Question

The GDP p.c. is around 9000 $ in Thailand – a typical mid-income trap situation. Because income levels (including salaries) in Thailand are significantly above countries like Bangladesh, Vietnam and Pakistan; Thailand can no longer compete against Bangladesh, Vietnam and Pakistan in producing and exporting cheap commodities.

How can Thailand overcome the mid-income trap and be one of the rich countries in GDP p.c.?

Answer 1

Thai labor was not seen as cheap in the Thailand economy, which was one of the biggest developments. Thailand is unable to compete with low-wage and low-income Asian countries because of the improvement in wages and quality of life.Moreover, they cannot compete with high-ranking countries like Japan and South Korea.This is known as the Mid income trap.

In order to escape the trap, the government devised various programs and decided to encourage the government in infrastructure and other sectors. The government implemented a deep invest ment in hopes of attracting more foreign investment. This kind of innovation will lead to higher economic growth.

A few months ago, the government announced a broad range of financial plans. It was intended to enable the country to compete with the larger countries. International trade has played a huge role in the Thai economy since the first phase of high-cost public-financed infrastructure projects.In 2016, the export value of goods services in Thailand was above 68% of GDP.