The economy weakened last year thanks to the Sino-US trade war. This year, its health could worsen further due to two emerging factors. One is the Covid-19 outbreak which has hit the country's tourism industry hard. Another is potential political turmoil signalled by a series of "flash mobs" of students which gathered after the Constitutional Court's ruling to dissolve the Future Forward Party (FFP). If the rallies continue unabated, this year's growth could be worse than analysts predict.
According to the National Economic and Social Development Council (NESDC), last quarter's growth was the lowest of the past 21 quarters. The low growth was caused by three factors. The first was the global economic slowdown driven by protectionist trade policies and the appreciation of the baht which resulted in a contraction of 4.9% in exports. The second factor was delays in the passage of the 2020 fiscal budget bill, and the third drought.
At the same time, the NESDC estimates this year's GDP growth will be in the range of 1.5 to 2.5% or an average of 2%. This is a contraction from last year. The GDP forecast is based on a scenario that the spread of the coronavirus is contained by April or May.
The Stock Exchange of Thailand (SET) has tumbled below 1,400 points in the past week. This has painted a threatening economic picture causing anxiety among many.
In parliament, the censure debate last month by the opposition ended with a victory for the government, thanks to its majority in the House. Thais obviously cannot rely on the House as a place to tackle the economic downturn, as politicians from opposing camps are too occupied with power struggles. Their actions will worsen investor confidence. By appearing aloof from the economic turmoil, parliamentarians have behaved as if they live in a world apart from ordinary people.
At the same time, a new round of street politics has begun. Following the dissolution of the FFP, a party popular among young people. Students from universities and schools across the country have held rallies to express their dissatisfaction with the verdict. Nobody can predict how this new wave of protests is going to end. It is yet another fight over political ideology in the country which has already been riven by colour-coded political conflict over the past two decades.
The students have labelled the government as undemocratic, a "dictatorship regime". Prime Minister Prayut Chan-o-cha himself has benefited from a new rule in the constitution, sponsored by his former military regime, which for the first time allows all 250 senators, the majority chosen by himself, to join a parliamentary vote for prime minister. All the senators voted for him. Even though the government is a product of the March election, the students say it is just a political machine that helps Gen Prayut prolong his power.
In fact, the former military government laid out many key economic foundations. These include the Eastern Economic Corridor (EEC) to create new industries, instead of letting the country's development rely on old, deteriorating industries. Under the EEC, the former government managed to secure private investment for a high-speed train project that links the three international airports and the U-Tapao airport development project. The combined cost of the two schemes is more than 400 billion baht. Without political stability under the military government, these projects would not have come together as well as they did. The rapid development of these projects within such a short time is a miracle for Thailand.
Moreover, the former government's push for 10 mass-transit rail lines across greater Bangkok will make a two decade-old dream of Bangkokians come true. This development will transform mass transit in Bangkok in the next three to four years, offering a less stressful travel experience for commuters.
Gen Prayut's military regime also launched an e-payment system which facilitates financial transactions and cuts related cots.
These initiatives will remain the key foundations for the country's future economic development. However, the students do not seem to pay much attention to these issues. Their priority is opposition to the "dictatorship" and calls for true democracy.
Gen Prayut may not be the best prime minister the country has ever had. But neither is he the worst. During the censure debate, the opposition was unable to make corruption allegations against him stick. In the past, heads of government were usually brought down by graft accusations.
However, the undemocratic nature of the constitution will come back to haunt him. Some may wonder how the charter, which increases the military's involvement in politics, was approved in the 2016 referendum. The answers lie in developments in Thai politics over the past two decades. During this period, those students who are now holding rallies were still in school.
With the coronavirus outbreak, mass rallies such as the ones organised by the students should have been avoided as they could expose them to infection.
However, with medical advances, the outbreak will eventually be contained and the economy will recover.
Political turmoil, by contrast, will continue to derail progress in economic development. Its impact will be worse than the outbreak.
I do believe the majority of Thais want democracy and oppose dictatorship. At the same time, they do not support calls for extreme liberal ideologies, as promoted by student leaders, without taking into account the Thai political and social context.
It is unclear in which direction their ideologies will lead the country. Thailand has suffered enough.
The lingering question remains of who can emerge as a leader to defuse this political time bomb.