Thai business leaders urge political stability and strategic investments to revive economy

The Thai business sector is increasingly concerned about the nation's political instability, fearing it could erode investor confidence and further weaken the already fragile economy.

Business leaders are calling on the government to avoid implementing socially sensitive policies and instead focus on short- and long-term measures to stimulate purchasing power and invest in infrastructure, rather than relying on ineffective cash handouts.

Thailand's economy is currently facing multiple risks, both domestically and internationally, including a slowdown in economic growth, trade wars, currency volatility, and political uncertainty. These factors directly impact investor confidence and could exacerbate the economic downturn.Sunthorn Sathaporn, President of the Housing Business Association, stated that Thailand's economic situation has yet to show clear signs of recovery, particularly in the capital market, which lags behind other ASEAN countries. This reflects declining investor confidence, necessitating cautious and prudent government policies to avoid long-term instability.

Sunthorn emphasized that previous cash handout schemes, such as those targeting teenagers or the general public, have proven economically inefficient and have drawn public criticism, potentially undermining confidence in the government.

He also cautioned against pursuing socially sensitive policies, like establishing entertainment complexes with casinos, without comprehensive public consultation, as this could lead to political backlash and broader instability.

Despite global stock markets showing signs of recovery, Thailand's capital market remains sluggish, indicating that investors are primarily concerned with domestic factors.

Sunthorn suggested that the government should revise its economic stimulus plans to focus on large-scale infrastructure projects, such as the dual-track railway and the Bangkok-Nakhon Ratchasima high-speed train. These projects could help distribute economic growth to regional areas and stimulate the real estate sector outside Bangkok.

Proposal to Implement Windfall Tax to Increase State Revenue

Another significant proposal is to consider enacting legislation to collect windfall taxes from areas that benefit from government infrastructure investments, such as electric trains, dual-track railways, airports, and expressways. This would provide a sustainable source of revenue beyond traditional tax collection methods.

Additionally, there is a suggestion to expedite the enactment of "property rights-based" laws and extend land lease rights from 30 to 60 years to encourage long-term investment and address concerns over the use of "nominees" in the real estate sector, which remains a point of contention in the economic system.


Concerns Over Potential Impact of Parliament Dissolution on Tourism

Suphajee Suthumpun, CEO of Dusit Thani Public Company Limited, noted that the tourism industry is directly tied to investor confidence. If the parliament is dissolved and new elections are called for justifiable reasons, it may not impact tourism. However, if the dissolution stems from concerning reasons, it could negatively affect the tourism sector.

Regarding potential changes in the Minister of Tourism and Sports, Suphajee believes that while the tourism sector is driven by multiple agencies, including the private sector, any change in leadership should ensure continuity and effective policy implementation.


Addressing Immediate Challenges in the Tourism Sector

The government is currently promoting the development of entertainment complexes, including casinos, which, if successful, would take 4-5 years to complete. However, the immediate challenge facing Thailand's tourism industry is the decline in demand from Chinese tourists, the country's largest market. Efforts should focus on targeted marketing to address this issue promptly.

In April, the number of foreign tourists visiting Thailand decreased, prompting the Tourism Authority of Thailand (TAT) to revise its 2025 target from 38-39 million to 35.5 million visitors. This adjustment also affects projected revenue from international markets, as Chinese tourists are opting for destinations like Japan and Vietnam.


Advocating the "3 Build, 2 Stimulate, 1 Reduce" Strategy

Suphajee proposes the "3 Build, 2 Stimulate, 1 Reduce" approach:

Build Thailand as a Premium Destination: Rebrand the country to attract high-spending tourists with specific travel purposes, such as medical and wellness tourism, aligning with the goal of becoming a regional medical hub.

Build Confidence in Basic Standards: Ensure safety, convenience, and the appeal of tourism products and services.

Build Common Standards: Develop unified standards to meet tourist expectations, similar to the SHA Plus certification during the COVID-19 crisis.

Stimulate Business Adaptation: Encourage businesses to meet various standards, offering continuous support through tax incentives, marketing assistance, and access to funding.

Stimulate Awareness of Sustainability Trends: Promote the adoption of renewable energy and waste reduction practices in the hotel and tourism sectors, with government support to offset costs.

Reduce Business Complexity: Simplify regulations to integrate unregistered hotels into the formal system, ensuring they meet necessary standards.


Enhancing Agricultural Product Prices for Sustainable Income

Somchai Pornrattanacharoen, Honorary Advisor to the Thai Wholesale and Retail Association, urges the government to implement concrete measures to stimulate the grassroots economy, particularly for low-income individuals, aiming to increase long-term income rather than relying on unsustainable cash handouts.

He also emphasizes the need to raise agricultural product prices to strengthen the grassroots economy, which would, in turn, boost local businesses and contribute to the overall economy.

Furthermore, Somchai calls for government oversight of foreign e-commerce platforms that impact Thai businesses, suggesting higher taxes to enhance competitiveness. He also recommends evaluating the benefits of free trade agreements (FTAs) to ensure they positively impact the Thai economy, as the influx of foreign goods under FTAs can challenge local businesses.

“From the private sector's perspective, the focus should shift from GDP growth targets to strategies that address grassroots economic issues, increasing income for rural populations,” he said. “Although restructuring and income-boosting policies require substantial long-term investment, they are crucial for sustainable development, unlike short-term digital wallet schemes.”


Accelerating Domestic Investment in Emerging Industries

Buranin Rattanasombat, President of the Marketing Association of Thailand, notes that the global economic and trade landscape is highly uncertain, affecting economic growth. However, Thailand's strong relationships with Asian countries, the U.S., and Europe present opportunities for collaborative crisis management and public guidance.

He asserts that the trade war necessitates a strategic shift for Thailand, moving beyond export-driven GDP growth. The optimal policy involves domestic investment in emerging industries with potential, transitioning from traditional sectors. Adjusting investment promotion policies to attract high-potential investments can enhance Thailand's competitiveness and elevate its economic structure in the medium and long term.

(2025/05/20-00:00)