Thailand Economic Policy and Development

Economic Policy and Development Potential

The economic policy of Thailand is strongly influenced by the contradicting experiences of the economic boom 1984-1995 and the following Asian crisis (1997). The causes of the boom and the crisis as well as the interventions of the International Monetary Fund (IMF) are highly controversial, depending on the viewer’s economic policy. In Thailand itself, the requirements of the IMF led to anti-globalization initiatives with a nationalistic touch, which helped the Thai Rak Thai party to win the 2001 election. Thaksin’s economic policy – Thaksinomics – then combined an export-oriented growth strategy with Keynesian investment programs. The concern for domestic demand was made by Yingluck Shinawatra with the Continued increase in the minimum wage. The Yingluck government had also decided on an ambitious investment program. The “Building the Thai Future 2020” program aimed to modernize the country’s infrastructure. Almost 6 trillion baht, or 20% of the gross national product, should be invested in highways, high-speed trains and flood prevention measures. The rice subsidy program, which was supposed to guarantee small farmers a stable price, was very popular – but also criticized. Due to a drastic (and partly speculative) decline in the global rice price the government stayed in warehouses full of rice and billions in debt. Since the coup in May 2014, however, the military has remained on the same economic policy course. The regime quickly paid the promised prices to the smallholders, invented its own travel program and maintained the minimum wage – as it fears a further loss of legitimacy. The infrastructure program in the context of China’s new Silk Road will also continue almost unchanged. The economic development but remains under the military regime with almost modestly below three percent, compared to six percent growth 2012th The World Bank noted a slight recovery to four percent in 2018.

On the run: the Rohingya and Thailand

Since 2012 there has been systematic violence and expulsion of the Muslim Rohingya in Myanmar. Hundreds of thousands are now living in camps, tens of thousands are trying to flee through Thailand on boats or overland. The situation came to a head in 2015 when governments in Thailand, Indonesia, Malaysia and Australia refused to allow the overcrowded cutters to go ashore. The navy forced the boats back out to sea, to almost certain death by drowning. People smugglers use the crisis to hold refugees in camps until they are sold as slave labor or ransomed. Those who refuse are often killed, as recently discovered Show mass graves. On human smuggling network Thai officials are military and police officers involved. At a regional conference in Bangkok at the end of May 2015, the governments of Malaysia and Indonesia announced that they would take in refugees at short notice. A longer-term solution to the humanitarian crisis is not in sight. The situation of the Rohingya is closely linked to slave-like working conditions in Thai export industries, especially in fishing.

Escape from Thailand

Shortly after the military coup in 2014, thousands of people fled to Cambodia and Myanmar. They feared a more repressive policy of the military regime against foreign workers. Now this fear has come true. The new law regulating the work of “aliens” stipulates a possible maximum sentence of five years if migrants work in Thailand without a work permit. Instead of strengthening the legal situation of employees, who often suffer from the arbitrariness of employers and organized trafficking networks, they are further criminalized and disenfranchised. In the first few days after the law was introduced, thousands were already out of the countryfled. Since Thailand is dependent on migrants in key industries such as textiles, fishing, electronics and agriculture, there is already talk of a potential crisis for macroeconomic development.

Development and development policy

Thailand’s boom also had its downsides. Large numbers of peasants and workers barely benefited from economic growth based on low wages. At the same time, voices were growing louder warning of the ecological consequences of unlimited economic growth. In 1995 farmers’ organizations, small-scale fishermen and environmental activists founded the “ Forum of the Poor ”, which protested against development projects such as the Pak Mun Dam and eucalyptus reforestation. In 1997 the forum demonstrated for 99 days in front of the government seat in Bangkok Influence. Thaksin was able to use independent development strategies, which differ from the common Poverty Reduction Strategy Papers (PRSP) of the World Bank, greatly reduce the incidence of absolute poverty. In contrast, the military regime emphasizes King Bhumibol’s “sufficiency economy philosophy”.

Sustainable Development Goals

Thanks to Thaksin’s successful economic policy, which was flanked by social programs, Thailand was able to achieve most of the Millennium Development Goals before 2015. Above all, successes in the fight against absolute poverty and in the health sector can be seen, so that Thailand has set its own MDGs Plus targets. Goals that contradict economic growth, such as ecological sustainability or gender equality, which could threaten the lucrative sex industry, will not be so easy to achieve. Thailand has been pursuing the implementation of the so-called Sustainable Development Goals since 2015. The aim is to combat the causes of poverty, inequality and climate change. On theProgress reports the United Nations Country Team. In 2020 the Thailand Business Leadership for SDGs met. In the meantime, King Bhumibol’s “Philosophy of Frugal Economy” has become the country’s official development policy.

Development cooperation

In view of its economic development, Thailand is no longer a priority country for development cooperation, but it functions as a regional center for the region in which many governmental and non-governmental development organizations are active. Projects of international organizations such as the World Bank or UNDP focus less on economic development, but increasingly on “good governance” or environmental issues.

German development cooperation has also changed significantly. The Society for International Cooperation (GIZ), which has been active in Thailand since 1956 and previously promoted a lot in the field of rural development (e.g. the Thai-German Highland Development Program), today focuses on the environment (sustainable consumption, environmental and Climate protection as well as sustainable transport and urban development). The BMZ is now pursuing “triangular cooperation ” with Thailand, in which they undertake joint projects in countries such as Laos and Cambodia. Other development cooperation organizations from German-speaking countries, such as AGIAMONDO,EED and Bread for the World, SwissAid and Horizont 3000 have reduced or even stopped their use in Thailand. The German Development Service DED, which used to be heavily involved in Thailand, became part of GIZ in 2011. However, the political foundations Friedrich-Ebert-Stiftung, Konrad-Adenauer-Stiftung and the Heinrich-Böll-Stiftung are still active. The Goethe-Institut also has an extensive program in Thailand.

Thailand Development cooperation

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