16 March 2004 17:56
Thai-Russia economic relationship after president election
Section: Research - Russia is a country that has succumbed to painful economic crisis over the last 5-6 years due to
a serious slump in the Ruble currency in 1998. The banking and economic system of Russia was in such serious condition
that the country had to ask for urgent assistance from the IMF (International Monetary Fund). But today, Russia, under
the management of President Vladimir Putin has been able to stabilize and recuperate its economy. In 2003, Russia's
economic growth increased to 6.8 percent, versus an average GDP of 6.5 percent in the three years previous. It is
expected that, in 2004, the Russian economy will grow around 7 percent, while the inflation rate was slow to 12 percent
last year, from as high as 120 percent in the year 2000.
Kasikorn Research Center (KRC) has concluded that the economic relationship between Thailand and Russia will likely
thrive further after the presidential election on March 14, 2004, where President Vladimir Putin is expected to win a
second term. Some interesting points about the Thai/Russian relationship include: 1. Thailand - Russia Trade Thailand
and Russia have set a target of increasing trade turnover between the two countries to reach USD 1 billion per annum. It
is expected that the target will be easily achieved, since in 2003, the overall trade value (imports + exports) between
the two countries reached a historical high of around USD845 million, growing by 30 percent. In particular, the export
of Thai goods to Russia jumped more than 80 percent, with an export value of around USD273 million. Exports from
Thailand to Russia that did well were rice - the number one export from Thailand - which increased by 291 percent.
Meanwhile, the export value of radio-broadcast receivers and television receivers expanded by 233 percent. Also doing
well were color television picture tubes, garments, polymers of ethylene, propylene, etc in primary forms, tobacco
leaves, plastic products, rubber products, canned and processed seafood, which all increased more than one-fold, among
others.
2. Thailand-Russia Tourism It is estimated that Russian tourists travelling to Thailand will top 70,000 for the first
time in 2003, which would be the highest ever achieved. It is forecast that Thailand will have earned at least Baht2.8
billion from Russian tourists in the preceding year. A popular tourist attraction for Russians is Pattaya Beach. In
addition, some groups of Russian tourists are also interested in shopping for bargains in Thailand, such as garments,
shoes, bags, home decorative items, etc. to re-sell in Russia. At the same time, Thai tourists travelling to Russia are
expected to number around 2,200 people in 2003, which was close to 2002, as opposed to an average 1,500 Thai tourists
that visited Russia between 1997-2001. The total expense of Thais traveling to Russia is around Baht120 million per
annum.
3. Thailand-Russia Investment It is expected that Russia will increase joint investments with Thai businessmen, after
the Thai and Russian government have signed agreements concerning promotions and investment protection between the two
countries, where the advantages and expertise of each country will be supportive factors for joint investment in various
projects. This would be particularly true of Russia's highly advanced expertise in science and technology, which
will be very useful for R&D (Research and Development). Moreover, Russia is also highly skilled in biological
technology, information technology, microchip technology, space technology, and knowledge on solar power, where Thailand
could be the recipient of technology transfer to further enhance its knowledge in these areas.
Kasikorn Research Center 12 March 2004
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RUSSIA IN FACTS
