Demands grow for Thailand’s structural overhaul

Strategic Reforms and Vision for Thailand’s Future

Thailand is at a critical juncture, facing the need for structural reforms, deregulation, and a unified national vision to navigate an increasingly unpredictable global environment. This was emphasized by prominent figures from government, industry, and academia during a recent event hosted by the National Press Council in Bangkok.

The growing threat of increased tariffs from the United States has prompted countries to reassess their trade policies. Deputy Finance Minister Julapun Amornvivat highlighted this challenge at the gathering, which marked the 28th anniversary of the Council. He was representing Deputy Prime Minister and Finance Minister Pichai Chunhavajira, who was in Washington for trade negotiations ahead of a July 9 deadline.

Although the Thai delegation returned without a finalized agreement, Mr. Pichai expressed confidence that a revised proposal from Thailand would gain US approval. “We must accept that the old global trade balance is no longer viable,” said Mr. Julapun. “Existing trade frameworks, whether bilateral, multilateral, or under the World Trade Organization, are being challenged by current US policies. Thailand must work towards establishing a new equilibrium.”

He stressed the importance of a collective response involving multiple ministries, including Finance, Commerce, and Agriculture, as well as private sector bodies such as the Federation of Thai Industries and the Thai Chamber of Commerce. Despite the uncertainty, Mr. Julapun expressed cautious optimism, hoping that Thailand would face a maximum 10% import tariff rather than the proposed 36%.

Addressing Domestic Political Concerns

Commenting on domestic political concerns, Mr. Julapun dismissed claims that the country had reached a political dead end. He pointed out that the constitution provides mechanisms to resolve ongoing issues, including the recent suspension of Prime Minister Paetongtarn Shinawatra by the Constitutional Court. “There is no dead end. The constitution clearly outlines a way forward. Whether people find the outcome satisfactory is another matter, but we can move ahead,” he said.

He emphasized the importance of respecting judicial processes and moving forward regardless of the court’s eventual decision. “Life does not end here,” he added.

Combating Corruption and Enhancing Competitiveness

Chanin Chalissarapong, vice-chairman of the Thai Chamber of Commerce, delivered a frank assessment of business sentiment, describing corruption as a “cancer” eroding Thailand’s competitiveness. He advocated for deregulation and digital transformation as key solutions to close corruption loopholes and improve public sector efficiency.

“Competitiveness will come through deregulation,” he said, urging the government to attract foreign investment, particularly in high-tech industries like artificial intelligence, quantum computing, and biotechnology. He highlighted opportunities in Thailand’s “new S-curve” sectors: agriculture, food, tourism, and healthcare, with an emphasis on biotechnology to produce high-value goods such as bio-fertilizers and biopharmaceuticals. He stressed that regulatory reform is essential to attract global expertise and capital.

Reforming Regulatory Frameworks

Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, echoed calls for reform, pointing to Thailand’s more than 120,000 laws and sub-regulations as a major obstacle to productivity. He proposed an “omnibus law” approach to sweep away outdated regulations, similar to successful reforms in South Korea that spurred rapid economic development.

“Excessive regulation acts as a hidden cost, a chain holding Thailand back,” Mr. Kriengkrai said. He urged the government to capitalize on Thailand’s strengths in the Bio-Circular-Green (BCG) economy, especially in biodiversity, and to view China as a lucrative market for Thai bio-products rather than merely a competitor. Clear and consistent government policies, he said, are critical to enabling industry growth.

Addressing Human Capital Challenges

Somchai Jitsuchon, research director at the Thailand Development Research Institute (TDRI), raised concerns about the country’s human capital, noting that over half of Thais aged over 40 have only limited education, an impediment to national development. He cited examples such as Alibaba founder Jack Ma’s preference for investing in Malaysia over Thailand due to superior human resources, and argued that “political quality reflects the quality of the electorate.”

Mr. Somchai called for stronger civic education to improve democratic engagement and highlighted the dominance of tourism as a “forced choice,” resulting from a lack of workforce capacity in more advanced industries.

Vision for Inclusive Green Growth

Natthapong Ruengpanyawut, leader of the opposition People’s Party, laid out a strategic vision for inclusive green growth, centered on grassroots investment and regional development. His three-pronged plan comprises developing secondary cities to match Bangkok’s quality of life and attract private investment, installing one million solar rooftops within four years to cut electricity costs and spur the renewable energy sector, and expanding “economic forests” by one million rai through public-private partnerships to generate high-value timber and bio-materials.