Thailand must recalibrate its strategic positioning to remain competitive in the evolving global landscape, concentrating only on sectors where it offers true strengths, rather than spreading its efforts across many industries as in the past through the 10-cluster policy, according to an economics analyst.
Somjai Phagaphasvivat, an international economics analyst, said Thai products are now being squeezed by cheaper goods from CLMV (Cambodia, Loa, Myanmar and Vietnam) countries, which have lower labour costs than Thailand. At the same time, Thailand is struggling to compete when it comes to higher-priced, technology-driven products.
“We cannot develop mid-range products like Malaysia, which is a semiconductor hub, nor high-end products like Singapore. We are caught in the middle — between low-cost goods and high-cost goods,” Mr Somjai said.
According to Mr Somjai, Thailand’s adaptation is constrained by multiple factors: an older population; limited government revenue; and high public debt, which is near to the 70% GDP ceiling.
According to the National Economic and Social Development Council (NESDC), Thailand became an aged society in 2024, with around 14 million people aged over 60, representing roughly 20% of the population.
By 2033, the elderly population is expected to reach 28%, moving Thailand into the ranks of a “super-aged” society.
“I think we should now focus on a few industries that are tangible and where we have real strength — food, tourism and wellness. For example, we can elevate Thai food to premium status, increasing product value,” he said.
According to Mr Somjai, Thailand’s agricultural sector, which feeds the entire nation, employs one-third of the labour force but contributes only 10% of GDP.
Thai rice yields are only 490 kilogrammes a rai, compared to Vietnam’s 1,000 kg a rai, thanks to Vietnam’s hefty investment in the development of rice varieties. By investing in research and development for rice varieties, Thailand can also create a premium rice market, he said.
As for tourism, Mr Somjai says countries like Italy have elevated secondary cities into memorable destinations. Thailand can do the same — for example, positioning Ranong as a premium hot-spring city. In addition, Thailand can offer Buddhist-based wellness experiences that attract foreigners seeking mental-development retreats.
“What has happened over the past year reflects the collapse of the old world order and the emergence of a new one — changes to which Thailand has been unable to adapt to in time,” said Mr Somjai. “The old world order, which emphasised liberalism — prioritising democracy, human rights, women’s rights and gender diversity — is being overturned.
World-order leadership, notably the United States under President Donald Trump, has dismantled these liberal principles. This can be seen in the US “New Security” policy released on Dec 6, which clearly shows the US shifting from liberal democratic values toward the opposite direction, incorporating authoritarian elements — targeting gender-diverse groups, disregarding territorial integrity, sovereignty and international law, and intervening in other countries’ internal affairs, such as attacking the EU and supporting right-wing groups in Europe.
The outspoken expert said that the old system, which had stability through the UN Charter, is now collapsing. The global situation is becoming unregulated. Thailand must prepare for the disappearance of these rules. Respect for international organisations such as the World Trade Organization is fading.
According to Mr Somjai, the growing trend of trade protectionism is already affecting Thailand and remains unpredictable. Thailand has yet to adapt to changes driven by Trump’s policies, which have increased tariff rates from 2% to 14-15%.
According to Mr Somjai, the world is undergoing a geopolitical shift. It is now clear that the US is emphasising “American greatness”, reverting to a 200-year-old Monroe-style doctrine — what he calls “Trump Colonialism” — intervening in countries the US views as unfriendly, such as meddling in Europe by supporting right-wing groups and pursuing anti-EU policies that weaken Nato.
Europe is facing security threats, and the US appears willing to let Ukraine lose because it does not see Russia as a threat to the US. This marks an unprecedented shift — from a close US-European alliance to a relationship that now seems on the verge of conflict, he said.
Another major issue is the US prioritising its strategic balancing against China, seeking regional allies — including Thailand — which may ultimately be pressured to choose sides, a development for which Thailand is not prepared. Vietnam, meanwhile, is an example of successful balancing between two major powers, maintaining trade with China despite South China Sea disputes, even becoming a key production base for China, he said.
On technological change, the world is entering an era of AI and quantum computing, which will affect competitiveness in goods and services. Thailand is also unprepared in this front because it has been unable to develop its technological capabilities. This is why the Thai economy is growing at only 2%, the lowest in Asean aside from Brunei — selling low-value goods while buying expensive technology, which undermines our competitiveness.
On climate change, which is now a key factor in global competitiveness, countries that are able to compete in the world market must produce low-carbon goods and reduce greenhouse gases. Additionally, Europe has already begun implementing its carbon border adjustment mechanism, while Thailand still needs time to adapt, he said.
Provided by SyndiGate Media Inc. (Syndigate.info).
