RESPECTED economist Dr Supavud Saicheua said in a recent Voice TV streaming television channel that even though the Thai economy is projected by Kiatnakin Phatra Research to slump by -6.8% this year, it is hoped that the situation will improve in the second half leading to 15 million tourists flocking to Thailand which would strengthen the country’s strongest economic engine.
Focusing on the Thai government’s handling of the dire coronavirus crisis, about which he has written a book entitled “Beating Covid 19” to help the public better understand the pandemic amid a flood of information pouring in everyday, Dr Supavud said tourism is the only engine running well with the others just staying stationary.
In fact the Thai economy had already weakened from the third quarter of last year when the auto industry started laying off workers.
He pointed that the locked down economy has to be reopened after April 30 as the country cannot hold out any longer.
He disagreed with imposing a 24-hour curfew, saying that it would just add a burden to the people when the government should in fact complete testing those suspected of having contracted this disease.
Equally important is that the focus right now should be on both parts, with economy too needing equal attention as the reduction of the Covid-19 infection and fatality rates.
The pandemic has hit the Thai economy in two ways, with one being knocking the poor people who have so little money and get shoddy health care very hard and the other dampening all key economic engines.
In shaky position are the trade and service sectors which form 60% of the GDP, exports that are expected by Kiatnakin Phatra Research to plunge by 10% this year, while tourism, which forms 12% of GDP, has shrunk by 90%.
Meanwhile workers in the informal service sector total around 20 million with half being farmers. However it is feared that 5 of the remaining 10 million will be jobless this year.
This total is higher than during the Asian financial crisis of 1997 when just two sectors, property and finance, were hit,
With the big hope for ending this global pandemic being a vaccine and this expected soonest to come through by May next year, Dr Supavud urged the government to adopt a three-pronged strategy to take the country forward.
First and most importantly is ensuring that the number of infected people does not rise so that no additional lockdowns would be required.
Secondly monitor the global economic direction and if globally things improve then so would Thailand.
An optimistic view is that the US would succeed in controlling the pandemic by the end of August because if not this viral disease could worsen when the cold weather returns.
Europe would likely also succeed in doing so which would generate demand for goods and help lift Thai exports.
The third, and the toughest step that the authorities have to take, would be rearranging the distribution of national resources.
An example is the tourism sector which in the days before the coronavirus pandemic the estimation was 40 million visitors and an annual growth of 5%.
But even should this sector bounce back as expected, total number of visitors would be 20 million but growth again at 5%.
This would leave excess capacity of from 30 to 50% in this industry.
During the 1997 economic crisis it took two years for industrial, service and agricultural sectors to absorbs around 1 to 2 million people left jobless. Significantly agriculture then formed 20% of the GDP but today it is 10% so would not be able to help much.
Dr Supavud suggested that the government focus on building up health tourism because Thailand has good medical services and delicious food.
The auto industry would see a jump because people would shift from public to person transport to maintain social distance. However this industry has to quickly switch from petrol to electric vehicles which are what will be in greater demand in future.
Dr Supavud talking to the Press recently.
Report written by Nina Suebsukcharoen