Thailand Development Research Institute (TDRI) has cautioned the country against jumping too fast into new strategies in the face of COVID-19.
“It is necessary that we get good analyses of global situation first. Things must be clear to an extent before we can start good planning,” TDRI Dr Somkiat Tangkitvanich said in an interview with The Story Thailand.
- Krating: People will make magic happen
- Dell Technologies says ‘COVID-19 will accelerate digital transformation’
- KT Ventures: COVID-19 Shakes Startup Ecosystem
He said a great new normal would materialize only if there were high-quality preparations for great strategies. “To date, many of Thailand’s strategies are not in line with global trends because the country has still used too little information and too superficial discussions in strategy formulation,” he commented.
Established in 1984, TDRI has served as a public policy research institute. It provides technical analysis (mostly but not entirely in economic areas) to various public agencies to help formulate policies to support long-term economic and social development in Thailand.
Somkiat said there were now widespread debates that
Thailand should create new business models and adjust national-development directions for the post-COVID 19 period.
“Regarding short-term impacts such as logistic disruptions that arise from curfews, challenges will likely end in one or two month(s),” he said, “But there will be long-term impacts like a drop in purchasing power and demand. Those are bigger challenges”.
What Lie Ahead for Thailand’s Main Economic Engines?
Last year, tourism accounted for 18 per cent of Thailand’s gross domestic product (GDP). The country attracted about 39 million foreign visitors in 2019, who altogether helped generate 12 per cent of its GDP.
This year, this big economic engine has almost come to a complete halt as all commercial flights from overseas have been suspended for months. Travel restrictions and virus fear look set to dampen to travel mood even after flights resume too.
“For the time being, Thailand will have to rely on domestic tourism,” Somkiat suggested.
He also warned that Thailand must get prepared for the fact that tourists’ demand would not be massive, even if it re-opened to foreign travellers later.
“A lot of people will yearn for vacations but they will not be able to spend as much as before because of COVID-19 impacts,” he said.
Somkiat said those in the tourism industry would definitely have to adapt to changes but it remained inconclusive at this point as to what should be done. “Investments have already been put in the expansions of the Suvarnabhumi Airport and the constructions of so many hotels,” he commented.
According to him, Thailand will not get good news from its export industry either given that on top of various trade barriers, COVID-19 has caused a financial crisis and curbed the purchasing power of consumers.
Prospects of Healthcare and Agricultural Sectors
Records show Thailand’s food exports do not drop significantly even during COVID-19 crisis. In the eyes of many, these figures suggest Thai food has high potential.
Somkiat, however, pointed out that Thailand’s agricultural sector now accounted for just eight per cent of GDP but used 30 per cent of its workforce.
“Before we rush to focus on agricultural sector, we need to consider how to create the new agriculture that can generate bigger income. We also must take into account the fact that crop prices are highly volatile. The agricultural sector also faces risks related to weather conditions and natural disasters,” he said.
Somkiat said if Thailand set its sight on new agriculture, its agricultural sector needed big improvements so that it could produce high-quality food that would fetch a good price.
In his view, medical tourism looks interesting as Thailand’s image as a medical hub enjoys a boost from the country’s ability to handle the COVID-19 situation relatively well.
Yet, Thailand also needs to determine if it has adequate healthcare workers if medical tourism become a boom.
TDRI Collaboration with Thai Chamber of Commerce
Asked what TDRI is doing during COVID-19 crisis, Somkiat revealed that his institute was now helping the Thai Chamber of Commerce prepare recommendations on how to re-open schools and towns.
Thailand looks set to ease restrictions further from June 1 onward, after two previous rounds of easing earlier this month give satisfactory results.
