Thailand made headline news worldwide a year and a half ago when its monarch, King Bhumibol passed away. Soon after, the entire country underwent a one year-long mourning period until last year October, when the king was finally cremated. The country, and its people, suffered a loss of whom they called “the Father of Thailand.” He reigned the country for 70 years. King Bhumibol was a unifying symbol for the country’s development and in its economic progression. His Sufficiency Economy Policy was moreover, one of the most advancing evolution in Thailand’s economy.

Above: A Thai lady holds the portrait of the late King Bhumibol in her hands.

The fact that Thailand recovered from the 1997-98 Financial Crisis was a spectacle for nations worldwide. Within years, the country’s economy rebounded back to the state before the crisis and its subsequent development gained a worldwide interest. Many believed it was likely, a result from the late king’s Sufficiency Economy Policy (SEP).

His theory of Sufficiency Economy reformed the economic system of the country. After suffering from the 1997-98 financial crisis, the country began to lead a self-sufficient economy under the SEP philosophy. This middle-way policy, influenced by Buddhism beliefs, considers the overall wellness of the local people, to the community and to the nation as a whole. It encourages people to live in where they only consume what they need without added extravagance. It provides a guide for the government to execute plans and policies to strive towards an outcome that will be beneficial to the overall development of the country. The goal of SEP, is to measure economic progression using GDP but at the same time, reduce poverty and social inequality occurrences.

Early projects under the SEP philosophy largely improved the rural impoverishment in the country. The theory provided an operational framework and foundation for state-owned corporations after the 1997-98 Financial Crisis. King Bhumibol emphasized that the SEP philosophy is not only a theory, but a way of life.

Above: A chart to outline the basis and definition of the Sufficiency Economy Policy (SEP).

A year ago, some predicted that Thailand’s economy will be affected by the king’s death. Indeed, it slowed developments and construction as the country mourned for over a year and thus constraining many business activities.

In 2013, Thailand’s GDP skyrocketed to a $422 billion USD, then moderately decreased until 2016 where it plateaued to 2017’s $407 billion USD.

The Thai Baht has dropped since the death of the monarch in late 2016 from its exchange rate of 35.7 to one US dollar to today’s 31.7.

Thailand has nurtured its manufacturing industry into one of the country’s economic pillar and is determined to become the manufacturing giant and a hub of the ASEAN community. Its automotive and electronic manufacturing industry has since show the most significant amount growth in Southeast Asia. Exports and imports, is now a major factor that sustains the country’s economy. Exports grew by 8.6% at the end of 2017 from the same time in 2016. Imports, on the other hand, grew by an alarming 16.6%. The highest of the 12-month sum of the trade balance reached a 15.2 billion in November. The next goal of Thailand is to reach its S-curve goals, to increase development in robotics, aviation, and logistical services.

The economic progression is steady, but investors are expecting, in turn, a more significant growth.

Many remain skeptical of the economic progression as Thailand emerges from its mourning period. Identified challenges will linger, especially during this changing time as a new Thai monarchy ascends and political instability remains unclear.

Instability in the country’s government and a loss of prestige in the new Thai monarch has scared off private and foreign investors.

Above:  King Maha Vajiralongkorn gives a speech.

Many underlying challenges still occur throughout the country: the agriculture industry faces a number of debts, manufacturing lacks local and educated workforce, demand for education and training rises, state- owned enterprises are under-supported, environmental degradation results from overhauling tourism, and uneven development occurs in the countryside.

The Sufficiency Economy Policy is a philosophy to reach a progressing balance and significant results in the distant future. As projects in the early 2000s were strategized with SEP, the policy has since been recognized internationally with foreign developing agencies. In 2010, with this policy emplaced by the late king, Thailand reduced its poverty rate to the lowest in Southeast Asia. SEP remains the basis of the developmental strategies of the country in order to improve its security, competitiveness, social equality and green growth.

Political fracture and economic challenges places the new monarch in a difficult situation. His father, King Bhumibol, was ahead of his time with his thinking for the Thai economy and he further consolidated a recognition of SEP among leaders worldwide. In 2016, the new monarch, King Maha Vajiralongkorn said, “No matter what problems we may face in our country, we believe that if we work together, we can overcome and alleviate any situation.”

The world, now awaits and watches, as the new monarch makes impression on the nation and if he will continue his father’s legacy to consolidate the SEP philosophy into the country’s oncoming economic development.

Source: Oxford Business Group, Trading Economics, The Economist, The Straits Times, The Nation, CNN