Thailand’s excellent Covid-19 response has become a golden handcuff for the Prayut government

Thailand’s response to the coronavirus pandemic has been excellent. At a time where Europe and North America are seeing a second wave of coronavirus infections, Thailand is cruising through relatively unscathed and life in the kingdom has returned to normal.

A combination of factors have helped Thailand as it combatted Covid-19, world class public health infrastructure, the right climate, and a government that has largely step aside and let the doctors handle the battle.

But while the public health battle has been won, and won decisively, the economic fallout from our battle with Covid-19 will likely be with us for some time.

Thailand is set to see its largest economic contraction ever, worse than the 1997 ASEAN Financial Crisis. The GDP is set to contract nearly 8 per cent while the lack of tourism has shut down whole industries throughout the country.

The government under the Prayut Chan-ocha administration has done an exemplary job in staying out of the way and letting the healthcare infrastructure guide the country at the height of the crisis. But now that the crisis is mostly over inside our covid-free bubble, the government has not managed to come out with the right policies to help the free falling economy.

Signs prohibiting entry to the Royal Hotel, currently used as an alternative state quarantine (ASQ) hotel for people returning to the country from abroad in an attempt to prevent the spread of the COVID-19 novel coronavirus, are seen displayed at the entrance of the building in Bangkok on September 28, 2020. (Photo by Mladen ANTONOV / AFP)

In fact, a series of missteps has marred the government’s economic response from the misallocation of various stimulus packages to the the high profile reshuffle of the economic posts. Predee Daochai, the much respected former President of Kasikorn Bank, was recruited by the prime minister personally for weeks only to be driven out by internal politics less than a month after assuming the post of Finance Minister.

The government’s economic response has not been helped by months of anti-government, pro-democracy protests aimed at toppling the military-backed Prayut regime. The prime minister has on occasion complained that the protests was hampering his economic response.

It is a complaint not without its merit. But not for the reason that the prime minister said.

Prayut might say that the protest is hampering investor sentiment and stopping foreign direct investment but what is really slowing down the economy is that the government is playing it safe.

Thailand’s economy, much of which is reliant on tourism, has not been able to restart because of a lack of foreign tourists. While the government has approved two initial waves of Chinese tourists (who must go through state quarantine for fourteen days), this is but a drop in the bucket for what the industry needs.

But Thailand’s excellent response to the coronavirus pandemic has become something of a golden handcuff for the Prayut administration looking for any way to defend its record amid growing political pressure.

There are other countries in the region who have also had exemplary Covid-19 responses. South Korea, Singapore, Japan, Australia, and New Zealand come to mind. These countries have pursued green late agreements among themselves to allow travel between coronavirus free countries.

However, Thailand’s government is not willing to risk participating in these green lanes because it is afraid the one excellent score on its governance track record could possibly suffer a blemish.

Political pressure has indeed affected the economy but only because the government is not brave enough to take the risks necessary to kickstart the economy by participating in green lane programs. Instead, because it realizes how poorly it has governed (even before the pandemic), it continues to handcuff itself to the one thing it has done right.

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