Here is why I think Thailand might be entering a second consecutive lost decade. The first lost decade, between May 2014 and August 2023 was largely brought about by coup leader Gen Prayut Chan-o-cha, who ushered in a period of relative economic stagnation and uncertainty. He basically, and illegitimately, ruled for nine years.
Fast-forward to the present: August 2026. Consider these news items.
Thailand has just registered the lowest economic growth among major ASEAN economies. The economy grew by just 1.9% year-on-year in the second quarter of 2026. No one is expecting anything markedly better in the months to come, if not in the coming year or two.
Tourist arrivals have declined by nearly 3 per cent so far this year, while tourism is growing in Vietnam and Japan.
Toyota (Thailand) is urging the government to be fair to it compared with Chinese EVs, while Indonesia is publicly urging Toyota to move its ASEAN production base from Thailand to Indonesia, promising many incentives. Indonesia’s Finance Minister, Purbaya Yudhi Sadewa, said last week that Jakarta was prepared to offer incentives to make the country a more competitive production base.
As a result, local media reported on Wednesday that the Thai government may lower excise tax rates for carmakers operating genuine domestic factories and using locally produced auto parts.
But why did the Thai government have to wait until Japanese automotive firms, which have created tens of thousands of Thai jobs over half a century, complained and spelled out that fully imported Chinese EVs enjoy a 30 to 40 per cent cost advantage over Thai-made vehicles?
Indonesia, meanwhile, is doing its best to entice Japanese auto giants to relocate to Indonesia from Thailand.
Speaking at the Gaikindo Indonesia International Automotive Conference (GIAC) in Tangerang, Banten, Purbaya told Indonesian media:
“We will support Toyota, but bring your main manufacturing base from Thailand to Indonesia. I will give you whatever incentives you want.”
Purbaya also questioned why Thailand remains the region’s automotive manufacturing hub, despite Indonesia being Southeast Asia’s largest economy and most populous country.
According to Channel 3 News, Toyota executives in Thailand met senior Industry Ministry officials on Tuesday to discuss the automotive sector’s future, investment cooperation, and maintaining Thailand’s competitiveness as a major production base.
They called for Thailand to overhaul its vehicle excise tax structure. Toyota has said it currently has no plans to move its production base out of Thailand, however, and is urging the government to ensure fair and competitive tax policies.
“The government and Toyota also discussed the sustainable development of Thailand’s automotive industry. Thailand has subsidised Chinese EVs with taxpayers’ money for years, dating back to the Prayut dictatorship. And what has Thailand got in return?” the report stated.
Now, for another sign of Thailand’s declining competitiveness: Thai fixation with Cambodia.
Ultranationalist Thais rejoiced as Cambodian press reported earlier this week that three factories on the Cambodian side of the Thai-Cambodian border would cease operating, partly due to the impact of a prolonged border closure, despite that one of the three factories is Thai-owned.
And in yet another news item today:
Former Deputy PM Plodprasop Suraswadi says he has repeatedly proposed a solution to Nan’s recurring floods, which are ravaging the province at the time of writing, killing two people: build a bypass water channel around the city.
He said he has raised the idea more than 100 times, arguing that, without diverting floodwaters away from the city, Nan will continue to face the same flooding problem repeatedly, Matichon, a sister daily of Khaosod English, reports: “Plodprasop said the authorities need to address the root cause rather than simply deal with floodwaters after they enter the city.”
Well, it seems obvious, yet Thailand is unable or unwilling to commit itself to delivering the obvious preventative measures.
Given all this, at this stage, how many will deny that Thailand is gradually losing its competitiveness and focus?
Many cannot see the big picture.
There is no collective goal as a society—just survival of the fittest. Young, better-educated Thais look for jobs and opportunities abroad.
Is there any serious talk about overcoming the middle-income trap? How about maintaining our status as Southeast Asia’s most visited country, if not setting a goal of becoming Asia’s most visited country? Or becoming a leader in solar technology and energy? Are these too much to set as goals?
How about markedly better road safety within five years? A more equitable society? Anyone? A freer society where people do not need to go to prison or flee abroad for criticising the monarchy? Does Thailand really have any common goal as a society at all at this point?
Distracted by political infighting, conflict with Cambodia, and other crises, Thailand continues to drift, apparently with no serious or meaningful common goal set.
The main opposition People’s Party is more engrossed in trying to bring down the Bhumjaithai government—which, ironically, it originally supported when it voted for Anutin Charnvirakul as PM last year—than anything else.
Growing xenophobia, particularly against the Chinese, Israelis, and migrant workers from neighbouring countries, is becoming apparent. One emergent vigilante group (Thai Mai Thon), cluelessly calling themselves in English “Thai Intolerance”, conducts routine inspections of restaurants, coffee shops, and markets looking for migrant workers or business owners it alleges are operating illegally, and posts its ‘accomplishments’ on social media for all to see.
Basically, Thailand is in disarray, if not lost. When Prayut Chan-o-cha staged a coup in 2014, Thailand experienced a lost decade. Now we may be entering a second lost decade unless we act together and come up with a common goal to work towards
Returning to the impact of the prolonged Thai-Cambodian border closure: even if none of the factories were Thai-owned, it would still be tragic if ordinary people who have nothing directly to do with the conflict lost their jobs — whether Cambodian or Thai. Ultranationalism can make people see others as enemies, or barely human, while ignoring the economic damage that is also affecting their own country.
Or perhaps this is the only common goal most Thais have now: perpetuating Cambodia as our eternal enemy – at all costs.
This writer hates to type these words, but perhaps Thailand is entering its second consecutive lost decade and is in decline.