Thailand's Board of Investment yesterday said the value of projects it had approved slumped 30 per cent to US$2.5 billion in the first quarter as Japanese companies sharply reduced expansion in the country.
The number of Japanese investment projects approved dropped to 57 over the three months, from 81 in the same period the year before. The Japanese economic slowdown made firms reluctant to invest abroad.
Speaking in Hong Kong, Board of Investment secretary-general Staporn Kavitanon said they had launched a number of incentive measures but admitted there was a limit to what they could achieve.
He said the slowdown in Japanese investment projects was especially harmful to Thailand as the Japanese had traditionally been the dominant investors.
He said: 'Japan has always been the main player so a softening of its investment has a big effect.' In 1995 for instance, the board approved 284 Japanese investment projects, more than for the next four highest countries combined.
Mr Staporn said the decline in Japanese investments this year had been partially offset by an increase in investments made by US and European companies, but the increase was far from sufficient to make up the shortfall.
