Whаt is thе есоnоmiс роliсy оf Тhаilаnd in thе lаbоur mаrkеt sесtоr аnd hоw will Тhаilаnd dеаl with аdvаnсеmеnt оf Сhinа?
Thailand was one of the fastest growing economies in the world in the 1960s until the late 90s. Thailand was regarded to be part of the second wave of industrializing countries by the 1990s with the likes of Indonesia and Malaysia (BoT, 1997). Thailand depended on the central bank as well as other government financial agencies to come up with the right atmosphere for economic growth and delegated to the private sector to make important business decisions. In 1997, the Asian economic
Crisis adversely affected economic stability in Thailand and many financial institutions collapsed (Raquiza, 2013). This section builds the background to the economic situation in Thailand before the challenges facing growth are discussed.
Thailand is a country that is newly industrialized and its economy hugely depends on exports. Geopolitics consequently affects the growth and stability of the country’s economy. The service and industrial sectors are the main sectors contributing to Thai Gross Domestic Product and account for 39.2% of GDP (Leturque & Wiggins, 2010). There are many challenges affecting economic policy development in Thailand.
Postwar international and domestic politics played crucial roles in the development of Thailand economy during the era of the Cold War. The Second World War affected the Thailand economy and the Thai government allied with Japan to declare war against the Allies (Manoranjan, 2009). Regional politics have played a role to influence the growth of Thailand economy. The influence of geopolitics and international financial institutions such as the World Bank and IMF cannot be ignored. The domestic political influence has played in shaping economic policy development (Warr, 1996). The ripples of international institutions decisions affect national economic development agenda and Thailand is not an exceptions. Military and economic support from the United States has worked an important part in strengthening international ties and economic dependency on geopolitics.
Thailand has to deal with challenges affecting economic policy development in order to come up with a policy that will ensure positive growth of the economy. It is important to incorporate all stakeholders, practitioners and industry analysts prior to development of any economic policy (Kaosa-ard, 1998). The ripple effects to other sectors have to be deliberated on in length before implementing any new policy. Policy evaluation has to be done to assess its progress.
Thailand has reported a robust and stable economy prior to the 1967 coup. Other political intrigues have shaped the growth path of Thailand economy. International and regional politics has affected important economic decisions. This conclusion recaps important points discussed in the entire report and echoes their significance to Thailand economic policy formulation.
Meanwhile, with China showing signs of progress in the world economy, mix reactions have arisen from the world. The vast advancement of China can pose a threat or an opportunity for some countries, particularly developing countries like Thailand. This proposal will also provide some insights if Thailand can find opportunities in dealing with China in the international market or would this make it competitors. One issue could be that the cheap labor of China would attract multinational leaving the rest of those countries providing same cheap labor a decrease in industry profit or no investors at all.
Further, the organization of the Asian Infrastructure Investment Bank (AIIB) by China is seen as a growing infrastructure facility where the Thailand is prospective founding members (Xinhuanet, 2014). The policy proposal can also look into the features of AIIB and identify the pros and cons of Thailand being members.