Thai society will become an aging society before the country manages to move up from the middle-income trap, said an economist and a businessman.
Dr Kirida Bhaopichitr, Director for International Research and Advisory Service of the Thailand Development Research Institute (TDRI), has pointed out that according to current projections, Thailand will become an aged-society in about a decade from now, BBC Thai reported on Thursday, 26 May 2016.
The TDRI researcher said that currently the proportion of Thai citizens of working age (15-64 years old) and the elderly of 65 years or above is seven to one. However, it is changing rapidly and in less than a decade the ratio between the two age groups will fall to three to one.
Kirida analysed that if the Thai economy continues to expand constantly at the current rate of about 3.5 per cent on average without structural economic adjustments due to global economic changes, the country will move up the ladder from the middle-income trap in about 20 years.
This means that the country will become an aging society before it becomes a rich country, unlike other neighbouring Southeast Asian countries, who still have large working-age populations.
The TDRI researcher said that with the aging population, stagnant economic growth and the fact that the country is among those with the highest income disparity among higher-middle-income economies, the country will increasingly experience economic problems, especially in maintaining its public welfare policies.
In order to foster economic growth to get out of the middle-income trap, Kirida said that the government will have to increase the industrial sector of the country to 60 per cent of national GDP while developing its agricultural and service sectors with new technologies.
She however warned that further industrialisation might come at the cost of the environment.
Pipat Luangnarumitchai, Assistant Managing Director of Pathra Securities, offered a less optimistic outlook on the Thai economy, saying that with an aging population, depleted natural resources, and economic and political instability, Thailand will find it harder to cope with economic competition in the region.
He said that instead of developing its economy through innovation and technology, Thailand still imports cheap labour from neighbouring countries for its industries, which does not help to develop the economy in the long run.
