Thailand’s economic future post Covid-19

The old saying “what we do now will determine our future” is highly relevant to the situation we currently face, as the actions we take over the coming months in the fight to contain Covid-19

will shape the prospects of the Thai economy for decades to come.

As the light at end of the tunnel draws nearer – with good news coming in about the success of Covid-19 vaccines, herd-immunity, and the re-normalization of life in the US, Europe and other parts of the world – people are looking forward to living more normal lives once again.

But what awaits us at the end of the tunnel?

Key risks in the post Covid-19 world, or the new normal, will be those we previously faced before the pandemic started. When people look back 10 years from now, the pandemic will be regarded as an event that briefly overshadowed and interrupted three key megatrends:

(1) The Fourth Industrial Revolution. Technological disruption will return with a vengeance. Although Covid-19 helped reduce some of the pressures on businesses from technological change, it also accelerated certain aspects of digital transformation reducing adoption times from 7-10 years to as short as one to two years.

(2) Trade wars. Resumption of trade wars should be expected. Even with President Biden leading the US, the fundamental problem remains unchanged – China is emerging as a true challenger to existing global power structures. With the size of her economy increasing along with major technological advancements, China will place great competitive pressure on existing economic powerhouses.

(3) Geopolitics. Conflicts will return in some regions of the world. The Middle East illustrates this situation as clashes that had been temporarily paused are now regaining momentum.

What should we do before we reach the end of the tunnel?

In every crisis lies great opportunity. This time is no exception.

Crisis creates great difficulties, but times of crisis are often also the best times for change.

Businesses that manage to turn Covid-19 into their opportunity will thrive during the new normal. But those that spend their time waiting for the pandemic to end and wishing to return to the world they knew before the crisis, will face even greater challenges.

This is because as those companies stalled and stopped, many of their old competitors and some newcomers instead used this crisis to diligently fine- tune their operations – reducing excesses, improving efficiency and adopting new digital technology – and create new products ready to be launched once the recovery is in full swing.

This is why some businesses that manage to hold on until the end of the tunnel, may still fail in post-Covid period.

Thailand, as a country, faces similar challenges. As we try to reduce the numbers of people who fall sick or succumb to the virus as well as minimize the scars Covid-19 is leaving on the economy – such as failed businesses, rising non-performing loans and public and household debt, as well as losing some of our key assets to foreign businesses – we need to continually lay down new foundations for the post Covid-19 world.

Our neighbors have been working hard at this. Indonesia has been producing many startups and unicorns, as well as introducing changes to outdated regulations with the new Omnibus Law. Malaysia has been attracting industries of the future, such as digital technology and electric vehicles (EV). Vietnam has emerged as the winner in supply chain relocation and now receives three times the foreign direct investment than Thailand. China, US and the EU are now introducing major infrastructure projects both domestically and through international cooperation under initiatives such as the Belt and Road Initiative and the G7’s Build Back Better World that will substantially reduce logistics costs and raise productivity.

The most unfortunate thing is that, at this point, Thailand is too pre-occupied with the short-term management of Covid-19 and spends too little time laying down necessary foundations for future.

Like businesses, if we, as a country only wait for Covid-19 to end

and do not use this opportunity well, Thailand will emerge in a greatly disadvantage position in the post Covid-19 world.

It is still not too late. What we do now will determine our future. If we use the coming months well; changing outdated laws and regulations, reshaping existing industries (agriculture, tourism, automobiles, and petrochemicals), and pushing for new immediate S-curve industries (such as bio-circular-green and digital, as well as become the leading regional hub for regional headquarters and logistics), we can still secure a great prospect for ourselves, our country, and our future generations.