Democrat Party deputy leader Korn Chatikavanij warned that Thailand risks falling into an economic trap, saying the country has gone from being an economic success story to the “sick man of Asia”.
In a Facebook post, the former finance minister on Monday shared his views on the economic outlook as Thailand hosts the IMF-World Bank Group Annual Meetings for the second time.
The Democrat list-MP said the economic atmosphere is vastly different from when the country first hosted the meetings in 1991.
At the time, Thailand’s economy was growing by an average of about 8% a year following three consecutive years of double-digit growth, boosting investor confidence and encouraging Thais studying and working abroad to return home.
Hosting the meetings then was seen as a reward for the country’s economic success and an opportunity to present itself to global investors, he said.
However, overlooked weaknesses, including a large current-account deficit and high foreign debt, contributed to the 1997 financial crisis six years later, he said.
According to Mr Korn, the atmosphere this time has shifted to questions from foreign observers as the Thai economy lags behind almost all other Asean economies.
He said the country faces structural problems, including a transition to a fully aged society, a shrinking workforce and household debt among the highest in the world.
A policy interest rate of 1% could give the public and private sectors a false sense that their debt burdens are manageable, he said.
“The risk is the country is gradually declining, and it is harder to address because there is no crisis forcing us to act,” he said.
“The meetings present an important opportunity for Thais to ask themselves a question they failed to ask in 1991. ‘If we continue on this path, what will Thailand look like in five years?'”