11 July 2024

In over six months in office, Prime Minister Srettha Thavisin has earned kudos for his efforts to win back the confidence of international investors, but there’s little else to show for all the travels and meetings.

The country’s image was undoubtedly damaged by the 2014 military coup and a military-backed government, and the PM has been working hard to rebuild confidence and credibility.

Srettha has been proactive in reaching out to many world leaders – politicians and investors – to secure investments in Thailand.

With many years of experience running a successful business, and fluency in English, he has engaged the global community with confidence, something his predecessor, General Prayut Chan-o-cha, lacked.
Soon after his trip to Australia, Srettha flew to Germany and France – key members of the European Union and one of Thailand’s major export markets and source of foreign direct investment.

It remains to be seen to what extent Srettha’s visits could serve as a catalyst for a free trade agreement. The EU has moved faster than Thailand in developing its low carbon economy, which could adversely affect Thai exports. Strict green measures put in place by the EU could prevent Thai products access to that large market.

Srettha is also negotiating with the EU to waive tourist visa requirements for Thai passport holders.

Wooing foreign investors

The Srettha government has tried to find flagship projects that could impart momentum to Thailand’s tardy economic growth. The PM remains enthusiastic about persuading international investors to pour money into his proposed land bridge project connecting the Gulf of Thailand and the Andaman Sea on Thailand’s west. This ambitious 1-trillion-baht initiative has not drawn any strong commitments from foreign investors.

Srettha last month met with Cambodia’s Prime Minister Hun Manet  in Bangkok. They discussed potential joint oil and gas exploration – a joint venture long overdue – in an area of the Gulf of Thailand where both have overlapping territorial claims.

The areas have huge reserves of natural gas that could provide crucial energy supplies to both countries that are net energy importers. So far there is no clear time frame on when they would sign agreements for joint energy exploration.

Efforts to reopen tourism access to the Preah Vihear temple from Thailand has also been pushed to help boost tourism in both countries.

Visa breakthrough with China

Srettha has notched up one major success in signing a permanent free-visa agreement with China, which came into effect from March 1.  Thailand appears to have regained the confidence of Chinese tourists, reflected in the increasing number of arrivals in the first two months of 2024.

During his visit to the United States in November to attend the APEC Summit, Srettha met with many world leaders and US businessmen, including executives of Amazon Web Service, Google and Microsoft who have promised investments in data centers. These US corporate giants have made commitments to invest since the time of the Prayut government.

There has, however, been no breakthrough in investments in the high-tech sector, which Srettha has been pushing. None of the giant chip-making companies like Intel, Nvidia, Samsung or Taiwan Semiconductor Manufacturing Company have shown any interest in setting up plants, leaving Thailand stuck in the declining electronics industry.

Limited hopes
Aat Pisanwanich, an economics analyst and senior consultant at Intelligence Research Consultant Co, said he would give Srettha a score of six out of 10, for the road shows on several occasions, though they may not have led to concrete achievement.
Srettha is just doing a routine job as part of the government, and spending time on unsound schemes, such as the 500-billion-baht cash handout and land bridge project, he said.

“I don’t think Srettha would be successful in making Thailand a regional hub in many areas, including aviation,” Aat said. He was referring to a recent Srettha speech outlining his government’s vision to make Thailand the hub of the region in eight areas – agriculture and food, aviation, tourism, logistics, future mobility, digital economy, wellness and medical, and finance.

The Thai economy is bogged down by structural flaws, such as an aging society, huge inequality, shortage of highly skilled labor, declining competitiveness of the private sector and weak institutions. In addition, Srettha has to deal with the limitations of a coalition government.

Comprehensive reforms have not been on Srettha’s agenda. The Pheu Thai Party campaigned on populist policies during the 2023 election. In comparison, the opposition Move Forward Party has proposed reforms to the tax system, the military, education and social welfare.
Many critics are worried that Srettha might have limited political clout, because of the influence of former prime minister Thaksin Shinawatra, the de facto patriarch of the ruling Pheu Thai. Thaksin is himself deemed by some as a political stooge of the military-backed elite who allegedly still control the elected government.
“This government is not better than the previous bad one,” said Sulak Sivaraksa, a veteran social activist in a recent interview to Today news.

By Thai PBS World’s Business Desk