What Thailand Needs to Do to Become a High-Income Country

Abstract

A country caught in the middle-income trap is one that has experienced initial economic growth and achieved middle income status but that has then lost momentum and eventually failed to attain high income or developed country status. A key reason for this condition is productivity deterioration, a process that demands economic strategies to reverse. Escaping the trap therefore requires embracing of a more complex economy, creating a larger tax base, lessening domestic vulnerability to international economic forces, and having higher general income and good public welfare. This paper examines how long Thailand has been in the trap, the factors holding back the country from further development and, more importantly, the possible steps that the Thai government can take in order to escape the trap.