This paper has been accepted for presentation at the forthcoming ICGBE to be held in June this year.
Since its landslide electoral victory in 2011, the incoming Pheu Thai administration under Prime Minister Yingluck Shinawatra has sought to introduce a radical new economic policy that aims to lead Thailand out of the Middle Income Trap which fastened around the country as a result of the pursuance of low labour-cost export-oriented manufacturing. Policies have included the raising of the minimum wage, construction of infrastructure to promote linkages with neighbouring countries and markets and the encouragement of offshoring of existing low value-added sunset manufacturing facilities. At the same time, the government has had to contend with the hangover of past policies and circumstances, which require trade-offs and compromises to find least worst solutions. A prime example of this has been the rice purchasing programme, which offers a guaranteed price to farmers above the prevailing market price in the hope that a future increase in demand will enable the avoidance of substantial losses. This paper aims to provide an overview of Pheu Thai’s economic policy as a whole to delineate the strategy and logic of the approach, successes and failures to date and prospects for the future.
Keywords: economic policy, infrastructure, Middle Income Trap, Thailand
John Walsh, Shinawatra University