Bangkok: Thailand risks lagging behind ASEAN, with the energy crisis exacerbating the economic crisis. The major challenge is that reforms have yet to materialize.
According to Thai News Agency, Associate Professor Dr. Ath Pisalvanich, an expert in international and ASEAN economics, revealed on the Good Morning ASEAN program on MCOT News FM 100.5 that despite a vibrant tourism atmosphere in Thailand, boosted by the Songkran festival, the Thai economy still faces structural problems and new risk factors severely suppressing growth. These include high household debt, declining purchasing power, and low competitiveness in both agricultural and industrial sectors. Energy prices, especially diesel fuel, have become significant pressure points recently.
A recent IMF report estimates that, under the global energy crisis, oil prices could reach $80-120 per barrel, depending on the conflict in the Middle East, particularly tensions between Israel and Iran. Although there are positive signs from a two-week temporary ceasefire, there remains pressure on Iranian oil exports and the risk of threats to key energy transportation routes in the Middle East, from which the world relies on approximately 25% of its oil. This impacts both oil and LNG prices, which Thailand imports.
This situation has led the IMF to forecast a global economic slowdown, and Thailand is projected to have the lowest growth rate in ASEAN, reflecting structural problems that have not been seriously addressed. Over the past 20 years, Thailand's corruption index ranking has continuously worsened, currently standing at 116th. As a result, foreign investors perceive investment in Thailand as having 20-30% higher hidden costs, coupled with higher energy and production costs compared to competing countries.
Meanwhile, the latest Global Opportunity Index excludes Thailand from the list of ASEAN countries with the potential to attract investment, reflecting a lack of a compelling new economic story to entice investors. This results in Thailand's foreign direct investment ranking only 4th or 5th, behind major countries in the region.
Associate Professor Dr. Ath said that the current government's economic policies are merely maintaining the situation without addressing the root causes. He proposed three urgent tasks: combating corruption, creating new investment opportunities, and reforming the energy structure, especially focusing on oil prices which directly impact the cost of living. If this isn't addressed urgently, Thais will face insufficient income, lack of savings, and a risk of long-term economic recession.
Furthermore, Thailand must address the aging society by harnessing the potential of its workforce and accelerating human capital development through an education system that keeps pace with technology, especially the effective use of AI, to enhance its competitiveness. Otherwise, Thailand risks becoming a developed country in ASEAN in the future.