Increasing Thailand’s Resilience to Global Shocks through a Circular Economy Approach
Thailand, which thrives on tourism, suffered a hit during the Covid-19 pandemic. Despite that, the economy is expected to grow 2.9% in 2022 alone, provided that tourism and private consumption continue to increase. Global events such as the Ukraine-Russia war and the current lockdowns in China have the ability to alter global supply chains. This is especially relevant for smaller countries such as Thailand due to their oil dependency. As published in “The Thailand Economic Monitor”, adopting a more circular approach can help promote sustainable growth that is resilient to global shocks.
Tourism in Thailand is expected to grow to pre-pandemic levels in the last quarter of 2022, supported by the decline in active Covid-19 cases. This means relaxations in travel requirements and the opening-up of borders for trade and tourism. With this, the arrival of tourists is expected to reach 6 million in 2022, which is a sharp increase from 0.4 million in 2021.
As suggested by economic modelling, a fast transition towards a circular economy in Thailand could increase output and create around 160,000 new jobs, representing an increase in 0.3% in total employment. It could also boost GDP by 1.2%, reduce GHG emissions by 5% by 2030, and help control high commodity prices. Several actions to support the transition to a circular economy have been suggested. These include creating awareness on resource degradation, intensity and pollution.
According to the Pollution Control Department, plastic makes up to 12% of Thailand's annual waste volume, equivalent to a total of 2 tons. Thailand currently faces a number of issues relating to pollution. One concern involves the chemicals that are released when plastic waste is burned or dumped into waterways. The concept of a circular economy provides a framework for systemically rethinking production, consumption and waste management.
The World Economic Forum selected Bangkok as one of four cities to pilot a new initiative to support the development of circular economy solutions suited to local needs through grassroots efforts. Bangkok is a hub of Global Shapers, a network of hubs led by young people and established in the spring of 2022. The program makes use of the Scale360° approach developed by the Forum to bring together business and innovation leaders to scale up local activities for global change.
A report by “The Thailand Economic Monitor” highlights two key actions to be taken by the government of Thailand to initiate the transition to a circular economy. The first one involves introducing concentrated and targeted measures to design standards, logistics, and adequate compensation schemes to compensate actors who incur necessary risks when innovating in a circular economic environment. The second action highlights the importance of creating awareness about resource degradation and intensity.
As described by Jaime Frias, Senior Economist at the World Bank, “with rising demand for resources in the domestic market, Thailand could add the circular economy approach to the pool of policy solutions that can decouple growth from a resource-intensive economy. A concerted public and private response, along with targeted reforms, will be necessary to unlock Thailand’s potential in this area”.