A vaccination passport for inoculated travellers, which may be compulsory, could be the key to reopening the world’s sky lanes in the latter half of next year and is something that might well be looked at by authorities in Thailand. However, like everything to do with this virus emergency, there are questions and uncertainties. For now, Thai economic planners have their programme for 2021 and into 2022 which could see the virus closure of Thailand’s borders becoming a period of fundamental change in the kingdom ushering in a new era.
The prospect of Thailand reopening earlier to mass-market tourism in 2021 is still on the cards with a vaccine passport set to be launched in the first half of next year by IATA and taken up by all airlines flying into Thailand. It is a development sure to attract the attention of the Thai government, which despite its cautious approach, does want to welcome more foreign tourists as soon as possible. However, Thailand’s economic planners, who have already pencilled in a resumption of foreign tourism in the latter half of next year, are even going beyond this and are rolling out programmes, in the meantime, which may lead to an economic reset of the country and a boost to efforts to tackle inequality.
Thailand is preparing itself for a gradual and protracted period of recovery in 2021 and into the following year with immediate plans to front-load the disbursement of public funds in the first part of 2021 both in terms of current expenditure and capital investment.
This was explained by the Director of the Bureau of Budget Mr Dechapiwat Na Songkhla, on Saturday, when he said that he expected all government agencies and departments to have spent 60% of their budget by the end of June 2021.
Growth at a range of 2% to 5% next year targeted
It comes as the government is expecting challenging headwinds as figures emerge from the fourth quarter of this year and the first quarter of 2021.
Brexit on the January 1st next, as the UK leaves the European Union, may also have an impact on trade while in both the United States and across Europe, the virus is currently extracting a heavy toll with deaths and lockdowns even as vaccination programmes are rolled out.
Indeed, the havoc wreaked in Europe and the US has justified the defensive posture of Thai authorities in keeping the country’s borders closed at an extremely high cost to the economy and the exchequer.
Minister of Finance Arkhom Termpittayapaisith, last week, predicted a growth rate of 4% to 4.5% for the Thai economy but also said that the number of foreign tourists entering Thailand would not return to 2019 levels until 2024.
Exports will be hit by a rising baht in 2021
In the meantime, Kasikorn Research this week, predicted a growth rate of 2.7% based on a 3% growth in exports next year compared to a 7% contraction in 2020.
It also suggested a modest return to mass tourism in the latter half of 2021 forecasting 5.25 million visitors which is significantly higher than the government’s projected figure for the last 3 months of the year.
The bank projects that these visitors will contribute a significant ฿240 billion to the Thai economy in 2021.
However, the rebound in exports, which the country saw in the third quarter, is already being threatened by a strengthening Thai baht which, midweek, temporarily broke through the ฿30 to the dollar mark and is expected to strengthen further in 2021 as currencies from western countries weaken across the board.
Vaccinations are key to boosting the growth rate in 2021 with IATA travel passport plans for all airlines
The key focus, entering into next year, will be the rollout of vaccination programmes against the Covid 19 virus in all countries and how that allows curbs on economic activity to be lifted.
In Thailand, a programme is expected to get underway in June and be completed by the end of the year.
Another key development may be the introduction of a worldwide vaccine travel passport, now being developed by IATA, the International Air Transport Association.
A rival vaccine passport is also being developed by the World Economic Forum but it is envisaged that the IATA one will be quickly and seamlessly incorporated into the operational networks of international airlines.
Opportunity for Thailand to reopen faster
This may be an opportunity which the Thai government can look at next year and may facilitate a quicker reopening of the country’s borders to international tourism.
This week, Nick Careen, an IATA Vice President for Airport, Passenger, Cargo and Security, who is working on the project, gave some details.
He revealed that the passport will be adapted to a system run by IATA and that it will use ultra-secure blockchain technology to protect user’s privacy and data.
It will store all inoculation information and vaccine information on potential passengers on the transport organisation’s system linked to all airlines.
IATA, which represents all the world’s airlines including those flying into Thailand, is currently developing the facility which will be tested over the opening months of 2021 on IAG Airlines, the international airline group which includes British Airways.
An initial version will be available for Apple phones but it is expected it will be April or May before the service is available for Android and all other phone users.
Travel passport linked to Covid tests and vaccines available to all border control personnel
The passport will be accessed through people’s smartphones and will use a QR code which can easily be scanned by all governments and official agencies at airports across the world.
The service will be free of charge to all airline passengers, with airlines operating under IATA’s umbrella each contributing a payment per passenger to give the system universal momentum.
The information will also be capable of being loaded across the world at all airports and by border control personnel.
Can vaccinated people still carry the disease?
However, the problem with the plan is that while vaccinated people may be immune from infection for an as yet undetermined period from the virus, it is not at all clear if they will still have the capacity to spread the disease.
This week, a top immunologist at Stanford University warned Americans who will be getting the vaccine in a matter of weeks across the United States that they may still be required to wear face masks.
‘A lot of people are thinking that once they get vaccinated, they’re not going to have to wear masks anymore,’ said Michal Tal. ‘It’s really going to be critical for them to know if they have to keep wearing masks, because they could still be contagious.’
Certainly, it will be the second half of 2021 before the doors will open to mass tourism in the kingdom
For now, the Thai government which moved to ease some restrictions on incoming foreign tourist this week by widening the availability and the scope of tourist visas, will rightly be wary of the new IATA vaccination passport but it is something that should be looked at particularly if some authoritative research can be found to show if vaccinated people do not transmit the disease.
Either way, it will be the second half of 2021 before any move to reopen Thailand’s borders to foreign tourism without quarantine and restrictive conditions will be seen, if at all.
Between 4 and 8 million foreign tourists expected in 2021 according to various predictions and estimates
Current government figures are suggesting from 4 million to 8 million tourists next year depending on whether that door reopens sometime at the beginning of the third quarter of 2021 or the last quarter.
It is also very dependent on the state of both the world economy by then and conditions in Thailand.
This includes the extent of the demand that may still exist among world travellers and the value of the US dollar and other western currencies against the baht.
The Finance Minister, Mr Arkhom, has only forecast 4 million foreign visitors for 2021.
Thailand’s economic planners are focused on transforming the economy away from tourism
Thailand’s economic planners are, however, looking even beyond that to a new structure for the Thai economy as the country moves into 2022 with increased emphasis on national development, building competitiveness, security and efforts to tackle inequality.
This is all part of the Thailand 4.0 strategy which foresees transforming Thailand into a high-income economy over the next twenty years including the upskilling of existing workers.
Last week, the PM chaired a meeting of the Centre for Economic Situation Administration (CESA) which approved ฿43.5 billion in social welfare payments which will benefit over 14 million Thais in the first quarter of 2021 with payments of up to ฿4,000 per month.
Foreign tourists may be returning to a changed Thailand as the country seeks a higher income future
This was outlined by Mr Dechapiwat this week and should be viewed with Thailand’s efforts to initiate more comprehensive social welfare payments and supports during the pandemic.
The message appears to be clear.
Even when Thailand does again reopen to foreign tourism, it may well be a fundamentally altered economy and indeed a country on its way towards change, that foreign tourists will return to.