Within the Southeast Asian peninsula, no other country has quite achieved the level of perpetual vogue that Thailand has, with the nation ranked in the top ten most-visited countries list for the past decade. Tourists are enchanted by the distinct and cultural uniqueness of the nation, yet the natural warmth radiated by its people offers a strange, reassuring sense of familiarity to strangers.
The only Southeast Asian country to have stayed free from European colonialism and influence is a touristic haven; safety, pristine beaches, an exotic language, renowned hospitality, scrumptious cuisine, a thriving night scene- the list is endless. Such is Thailand’s dominance and individualism as a well-rounded destination that a visiting comedian in 2008 did an entire segment on how ‘The Land of Smiles’ moniker could in fact be perceived as a dry, sarcastic jab from the Thai people to other countries- an untrue statement said wryly for comedic value, but nevertheless grin-inducing.
One area, however, of parallelism that Thailand has with many of its peninsular sisters comes in the form of the nation’s slower fructifying of its digital transformation. Save for Singapore, who has its efficiency and geographical limitations to thank in enacting and realising national policies, nation-wide digital adoption has largely been elusive for the majority of Southeast Asian countries outside their respective capitals. However, this is not to say the Thais have been unambitious or goalless in making progress towards transforming into a digital economy.
Pick And Roll 4.0
The desire to play ball with the rest of Southeast Asia’s movement towards digital adoption can be seen in the Thai government’s fourth industrial transformation policy, appropriately named Thailand 4.0. Thailand 1.0 focused on developing agriculture, 2.0 on light industries and development in the fields of food products and textiles, and 3.0 looked to the production of equipment and automobiles- all three policies came together relatively well to give the nation a reliable economic base to build upon. The latest policy iteration has shifted the country’s gaze on innovation and technology- and rightly so; the Thai e-commerce scenery has been reported to be flourishing, one of the fastest-growing in the region with a 68 per cent online merchandise value increase in 2021, with experts foretelling a further 14 per cent growth by 2025.
Like any statistic pedestaled optimistically however, comes a flight of challenges. The first is competition. Thailand is growing in e-commerce, digital adoption and of course, data center potential, but so is the rest of Southeast Asia. Singapore comfortably remains the lead of a regional ensemble, followed by Malaysia, Indonesia and recently, Vietnam; other nations have a ways to go in establishing the infrastructure needed to be recognised as an emerging digital space. Going by the number of data center sites, Thailand is trailing Indonesia closely at fourth place, with 16 to Jakarta’s 21.
Digitalisation, integration of 5G services and improved connectivity with fellow Asian countries have all contributed to the healthy narrative of Thailand as an attractive market for investors. The government has capitalised on this as well, with the Thai cabinet granting VAT exemptions for data centers, as long as applications are filed within the next five years and certain criterias are met- all of which are reasonable and ought to be for investors. Already, Google announced last month that a Google Cloud region would be developed in the country, with a tax exemption likely qualifiable.
The move comes about as little surprise, Thailand wants to be breathing down its regional competitors’ necks quickly. The nation has not held their breath in making advantageous decisions either, with the Thai Digital Promotion Agency (DEPA) acquiring assistance from the U.S. Trade and Development Agency (USTDA) to encourage the development of smart city initiatives on Phuket, one of Thailand’s most popular tourist destinations. The island will undergo modernisation of fibre-optic networks, cybersecurity, emergency communications systems, and data servers- an intelligent and welcome digital diagnosis of building on one of Thailand’s strongest sectors.
Even in the field of visa exemptions Thailand’s awareness and competitiveness is present, with the recent announcement of its new Long Term Resident (LTR) visa scheme aimed at attracting highly-skilled foreigners over the next five years rolling out at similar times with Malaysia’s MM2H program and Singapore’s One pass scheme.
Although the constitutionally-monarchical nation has made the right moves in suiting up for a digital transformation through private investment, international collaboration and tax exemption, a lack of specific nation-wide technological skills, sluggish advancement in digital infrastructure and budget constraints threatens to restrict progress as a starched collar on loan. Headway can only be made if existing limitations are dealt with capably, and Thailand looks up for the challenge.