World Bank Urges Thailand to Boost Urban Productivity for High-Income Growth

The World Bank is urging Thailand to boost the productivity of Bangkok and strengthen its secondary cities to accelerate its transition to a high-income economy, according to a new report. The study, titled "Thailand Cities of the Future: Urban Foundations for a High-Income Economy," highlights that the country's economic growth is already concentrated in urban areas, with urban districts accounting for approximately 89% of GDP growth recorded between 2010 and 2020. To meet its high-income target by 2037, Thailand will need an annual per capita GDP growth of around 5.4% over the next decade. "Building Thailand's cities of the future is not simply an urban planning agenda. It is an agenda for growth, competitiveness, jobs, and resilience," said Stephen N. Ndegwa, World Bank Country Director for Thailand and Myanmar. The report suggests that while Bangkok must continue to serve as the main national economic anchor, secondary cities need to assume more relevant and complementary roles. The aim is not to supplant the capital but to foster a more balanced urban network. Currently, Bangkok generates nearly half of the national output and is almost 27 times larger than Chiang Mai, the country's second city. This concentration has historically favored Thailand's economic development but has also led to escalating costs. Congestion in Bangkok accounts for an estimated 7% to 10% of the city's gross regional product annually. Furthermore, climate risks, pressure on infrastructure, and rising housing costs complicate the capital's ability to sustain its expansion pace. The World Bank posits that the choice is no longer between Bangkok and secondary cities, but rather the priority is to establish a more efficient economic division of labor. This involves a productive and connected capital supported by cities with their own specializations, better infrastructure, and the capacity to attract investment. The report warns that many Thai cities have not yet reached the scale or productivity necessary to become regional engines of growth. The issues extend beyond a lack of infrastructure, encompassing fragmented planning, weak inter-agency coordination, and funding that does not always align with the economic strengths of each territory. The World Bank proposes concentrating investments in areas where they can reinforce each other. For instance, a city with tourism potential requires not only new roads or airports but also digital services, urban management, workforce training, climate resilience, and efficient connections with suppliers and markets. "The key is to invest more strategically," stated Poon Thiengburanathum, Deputy Director of Strategic Planning and Management of the Program Management Unit for Area-Based Development. Urban transformation will also hinge on the ability of local and national governments to work in a coordinated manner. A city may receive new infrastructure but still fail to generate growth if it lacks planning, talent, efficient transportation, or institutions capable of executing projects. The report was prepared by the World Bank in collaboration with the Program Management Unit on Area-Based Development and the Urban Design and Development Center (UDDC), synthesizing international, national, and local knowledge on the challenges and opportunities of Thai urban development. While Bangkok will remain indispensable, its sheer size no longer guarantees limitless advantage. Congestion, climate, and urban costs are transforming economic concentration into a vulnerability. The World Bank's proposed alternative is not to abandon the capital but to build a network that enables cities like Chiang Mai and others to play stronger economic roles. For Thailand, achieving its 2037 goal will depend less on a single megacity and more on its ability to connect urban centers with clear objectives, coordinated investments, and differentiated economic responsibilities. Success in this endeavor could see its cities drive a high-income economy; failure means Bangkok's congestion and the untapped potential of secondary cities will continue to hinder development.