Thailand in crisis – Today the economy

Published on : 21/09/2020 – 10:03

Thailand, currently shaken by a strong political protest movement, is also in the grip of a serious economic crisis caused by the Covid-19 pandemic.

Thailand, the second country to be affected by the coronavirus after China, can be proud of having been the first country to regain control of the pandemic with a limited number of victims, 59 dead to date. One of the few to have managed the health crisis very well. On the other hand, for its economy, the addition is steep. Thailand is now facing its worst recession since the Asian crisis of 1998 and the most violent in the entire Southeast Asian region. In large part because of the total closure of the borders in early April. Tourism, one of the main engines of the economy, has been crippled. With nearly 40 million foreign visitors per year, this industry generates on average 20% of the national wealth. It is also a very large provider of jobs, especially for those who have left the countryside to accept odd jobs rarely declared in this industry. The other engine of the economy, foreign trade fueled by the auto industry, was already suffering before the pandemic. Since then, exports of cars, but also those of electronic products and rice have collapsed. According to local authorities, GDP could shrink by more than 8% this year.

This brutal deterioration of the economy played a role in the protest ?

Global aspirations for more democracy are not directly linked to the economic crisis, even if they have socio-economic springs. Income inequalities, the highest in the world according to the Credit Suisse ranking, are one of the powerful levers of the movement. When they dare to demand that the king’s fortune come back under state control, when they call for a new constitution, the demonstrators question a political system that economically benefits the military elite and the big families who trust governments . Economic disparities have worsened over the past four years in Thailand and the current crisis will reinforce this trend. If ever the deprived of the countryside, the most affected by the current crisis, make common cause with the young demonstrators in Bangkok, the protest risks being amplified by the consequences of the economic crisis, the scenario feared by the government.

And if this political crisis persists, will it slow down the recovery?

Uncertainty about the future generally deters entrepreneurs from investing, from carrying out new projects. The trust capital generated by the good management of the health crisis already seems to have been squandered. In August, a few weeks after his appointment, the new Minister of Finance resigned. We are still waiting for his replacement while the government must extend its support system for the economy. The relief allowance of 5,000 baht, or 135 euros, paid to about 14 million Thais expired in July without a new device taking over. The recovery is also very dependent on the global course of the pandemic. Although Thailand is renowned for its resilience, people often talk about its Teflon economy, its ability to overcome the economic crisis depends more than ever on its foreign partners. For this very outward-looking economy to restart, tourists must first find the means and a climate of security.

IN SHORT

To follow this Monday in France the crisis meeting at the Bridgestone plant in Béthune that the Japanese group wants to close

Two ministers will be on site this Monday afternoon to meet with local elected officials and employee representatives. The management agrees to open a negotiation to think about an alternative, rejoiced Sunday evening the Minister of Industry Agnès Panier-Runacher, who will therefore be in Bethune with Élisabeth Borne in charge of Labor.

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