Thailand’s Economic Dilemmas in Post-Pandemic Asia
Published online by Cambridge University Press: 30 June 2023
Summary
INTRODUCTION
Thailand combines many recent economic trends facing Southeast Asia, while being immersed in the geopolitics of Northeast Asia and facing demographic conditions resembling those of Northeast Asian countries. Thailand continues to economically and politically manoeuvre around the tensions in intra-Asian relations. Over the past decade, Thailand has managed to balance many disparate competitors—attracting investments from China and Japan, welcoming military cooperation with both China and the United States, and hosting travellers from Russia, Ukraine, China, the US, Israel, Saudi Arabia, and Iran—with a goal of receiving benefits from engagement with many different sides and actors.
Thailand's economy suffered greatly during the height of the COVID-19 pandemic. Today, the Thai economy appears to be on a better footing than it was on two years ago, but with substantial long-term challenges that remain unresolved.
How will Thailand's economy fare as the world leaves behind the restrictions of the pandemic era?
Thailand holds a historic reputation as a powerhouse of Southeast Asia. It retained a large degree of political independence in the nineteenth and twentieth centuries, but quickly aligned with the United States during the Cold War, which facilitated Thailand's military upgrading and greater regional political influence. By the end of the Cold War and into the twenty-first century, Thailand was home to US military exercises, substantial Japanese foreign investments, and growing trade with China. However, in the last fifteen years, an unstable political system with few bold efforts at reform, coupled with rapidly growing competition from other Asian economies, has greatly diminished Thailand's economic lustre. Thus far, COVID-19 has only exacerbated the challenges to Thailand's future regional prominence, and has not yet generated sufficient political or social momentum for fundamental reforms to Thailand's governance and economy.
The following sections review the economic challenges that Thailand faces, centred around the enduring economic disruptions of the COVID-19 period. After weathering the 2020–21 peaks of the pandemic with relatively minor health costs but substantial financial costs, Thailand could celebrate a partial return to pre-pandemic levels of economic vitality, with particular optimism around foreign investments and trade in goods. Still, Thailand must confront daunting challenges in rising debt, poor demographics, an uncertain upgrading in labour force skills, and unmet needs for structural transformations in education, tourism, and agriculture.
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- Thailand’s Economic Dilemmas in Post-Pandemic Asia , pp. 1 - 51Publisher: ISEAS–Yusof Ishak InstitutePrint publication year: 2022