In May, Prime Minister Prayut Chan-o-cha marked nine years in power. In Thai politics, this is a remarkably long tenure, exceeding even Prem Tinsulanonda’s eight-year rule in 1980s; not since Thanom Kittikachorn’s tenure from 1963 to 1973 has any leader been in office for over nine years.
Given such an extended period of rule — with five years where the prime minister wielded virtually absolute power — the Prayut era should be considered one of Thailand’s best recent opportunities for long-term economic planning and achievement. Thailand is a country in search of new engines for growth, after being bedeviled for so long by the middle income trap. Recognizing this, Prayut’s government set a goal of taking Thailand to developed country status by 2037.
The Thailand Development Research Institute (TDRI) recently released a report evaluating the Prayut administration’s second term. Given that this is one of the few reports issued so far holistically evaluating the Prayut government’s policy record, it is worth taking a close look at its conclusions. Has the Prayut era advanced Thailand’s economic competitiveness? We’ll zoom in on three key areas highlighted by the report: industrial strategy, infrastructure, and education.
One of the Prayut government’s flagship programs is the Eastern Economic Corridor, designed to build on the Prem-era Eastern Seaboard by pushing for new investments in target industries and build new ’S-curve’ industries (new industries with intensive innovation.) The report finds that the EEC has been highly successful at drawing in new investments, particularly in existing industries such as electronics and automobiles. However, the EEC has achieved far less in terms of investments in the new S-curve industries, such as robotics.
“It can be said,” the TDRI report states, “that the EEC has furthered currently existing industries, but is still unsuccessful at building new target industries for Thailand.” Seen in this light, given the need for economic restructuring that makes Thailand a more innovative economy, the Prayut government’s efforts have not fully borne fruit. As I wrote last year when Prayut announced a new three-pronged economic strategy, Prayut seems to have remained “focused on Thailand as a manufacturing hub rather than as an innovator in itself.”
Where Prayut’s government achieved indisputable success was in building infrastructure, both physical and digital. The TDRI report notes that although several projects were delayed by the pandemic, while railway lines in the EEC along with regional transport services have yet to materialize, the Prayut administration did successfully complete many public transport projects. The recent opening of the red and orange train lines in Bangkok, with the pink line soon to follow, is evidence of this.
Meanwhile, digital services such as Promptpay have leapfrogged ahead during the pandemic, doing much to advance Thailand’s digital economy. At the same time, however, the flurry of digital-related legislation the government enacted has yet to lead to concrete results.
The biggest issue the TDRI report noted may have been in education. The report points out that the core school curriculum has not been revised in 15 years, and despite early efforts by the government to partially build a new competency-based curriculum, “political actors refused to permit its usage, meaning that the country lost an opportunity to modernize its education.” Prayut’s second government did continue efforts from the first Prayut cabinet to sandbox areas allowing some schools to be more independent in innovating, which have achieved some success, but with unclear results for the education system as a whole.
All of this reveals a mixed picture of what Prayut and his government have done to advance Thailand’s competitiveness: both clear successes and evident failures. The government has laid important infrastructural foundations, but Thailand still looks like it is searching for a strategy when it comes to economic restructuring and ensuring people are equipped with the skills needed to succeed in the 21st century’s knowledge economy.
What is unclear, moving forward, is what Thailand’s next government will do to build upon these efforts, or what new direction it is seeking to adopt. So far, the signs are worrying. Almost all political parties focused far more heavily during the election campaign on populist pledges than on a long-term economic strategy or education.
For example, the next Pheu Thai government looks set to implement its policy proposal to give out 10,000 baht in digital money, which it had initially scrapped while in a prospective coalition with Move Forward but now brought back. Back then, Pheu Thai had explained that it had to scrap this policy because it would cost the state 560 billion baht. How Pheu Thai will fund this pledge without eating into funds that could be more wisely spent on projects more critical for long-term sustainable development remains to be seen.
And indeed, this policy also represents another potential issue as we transition to a new government: projects worthy of continuation may be discontinued for political reasons. During the election campaign, Pheu Thai said that they would use a new digital wallet for transferring its promised 10,000 baht handout. Why the new government cannot simply use the Paothang app, which has already been successfully used for the khon la krueng scheme during the pandemic, is unclear. Will this also play out on projects that were successful but are too marked by Prayut’s fingerprints?
The incoming Pheu Thai administration may hope that it will be able to make up for the public relations fiasco caused by its abandonment of the Move Forward Party through short-term spending schemes that it hopes will lead the electorate to forgive and forget. It will, however, be doing the electorate a much better service in the long-term by focusing on necessary structural economic reforms. That will require it to take an honest look at where the previous government succeeded, where it fell short, and what adjustments are needed to make Thailand a truly competitive economic powerhouse once again.