Thailand finds itself, at this time, in a part of the world where geopolitical tensions are rising and are already adversely affecting its economy since 2018. The FTI leader warns that the situation must be monitored carefully and contingencies planned for by the kingdom’s leadership as the danger rises.
A top Thai business leader, on Wednesday, described a more insecure and dangerous world than existed before. He warned that it posed real threats to the kingdom’s economy. Kriengkrai Thiennukul of the Federation of Thai Industries (FTI) said planners must constantly monitor and weigh such developments carefully. He noted that many of the strained relationships and flashpoints were in Eastern and Southeast Asia with rising tensions between the United States and China as well as Japan and China of key concern.
The Chairman of the Federation of Thai Industries (FTI), Kriengkrai Thiennukul, has warned that Thailand’s economy in 2023 and beyond is facing unprecedented uncertainty due to geopolitical threats throughout the world.
The industry chief was speaking at a conference on Wednesday organised by the Matichon publishing group at the Pullman Bangkok King Power Hotel in the capital on the future path for the kingdom’s economy.
Thailand’s economy to grow at 3.6% in 2023 although nothing is certain amid roiling world tensions with already weakened world trade and GDP prospects
Mr Kriengkrai started his presentation by suggesting that, currently, economists at his organisation are projecting 3.6% GDP growth for the Thai economy in 2023 despite a more hostile environment for exports and based on an anticipated improvement this year in foreign tourism.
However, he warned those attending about what he saw as ‘ticking bombs’ around the world as the global order that existed up to 2018 has deteriorated beginning with the trade war that commenced at that time between China and the United States which has escalated and now extends into numerous dimensions.
He described how the pandemic crisis has upended global supply chains with many countries now determined to move manufacturing closer to home amid world insecurity with a growing list of potential flashpoints.
No end in sight to the Russian-Ukraine war while tensions over Taiwan are simmering with rival powers now involved in a regional arms race
He referred to the Russia-Ukraine war which contributed greatly to higher energy costs in 2022 sparking runaway inflation.
The business leader noted that the war which began on February 24th last year shows no signs of ending with both sides currently planning offensives.
Mr Kriengkrai told his audience that no one can predict with any certainty, at this time, when the war will end and is likely to be resolved.
He then went on to express his fears relating to a build-up of tensions and arms concerning the Taiwan Strait which last year threatened to erupt amid ramped-up US-Chinese tensions.
The tension between the US and China in the region has now led to several anti-Chinese alliances such as the QUAD alliance involving India, the United States, Australia and Japan with Vietnam, South Korea and New Zealand as associates and the AUKUS pact between the United Kingdom, the United States and Australia.
There is also clearly a build-up of arms on both sides with the Chinese armed forces ordered by the Communist Party leadership to be prepared to take Taiwan in the future by military force while being able to face down any potential American and Allied response.
North Korea, sabre rattling is of concern but Japan’s volte-face on military power in response to Chinese aggression is worrying Mr Kriengkrai
In addition to this, North Korea, emboldened by increasing polarisation between the powers and divisions within the US Security Council, has begun to deploy more intercontinental missiles on the Korean peninsula.
Mr Kriengkrai said the isolated communist state had tested 70 rockets this year alone and fired between 6 and 7 intercontinental missiles into the atmosphere which had travelled long distances.
He also expressed his alarm at the movement in Japan towards rearming and escalating tensions between it and China.
He noted that Japan has begun the process of changing its constitutional framework aimed at providing a more robust response to what it sees as Chinese aggression which has led to a proposed doubling of the size of its armed forces.
He expressed deep concern that the Japanese armed forces were now pursuing a more aggressive disposition than had been the case before, ever since the country adopted its Pacifist constitution after World War II.
Thai industry still faces threats from COVID
In addition to this, he drew attention to ongoing disputes between China, the Philippines and Vietnam in the South China Sea and the constant threat of conflagration in the Middle East.
His message to the conference was that all of these things need to be monitored closely by an open economy and country such as Thailand.
He said that there also remains a lurking threat from COVID-19 which still posed a threat to supply chains, particularly those linked to China.
This year, world trade is depressed with the US economy projected to only grow by 0.5%, Europe projected to just hold its own and Japan projected to grow by 1%.
Cautiously optimistic about Chinese growth
Mr Kriengkrai predicted that Chinese growth would be 4.3% in 2023 although he acknowledged that many saw its potential as far higher in the months ahead. He said he would prefer to wait and see.
He noted that the Federation of Thai Industries (FTI) was projecting 3.6% growth in Thailand this year while the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) had pegged growth in 2023 at between 3 and 3.5%.
The key factor, he emphasised, was the anticipated return to stronger growth and the performance of the foreign tourism industry again in the year ahead.