Vietnam’s Rapid Rise and Thailand’s Search for Direction

Vietnam’s steady economic ascent is no longer a distant talking point. It has become a concrete challenge for Thailand. In boardrooms across Bangkok, references to Vietnam increasingly surface in strategy discussions. The concern is legitimate: economic forecasts suggest Vietnam could surpass Thailand to become Southeast Asia’s second-largest economy in the early 2030s.

Recent corporate moves highlight this shift. Apple has expanded smart-home and wearable device production in Vietnam, reinforcing the country’s growing reputation as a regional technology hub. Meanwhile, Chinese tourists once a lifeline for Thai tourism are showing greater interest in destinations such as Hạ Long Bay, Da Nang, and Phú Quốc. Although Thailand aims to attract higher-value visitors rather than large groups, the question remains: What’s next for Thailand’s economic vision?

A Leadership Gap and Outdated Visions

Prime Minister Anutin Charnvirakul has acknowledged concerns about Vietnam’s rapid growth. His administration’s flagship project, the Kra Isthmus Land Bridge represents an effort to position Thailand as a logistics hub connecting the Indian and Pacific oceans. While the plan is ambitious, some analysts argue it symbolizes the search for a clear and transformative national strategy.

Thailand’s economic success in the late 20th century was built on political stability and foreign investment during a volatile regional era. That foundation fostered decades of prosperity but also created complacency. Today, the nation must contend with overreliance on tourism and slower innovation in manufacturing.

Why Vietnam Is Winning?

Vietnam’s edge lies in its adaptability and policy consistency. Competitive labor costs, a young workforce, and government incentives have made the country a production magnet for global brands. From semiconductors to consumer electronics, multinational firms now see Vietnam as an integral part of their “China plus one” strategy.

Thailand, by contrast, has been slower to establish leadership in new growth sectors such as electric vehicles, renewable energy, and biotechnology. Policy hesitation including the collapse of the casino reform proposal earlier this year has created uncertainty among investors seeking clear direction.

Reclaiming Economic Momentum

If Thailand wants to stay competitive, it cannot afford incremental steps. It needs initiatives that align with global economic trends. Here are four strategic directions:

1. Reinvent Manufacturing with High-Tech Hubs
Encourage high-tech clusters and investment in automation, electric vehicles, and semiconductor supply chains.

2. Leverage Tourism for the Luxury and Wellness Market
Strengthen Thailand’s wellness and medical tourism market, focusing on sustainable, high-value experiences distinct from neighboring countries.

3. Accelerate Green and Digital Transformation
Expand renewable energy commitments, transparent carbon goals, and smart-city projects to attract ESG-oriented investors.

4. Regulatory Reform and Investor Confidence
Simplify business processes, enhance transparency, and ensure predictable tax frameworks to restore investor confidence.

Lifestyle and Long-Term Attractiveness

Despite its current challenges, Thailand retains a comparative advantage that is not easily replicated: its quality of life. The Thailand Privilege Card program, restructured from the Elite Visa scheme in 2023 offers long-term residency and lifestyle conveniences for professionals, investors, and retirees. While not a substitute for deeper economic reform, such initiatives support Thailand’s appeal as a stable base for global citizens seeking regional opportunities.

As Vietnam advances industrially, Thailand continues to embody a refined balance between lifestyle, connectivity, and opportunity. The country’s next economic breakthrough may take time to shape, but its enduring strengths from its infrastructure to its cultural magnetism provide a foundation that remains deeply relevant to the future of Southeast Asia.

Source: Monocle