Comment on “Thailand's Policy Challenges”

• Date: 01 July 2020
• DOI: http://doi.org/10.1111/aepr.12298
• Published date: 01 July 2020
• Author: Akio Egawa

Comment on “Thailand’s Policy Challenges”

Akio EGAWA†

Momoyama Gakuin University

JEL codes: H1, H3, P16, P18

Accepted: 14 December 2019

Thailand will no longer be able to sustain its economic growth which is largely based on

merely maintaining low value-added and cost-oriented export industries. There is a need

for Thailand to change its economic and social systems to upgrade its industrial structure

into a technology-intensive and knowledge-based system to develop economic competi-

tiveness. Nikomborirak (2020) identifies the problems that are hamp ering Thailand’scom-

petitiveness development by carefully overviewing past policy efforts. Similar to Japan’s

“Economic Revitalisation Strategy”unveiled by the Abe Cabinet in June 2013, the three

main policy objectives that can propel Thailand toward global competitiveness and

improve its international standing are: promoting new industries; removing obstacles ham-

pering competitiveness development through regulatory reforms; and expanding overseas

markets through free-trade agreements. Nikomborirak focuses on these three policy mea-

sures and assesses both positively and negatively the policy efforts made by the Prayuth

government since 2014. Through her discussion, Nikomborirak concludes that although

fiscal reforms have progressed theoretically, but regulatory reforms have not advanced

pushing the Thai economy’s competitiveness to a low level for more than a decade.

Nikomborirak contributes toward future research on the Thai economy with the follow-

ing assertions. First, by comparing the rice-pledging scheme and cash handouts for farmers

through welfare cards she explains that not all populist policies should be criticized. Second,

even though the pursuit of too many populist policies would limit public investment pro-

jects which are necessary for improving economic efficiency, the Thai people have become

addicted to expansionary fiscal policies after the global financial crisis in 2008. The Prayuth

government announced fiscal rules and discipline in 2018, but Nikomborirak argues that

such stringent rules may not be applicable in practice because the leadership has adopted

this stance to make room for easing the restrictions after the 2019 election. In fact, the cur-

rent coalition government has listed many short-term schemes to benefit the electorate.

Third, observing the policy efforts over these past 5 years (2014–2019), Nikomborirak

points out that progress in implementing regulatory reforms and developing infrastructure

are generally undertaken only where there is pressure from foreign countries and investors.

Evidently, Nikomborirak’s key concern is the Thai economy’s recent low in-

ternational competitiveness. However, her understanding of its causes and her

†Correspondence: Akio Egawa, Faculty of Economics, Momoyama Gakuin University, 1-1

Manabino, Izumi City, Osaka Prefecture 594-1198, Japan. Email: aegawa@andrew.ac.jp

© 2020 Japan Center for Economic Research 301

doi: 10.1111/aepr.12298 Asian Economic Policy Review (2020) 15, 301–302