Experts Urge Thailand to Boost Competitiveness
Thailand stands at a crucial juncture, grappling with a decline in its competitiveness in the face of global economic shifts. This concern was echoed at the recent seminar titled “Impact of Global Supply Chain Changes on ASEAN and Thailand,” where prominent figures voiced their worries about the nation’s economic trajectory.
Trade Tensions and Investment Challenges
Yuthasak Supasorn, the Chairman of the Industrial Estate Authority of Thailand (IEAT), underscored the substantial impact that trade tensions—with a specific focus on US reciprocal tariffs and domestic reshoring efforts—have on businesses. He highlighted how these factors should compel Thai investors to exercise caution in their pursuits. The environment of uncertainty surrounding global trade can deter foreign direct investment (FDI), which plays a crucial role in sustaining economic growth.
The statistics speak volumes. According to the World Investment Report 2025, Thailand’s average FDI inflows from 2020 to 2024 reached only US$6.86 billion. In stark contrast, neighboring countries such as Indonesia and Vietnam attracted FDI inflows of US$22.19 billion and US$17.60 billion, respectively. This decline not only signifies a lost opportunity but also poses a considerable risk for the domestic economy.
The Consequences of Declining FDI
Yuthasak is not alone in his concerns. He warns that the downturn in FDI can trigger broader economic ramifications, diminishing investments across both the manufacturing and services sectors. When foreign investments wane, businesses may struggle to maintain their operations, leading to potential closures and economic shocks that could ripple through the economy.
Thailand’s allure as an investment destination is diminishing, and Yuthasak stressed the importance of enhancing its brand image. Collaborative efforts with the government are imperative for fostering an environment conducive to investment. Good governance and transparency must be prioritized if Thailand hopes to recapture the attention of foreign investors.
A GDP Decline and Competitiveness Crisis
Echoing these sentiments, Kriengkrai Thiennukul, Chairman of the Federation of Thai Industries (FTI), highlighted the stark reality facing Thailand: a 2% decline in GDP. This downturn, as he argues, reflects a broader trend of eroding competitiveness in the Thai economy. Compounding this issue are a myriad of global challenges, including technological disruptions, the ongoing US-China trade war, and geopolitical tensions that continue to loom over Thailand’s economic landscape.
The Impact of an Ageing Population
Furthermore, Thailand finds itself ensnared by demographic challenges, notably an ageing society. With a significant portion of its population—14 million out of 64 million—aged over 60, the implications for the workforce and economic productivity are profound. This demographic shift has led to concerns about Thailand entering the middle-income trap, which can stymie growth and innovation.
In his discourse, Kriengkrai called for immediate reforms, particularly focusing on the overhaul of archaic laws that impede trade and investment. With over 10,000 existing laws, the maze of regulations presents significant hurdles for businesses, making it essential to streamline processes to stimulate economic activity.
The Need for Agility in a Rapidly Shifting World
“The world is shifting faster than us,” Kriengkrai remarked, pointing out how neighboring Vietnam has quickly adapted to changing global trends. This adaptability has positioned Vietnam favorably in the region, while Thailand’s slower pace of reform raises urgent questions about its long-term economic health.
A multifaceted approach is therefore essential to address these complex challenges. By valuing speed and efficiency in response to global dynamics, Thailand can aim to reclaim its position as a competitive player in the ASEAN region.
As these experts call for action, the message is clear: Thailand must rethink its approach to investment, governance, and socio-economic modernization if it hopes to thrive amidst evolving global conditions. The next steps taken will be crucial in shaping the future of Thailand’s economy.