Economy & Politics

How Thailand beat the virus – and its economy is still suffering

Social distancing at school: Thailand is fighting the virus rigorouslyimago images / ZUMA Wire

Taiwan and South Korea hit the headlines. But the hidden champion in the fight against the coronavirus is Thailand. No local infection has been registered in the Southeast Asian country for more than two months. The World Health Organization (WHO) even sent a film team to document Thailand’s successes for the global public. An honor otherwise only bestowed on wealthy New Zealand.

But hardly a Thai person feels like partying. Despite the successes in the fight against the pandemic, the country’s economy is facing its greatest challenge in decades. The virus will hit the country much harder economically than the 2004 tsunami or the Asian crisis in the late 1990s.

The pandemic has shocked the country’s main industry, the tourism industry. Estimates assume that the industry directly and indirectly contributes more than a fifth to the country’s economic output. This dependency is now taking revenge. The Thai Chamber of Commerce expects the economy to shrink by up to 11.4 percent this year. The kingdom is one of the states that will be hardest hit economically by the pandemic.

GDP quarterly (in%)

source: tradingeconomics.com

The gloomy economic forecast is in stark contrast to the corona numbers, which are astonishing in international comparison: Only 58 people died of the disease in Thailand, and less than 2500 people were infected in Thailand. In Germany, which is only slightly more populous, the number of victims is almost 10,000 and the number of infections is almost 200,000.

The risk of a major outbreak for Thailand was extremely high because of its numerous visitors from China. The first coronavirus infection outside of the People’s Republic was even found in the holiday country: a tourist from Wuhan had brought the virus to Thailand in January.

Keeping your distance is part of the culture in Thailand

But the authorities reacted decisively. They tested a lot, quickly isolated the infected and consistently tracked down contacts. The reasons for Thailand’s success story are not entirely clear: Doctors also consider an advantageous genetic disposition of the Thais to be possible.

Perhaps everyday culture also plays a role. In the Mekong region, people respectfully keep their distance from one another. Instead of shaking hands in greeting, you put your own palms on top of each other to greet you and lower your head slightly – the traditional wai. The discipline with which the Thais have been wearing masks since the beginning of the crisis is likely to have had a positive effect.

One measure has almost certainly contributed to the medical success: the rigorous isolationist policy. The borders have been practically tight for months. Only selected groups have the chance of entry. Even Thai people stranded abroad wait a long time before they can return to their home country. Those who ultimately manage to do so must then be placed in strict quarantine for two weeks – either in a government center or in an authorized hotel.

The isolation works. While infections are found daily in the quarantine centers, the country is otherwise virus-free – apart from the ubiquitous masks, disinfectant dispensers and the call for social distancing. After strict measures between March and May, everyday life is largely back.

However, it is much quieter – the side effect of strict isolation therapy. In Bangkok, actually one of the most visited cities in the world, restaurants and shops are much emptier. Tourist hotspots like Krabi and Phuket are completely extinct. Many shops and hotels will probably never open again.

Poverty grows

Even before the outbreak of the disease, Thailand’s economy had lost momentum. In 2019, the economy grew less than three percent. Too little for an emerging country that wants to catch up with the industrialized nations. The World Bank lamented this year that poverty in the country has increased again. 6.7 million Thai people live on less than $ 3.10 a day. In 2015 it was less than five million.

The country has failed to move up the value chain and become more productive. Instead, competitors like Vietnam have been more successful in attracting direct investments. An already long-lasting drought is also putting a strain on agriculture. Only because of the increasing number of guests, especially from China, the economy grew at all. The greater the pressure to reopen the country.

But hardly anyone dares to predict when wealthy guests will be allowed to return to the country. The population still supports the government’s rigorous course: In a survey in July, 95 percent of Thais were in favor of not allowing foreigners into the country. The fear of the virus is too great – but also of another lockdown, which would put an even greater strain on the economy. And even if Thailand were to open its borders, it is questionable whether foreigners would even want to travel far.

In order to mitigate the worst effects, Thailand’s government is at least trying to stimulate domestic tourism: For example, it subsidizes hotel stays with the equivalent of up to 80 euros. Additional holidays should also encourage the Thais to spend money. This is not yet a sustainable strategy: It would probably be the first time in economic history that a country with more holidays can save itself from a crisis.


Frederic Spohr is the office manager of the Friedrich Naumann Foundation for Freedom in Thailand and Myanmar, based in Bangkok. Twitter: @fspohr


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