Thailand: Scaling the high-income ladder

  • Prime Minister Prayut Chan-o-cha’s speech at the 74th session of the UN General Assembly in New York was chock-full of talking points, but the one that stood out was his declaration that Thailand would become a rich country by 2036.
  • The remark bears no relation to the current reality, and analysts question whether Southeast Asia’s second-largest economy can vault from a middle-income trap to the high-income segment within 17 years.
  • Thosaporn Sirisamphand, secretary-general of the National Economic and Social Development Council (NESDC), said the prime minister’s remark came as no surprise, as the lofty goal is stipulated in the country’s 20-year national strategy (2017-37).
  • The government’s 20-year plan calls for closing the widening income gap in the country to 15 times within 20 years, down from 20 times.
  • To reduce the income gap, the state will focus on income distribution, economic development and legislative reform to give low-income groups access to education, economic opportunity and justice.
  • The government also aims to raise per capita income to USD15,000 (THB467,384), with average GDP growth of 5-6%. The plan further entails raising competitiveness so that Thailand can break into the global top 20 on that score.
  • The country’s national strategy comes with 23 master plans. Under those plans, there are 15 urgent flagship projects that must be implemented during 2019-23.
  • The 15 projects are split into several groups: social and economic restructuring in an effort to increase Thai competitiveness; upgrading Thais’ skills; projects that can create a balance between social and economic growth; infrastructure projects that can drive long term economic growth; and projects that can generate income to create sustainable growth.
  • Nonetheless, the government may need to revise the master plan to suit the changing situation. The country’s economy may grow by just 3% in 2019, and the US-China trade war is manifesting as a key threat to global trade.

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