Thailand steadily slipping behind its neighbours

[webfact]

EDITORIAL

Thailand steadily slipping behind its neighbours

By The Nation

 

Until structural reform begins in earnest, our economic outlook will remain uniquely bleak in the region

 

BANGKOK: -- Having run the country for more than three years, the Prayut government is still struggling to gain popularity on the economic front, while the country’s longer-term structural issues remain unresolved.

 

In a telling revelation, the University of Thai Chamber of Commerce’s consumer-confidence index for July was 73.9, pointing to a seven-month low after several provinces in the North and Northeast were hit hard by floods. The July index fell for the third month in a row due to weak agricultural prices, especially for rice, tapioca, rubber, corn and pineapple, resulting in less purchasing power for a huge segment of provincial population.

 

Against a backdrop of a relatively weak macro-economic recovery, consumers also expressed worries about their wellbeing through the remaining months of this year, given that the cost of living continues to rise amid stable or falling incomes. The country’s GDP is forecast to grow 3-3.5 per cent this year, indicating a relatively weak recovery compared to other Southeast Asian countries. In fact, Thailand is lagging behind most of its neighbours in terms of economic growth rates over the past decade.

 

Banyong Pongpanich, executive chairman of Kiatnakin Bank, painted a bleak picture at a recent Chulalongkorn University seminar on the country’s economic outlook.

 

Due to the extended period of relatively low growth rates, Thailand’s GDP will likely be surpassed by Malaysia’s in the next few years. Currently, the Thai GDP is about US$400 billion, making it this region’s second-largest economy after Indonesia. The figure is far higher than Malaysia’s $296 billion, but that country’s annual growth rate is higher than Thailand’s.

 

The Philippines’ GDP, worth about $300 billion in 2016, is also expanding at a higher rate than Thailand’s, so it too is hot on our heels.

 

Last but not least, Vietnam, whose GDP was worth about $200 billion in 2016, is another high-growth economy in Southeast Asia. From 2000 to 2016, the Vietnamese economy grew by an average of 6.19 per cent, so the Vietnamese GDP can also surpass that of Thailand in the next several years if we remain mired in low-growth economy.

 

In fact, Thailand has been growing at a rate lower than the 4.8-per-cent annual average among all Asean economies over the past decade, largely due to structural and income inequality issues, as well as an unfavourable political climate.

 

The country’s structural challenges are both economic and educational, resulting in an inability to grow beyond the 3-3.5-per-cent-range over the past decade. Overall, effective economic and educational reforms are crucial to the Kingdom’s longer-term competitiveness, but the tasks required for reform are daunting and time-consuming.

 

In addition, Thailand is also facing a widening economic and social inequality due to the uneven distribution of economic benefits. This is evidenced by the fact that companies listed on the Stock Exchange of Thailand enjoyed a huge increase of 31 per cent in combined earnings last year, compared to a meagre rise of earnings or no growth at all for middle- and low-income people. In other words, shareholders of Thai companies whose combined earnings account for 25 per cent of Thailand’s GDP got an outsized share of economic gains, even though the overall national economy grew at a rate of only 3.5 per cent.

 

This trend is unsustainable and can only be corrected by effective structural reforms that increase international competitiveness while reducing domestic inequality.

 

Source: http://www.nationmultimedia.com/detail/opinion/30323482

 

-- © Copyright The Nation 2017-08-11

[BasalBanality]

Change comes from within.

[Just1Voice]

I've said before, but I'll say it again.  A crash is coming. One year?  Two years?  That I don't know, but I do know it will happen.  With a GDP of only 3.5 for the past 3 years, while other SE Asian countries surpass that, combined with the massive expenditures of the military, the country can't sustain itself.  Household debt is increasing at an alarming rate.  Banks are turning down personal loans for fear of default. Cost of living is increasing faster than the economy is growing.  

 

And when this crash happens, it will make the last one look like a picnic in the park. 

 

 

[inThailand]

4 minutes ago, Just1Voice said:

I've said before, but I'll say it again.  A crash is coming. One year?  Two years?  That I don't know, but I do know it will happen.  With a GDP of only 3.5 for the past 3 years, while other SE Asian countries surpass that, combined with the massive expenditures of the military, the country can't sustain itself.  Household debt is increasing at an alarming rate.  Banks are turning down personal loans for fear of default. Cost of living is increasing faster than the economy is growing.  

 

And when this crash happens, it will make the last one look like a picnic in the park. 

 

 

I concur, nothing positive is happening here and no real progess is on the horizon. Thailand is getting left behind in a world they just can not compete with.

[leeneeds]

 

Even grade school kids know you can not buy a lolly pop if you have no money.

[canuckamuck]

A small percentage of people are doing well and continue to do well with a $400 billion economy. Meanwhile the working class is not seeing any increase, farm commodities are dropping in value, and inflation marches on.

Add to this the obvious interference from influentials on the democratic process. Having the privileged class continually veto the choices of the majority. And you have what amounts to a box of oily rags stored next to the furnace in the basement of a fireworks factory. I am no socialist but Marx and Engels would have a field day with this,

[HiSoLowSoNoSo]

21 minutes ago, Just1Voice said:

I've said before, but I'll say it again.  A crash is coming. One year?  Two years?  That I don't know, but I do know it will happen.  With a GDP of only 3.5 for the past 3 years, while other SE Asian countries surpass that, combined with the massive expenditures of the military, the country can't sustain itself.  Household debt is increasing at an alarming rate.  Banks are turning down personal loans for fear of default. Cost of living is increasing faster than the economy is growing.  

 

And when this crash happens, it will make the last one look like a picnic in the park. 

 

 

What to expect when you chase away the needed foreign workers and make it very unattractive to invest here as a foreigner? Their xenophobia and nationalism will bite them in the rear and they will come begging like a bargirl for lady drinks when they understand that they are broke. (and they will probably also blame foreigners for their bad economy)

[colinneil]

No need to worry folks, the general will use article 44 to fix everything.

[darksidedog]

If Thailand becomes the pauper in the region, it will have no one to blame but itself.

[gummy]

Just now, darksidedog said:

If Thailand becomes the pauper in the region, it will have no one to blame but itself.

Wrong.  Thais never blame themselves as they believe they are always right. 

[inThailand]

22 minutes ago, gummy said:

Wrong.  Thais never blame themselves as they believe they are always right. 

Yup!  They will blame and take it out on expats. Life here is not going to get easier.

[OmarZaid]

Education is key ... and local autonomy must be returned to the soil ... to the farmers and not the gangsters

[scorecard]

1 hour ago, inThailand said:

I concur, nothing positive is happening here and no real progess is on the horizon. Thailand is getting left behind in a world they just can not compete with.

 

And basically Joe citizen doesn't care, expects 'someone' to fix it, but without any personal pain, and even worse Joe citizen doesn't even understand the overall situation.

 

Ask a few Thai bachelor students some basics and don't be surprised when they are no clue whatever, and don't want to learn.

 

"Where does the money come from the build a new hospital?"

 

"From the government, which means that we should have very rich people in the government."

 

"No, that's not how it works, the money comes from taxation / parsee., and everybody pays some form of tax, salary, VAT, etc."

 

"But that's not fair for me, I only have a little money left after I pay my monthly installment on my expensive smartphone and pay taxis to get to uni and then go shopping." 

[fantom]

List of Thai billionaires by net worth
 is most illuminating. On a well known pedia site.

[soalbundy]

2 hours ago, Just1Voice said:

I've said before, but I'll say it again.  A crash is coming. One year?  Two years?  That I don't know, but I do know it will happen.  With a GDP of only 3.5 for the past 3 years, while other SE Asian countries surpass that, combined with the massive expenditures of the military, the country can't sustain itself.  Household debt is increasing at an alarming rate.  Banks are turning down personal loans for fear of default. Cost of living is increasing faster than the economy is growing.  

 

And when this crash happens, it will make the last one look like a picnic in the park. 

 

 

The developed world wont be far behind, most households in farangland rely on debt to keep going. Their governments are on a debt binge and although they are making tentative steps to ween themselves off of it I cant see it happening anytime soon, so yes the big bang is coming but not in Thailand alone.

[Lupatria]

Has there ever been an economically successful military government? It's like leaving a clinic for heart surgery in the hands of plumbers.

[worgeordie]

Most of the problems self inflicted,not fully thinking through policies before implementing them,

then quickly doing a u-turn.

regards  worgeordie

[StraightTalk]

"Help, help the sky is falling! Help, help the sky is falling, Turkey Lurkey!"

[soalbundy]

Just now, Lupatria said:

Has there ever been an economically successful military government? It's like leaving a clinic for heart surgery in the hands of plumbers.

If you go back as far as Oliver Cromwell (you could say that this was a military government albeit a parliamentary one) that was successful economically although unpopular. 

[ChrisY1]

It's blatantly clear that this junta (and past military of course), don't really have great interest in the people.

There's nothing unusual about this, military rulers historically have always been there for self benefit and the current generals are no different.

The focus on activists, politicians, Sect 112 and etc.  is so concentrated, that management of the country has been almost ignored.

Incompetence, nepotism, corruption....seem to be the current juntas creed!

[khunano]

2 hours ago, colinneil said:

No need to worry folks, the general will use article 44 to fix everything.

But first he has to sort out the replacement of the tm 6 form...

[Nowisee]

It's nice not having to rely on this economy.  When it gets too crazy, I'll just move on.  

Not need to stay here.  More happening in Malaysia, Vietnam and Philippines anyway.

[Rancid]

"In addition, Thailand is also facing a widening economic and social inequality due to the uneven distribution of economic benefits." So in essence Thailand is following the current western economic model that screws the middle and working classes and only helps the rich get richer? Anyone doubting that to be the case should look at some charts, the evidence is clear.

 

The even spread of wealth accumulation is what fires a country's economic engine, the current meme of propping up the wealthys inefficient monopolistic businesses while screwing everyone else takes us back to the days of pseudo feudalism. Small businesses get screwed with excessive taxes and regulation to prevent better competitors emerging and workers wages are minimalised by converting them to part time.

 

Last time we had this governments were overthrown by angry mobs, will the police states spying on everyone, a lying media and militarized police save them next time?

[3421abc]

I lived here for the past 5 yrs and I spent the last 9 months living in Ho Chi Minh.

I can tell you in 10~15 yrs that city will be like Singapore. Very fast development and the vietnamese have a good work ethic. Also much more open to foreigners now than Thailand. Here they just go backwards

Here is all about looking pretty and hiso.

[pattayadgw]

The Thai baht is too strong... when are they going to get their heads around this and devalue it?

[Lemonltr]

As a result of suppressed competition, the earnings of stock exchange companies had a huge increase of 31% whilst a huge section of the provincial population had less purchasing power! In other words and as usual- the rich get richer and the poor get poorer.

The country is in a mad dash for reconciliation -and happiness.

[Lemonltr]

6 minutes ago, pattayadgw said:

The Thai baht is too strong... when are they going to get their heads around this and devalue it?

They can't directly devalue it. It's a floating currency.

[sawadee1947]

4 hours ago, Just1Voice said:

I've said before, but I'll say it again.  A crash is coming. One year?  Two years?  That I don't know, but I do know it will happen.  With a GDP of only 3.5 for the past 3 years, while other SE Asian countries surpass that, combined with the massive expenditures of the military, the country can't sustain itself.  Household debt is increasing at an alarming rate.  Banks are turning down personal loans for fear of default. Cost of living is increasing faster than the economy is growing.  

 

And when this crash happens, it will make the last one look like a picnic in the park. 

 

 

I'll say it again

well, you might repeat as often you want: what is your point then? What do you think YOU can change? Stay here! It will be good for our currency exchange when the crash will come.

Honestly speaking: is there any country which is run by soldiers which is developing? And got a growing GDP?

Change has to be done from top....... A fish rots from the head down.

[Bangyo1948]

Lately you see more and more shops closing down so now they sit there empty along with the ever growing number of newly constructed shophouses and it is not just in the big cities

[NCC1701A]

It's not going to crash. It is going to move sideways for decades.

 

If there is a global crash, don't be surprised if SEA recovers faster than the west and your western countries currency don't recover for a very long time.