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Thai Economy Struggles Amid COVID Second Wave

Workers decorate window on a high rise building of a renovation shopping mall in Bangkok, Thailand, 03 May 2016.
Workers decorate window on a high rise building of a renovation shopping mall in Bangkok, Thailand, 03 May 2016.

Thailand had hoped the new year would bring relief to its battered economy. But a second wave of the coronavirus has sunk the kingdom deeper into trouble, leaving streets scarred with abandoned businesses and millions scrambling for an income.

The kingdom, one of Asia’s most unequal societies, appeared to have controlled the virus, with just a fraction of the caseload seen in the worst-hit countries. But outbreaks blamed on Myanmar migrants smuggled over the border by Thai officials — as well as clusters at illegal gambling dens — saw a resurgence of the pandemic. Since December 15, 12,000 cases have been recorded, around three times the previous level.

Seventy-six people have died since the coronavirus emerged, according to Thai health officials — a small number compared to the worst-hit countries — but enough to prod the government into widespread closures of bars and massage parlors and placing restrictions on restaurant opening hours.

That has compounded the near total collapse of tourism, which contributed $60 billion to the economy in 2019, as a result of travel restrictions and two-week quarantine requirements. Millions more have lost jobs ranging from trinket sellers to street food vendors who depended on tourists.

Round 1 of the virus forced Rangsan Thaitanadrob to close his shop and seek out customers by turning his motorbike into a mobile store piled high with cleaning products, toilet tissue and surgical masks. Round 2 is pushing him to the brink.

“I work twice as long, and my income is still 60% down. People just don’t have money to buy anything,” said the 56-year-old who provides for a family of five. “There are days I have to rely on fate.”

The Thai economy is expected to record a 6.5% contraction in 2020, according to data released Thursday by the Fiscal Policy Office. It has continued to sputter this month, leaving millions unemployed and desperate for meager government relief payments.

Debt has surged to dangerous highs, experts say, hitting middle- and low-income individuals hard.

“We are seeing a spike in the level of household debt to a record level of almost 90% of GDP,” former Finance Minister Korn Chatikavanij told VOA.

The government injected a record $56 billion stimulus into the economy last year but has pumped in just $7 billion so far in 2021.

The cabinet this week approved a new round of COVID-19 relief for low-income groups. The new package aims to reach around 30 million people with the equivalent of $230 in credit to buy necessities.

Yet, complaints abound over the slow release of previous relief payments and a failure to deliver assistance to Thailand’s populous but poor rural hinterlands.

Thailand's food and drug administration last week approved AstraZeneca's vaccine for emergency use but has yet to grant authorization for that of Sinovac Biotech, of which Thailand has ordered 2 million doses.

“(The) recent tax stimulus package was poorly thought through and likely to be wholly ineffective. Less than half the stimulus fund (has been) dispersed so far,” Korn said. “The government can and needs to up their game.”

Fears over the virus and an emergency law have for now ended a wave of political protests by a youth-led pro-democracy movement that had menaced the government of former army chief Prayuth Chan-o-Cha.

Prayuth seized power in a 2014 coup, and despite reinventing himself as an elected civilian leader, he has maintained a close relationship with the generals.

Facing the unprecedented challenge on the streets, the public health crisis and the economic collapse, critics say his government appears out of ideas.

Thailand, Southeast Asia’s second largest economy, also appears to be running out of luck after more than a decade of political turmoil.

“Thailand’s economy used to be perceived as the Teflon economy in which domestic politics doesn’t have much bearing on the economy,” said Pavida Pananond, a scholar at the Thammasat Business School in Bangkok.

“But after a decade of political uncertainty, we are seeing that we cannot separate politics from economics,” she said, adding that the Thai government lacks “clarity, certainty and vision.”

Thailand is suffering a deeper contraction than its Southeast Asian neighbors, mainly because its economy was more dependent on foreign tourism, particularly from China. In 2019, 40 million tourists arrived. Last year, it was around 7 million.

From closed massage shops to shuttered bars, the streets of Bangkok show the scars of failed businesses. In their place, ad hoc stalls selling cheap clothes, fruit and vegetables have sprung up.

For Bunn, a cobbler who is the only breadwinner in his family of seven, the lack of tourists has reduced his income to just $7 a day. Yet he still cycles long distances through the capital’s empty tourist districts looking for customers.

“It’s not enough to feed my family,” he said. “But this is all I know how to do.”