Economists Warn That The Thai Economy Is At Risk Of Losing Advantages To Neighboring Countries

[Jai Dee]

Economists warn that the Thai economy is at risk of losing advantages to neighboring countries.

Economists warn that the Thai economy is at risk of losing advantages to neighboring countries, which are also the country’s competitors.

Economist at the Chulalongkorn University and director of the Chinese Studies, Associate professor Dr. Sompop Manarangsan (สมภพ มานะรังสรรค์) said that the Thai economy may fall into a trap of becoming “sandwich filling”. He explained that Thailand’s competitors, especially Vietnam and India, are closely following Thailand and may surpass Thailand as they have many advantages, such as low cost and low-waged labor, making it easier for them to sell their products at lower prices.

Meanwhile, Dr. Sompop said that more advanced countries such as South Korea, Taiwan, and Hong Kong, are at a much-advanced stage, when compared to Thailand. He added that Thailand must be careful of losing advantages to neighboring countries.

Dr. Sompop said that the grass root level such as community and SME businesses will be affected, if the people decide to reduce consumption. He said that these small and medium sized businesses account for around 90% of all Thai businesses.

Source: Thai National News Bureau Public Relations Department - 27 March 2006

[cclub75]

The image of "sandwich filling" is really accurate, and it could become a difficult position for Thailand.

But it's difficult to compare Vietnam and India for instance, 2 different systems and 2 very different scales.

The PC is going to have its "congress" in Vietnam soon. And it seems that they have an internal debate : some think that Vietnam have been too far on the "reform path" and the economic growth, and fear that Vietnam may loose its "identity".

What I mean is they still have a strong ideological lock-up. The PPC in China is much more pragmatic.

You can be sure that it will put a burden on foreign investments. They already started to strenghten the rules for foreigners who want to stay (visa) and work in Vietnam (now they have "work permit", like Thailand).

[h90]

the solution would be good education, but as every gouverment is looking in the short range only it will not happen.....

[Prakanong2005]

the solution would be good education, but as every gouverment is looking in the short range only it will not happen.....

One of the problems India has is that it has concentrated on tertiary education and has a number of highly skilled workers in say IT, Data Management etc but it has very high levels of illiteracy among the general population.

The premise in the OP though has a lot of credence - China is cheaper to produce in.

Singapore, Malaysia, Taiwan etc and the like are better at value added goods.

Its often a lot easier to do business elsewhere without restrictions on things like foreign ownership and the wide ranging corruption and lack of rule of law and transparency that there is in Thailand compare to others.