Thailand and ASEAN: A Case Study of Growth Without Stability in Southeast Asia
Jawad Asaria | John Morozov
The Association of Southeast Asian Nations (ASEAN) is a political and economic organisation of 11 Southeast Asian nations—Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar, Cambodia, Timor-Leste—which aims to promote intra-regional exchange as well as regional stability. Thailand, as a founding member, was promised security and a pathway out of poverty. However, this article asserts that while ASEAN initially delivered trade benefits and development opportunities to Thailand, ASEAN also eroded trade advantages and amplified structural weaknesses for the Thai state.
Since its establishment in 1967, many have celebrated ASEAN as a cornerstone of regional solidarity, with Singapore, a member country, going as far as to say ASEAN is “the most successful regional organisation in Asia.” In many ways, that characterisation holds ground: ASEAN’s trade with China has risen approximately 15% in the last financial year despite having a 258.7 billion dollar trade balance with Europe, and the region boasts a growth of 4.6%, more than double the US’s and triple the EU’s. In a multipolar world, the ASEAN region is especially important to both the U.S. and China; overtures to ASEAN countries by these superpowers are made with shocking frequency. Despite poverty in some areas, Southeast Asia is one of the richest regions in the world, with a rapidly growing middle class that represents a potentially significant consumer market, one which is increasingly more digitally literate and entrepreneurial.
Thailand’s agricultural strength places it apart from the rest of the ASEAN countries, but it is not clear whether ASEAN membership has truly benefitted the Thai economy. Thailand is known as the kitchen of the world, but its export industry is also supported by other materials and produced goods, such as rubber and automotives. ASEAN integration helped to expand Thai export markets, specifically the automotive industry, but it must be mentioned that Thailand already had robust agricultural and rubber industries prior to ASEAN. Its membership did not allow Thailand to develop new industries so much as it provided more of a market to sell Thai materials and goods. When the ASEAN Free Trade Association (AFTA) was created, Thailand experienced an export-driven economic boom. However, even as Thailand was experiencing more economic growth, structural and logistical difficulties persisted. Many illegal workers from other ASEAN countries were exploited, alongside children and urban workforces, in order to meet demand. Since the Thai baht was pegged to the U.S. dollar—the dollar appreciated in the 90s—Thai exports became less competitive. By the end of the decade, Thailand experienced an economic crisis, in part due to unsustainable FDI and asset bubbles that spread out of the whole region. During the 2008 financial crisis, Thailand became the most affected ASEAN country due to its dependence on global exports. The economic downturns that ensued exposed Thailand’s relatively disproportionate sensitivity to global shocks. Furthermore, it reminded the world that Thailand’s membership in the ASEAN may have helped expand export bases, but it has also deepened economic inequality and national dependency.
Being an ASEAN member has not alleviated Thai internal security issues and Thailand’s numerous border disputes have sowed precipitous distrust amongst its allies. Whilst ASEAN was founded to counter communist influence and create regional stability, communist insurgencies continued region-wide post-ASEAN. One of the central aims of ASEAN was also to refute Chinese influence but Thailand specifically was among the first ASEAN countries to normalise diplomatic relations with China, reflecting the common motif of Thailand breaking with ASEAN policy. In the 1970s, domestic turmoil in Thailand, such as the toppling of the military regime, came to pass whilst Thailand was a member of ASEAN. In 1991, the civilian government was overthrown by a military officer who had previously orchestrated a coup, leading to brutal crackdowns and widespread violence, until 1997 when the new Thai constitution was written. In the late 2000s, Cambodia and Thailand, two ASEAN members, engaged in a series of border skirmishes that claimed dozens of lives and displaced thousands, with many countries in the ASEAN community viewing Thailand as a suspect member. Domestic political fighting and protests have undermined Thailand’s status as an ASEAN member, sometimes very visibly such as when an ASEAN summit in Thailand was disrupted by protestors. Conversely, it also seems to be the case that Thailand’s membership in the ASEAN has not protected Thailand from internal or external security threats.
Structurally, as labour costs and regional regulations increase in Thailand, Vietnam seems poised to overtake Thailand’s traditional industries. The fact both countries are members of ASEAN may benefit a country like Vietnam which has a lot to gain but places Thailand, a country with a lot to lose, in the firing line. ASEAN membership has not been able to mitigate threats Thailand sees which are based in its geography, history, and institutional weaknesses. Early ASEAN membership did not address Thailand’s structural problems and, if anything, the 1990s boom period for Thailand only served to more openly display such weaknesses. Thailand’s developmental model was based on FDI inflows rather than internal reform, because such internal reform was not demanded by the ASEAN; poorer ASEAN countries were happy to make use of the labour opportunities present in Thailand. In Thailand, the rural underdevelopment persisted through the 2000s as did the persistence of coups, many of which brought with them brutal crackdowns and great injustices dealt to the Thai people. In all these cases, membership in ASEAN either transformed Thailand’s structural incompetency into imminent threats or failed to address pertinent changes that could have potentially led to Thailand averting major damage in its economic bust cycles and in periods of unrest.
Overall, ASEAN has offered Thailand tangible opportunities for expansion and decision-making on the regional scale, but those benefits have not helped to correct Thailand’s deeper economic and political instability. Thailand’s structural weaknesses, whether due to export dependency or political volatility, have shaped its trajectory far more than ASEAN membership has. Even if ASEAN membership has facilitated periods of growth for Thailand, it has not insulated it from crisis and, as a result, ASEAN’s value to Thailand remains ambiguous, uneven, and limited.
Jawad Asaria is a Junior in the Dual BA Program between Columbia University and Sciences Po. He is pursuing a Financial Economics Major and hopes to contribute positively to the economic empowerment of the Global South. Asaria is passionate about entrepreneurship in Africa and follows it with great attention. In his spare time, he likes to watch films and is trying (in vain, some might argue) to learn golf.