Paetongtarn govt’s policy document to highlight challenges facing Thailand
Draft policy statement to place before Parliament nine major issues
The new Thai government has prepared a draft policy document outlining the goals of "Hope, Opportunity, and Economic and Social Equality" to be submitted to the Secretariat of the House of Representatives for presentation on September 12.
The draft policy highlights Thailand's strong potential but also identifies several future challenges:
Living conditions and debt: Many citizens have insufficient income relative to their expenses, while the household debt, which currently exceeds 16 trillion baht – more than 90% of the GDP – is a major area of concern. Non-performing loans (NPLs) are also on the rise, along with informal debt.
Ageing society: Thailand is transitioning into an ageing society more rapidly than its development level and other regional countries. As of 2023, Thailand has entered a "Complete Aged Society", with over 20% of the population being elderly. It is projected that within the next 10 years, the country will become a "super aged society". The birth rate is declining, and the quality and skills of the workforce are low.
Social security and drug abuse: Social security is threatened by the proliferation of drug abuse, which undermines quality of life, the economy, and national security. In the second quarter 2024, drug-related criminal cases increased by 29.9% compared to the same period in 2023, with the number of drug users rising to 1.9 million. Online crime and gambling have also surged.
SMEs: Small and medium-sized enterprises, which employ 32-35% of the workforce and contribute about 35% of GDP, are facing liquidity issues. The non-performing loan ratio of SMEs has risen to 7.6%. This is due to a slowdown in domestic purchasing power, impacting employment, wage adjustments, and economic recovery.
Traditional Industries: Traditional Thai industries, especially SMEs, are struggling with rapid technological disruption and changes in production structures and global demand. Increasing competition from imported goods, particularly through online platforms, has forced reduction in production capacity, employment, and even led to closures, with capacity utilisation falling below 60%.
Climate change: Global climate change affects agriculture and tourism. For instance, Thailand experienced drought in the first half of 2024 and is expected to face abnormal heavy rainfall in the latter half. Persistent PM2.5 air pollution in recent years has also impacted public health.
Political Instability: Thailand has long faced political instability due to coups and severe political conflicts, leading to unpredictable changes in government.
Bureaucratic inefficiencies: The centralised bureaucracy is failing to meet public needs effectively, with overlapping roles, fragmented structures, and unnecessary expansion into regional offices.
Geopolitical challenges: Thailand faces challenges from shifting geopolitical dynamics, including polarisation among major powers, trade protectionism, and global regulations creating indirect competitive barriers.
