Thailand Plans to Boost Northeastern Economy

Thailand’s northeastern economy, among the poorest in the country, is looking to expand trade with neighboring Laos and business in the Greater Mekong Subregion (GMS) as it recovers from a two-year recession.

The downturn was triggered by an end of populist programs heralded by the former government of Yingluck Shinawatra. The May 2014 coup ended her almost three year administration and brought an end to programs led by a rice price pledging scheme.

Under the program, farmers were paid at rates some 50 percent above the global market before the effort collapsed, costing Thai taxpayers more than $14 billion and leaving farmers across the region deeply in debt.

While the good times lasted, funds triggered a boom in retail and commercial investment and spending. Major department stores sprang up in towns such as Ubon Ratchathani and Udon Thani.

A rice farmer collects snails and cleans the rice field near Udon Thani, Thailand, Sep. 15, 2015.

But now retailers report sluggish sales and the Thai central bank warns of growing indebtedness among farmers as rice prices fall to their lowest in six years.

Agriculture accounts for some 20 percent of the region’s economy, followed by trade. Household incomes in the Northeast are the lowest in Thailand, at close to $550 a month, well short of the nearly $1,200 earned per month in the Bangkok region.

Border trade

But Athikarn Ringcharoen, president of the Chamber of Commerce in Amnat Charoen province, bordering Laos, said the local economy was starting to pick up although still below levels of two years ago.

Athikarn said government policy support and increased cross border trade with Laos, was helping the recovery. He added that despite the poor state of the global economy, the provincial outlook was “OK”.