BANGKOK, Thailand – Bank of Thailand Governor, Sethaput Suthiwartnarueput, addressed the seminar “Big Heart Big Impact: Creating Opportunities for the Small… Power of Partnership,” emphasizing the need for a shift in Thailand’s economic growth strategy, September 13. In his keynote speech titled “Building a Strong Thailand Through Localism: The Future of Thailand,” he outlined the challenges facing the country and proposed solutions for sustainable development.
Challenges Facing Thailand’s Economic Growth:
- Stagnant GDP Growth: Over the past decade, Thailand’s GDP growth has not translated into increased household wealth. Despite nominal GDP rising from 100 to 180, household income has not seen a proportional increase, indicating structural issues. The GDP growth rate is expected to slow down further.
- Economic Concentration: There is a high concentration of income within a few large businesses, with the top 5% generating 80-90% of the revenue. Small and new businesses are closing at a higher rate, highlighting a lack of dynamism in the economy.
- Dependence on Foreign Investment: Thailand’s reliance on foreign direct investment (FDI) is no longer effective. While FDI share was once higher than neighboring countries like Vietnam and Indonesia, it has remained stagnant, indicating a decline in Thailand’s attractiveness for foreign investors.
Call for a New Growth Model:
Governor Sethaput argued that Thailand cannot continue to pursue growth based solely on GDP and FDI metrics. Instead, the focus should shift to improving household wealth and living standards through a more sustainable and locally driven approach.
Key Recommendations for Localism:
- Local Economic Development: Emphasize growth in local areas outside Bangkok and its vicinity, where 80% of the population and 80% of businesses are located. There is a significant gap between capital and provincial regions.
- Competitive Localism: Ensure that local growth is competitive on a global scale. This involves addressing challenges such as local population density, small-scale businesses, and diverse geopolitical factors.
- Building Local Strengths: Promote local uniqueness and create value through distinct characteristics, resources, and history. This includes enhancing local market connections via online platforms and fostering partnerships between small and large entities.
- Regional Development: Focus on developing secondary cities and ensuring effective local governance. Create new economic hubs and enhance access to these areas.
- Competitiveness Monitoring: Implement systems to track local competitiveness, including investor feedback on regulations and obstacles. This is crucial for improving regional investment climates.
