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Thailand is proving the doubters wrong

IN a little-noted milestone, Thailand overtook Taiwan as the country with the third-largest number of 7/11 stores in the world after Japan and the United States.

It may not seem such a big deal, but the marker was passed at a time when Thailand was emerging from violent and disruptive street protests in April and May.

During that period of social unrest, experts who should have known better started to write Thailand off.

Newsweek went so far as to report: “Of the nations once touted as the Asian tigers, or tiger cubs, including South Korea, Taiwan, Singapore and Malaysia, only Thailand is disintegrating.”

Some disintegration. At the time, just east of Bangkok, Ford Motor Co had launched a major new manufacturing facility that will be completed in 2012. Thailand remains Southeast Asia’s vehicle manufacturing hub, despite periodic political eruptions.

Indeed, everything from 7/11-type convenience stores to giant car-making factories are doing great business. Thailand is booming.

Growth forecasts are revised upward almost daily: The World Bank and the IMF now project that Thailand’s GDP will hit 7.5 percent this year.

And with US$148 billion in its central bank, Thailand has the 10th-largest foreign exchange reserves in the world.

As a result, during the “disintegration”, the Thai baht was one of the strongest convertible currencies in the world. Even at the height of the Red Shirt cataclysm, it was rock solid – unlike the dollar and the euro.

The reason all this is worth emphasising is that many deluded folks still think Thailand’s political volatility has knocked the economy for six. It has not.

When Newsweek wrote that in Thailand “mismanagement and mistakes turned a high-growth democratic paradise into a violent mess”, it could not have been more wrong.

Blindsided by smoke and gunfire, it neglected to appreciate that Thailand is still an economic powerhouse and still posts some of the world’s highest growth rates. According to that sadly diminished news magazine, “Brand Thailand is shattered.”

What unadulterated nonsense. Tell that to Ford and Suzuki and 7/11.

As one of the World Bank’s regional heads told me last week, if Thailand proves anything it is that governments are irrelevant when it comes to
fostering and sustaining a strong economy.

By far the best administration is one that interferes as little as possible. And that is something countries like Laos, Myanmar and Vietnam, where heavy state intervention continues to shackle their progress, should bear in mind.

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