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Behind the scenes of Thailand’s COVID-19 economic response plan and policy making

            The COVID-19 pandemic has had a devastatingly large impact on the global economy. It has catapulted the world into the worst recession since the Great Depression in 1929, surpassing the economic slump during the financial crisis a decade ago.

            Several international institutions forecast that the global economy will shrink due to disruptions to economic activities and the suspension of international travel. These forecasts indicate the severe economic consequences of the pandemic. At the same time, they also serve as a warning on possible future situations that could affect the behavior and decisions of those involved in economic policy making, whether it is government agencies or private companies.

 

            The International Monetary Fund, or IMF, forecasts that global GDP will shrink by 3 per cent and expects the Thai economy to shrink by 6.7 per cent. The Bank of Thailand predicts that the Thai economy will experience a large contraction of 5.3 per cent, as the pandemic has severely affected the tourism sector, a major source of income for the country. In addition, the pandemic has also battered Thailand’s manufacturing industry and the export of Thai agricultural products, especially Thai fruit, which could not be exported to the Chinese market during widespread border closures.  

            As a result, the sales value of Thai agricultural products is worse than the period before the pandemic, and has lowered the income for producers of agricultural products. This clearly demonstrates global interdependence in economic growth and reflects economies’ reliance on international trade.

  

            In the era of globalization and interconnected trade, economic problems in one country will inevitably affect many other countries, which are part of the global supply chain. Economic vulnerabilities from globalization have been widely discussed and have led to the relocation of production bases to minimize costs and impacts from the US-China trade war. In this situation, policy makers have to find the most suitable approach that serves the interest of their country, amidst the changing international attitudes towards economic integration.

 

Sharing experience on data collection to emerge from COVID-19 disruption

            The COVID-19 pandemic is likely to have uncertain effects on the economy. As such, monitoring the world economy would help us understand and detect any irregularities in the post-COVID-19 period.

            The Department of International Economic Affairs, Ministry of Foreign Affairs, has shared Thailand’s behind the scenes policy making to mitigate the impact from COVID-19 disruption. It has compiled a comprehensive database on important variables to measure the economic impact from COVID-19, in order to recommend, and to implement policies during the period of COVID-19 disruption. This data analysis has been circulated to Royal Thai Embassies and Royal Thai Consulates-General worldwide, to promote the exchange of experiences and information with their host country. The processed information identifies opportunities for foreign investors in Thailand and provides recommendations on how Thai investors should conduct their business abroad. In addition, Thailand continues to support increased international cooperation in target industries that would benefit Thailand’s economy and the region as a whole.

 

            The purpose of a centralized economic database is to enable policy makers to base their decisions on a common set of data. This would facilitate their coordination and brainstorming to resolve the problems of Thai business sectors, which have been affected by the COVID-19 pandemic and have seen reduced rates of growth. It would also encourage policy makers to integrate their agencies’ work, to engage with other countries based on a common data set, and to work together in the same direction.

            At the same time, the Government has also released various stimulus packages to tackle the COVID-19 outbreak, and has shared its best practices in mitigating the impact from the pandemic on the international stage. Many countries are interested in the guidelines and measures implemented in other countries, as they search for the best combination of measures in dealing with the situation. Thailand and fellow ASEAN Member States have continuously exchanged knowledge and experiences throughout the year 2020.  

            In this rapidly changing, disruptive world, the processing and presentation of useful information for decision makers in policy making and operations is extremely useful on two counts. First, it could be used to enhance international economic relations by identifying investment opportunities; and, second, it could boost national economic development by promoting local companies and local entrepreneurs abroad.

 

            The Division of Economic Information, Department of International Economic Affairs, monitors reports on the global economic situation and Thailand’s economy with the aim to compile macroeconomic data and to analyze the future direction of the global economy. The compiled information and analyses significantly contributes to the decision making process of policy makers. It helps them to identify the risks and opportunities for business and industries in various sectors, and to revise guidelines on the pursuit of economic diplomacy according to changes in the international political economy.

Follow up on the impact from COVID-19 on Thailand's economy and the world economy by the Department of International Economic Affairs, Ministry of Foreign Affairs, on Facebook: Globthailand and Twitter: @globthailand

 

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