As Thais all over Thailand are suffering economically due to a large drop in GDP as a result of Thailand’s lockdown over a panic about COVID-19, the future of the Thai economy is dire.
Thailand’s economy is reliant on tourism more than any other country in the region with airlines, hotels and tourist-related businesses the most affected sectors of the Thai economy.
The country already has the worst performing economy in Asia.
This week, Kirida Bhaopichitr, a research director at Thailand Development Research Institute (TDRI), said the Institute expects the Thai tourism industry to begin recovering in late 2021 after a COVID-19 vaccine was rolled out.
Along with that supposed recovery she seems to be intimating the Thai economy will recover right along with it.
There are two glaring errors about this statement, however, that not only make Khun Bhaopichitr someone to ignore, it also seems to point to TDRI’s lack of understanding about an economy and how Thailand’s complete lockdown for international tourists will destroy theirs.
A vaccine for COVID-19
Many governments, including the Thai government, seem to be basing their hopes of an economic recovery on a vaccine for COVID-19. Something that is ignorant at best and beyond stupid at worst.
Flu vaccines have been pushed by governments and drug companies since they first went on the market in the 1930s with large percentages of some countries’ populations getting them.
At best, a flu vaccine is only 45% effective throughout the general population. New versions also have to be developed twice a year as new flu strains emerge, thus rendering many vaccines even less effective.
Michael Osterholm, an infectious disease epidemiologist who led the Center for Infectious Disease Research and Policy 2012 review on flu vaccines, recommended getting the flu vaccine but criticized its promotion, saying, “We have overpromoted and overhyped this vaccine…it does not protect as promoted. It’s all a sales job: it’s all public relations”.
In other words, if you believe the words of Big Pharma, a COVID-19 vaccine will be highly effective. If you believe the epidemiologists that study it, it will not.
If the flu vaccine is not even effective for 50% of the people that get it then, why does the TDRI believe there will be a magical virus by the end of next year that will completely eradicate COVID-19?
Particularly as the COVID virus is mutating all the time.
Up to 60% of Thai businesses related to tourism will close in the next year
With Thailand in lockdown against international tourists, the sad truth is there will not be the same Thai tourism industry left by the end of 2021.
Up to 60% of all businesses related to the tourism industry in Thailand are expected to go bankrupt by sometime in 2021. Particularly if the lockdown continues beyond another few weeks.
Up to 22% of Thailand’s GDP is based on tourism, and a large percentage of that is on international tourism as foreign tourists contribute over 2.2 trillion baht to the Thai economy every year.
When Spain’s economy contracted dramatically in 2008 and set the country on an economically catastrophic course for more than a decade, their GDP had fallen by 13%.
Spain’s economy depends on tourism as much as Thailand’s and their international borders were not shut down.
It is horrific, therefore, to imagine how much worse Thailand’s economy will be in 2020-2021 with a possible up to 20-22% contraction in GDP as Thailand’s lockdown continues.
Of course, domestic tourism in Thailand will pick up some of the slack but, in reality, not much of it. Especially as, even after the Thai government has begun to encourage Thai tourists to travel, many are still staying at home.
After all, Thais by nature are some of the world’s most fearful people. That comes from living under military dictatorship for much of the last 100 years and, thus, being told what to do and when.
That fear is currently leading to a contraction in the domestic tourism industry in Thailand not an increase as, not only are Thais afraid of leaving their homes to go on vacation due to the government’s scare tactics over COVID-19, but due to the declining economy many also do not have the money.
As more and more tourist-related businesses lay off Thais, domestic tourism in Thailand is likely to fall further.
Thai baht and exports
Contributing to Thailand’s dire economic outlook for 2020-2021 even more, the Thai baht is also too strong. Thai exports, therefore, fell to their lowest levels in four years in January through May of this year.
This means, due to the global economic crisis as a result of the COVID-19 panic, Thai exports are projected to continue to fall as countries around the world look for cheaper options due to the strong Thai baht.
Thailand is currently the 20th largest export economy in the world with rubber, rice, computers, jewelry, soybeans and other food products high on the list of exported products.
This could also change if the baht remains at its current strength through 2021, thus damaging the Thai economy even further.
International tourists to Thailand in 2021-022
Of course, with Thailand’s rapidly declining economy in 2020-2021, what this will probably mean for international tourists when Thailand’s borders do eventually open are bargain basement prices for airfares, hotels and tours.
Shopping will also be cheaper as millions of Thai businesses will be desperate to attract foreign tourists.
That, however, does not help Thais or the Thai economy for the foreseeable future as the Thai government continues the almost 100% lockdown for international tourists and continues to tell them to be terrified of a virus that does not kill even 1% of the people that contract it.