Desperate for a long-term vision
text size

Desperate for a long-term vision

While political parties prepare populist pledges for the upcoming election, business leaders want the next administration to adopt a sustainable strategy for Thai firms to compete.

Election posters from several political parties line the pavement in the Thon Buri area of Bangkok during the campaign in March 2019.  Apichart Jinakul
Election posters from several political parties line the pavement in the Thon Buri area of Bangkok during the campaign in March 2019.  Apichart Jinakul

With the country's next general election tentatively slated for May 7, 2023 by the Election Commission, assuming the House of Representatives completes its four-year term by March 23, many political parties have cranked up their election machines, with leading parties already kicking off their campaigns.

Especially in provincial areas, campaigns have begun in the form of donations and financial support for community activities.

Parties are expected to make a number of pledges, for both traditional and populist policies, including continued aid and healthcare programmes for low-income earners and vulnerable groups of people, low-cost housing projects, debt suspension for farmers, and soft loans to small and medium-sized enterprises (SMEs).

But business leaders are adamant that they are desperate for the next administration to deliver long-term strategic plans to upgrade Thailand's competitiveness and sustain the country's economic growth.


Business chiefs said the country needs more long-term strategic planning to restore and grow the Thai economy, rather than the short-term populist policies that seem to dominate election campaigns and continue to be drafted by political parties.

Many politicians vying for seats in a new government still depend on this old tactic of promises to please a large number of voters.

"Populist policies are good, but not of all them can stimulate economic development and strengthen businesses, especially SMEs, over the long term," said Sangchai Theerakulwanich, president of the Federation of Thai SMEs.

"I think populist policies are short-term economic stimulus. They are not sustainable."

Long-term economic solutions are badly needed by SMEs, which continue to reel from the impact of Covid-19, he said. Many businesses have shuttered, while others are struggling to survive.

There are three groups of SMEs that demand specific help from a new government, said Mr Sangchai.

The first, categorised as the red group, are SMEs with non-performing loans. Their status is listed by the National Credit Bureau, which makes them unable to carry out financial transactions, he said.

Authorities must urgently help them by considering reducing the listing period to between less than six months and one year so these enterprises do not need to resort to borrowing from non-financial institutions, such as loan sharks, said Mr Sangchai.

Next is the yellow group, which covers businesses suffering a liquidity shortage. A new government should help them gain easier access to financial resources, he said.

Third is the green group, which are businesses that remain strong but require innovations to increase their competitiveness and support their expansion overseas.

"All three groups need help from long-term economic measures," said Mr Sangchai.

Echoing these concerns, Tanit Sorat, vice-chairman of the Employers' Confederation of Thai Trade and Industry, said populist policies are not enough to help Thailand make it through new economic challenges.

Thailand and other countries face high levels of inflation. Continued interest rate hikes from central banks in response to price surges may lead to a global recession next year, the World Bank warned last month.

In addition, the number of poor people in Thailand has increased to 20 million, around one-third of the population, said Mr Tanit, basing his estimate on the number of people registering under the state social welfare card scheme, which gives them financial assistance to relieve high living costs.

Saharat Chudsuwan, head of marketing and wealth advisory, mutual and private fund business at Tisco Asset Management, said the priority should be supporting the country's long-term economic and social development plan in order to strengthen investment confidence and enhance economic stability.

"The global economy is likely to slip into a recession next year, and currency volatility as well as interest rates are still high. Therefore, it is imperative to have a competent economic team to lead the country through the crisis," he said.

Thailand has a problem with high levels of household debt, and that could limit domestic consumption and spending, which are the core engines to boost economic growth, said Mr Saharat.

Export growth has moderated despite the baht depreciation because of the ongoing global economic downturn, he said.

Only tourism is driving the economic recovery, but the size of that rebound largely depends on China ending its zero-Covid policy, said Mr Saharat.

"The new government policies I would like to see include dealing with the issues raised by Thailand's rapidly ageing society as well as measures to boost infrastructure investment and facilities that support business and industry growth post-Covid," he said.

"R&D investment is also critical to support the country's development in technological industries, in order to enhance our competitiveness on the global stage."

Urgent policies Mr Saharat would prefer include measures to support the tourism, hospitality, and food and service sectors, which are the key strengths for Thailand now and could help the economy recover faster.


Sanan Angubolkul, chairman of the Thai Chamber of Commerce, proposed the government prioritise an upgrade of the country's overall competitiveness to cope with the expected economic difficulties next year as economists predict a global recession.

He said the government should speed up increasing domestic productivity in various sectors, improve existing laws and regulations that remain obstacles to trade and digital transformation to increase Thailand's competitiveness, and improve the ease of doing business for the private sector.

Mr Sanan said the government urgently needs to come up with policies and incentives to draw foreign investment.

"Foreign investment is a must to help rehabilitate our economy after the Covid-19 outbreaks," he said.

"But to win over foreign investors, Thailand needs policies that benefit and facilitate their investment."

Mr Sanan said foreign investment is not only instrumental to upgrading the country's overall competitiveness, but will also bring know-how and technology transfers, create employment and help with Thailand's economic development.

"Next year, the Thai economy is likely to confront escalating challenges, particularly from a global economic recession that may hit the export sector," he said.

Prime Minister Prayut Chan-o-cha walks out of Government House in this file photo. Chanat Katanyu

"It is essential for Thailand to ramp up tapping into new export markets, while accelerating talks for more free trade agreements to increase the country's exports, all while promoting tourism to support the economic recovery momentum."

The chamber also supports the government continuing to work together with the private sector to promote trade and domestic tourism, as the number of tourists from China and Russia is unlikely to reach pre-pandemic levels given their weakened purchasing power, in line with the world's economic slowdown.

Mr Sanan said the next administration needs to come up with clear plans for wealth distribution and infrastructure development in the provincial areas.


Marisa Sukosol Nunbhakdi, president of the Thai Hotels Association, said the next government should prioritise tourism to drive the economy, aiming to strengthen an industry that was undermined for years because of forced reliance on too many related ministries and organisations.

She said there is industry support for establishing a tourism task force that reports directly to the prime minister, aiming to integrate tourism policy and implementation.

"Any government should realise the tourism industry is the low-hanging fruit that could accelerate economic growth," said Mrs Marisa.

"There are too many obstructions for us to reap the greatest benefit because most resources, attractions and destinations as well as business regulations are supervised by different organisations."

Structural reform of tourism will help sustain the industry if every organisation is instructed to follow the same direction and goal, she said.

For example, Mrs Marisa said if the country wants to create quality tourism, the industry needs strong support from the ministries in charge of site development to improve the quality, or they should facilitate the private sector doing the work without barriers.

The hotel industry in particular has faced problems with illegal or unlicensed properties for many years, she said. This creates an unfair business environment and price wars, while the country has loses opportunities to earn proper tax revenue.

A woman casts her ballot at a polling station in Chatuchak district during the March 2019 general election. Patipat Janthong

Mrs Marisa said laws and regulations should not keep those who want to do business on the outside, as is happening these days.

Regulatory amendments should be implemented to legalise all types of operators without obstacles, she said. This will help the government assess service quality for the whole industry, allowing the state to set clear tourism goals, said Mrs Marisa.

She said tourism policy should help strengthen domestic investment to keep the revenue flow within the country, instead of letting foreign investors profit from our tourism growth under the cloak of local nominees.


Somchai Lertsutiwong, chief executive of Advanced Info Service, the country's biggest mobile operator by subscriber base, said assistance for SMEs and people in the provinces should be priorities.

Amid economic headwinds, large corporations are expected to survive because of their economy of scale and efficient operations, said Mr Somchai.

Those most at risk from rising inflation and interest rates are SMEs and low-income earners, he said.

"It is important to create real stimulus policies that focus on the real targets [SMEs and low-income earners] so as to support sustainable growth," Mr Somchai said.

Political parties and the next government must consider policies that can increase benefits for low-income earners, he said.

"The well-being of low-income earners will play a part in strengthening the overall economy, which subsequently benefits large corporations in terms of revenue stream," said Mr Somchai.

The stimulus packages could include short-term loans for people's daily living costs as well as to help SMEs, he said.

According to Mr Somchai, the purchasing power of many consumers is in serious crisis because of rising household debts.

He said several parties see the importance of this assistance and are ramping up their policies in canvassing for votes in the next election. These parties include the Sang Anakot Thai Party, Thai Sang Thai Party and Palang Pracharat Party.


Tim Leelahaphan, economist at Standard Chartered Bank Thai (StanChart), said for the next two years, the next government should pay more attention to flooding and mental health.

Even though flooding does not affect every segment of the economy nor every Thai, it is an annual occurrence, showing that the problem has not been solved. Investors and international fund managers regularly ask StanChart Thailand about the country's plan to solve the flooding, he said.

Governments regularly focus on the impact to the manufacturing sector, but flooding now represents a key obstacle for tourism, which is supporting the Thai economy, said Mr Tim.

The next government needs to work on a long-term solution for an issue that has plagued Thailand for centuries, he said.

Mental health is another social issue the next government should focus on as Thailand dealt with mass murder cases the past few years, said Mr Tim.

For the medium term of the next administration, from 2025-2026, the focus should be on public debt, he said.

The public debt ratio has increased to 60% of GDP, while the ceiling rate is 70%.

The next government should either consider using those remaining 10 percentage points for social programmes, or emphasise a reduction in the public debt ratio, said Mr Tim.

He said if the next government decides to use the remaining room under the public debt ceiling rate, it should benefit the county's development in the medium to long term, such as new infrastructure system development. This outlay can include new investment in strategic industries in the Eastern Economic Corridor to strengthen the country's economic structure and fundamentals over the long run, said Mr Tim.

StanChart Thailand has a positive view of Thailand's political factors, with low risk and a favourable backdrop for the upcoming general election next year, he said.

Somruedi Banchongduang and Nuntawun Polkuamdee

Do you like the content of this article?