All countries around the world face the daunting task of reinvigorating their economies as the the COVID-19 pandemic slows. The last three to four months have been unprecedented in modern times and while no one really knows how the virus’ spread and it’s economic impact will play out, some countries will have a tougher time getting back to pre-Coronavirus growth levels than others. Thailand’s long road back will be difficult as the kingdom relies heavily on tourism.
The Thai Ministry of Foreign Affairs has been talking a lot recently about their plan to help stabilize the country in the short term, and diversify bit for growth in the future.
On easing expense burden, water and electricity bills in all households were waived or discounted for three months. Personal and corporate income tax filing and payment deadlines have been extended. Withholding tax rate was reduced from 3 to 1.5 percent for six months. State properties rental fee that are used for residential and agricultural purposes will be exempted for one year. Furthermore, financial institutions are to postpone clients’ payment of loans for cars, motorcycles and housing.
Adding revenue is more challenging since all the engines of economic growth are nearly paralysed. The Thai government, like government all across the globe, have found themselves in the position of being the only source of cash to fund economies.
In the kingdom this has included programs where laid-off informal workers have been receiving 5,000 baht to compensate wages for three months, while those registered with the Social Security Fund will receive 70 per cent of their wages for up to 200 days. A 40-billion baht loan programme will enable those eligible to obtain a 10,000 baht emergency loan with a monthly interest rate of 0.1 per cent. At the same time, SMEs can apply for a low interest loan from the Government Savings Bank and SME’s Bank. The government has also approved a 150 billion baht budget for the distribution of 15,000 baht to ten million registered farmers.
Measures to sustain the economic sectors include the initiative for the Bank of Thailand to provide 500 billion baht of soft loans to financial institutions so that they can offer loans to certain SMEs. Another one trillion baht has been allocated to resuscitate sectors from agriculture to tourism. Moreover, Thailand is investing in human resources by providing training in necessary skills such as language training for tour guides and business management for entrepreneurs.
Most importantly, the government has gradually relaxed certain restrictions in phases since May 3rd, to let businesses revive. The decision was made based on the satisfying outcome in controlling COVID-19. The first group of establishments to be back in service included restaurants, food stalls, street vendors, markets, hair salons, healthcare facilities and golf courses. Consequently, the government permitted shopping malls and larger businesses to re-open.
While the prospect for Thailand in overcoming COVID-19 may appear promising, all the roads to economic recovery hint rocky hurdles. Gurus have already forecast a bleak annual growth for Thailand and around the world. Nonetheless, all sectors are taking advantage from this “time out” to make necessary preparations for the post-COVID-19 landscape.
COVID-19 has become an accidental accelerator for Thailand in redesigning its future towards a more innovative and sustainable economy, a plan that Thailand has been pursuing for some years. In the absence of tourists, Thailand is improving the quality of tourism services by developing technology-based solutions and expanding e-commerce applications. Thailand’s nature and national parks entered a “spa phase,” and have been restored to a pristine condition. Don Mueang International Airport in Bangkok is undergoing renovation. With social distancing in mind, the Tourism Authority of Thailand is targeting smaller tourist groups, focusing on quality over quantity, and enhancing health tourism.
Furthermore, Thailand is putting more efforts in research and technology, particularly in innovative medical treatment and solutions. Thailandnow have assistant robots and telemedicine to help doctors and nurses take care of patients from a distance.
Thailand has manage the medical side of the pandemic pretty well, and economically they hope they also have the right prescription. Time will tell, how well Thailand succeeds, but for a country with a heavy reliance on tourism, they’ll need to both diversify into other areas and be resilient until global travel once again resumes.