Domestic resilience and the robustness of the local economy are pivotal for maintaining Thailand’s economic momentum in the future, particularly with the observed reduction in foreign direct investment (FDI), as stated by the Governor of the Bank of Thailand.
At a seminar held by Thai Publica, Sethaput Suthiwartnarueput, the central bank governor, remarked on the consistent decrease in FDI in Thailand over the past two decades, contrasting with the positive trends seen in neighboring countries.
Currently, Thailand captures about 0.63% of the global FDI net inflows, a slight increase from the yearly average of 0.57% recorded from 2001 to 2005.
In comparison, during the same timeframe, Indonesia’s share rose from 0.07% to 1.39%, Vietnam’s from 0.16% to 1.01%, and Malaysia’s from 0.32% to 0.83%.
Given these developments, Mr. Sethaput emphasized the importance of focusing on domestic expansion rather than external economic dependencies.
He highlighted that urbanization and strengthening the local economy are essential for ensuring sustainable economic growth over the long term.
Another critical aspect, according to Mr. Sethaput, is increasing the economic scale to develop the local economy.
He advocated for a focus on local competitiveness and global connectivity, referring to this strategy as “globally competitive localism,” which is vital for enhancing and perpetuating Thailand’s economic growth.
Globally competitive localism is a strategy that encourages local entities to use their distinctive strengths and features to compete on a global scale.
This approach values the utilization of local resources, cultural identity, and community involvement while aiming to achieve global competitiveness.
Mr. Sethaput argued that Thailand should prioritize the welfare and prosperity of its citizens above traditional growth metrics like GDP and FDI to guarantee sustainability in the long run.
He suggested that urbanization initiatives should concentrate on enhancing education, healthcare, and social equality.
He noted that some governmental initiatives, such as special economic zones, have not substantially supported public welfare, pointing out that Thailand’s cross-border special economic zones have had a minimal impact on economic growth, contributing only about 0.5 percentage points to GDP despite years of implementation.
Kobsak Pootrakool, director and senior executive vice-president of Bangkok Bank, commented that government subsidies have not led to significant improvements in household incomes. In fact, the incidence of poverty has risen during the subsidy period.
The number of households living below the poverty line increased from approximately 1 million in 2007 to around 4 million in 2011, with seniors heading 64% of these households, according to Mr. Kobsak.
