Thailand 2023: Changes in policial landscape and diplomacy

In 2023, there were many changes in Thailand's political situation and socio-economic landscape. The parliamentary lower house elections in May altered the country's political structure. In August, Seta was elected as the 30th Prime Minister in a parliamentary vote. Faced with economic development slowing down, the new government, led by the Phat Thai Party, proposed several economic stimulus measures and adopted a more pragmatic approach in foreign affairs.

At the beginning of 2023, as the world emerged from the shadows of the COVID-19 pandemic, Thailand had high hopes for its economic development. However, due to the global economic downturn, the country's economic growth was slow. The tourism sector, contributing 11.5% to Thailand's GDP, experienced a decline, with 24.5 million tourist arrivals in 2023, significantly lower than the 39.8 million in 2019.

From May to the end of August, the extended period of government formation after the elections led to several months of governance vacuum, impacting the economy. The annual government budget was delayed, hindering government investments and causing a sharp decline in currency circulation. Thailand's household debt reached a historic high, and small and medium enterprises faced difficulties, requiring additional funds.

Facing the challenge of "low growth, high debt," Thailand's economic growth in 2023 was weak. The economic growth forecast for this year was revised down to 2.5%, with a range of 2.7% to 3.7% expected in 2024. Seta candidly stated, "Thailand's third-quarter GDP growth is 1.5%, the situation is very bad, and we are striving for investments from around the world." Confronting the economic struggle compared to neighboring Southeast Asian countries, the Phat Thai government proposed various economic stimulus measures, focusing on stimulating consumption, addressing the cost of living crisis, and attracting foreign investment.

To boost consumption and market vitality, Seta mentioned the possibility of implementing a plan to distribute digital wallets to middle and low-income Thai citizens starting in May next year. The plan would provide a 10,000 Thai Baht consumption subsidy to adults with a monthly income below 70,000 Thai Baht, injecting 500 billion Thai Baht into the economy. The latest referendum results indicate that 70% of Thai people approve of this plan. However, it still requires more rounds of parliamentary debate and several months to be officially approved. The implementation process may still pose political risks, affecting the stability of the Seta government.

Despite the economic challenges in Thailand this year, with a solid and stable economic foundation, the country's economy may accelerate its recovery in 2024 compared to 2023. The revival of the tourism industry is a crucial supporting factor, and Thailand's export sector is also expected to resume positive growth.

In terms of diplomacy, Thailand faced challenges in 2023 due to domestic political restructuring and frequent global geopolitical conflicts. As the second-largest economy in Southeast Asia, Thailand has traditionally pursued a balanced "bamboo" diplomacy, acting as a balancer in regional power struggles. Since Seta's government took office officially in September, it actively pursued a diplomacy that prioritizes practical economic benefits. This included attracting foreign investment from major countries such as China and the United States, as well as strengthening connectivity and economic cooperation with neighboring Southeast Asian countries. Seta sees himself as Thailand's "salesman" and, within three months of taking office, visited major powers such as China, the United States, and Japan.

After attending the third Belt and Road International Cooperation Summit Forum in Beijing in October, Seta went to the United States in November to participate in the 30th APEC Leaders' Informal Meeting. He secured investment commitments of 300 billion Thai Baht from three major US technology companies—Amazon, Google, and Microsoft—and reached preliminary agreements with cutting-edge technology companies such as Tesla. In December, Seta visited Japan to attend the Japan-ASEAN Special Summit, promoting road and bridge projects. Four Japanese automotive companies pledged to expand electric vehicle production in Thailand, with a total investment of about 150 billion Thai Baht.

However, Thailand's diplomacy also had to address security issues arising from geopolitical conflicts. The Israel-Palestine conflict brought unwarranted harm to Thai workers in conflict areas, with 39 Thai nationals killed in attacks, and 32 taken hostage in the Gaza Strip. Despite Thailand's efforts to rescue them, nine individuals are still held as hostages. Additionally, the situation in Myanmar significantly affected the security along the Thai-Myanmar border, with a large number of Myanmar refugees stranded at the border, and some even entering Thai territory.

Sino-Thai relations have been a long-standing focus of Thai diplomacy. In 2022, leaders of China and Thailand reached important consensus on building a more stable, prosperous, and sustainable China-Thailand community with a shared future. During Seta's visit to China this year, he had in-depth discussions with Chinese leaders on cooperation in various fields, reaching broad consensus. China and Thailand trust each other politically, and there is close interaction at all levels, with comprehensive exchanges strengthening. Both countries are accelerating the development of the China-Laos-Thailand connectivity concept, deepening cooperation in areas such as connectivity, trade, and tourism, maintaining a stable and smooth production-supply chain system, and cooperating on transnational crimes such as combating online gambling and human trafficking. This has promoted continuous new developments in the China-Thailand comprehensive strategic partnership.