“It has both positive traces. Not a single negative trace The negative trace that can still be seen as non-concrete is that Public debt arising from the economic crisis that we currently have to use through the National Bank has not yet been fully paid. In addition, there are remains of buildings in the case of Hopewell or abandoned Sathorn buildings. That some people climb to kill themselves. That is an NPA asset that does not have performance, that is, it is a wasted resource for over 20 years.”
But although there are many disadvantages But Ajarn Apichart turned it over to us to see the lessons and advantages that Tom Yum Kung has left for the Thai financial sector.
“People in Thai financial circles, money markets, capital markets are more cautious. And there is a much higher stability compared to before the economic crisis. As a result of the adjustments learned from the economic crisis, Thai financial institutions received very little damage from the Hamburger Crisis in 2007 – 2008, and it can still be said until now that Thai financial institutions are highly stable. Even today, facing the impact of external factors (External Shocks) from abroad in the form Stagflation”
(Read the story of the stagflation economic crisis at the article ‘Stagflation: When a sluggish economy meets inflation Problems that no country wants to happen (Because it’s hard to solve)‘ can be read through the link under the comments)
Changing Thai Economy
Every time there is a big crisis in Thai society. The economic structure will change.
is what Ajarn Apichart said after we continued to ask ‘After receiving the lesson from Tom Yum Kung How has the Thai economy changed since then?‘
In the beginning, Ajarn Apichart explained that The obvious consequence is that the country’s growth rate, reflected through GDP, is deteriorating, meaning that Thai people will get rich slower. But what is more interesting is the structural changes in Thailand’s economy that will make the country’s economic engine work differently as well.
“In the past, I was told to grow up fast. We grow from investment If you study basic economics, it’s C + I + G + (X – M). We invest a lot and set up a lot of factories. Production was expanding rapidly. Our income is growing fast. After the economic crisis, net exporters became the engine of investment. which is reduced by half Our investment rate has never returned to the level it was before the crisis. until now”
We will see the growth of the economy through the numbers of GDP If looking deeper than that, GDP will consist of about 5 main factors according to basic economic principles mentioned by Ajarn Apichart. which those variables will consist of public and private consumption (C, Consumption), domestic investment (I, Investment), government spending (G, Government Expenditure), Export (X, Export) andimport (M, Import)
Ajarn Apichart explained in depth that In the past, there was a Tom Yum Kung Crisis. Thai economy has a high growth. But those growth are driven through investment (Variable I). But after Tom Yum Kung Thailand’s investment is drastically reduced. And the main energy source that drives the growth of the Thai economy has turned to Net exports (X – M, exports minus imports) instead, we can see that the engines that make the economy change from the oil type’ models.investment‘ (Investment-Led Growth) is a type of oil-powered engine.net exports‘ (Export-Led Growth) instead, that is, the structure of the Thai economy that has changed after the crisis.
“At present, the effect of changing the structure from Investment-Led Growth becomes Export-Led Growth, it makes our Thai economy more open. We are a small economy compared to the global economy’.Small But Very Open Economy‘ Therefore, the impact from external factors (External Shocks) is quickly transmitted to the Thai economy.”
Thailand’s reliance on exports means that external events will have a greater impact on the country and the Thai economy. We can see from COVID-19 that affects export trade. Including the Thai tourism industry that was fully affected. In addition, there were also problems in terms of oil prices resulting from the Russo-Ukrainian war. transmitted in the form of stagflation
The economy is trapped.
So what will the changing structure of the Thai economy lead the Thai people? was the next question that we asked Ajarn Apichart.
“During the structural transition to Export-Led Growth, it depends on wages. At that time, our demographic structure was still very young. And our wages are still not expensive. We still have some natural resources left. Therefore, Thailand has become a contract factory. Hire to produce according to the order and export with low wages. resource intensive Doesn’t have its own technology
“Currently, two engines are important. (Wages and natural resources) that drove high export growth are gone. Our wages are already high compared to other emerging countries. It is not surprising that most foreign investments are invested in Vietnam. Vietnam’s exports are growing fast. It’s like Thailand in the 1980s when it was gold and fragrant. Natural resources are well known. cheap seafood we used to export There are no more fish left in the Gulf of Thailand. The engine here is off. This is the number one issue that causes our economy to slow down. because we can export less The growth rate of our export sector is less, we grow slower, which leads to a problem called ‘Middle-income trap’”
as mentioned before The growth of the Thai economy at the moment is mainly dependent on exports. But when both engines stop or do not work as well as before Thailand therefore faces the problem of economic growth not keeping up with the age of the people. The money in the pockets of Thai people has not grown in their age. therefore became a problem’old before rich‘ As Ajarn Apichart explained in the title ‘Middle-income trap’
The professor then went on to explain that the middle-income trap is a condition in which the economy cannot jump from being a middle-income country to a high-income country. Looking back 40-50 years ago, we can see that Thailand able to kick themselves from a middle-income country It can be a high-middle-income country. But still can’t cross the wall.’middle income‘ go to ‘high income‘ in full words
Boiled Frog Crisis
if it was before We can see that the proportion of young people is higher than the elderly. This is also an important factor contributing to the exponential growth, but things are different now. if compared to before The number of children in each family is much less than before. In addition, young people in the past are entering retirement age. This means that the ratio of the elderly to the total population will be higher than before. and will make Thailand become an aging society by default
“It means that the young generation, the young generation, will have to lean back because they have to bear the burden of raising an old person who is not rich. If rich old people, you don’t have to help, right? But old people who are not rich can’t take care of themselves. The next generation will have to take care of it.
“At the same time, GDP is growing slowly, meaning the income of the new generation is growing slowly. Will your income increase in time or not? This is a heavy burden for your generation.”
We can see that the trend of income and expenditure of the current generation of Thai people is quite worrisome. Because while the economy engine is not working well. Slow to grow, slow to get rich, and slow to settle. Another factor that looks to attack them is the increasing burden of expenses that will make it harder for them to set up.
This economic situation is no different from a boiling pot where the water is slowly heating up. The Thai people are like frogs lying in boiling water without jumping away. Finally, when the water boils The frog had no chance of jumping out of the cauldron. This is the origin of ‘boiled frog economic crisis‘
If the frog gets used to the gradually warming heat, it won’t jump out. It’s like us who are struggling until we get used to it, struggling until we get used to it, so we don’t get up to change.
unbreakable pot lid
So why don’t we just jump out of the pot now?
Probably a question that should come up in the minds of many readers. including the author himself So he asked Ajarn Apichart about the aforementioned doubts.
“Why we can’t kick ourselves out of the middle-income trap There are many reasons. The economic structural reason is that We lost our ability to compete. Therefore, our export sector grows more slowly. makes us lose our ability to compete If we can compete in the global economy We need something else to replace here, namely ‘innovation’, having the ability to produce more complex products. has a higher added value They need innovation. Its innovation is through investment. We haven’t done enough here.
“But what lies deeper behind it is’rules‘ (Rule of the Game), for example, rules that do not allow innovation. such as inadequate competition, monopoly market, if I am a Start-up, I innovate. I’m going to destroy the original market, right? Therefore, the market incumbent remains the same. If there is enough competition, it has to produce innovation against me. so he can defeat me But the original market leader is to find the rules. to monopolize Go do whatever you want so I can’t enter the market. Instead of them competing with me with innovations. But he silenced me from letting me enter the market instead. is to use a monopoly method”
Ultimately we find that by not jumping out of the pot One big reason might be that we can’t do it. Because the lid of the pot has already been closed (?) and it’s also difficult to pry it out. And the reason why it can’t be leveraged is because of the rules that cover and promote Thailand’not born‘ Innovation, which is very necessary to help kick the Thai economy out of this crisis.
economics Development or innovation only occurs when there is enough competition. Different people compete to make themselves better, better, more quality. to be a winner The results of the competition will benefit the development of the country in many aspects. A clear example would be ‘beer‘ If I shake off the monopoly Allow people to enter the market and compete with each other to sell beer. Every beer seller would have to do their best. Plus you have to develop your own formula to be the best. And also have to adjust the price to be the most suitable as well
But if there is a monopoly Market incumbents do not have to struggle to compete much. No matter what kind of taste, what level of price, in the end, he will still have a share in the market. because the rules allow it to be so and if so It’s almost no different from a sparring boxer. Lack of innovation and development that will benefit economic growth as mentioned above.
“So what should we start solving from?” the author asked Ajarn Apichart after listening to the intertwined problems.
“that we can escape We have to go back to solving structural problems, for example, we lack innovation. went back to the original story So what can be done to have a good innovation system? had to go back and fix the rules of the competition When solving the rules of competition, it is inextricably linked with the capitalist’s power to control the rules. It is intertwined into a loop. Ask if we will repeat the same pattern or not. We repeat the same steps all the time. We loop all the time. Don’t ask if we’ve dropped out or not.” (Laughs)
The answer that floats in the wind
How to recommend There really isn’t any advice.
We asked a question that even Ajarn Apichart wasn’t sure of the answer.Life advice for the new generation who are facing this problem.”
“must be more patient than my generation Because my generation comes with opportunities. We, students who graduated from Thammasat University in grades 2.1 – 2.2 still find work easily. Your life will be more difficult.
“OIt spins much faster than in my era. How are you going to keep up with the world? Not to mention interfering with the world that makes no sense in many matters, just how to keep up with the world is tiring. This I returned to the original saying. I was fortunate to die before…”
After listening to Ajarn Apichart’s answer I can’t help but be reminded of a song that asks nine questions, but all of them have the same answer – floating in the wind.
/ How many times must a man look up before he can see the sky?
And how many ears must one man have before he can hear people cry?
Yes, and how many deaths will it take ’till he knows that too many people have died? /
/ How many more times does one have to look up to see the vast sky?
How many ears does one person need? To be able to hear people crying?
How many more deaths does a person have to see before he realizes that too many have been lost? /
/ The answer, my friend, is blowin’ in the wind.
The answer is blowin’ in the wind. /
/ The answer, comrade? It was floating in the wind.
The answer flew in this wind… /
Even after almost 60 years have passed, the song’Blowin’ in the Wind‘ created by Bob Dylan (Bob Dylan) is still relevant to the times.
as well as the way out of the boiled frog crisis His answer must be floating in the wind…
Tags: Apichat Sathitniramai Criticizing Thai Economy Frog Boiling Pot-