The Economic Development of Thailand and Singapore

by Kyaw Lin Oo

Essay

The economic of Thailand and Singapore has been developed with different momentum because of different historical, social, cultural, and political background. However, these two countries’ development past can be explained by W.W. Rostow’s five stages theory of economic development. According to Rostow, there are five stages for the economic development for every country. These are traditional stage, pre-condition for “take off” stage, take off stage, Drive to maturity stage, and economic maturity stage. Every developed and developing country has experience of passing these five stages although some countries are stopped at the traditional stage.

Thailand and Singapore of Southeast Asia countries passed all five stages like any other country. Although they have different pace for economic development, both countries are currently at the final stage of maturity stage.

In Thailand case, the economic development was started in two decade ago. Before that, the economic development was at the traditional stage. In this stage, the political authority of Thailand was military dictatorship system in one way or another. At that time, the economic policy is centralized policy and all economic decision was come from central government. Therefore, the development pace of Thailand was very slow at that time. After that, economic policy of Thailand was dramatically changed. In the meanwhile, the political system of Thailand was also opened in somehow. Therefore, we can say that it is precondition stage of take off. At that time, democratic norm and cultural was started to utilize in Thai politics. At that time, Chatichai Choonhavan’s government came into power and he announced “to change battle fields to markets”.

After that, “take off” period came into effect and new technology was thriving in Thai economic. Especially, banking sector was booming in Thailand. And small and median size business was thriving in Thailand. This take off stage of economic development was disturbed by 1997 economic crisis in 1997. However, this economic crisis was recovered within three years and Thai economic was going up when Taksin Shinawat came into power in 2000. Under the rule of billionaire turn politician, Thai economy was at the stage of Driving to maturity if it is not maturity stage. From the Drive to maturity stage, today Thai economy enters into the maturity stage which is high in consumption of market force. During this maturity stage or at the interval of each stage, there was up side-down period of Thai economy. However, generally, Thai economy is steadily going up from the time of Chatichai Choonhavan.

Like Thailand, Singapore’s economy has been progressed long time before Thai economy was take- off. When Singapore was part of the Malaysia, the economy of Singapore was purely traditional economy and the society’s survival was based on individual production. When Singapore was separated from Malaysia, Singapore policy makers tried to open up the economy of Singapore and accept foreign direct investment (FDI) as a tool for economic development of Singapore. This period was precondition stage of take off in Singapore economy. When all foreign direct investment came onto the Singapore soil, Singapore economy was really take off from traditional economy. For this development, Singapore’s former prime minister and currently minister mentor Lee Kuan Yew was at the center of Political scene. As Singapore’s economy is developed, consumption of Singapore’s market is increased. Then, the economy became the drive to maturity stage. Currently, Singapore’s economy is at the maturity stage. Unlike Thailand, Singapore’s economy has never faced crisis or disturb. Therefore, the economy is progress steadily.

In both countries, the main contributor of economic development is political stability. It is obvious reason in Thai economy. When Thai politics was stable, and the economy was progress and when the politics became sour, the economy was going down. Currently, Thai economy is going down and the exchange rate is unstable because of the military coup in last year and mismanagement of junta backed intern government. In Singapore, the political situation is stable through out the decades and this political stability became a driving force for the economic development.

However, both countries use authoritarian or semi-authoritarian as mean for political stability in different degree. In comparing these two countries, Singaporean politics is more authoritative than Thai politics. Therefore, successive Thai governments faced challenge mainly from Army and as a result Thai economic development was disturbed. In Singapore, only one political party won in every election and the opposition is very weak in Singapore politics. Therefore, Singaporean politics is more stable than Thai politics.

Unlike Western political culture, Democratic norm and standard in Asian politics, especially Southeast Asia politics, are very young. In this stage, the governments of Southeast Asia nations try to get political stability with cost of authoritarianism and strong government because this political stability is only driving force for economic development. However, as the economy is developed in certain level and the educated middle class of society is expended, the question of democratic norm and standard is reappeared and the government must relax its control over the population certainly. Therefore, at the Rostow’s final stage of Maturity in economic development, the Asia governments are more democratic and people’s participation in political process becomes crucial.