Redefining Thailand's Economy

Koktail Magazine

27 Jun 2023

The key buzz word that arose from the 2022 APEC Summit in Thailand that is going to affect the structure of the entire economy was “Bio-Circular-Green (BCG) Economy Model”.

          In a nutshell, the Bio-Circular-Green (BCG) Economy concept is set to be a post-pandemic growth strategy where science, innovation and technology are applied to promote the efficient use of resources, maintain and restore our ecosystems, and reduce waste. It aims to build a system where the world—through a whole-of-society approach—can survive and grow, and address all the environmental challenges for a sustainable planet.

          More easily said than done, you may think. Just for the record, Thailand’s economy has been quite the roller coaster ride over the past half a century.In the late 1960s, school children were taught that Thailand’s top exports were teak, rice and tin. During the following three decades, Thailand’s economy boomed at an average annual rate of 7.5%, slowing down to 5% or less from 1999-2005 following the Tom Yum Kung Crisis, or the Asian Financial Crisis, graduating from teak and rice exports, to agriculture, manufacturing and services. 

          Eventually, manufacturing faced stiff competition from Thailand’s own regional neighbours, and we began to rely mainly on travel and tourism, our strengths being our vast natural and cultural resources. However, the unbridled drive for tourist dollars led to unchecked exploitation and eventual decline of the natural environment. Though not the only culprit—over-fishing has also destroyed the healthy marine ecosystem as well as coral reefs—tourism can be considered a double-edged sword if no control and management measures are implemented. During the Covid-19 pandemic locals at the popular Railay beach in Krabi Province noticed the re-emergence of manatees, dugongs, reef shark and turtles, as well as the revived health of the coral reefs.

           The World Bank Thailand overview indicates that a sustained economic recovery will require, amongst other things, the need to “explore more environmentally sustainable and efficient approaches to economic production.” Therefore, it is not only a welcome sign, but also a necessary step, that the Thai government has set as its national development and post-pandemic recovery policy the Bio-Circular-Green (BCG) Economy Model which will turn Thailand’s comparative advantage in biological and cultural diversity into competitive advantage. 

          The Thai government has already made headway into the BCG Economy Model. One of the most ambitious projects to date, with an investment of 3.4 billion baht, is the construction of the Bio Base Asia Pilot Plant (BBAPP), the multi-purpose biorefinery pilot plant in the Eastern Economic Corridor (EEC) in Rayong. Slated to begin operation in 2024, it is a joint venture between the National Science and Technology Development Agency (NSTDA) and the Belgium-based Bio Base Europe Pilot Plant (BBEPP).

          BBAPP is expected to create an infrastructure to support Thailand’s capability in processing agricultural products and increase the value of farm products for use as raw materials in pharmacies, food additives, cosmetics, and other biomaterials, through the use of technology. As the first pilot plant in Thailand and ASEAN, it is in a position to give Thailand an edge in developing and scaling up sustainable bio-based products and processes. As a top producer of sugar cane, cassava, oil palm, Thailand has over 40 million tonnes a year of biomass at its disposal that has not been utilised. This is an opportunity to use advanced technology provided by BBAPP to convert biomass to energy, chemicals and biomaterials, adding value to crops and their by-products. 

          In the automobile industry, known for its contribution to carbon emissions, the Thai government has made a push to make Thailand an electric vehicle (EV) production hub in the ASEAN region, with EVs accounting for at least 30 percent of domestic vehicle production by 2030. This is being done through an EV subsidy programme since September 2022, as well as tax incentives for EVs including excise, road, and import tax reduction. 

          That is not to say that small and medium size enterprises cannot switch to the BCG Economy Model. All it takes is the will and a concentrated effort, adjusting the mindset from making profit the top priority, towards the need and desire to balance earnings with responsible practices and concern for the environment. The following social entrepreneurs are doing just that. They have embarked upon their journeys to bring balance into the economy, eliminating the exploitation of resources, looking outwards towards mutual benefits for society and nature with greater compassion and care, rather than inwards to themselves for purely financial gains. And they have done this in their own individual ways, some through trial and error, but gaining respect, know-how, and a win-win situation for all.

          Through embracing and implementing the BCG Economy Model on every level, from government subsidised mega-projects to local SMEs, Thailand hopes to inspire all the 21 APEC member economies with a new environmentally friendly and responsible business code of conduct, creating awareness in all stake-holders that everyone is accountable for their future, and indeed the future of the country—and the world—as a whole.