Thailand, one of the BRICS+ new partner countries, is a monumental development success story rooted in agriculture with predominant exports being rice, tapioca products and rubber- to mention a few. Today Thailand is the second top exporter of rice, following India and preceding Vietnam, all of which are associated within the BRICS+ bloc.
From Agriculture to Industrial Powerhouse
Since the mid 20th century, Thailand has made tremendous progress by transitioning from an agrarian Thai economy to one driven by export-orientated industrialisation, producing goods that are widely utilised across international markets. Furthermore, the state has been very successful in attracting substantial foreign direct investment (FDI), with the top sources being Singapore, China, Hong Kong, Taiwan and the USA. Some focal point industries that investments have been directed to include automotive and parts, electronics and chemicals the industries in which the investments are most dominant are automotive and parts, electronics, chemicals, digital, and food processing.
Strategic Advantages and FDI Attraction
Elements that have contributed to the nation’s economic stature is their strategic location and infrastructure, centrally located in Southeast Asia which is a highly attractive point for companies expanding or trading internationally; as well as the fact the nation has a very well educated and skilled workforce which is favourable for a growing manufacturing base.
Warning Signs of Economic Decline
However, in recent years, the glorious makeup that makes Thailand successful is steadily declining. Since 2021, Thailand has witnessed 100 factories closed on a monthly basis. The nation that once had an annual growth rate of 7.5% between 1960-96, and between 1999-2005 had a 5% annual growth rate. Bangkok now faces a new reality where China’s redirection of goods into Southeast Asian markets, as a result of trading tensions in the West, has catalysed a wave of already processed and assembled goods into the Thai market, a benefit for China regarding market penetration because of their cheap exports. For Thailand, however, this has dire consequences for the nation’s economic environment with rising debt, a collapsing consumption, closing of factories and ultimately, an increase in unemployment.
The Pressure from Chinese Dominance
Furthermore, the strength of Chinese goods and FDI poses an additional issue most notably, their dominance in the electric vehicle (EV) market in Thailand. BYD, a Chinese company, is aggressively expanding its presence by establishing manufacturing plants in regions such as Thailand, where it aims to produce 15,000 units annually. This expansion is significantly impacting and overwhelming the local automotive market in a manner that they cannot compete with, another significant Chinese company having similar ripple effects worldwide is Shein. The closing of Thai factories is not a unique situation, there have been 80 000 jobs lost in Indonesia as a result of similar circumstances.
Factory Closures and Regional Tensions
Bangkok’s economy is at a critical intersection where traditional manufacturing, consumption and industrial models are now at a new unknown level threatening to halt economic growth. Many of the closed factories are small and medium sized enterprises (SMEs) mainly in garments, electronics, steel and furniture. A solution to protect local industries by the Association of Southeast Asian Nations (ASEAN) governments is to implement protectionist policies to avoid becoming transit hubs for Chinese goods. However, doing so may hinder ASEAN’s trade integration goals.
A seasoned former official from the Prime Minister’s Office is calling on the government to re-evaluate the nation’s industrial procedures. This appeal comes with a warning that failure to adequately address current conditions will only worsen the declining impact of manufacturing on the country’s GDP.
BRICS+ membership as a Strategic Lifeline
Despite these challenges, Thailand’s inclusion in the BRICS+ grouping offers a strategic opportunity to recalibrate its economic path. As a partner country of this expanding bloc, Thailand can leverage new South-South trade and investment partnerships that reduce dependence on traditional markets and utilise the influx for local benefit. The BRICS+ platform also provides an avenue for collective action on industrial policy, digital innovation, and trade diversification. Enhanced cooperation within the bloc could support Thailand in rebalancing its manufacturing base, increasing regional value chain integration, and negotiating fairer terms in global trade. If harnessed effectively, BRICS+ membership could help Thailand avoid economic stagnation and instead emerge as a resilient regional production and logistics hub.
Written By:
*Dr Iqbal Survé
Past chairman of the BRICS Business Council and co-chairman of the BRICS Media Forum and the BRNN
*Banthati Sekwala:
Associate at BRICS+ Consulting Group Egyptian and South African Specialist
**The Views expressed do not necessarily reflect the views of Independent Media or IOL.
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