Connect with us

Economics

Economic strategy and the roots of Thailand crisis

Published

on

In his presentation at the 21 April 2010 ANU conference on “Thailand on the Verge,” Peter Warr highlighted the importance of inequality, especially rural-urban inequality, as a key factor underlying Thailand’s political turmoil. Inequality, along with a persistently high level of informality in the labor market, were first highlighted a couple of years ago by Pasuk Phongphaichit and Chris Baker.

I want to push the causal arrows back a bit and address the roots of this inequality and informality, along with the country’s fall in absolute poverty noted by Warr.Thailand’s uneven performance — its overall poverty reduction and generally healthy growth rates, along with its persistent inequality and informality — are the result of a distinctive economic strategy.

The core of this strategy has been an emphasis on resource- and labor-intensive exports. In terms of policy, this has meant an emphasis on macroeconomic stability, logistics, and financial flows, especially to large firms. With brief and largely ineffective exceptions e.g. after the 1997 crisis, leaders have neglected the promotion of technical skills and linkages between small and medium-sized firms on the one hand, and larger producers on the other.

The result has been a form of uneven development. Thailand has been hugely successful at diversifying, at becoming a world player in sectors such as rubber, autos, and hard disk drives. But some 90% of Thai rubber is exported in largely unprocessed form, whereas the same percentage of Malaysia’s rubber is consumed domestically in locally produced manufactured goods. Thailand has been astute in encouraging automotive production for particular niches, especially pick-up trucks and more recently “eco-cars.” But the country’s impressive automotive “clusters” include only a small and dwindling number of local auto parts suppliers. Thai suppliers are even scarcer in disk drive production.

As the World Bank argued several years ago, Thailand’s ‘high-tech exports” are a misleading indicator of technological capacity; the country remains an assembler, rather than a manufacturer or designer.

via Economic strategy and the roots of Thai political turmoil.

Click to comment

Leave a Reply

Economics

Youth unemployment hits new highs in Thailand due to COVID-19 restrictions

BANGKOK, Thailand (ILO news) – Joblessness among young men and women in Thailand has reached a level unseen in recent years due to the impact of the COVID-19 pandemic, according to a new brief from the International Labour Organization (ILO).

Published

on

Coronavirus disease 2019 (COVID-19) WHO Thailand Situation Report - 22 February 2021

The Thailand labour market update  found that youth employment fell by 7 per cent in the first quarter of 2021 (from the fourth quarter 2019). The youth unemployment rate increased by 3 percentage points for both men and women, reaching a high of 6 per cent and 8 per cent, respectively.

(more…)
Continue Reading

Economics

Thai Chamber of Commerce expects GDP to grow by 1.5% in 2021

With the relaxation of Covid restriction measures and the reopening of Thailand, 200,000 to 300,000 foreign tourists were now expected to visit Thailand this year and contribute to approximately 12 billion baht of income.

Published

on

f0f77b2d thailandpass lane airport

The University of the Thai Chamber of Commerce’s economic forecasting center now expects the Thai economy to expand by 1.5% this year, owing to various government measures to stimulate the economy.

(more…)
Continue Reading

Recent

Most Read

Join 14,205 other subscribers