Thailand’s economy has found itself in a quagmire, and former prime minister Abhisit Vejjajiva believes that a simple injection of funds, such as the current government’s 500-billion-baht digital money handout scheme, won’t be the panacea it hopes to be. In a riveting interview with the Bangkok Post, Abhisit stresses the necessity of restructuring laws that obstruct the development of modern, green businesses—a strategy he deems essential for revitalizing the sluggish economy.
Legal challenges are major roadblocks for Prime Minister Srettha Thavisin’s endeavors to lure top-tier international companies to Thailand. Abhisit isn’t shy about critiquing Srettha’s performance. Despite Srettha’s global business meetings, the tangible outcomes have fallen short of expectations.
International investors are antsy about Thailand’s absence of essential laws, regulations, and technologies needed for modern business ventures. According to Abhisit, the government has yet to articulate a clear business direction, and the administration’s focus on low-growth sectors isn’t helping. Coupled with high household debt and limited purchasing power among the populace, these issues form a structural conundrum that the current government is tackling with its digital wallet scheme and a proposed daily wage hike to 400 baht.
“Look at Microsoft,” Abhisit pointed out. “They announced their investment plans for Indonesia and Malaysia, but when it came to Thailand, the specifics were conspicuously absent. If Microsoft genuinely intended to establish a data center here, they would have stipulated the percentage of clean energy required for their investment. Yet, questions about clean energy policies remain unanswered, adding another layer of uncertainty for potential investors.”
The problem extends beyond policy and investment attraction. Abhisit noted that Thailand’s economic growth is often highlighted by the performance of large public companies, which isn’t reflective of the wider economic reality. Only businesses with government concessions are thriving, leaving other sectors in the dust.
“Revamping outdated laws has been a subject of debate for years,” said Abhisit. “Our legal framework is a nightmare even for domestic companies. These archaic laws are out of sync with modern business practices, new technology, and today’s financial systems.” Even implementing the promised digital wallet initiative and wage hike requires legal amendments, he pointed out, while any delays could deepen economic stagnation into the next year.
Abhisit accused the ruling Pheu Thai Party, inheritors of the now-defunct Thai Rak Thai Party, of favoring short-term solutions over addressing root causes. “If structural problems are not resolved, the economy will falter again once the fleeting effects of the stimulus wear off,” he warned. He also that the coalition government is grappling with a lack of unity in its efforts to improve the economy.
Deputy Finance Minister Paopoom Rojanasakul spoke to the Bangkok Post reiterating the party’s stance that the digital wallet handout is essential for jumpstarting the dormant economy. Paopoom blamed the slump on three main issues: delays in implementing the 2024 fiscal budget, ineffective fiscal and monetary tools, and a contraction in loans, especially for SMEs. “Simply put, the fiscal sector lacks ammunition, and while the monetary sector has it, they’re reluctant to use it, resulting in cautious banking behaviors,” he said.
Prime Minister Srettha announced new measures on the horizon to stimulate the economy. He mentioned discussing economic stimuli and the stock market with Finance Minister Pichai Chunhavajira, and promised a significant announcement on new measures to be made shortly. “Let’s wait and see,” he teased, keeping everyone on tenterhooks. Srettha also shared that Pichai will be in talks with the Bank of Thailand’s governor about the inflation target.
Srettha, however, remains optimistic. He highlighted interest from foreign investors in Thailand’s ambitious 1-trillion-baht “Land Bridge” project. This colossal venture aims to create a logistics network from Ranong province along the Andaman Sea to Chumphon province along the Gulf of Thailand, featuring deep-water ports, a motorway, and a railway system designed for efficient container transfers.
Thailand stands at a critical juncture where bold shifts in policy and legal reforms could spell the difference between economic revival and prolonged stagnation. It remains to be seen if Srettha’s initiatives will ignite the desired economic turnaround, or if, as Abhisit predicts, the economy will remain caught in the doldrums of short-term fixes and structural inertia.
Abhisit makes a valid point. Short-term solutions like these handouts won’t fix anything in the long run. The economy needs serious structural reform.
But what about the immediate needs of the people? At least Srettha’s government is doing something to put money in their pockets.
The problem is that these ‘immediate solutions’ don’t address the root issues. The economy might get a temporary boost but it won’t be sustainable.
@Mia_L, not everything has to be long-term. Sometimes short-term relief is necessary to keep people afloat!
Thailand has always struggled with implementing effective long-term policies. It’s a cyclical issue.
Abhisit is just out of touch. Digital wallets are the future. Why pigeonhole his thinking to only green businesses?
True, the digital economy is booming worldwide. But without proper infrastructure and laws, it’s a house of cards.
Exactly, @Ravi Th. Long-term success in the digital economy requires the right foundation.
One doesn’t exclude the other. You can pursue digital transformations while also making strides in green business development.
It’s easy to criticize from the sidelines, but Srettha is actually doing something to help the economy.
As a small business owner, I could really use that 500 billion baht handout. Our debts are suffocating us!
I get that, but debt relief would do more for small businesses than a handout.
But small businesses need to stay open now. You can’t help them with debt relief if they’re already closed.
Exactly, @ZaraR! Immediate support is crucial for survival.
Pointing fingers won’t solve anything. Both sides need to work together to address these deeply rooted issues.
Is blaming each other the Thai government’s only pastime? Let’s get some real leadership in action.
Microsoft chose Indonesia and Malaysia for a reason. We need to ask why and fix those issues first.
The Land Bridge project sounds ambitious, but will it really solve any immediate problems?
Huge investments like the Land Bridge can attract more foreign funds in the long run.
But we need something that addresses our problems now. The Land Bridge is just another distraction.
Focus on modernizing laws and investing in green energy. That’s the real future of the economy.
Pheu Thai Party is too busy trying to look good for the next election. They should focus more on solid policy.
SMEs are being squeezed out. The government needs to prioritize lending and support for us.
If immediate funds can keep people afloat while long-term policies are implemented, why not do both?
That’s the challenge. Politicians often promise both but fail to deliver on either effectively.
The legal framework in Thailand is indeed a nightmare for businesses. Abhisit is right on that front.
Of course a former PM would be against the new guy. Typical politics. Let’s focus on solutions, not criticisms.
The 400 baht wage hike could have disastrous effects on small businesses. It’s way too high.
But employees need a fair wage to survive. You can’t always see this from a business-only perspective.
I understand that, @IndieArtist, but businesses will just pass those costs to consumers, worsening inflation.
Both points are valid, but the government needs to balance wage increases with measures to support small businesses.
Sustainable development should be at the core of any economic policy. It’s the only way forward.
Digital wallets and modern tech need robust laws. Without them, they’ll just create new problems.
Will we ever get a government that looks beyond quick fixes? Both Abhisit and Srettha have their shortcomings.