonymous, Kukrit hits at Japan inNew Nation, 4 October 1975, p. 5.

⁴Anonymous, BOOST FOR THAILAND inNew Nation, 20 June 1976, p. 2.

⁵Anonymous, Thais get loan offer inNew Nation, 27 July 1976, p. 7.

⁶Anonymous, Fukuda aid pledge to Thanin inNew Nation, 10 September 1977, p. 5.

⁷Anonymous, ISUZU ENGINE CAPITAL inThe Business Times, 23 August 1978, p. 9.

⁸Anonymous, Japanese confidence in Thailand inThe Straits Times, 1 February 1979, p. 22.

⁹ Anonymous, Prem to spearhead investment drive in The Business Times, 19 August 1981, p. 2.

¹⁰Anonymous, Wary Japanese inThe Business Times, 19 May 1982, p. 7.

¹¹Anonymous, Thailand negara strategik barisan depan inBerita Harian, 21 January 1983, p. 1.

¹²Anonymous, More investment? inThe Straits Times, 28 January 1983, p. 3.

¹³Anonymous, Japanese groups get 40pc in Thai project inThe Straits Times, 26 October 1983, p. 21.

¹⁴Anonymous, Four Japanese companies to help develop Thai gas inThe Business Times, 24 May 1984, p. 11.

¹⁵Anonymous, seal loan agreements inThe Straits Times, 17 July 1984, p. 9.

¹⁶Anonymous, Thailand-Japan economic ties inThe Business Times, 29 August 1984, p. 5.

¹⁷Anonymous, Thais to ask Japanese for cuts in trade tariffs inThe Business Times, 9 May 1985, p. 4.

¹⁸ Anonymous, Tokyo raising Thai investment in The Business Times, 4 February 1986, p. 3.

¹⁹Anonymous, Japan Industrial centre' may be set up m Thailand inThe Straits Times, 21 May 1986, p. 7.

²⁰Anonymous, Thais expect more Tokyo investment inThe Business Times, 21 October 1986, p. 19.

²¹Anonymous, High yen sparks new rush of Japanese investors inThe Straits Times, 16 December 1986, p. 7. See also Anonymous, Higher yen leads to surge of Japanese investments in Thailand inThe Business Times, 16 December 1986, p. 1.

²²Anonymous, Thailand expects significant inflow inThe Business Times, 21 January 1987, p. 8.

²³Anonymous, Nippon Steel joins oil rig venture inThe Business Times, 18 February 1987, p. 11.

²⁴Anonymous, Sony to make tapes in Thailand inThe Business Times, 21 April 1987, p. 11.

²⁵Anonymous, Prem in Tokyo to boost trade ties inThe Straits Times, 12 October 1987, p. 9.

²⁶Anonymous, Prem likely to seek more Japanese investments inThe Straits Times, 11 October 1987, p. 11.

²⁷ Anonymous, Help us learn new skills, Prem tells Tokyo in The Straits Times, 14 October 1987, p. 10.

²⁸Anonymous, Japan to concentrate on smaller Thai industries inThe Business Times, 21 December 1987, p. 4.

²⁹Anonymous, Benefits of competition inThe Business Times, 23 February 1988, p. 11.

³⁰Anonymous, Nikko to set up Thailand Growth Fund inThe Business Times, 4 March 1988, p. 20.