Thai Govt Pushes '3 Balances' Strategy to Boost Exports and Address Income Inequality

The Thai government is moving forward with a strategy of "3 Balances" to address the challenge of export growth not fully reaching small and medium-sized enterprises (SMEs), farmers, and laborers. The Ministry of Commerce has outlined a plan focusing on Market Balance, Product Balance, and Income Balance to ensure that export expansion generates more value within the country and benefits a wider range of Thai people. According to a government spokesperson, Thailand's exports grew by 21.6% in July 2024, marking the 25th consecutive month of expansion. However, the government views export figures alone as insufficient for measuring success. Much of the current growth is concentrated in industrial and technological goods, while agricultural and agro-industrial products are still recovering unevenly. SMEs, which form a significant employment base, account for only about 14% of the total export value. Therefore, the government is shifting its focus from "exporting more" to "how to enable more Thai people to benefit from exports" through structural reforms in three areas: First, "Market Balance" will involve accelerating the diversification of export markets, reducing reliance on major markets, and opening new markets in countries with potential, particularly for food, health, and high-value products. This aims to spread risk from economic and geopolitical volatility and increase opportunities for Thai businesses to access diverse markets. Second, "Product Balance" will focus on increasing the proportion of value added generated within the country, or "Local Content." This involves strengthening the connection between investment and production with Thai raw materials, components, SMEs, labor, and technology, thereby reducing dependence on foreign production factors. It also aims to upgrade agricultural and food products from selling raw materials to processing, standardization, branding, and utilizing Thai technology, ensuring that export revenue circulates more within the country. Third, "Income Balance" aims to solve the problem of benefit distribution from trade, especially for SMEs, farmers, and small businesses. Currently, Thailand has over 30,000 exporters, with over 22,000 being SMEs, yet they only account for about 14% of the export value. The government will work to reduce limitations related to capital, standards, technology, market information, logistics, and distribution channels, while also promoting SMEs to become part of the supply chains of major exporters and foreign investors. The government emphasizes that this approach addresses the root cause, as increased export figures will only become more meaningful to the public if income, jobs, and business opportunities increase accordingly. The goal is to ensure that the growth of the trade sector is more closely linked to the domestic economy. "The government's goal is not just to increase Thailand's exports, but to ensure that more Thai people benefit from exports, including SMEs, farmers, small businesses, and laborers, by opening new markets, increasing domestic value, and distributing trade income more equitably," the spokesperson stated.