The research headlines about Thailand being the next Japan have been going around research desks for the past 6-12 months, you can read the content for some info but in the end the key takeaways that we’ve had regarding this similarity is that there are two sectors that should perform well, first being convenience stores and the like and second being healthcare. The biggest risks come from property and banking as 1) there will be less demand for new properties and 2) As a result of this less demand for mortgages.
Enjoy the article.
“It’s Japan,” says one veteran observer of Thailand’s economy. “It’s got Japan’s demographics from 25 years ago, [and] it’s on the Japanese path of zero inflation, very low interest rates and a big current-account surplus.” By 2022 Thailand will be the first developing country to become an “aged” society, according to the BoT, with more than 14% of its population over 65. The proportion of elderly is rising faster in Thailand than in China.
Unfortunately, Thailand’s economic policymakers also exhibit some of the macroeconomic passivity that once paralysed Japan. The BoT has not cut interest rates since April 2015. At the BoT’s most recent meeting one member even voted for an increase, lest people grow too accustomed to easy finance.
In the absence of monetary easing, Thailand must rely on more expansive fiscal policy. Unfortunately public investment, which shrank by 1.2% last year, has been beset by backtracking and delays.
Thailand is also moving a little closer to Japan in its growing antipathy to immigration. The government last year imposed tough penalties on illegal migrants, many of them from Vietnam and Myanmar, who are viewed as stealing jobs, not rejuvenating an ageing workforce.
  1. japan was defeated in WW2. Immediately thereafter USA helped them rebuild but what really happened to propel Japan into the #2 economy was the Korean War. USA did not want to transport all the supplies needed from USA to Korea. So what did they do? They bought almost everything from Japan. That was the beginning of becoming #2. USA also helped them significantly with quality. I knew some of the people who went to Japan to help them is all the modern supply chain management processes.
    Japan became #2 world economy because of USA war in Korea and they had smart people who learned and changed many processes.

    • More than that, been reading How Asia Works by Joe Studwell, shows that the governments in North Asia did a great job at land reforms thereby providing their citizens with the ability to 1) grow agriculture 2) save capital 3) reinvest it 4) grow capital 5) become consumers; then the modern supply chain came in. Arguably explains why Indonesia and the Philippines are the messed up economies that they are today. Thailand isn’t too far away from being a mess either.

  2. besides the possible similarity of demographics to japan 15 years ago i really do not see any similarities between japan 15 years ago and thailand now – neither economically nor politically…

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