Thailand at a crossroads: Structural reform or short-term populist policies

Thailand holds a critical election this weekend, offering voters a choice between a pro-reform party and two political blocs committed to populist economic policies.

The vote comes as Thailand’s economy has stagnated for two decades, growing only 5% compared to pre-pandemic levels. By contrast, regional competitors Vietnam and India have seen their economies expand by approximately 40% during the same period.

The People’s Party—the successor to the Move Forward Party that won last year’s election—is campaigning on a platform of constitutional reform and dismantling corporate monopolies. Party leadership argues these structural changes are the only way to revive the national economy.

However, the reformist group faces significant hurdles in its bid to lead the country. Analysts suggest the party lacks natural coalition partners, which could complicate its efforts to form a functioning government.

The party’s primary rivals, the Pheu Thai Party and Prime Minister Anutin Charnvirakul’s Bhumjaithai Party, are instead promoting short-term stimulus packages and cash handouts. These populist strategies have been the cornerstone of Thai governance for the past 20 years.

Economic experts warn that Thailand will struggle to address systemic issues such as rising public debt and inequality without political stability and substantive reform.

The upcoming Thai election has evolved beyond a standard political contest, emerging instead as a high-stakes referendum on the nation’s economic architecture. At its core, the vote represents a fundamental choice: preserving a status quo dominated by entrenched corporate monopolies or pursuing a structural overhaul to level the playing field for the broader economy.

The growing divergence between Thailand and Vietnam highlights the tangible costs of institutional instability. While Thailand has been hamstrung by a cycle of coups and short-lived civilian administrations—rendering long-term strategic planning nearly impossible—Vietnam’s relative political continuity has allowed for a consistent policy environment that successfully attracts sustained foreign direct investment (FDI). Thailand’s stagnation is less a result of diminished economic potential and more a consequence of a political system that prioritizes temporary fixes over deep-seated structural reform.

For the opposition People’s Party, the primary challenge is not securing a popular mandate, but navigating a rigged "electoral arithmetic." The resilient alliance between royalist interests and major conglomerates forms a formidable barrier to change. Even should the party secure a plurality of seats, the probability remains high that establishment-aligned factions will form a tactical coalition to exclude them from power. Such a maneuver risks further disenfranchising urban and youth demographics, whose aspirations for systemic reform continue to collide with the interests of the traditional elite.

The elections in Thailand may not have a direct impact on the day-to-day operations of Vietnamese-American businesses, from the nail salon industry to local phở restaurants. However, as a cornerstone of ASEAN, Thailand’s political stability and economic trajectory are crucial to the overall health of the region. Many Vietnamese-American entrepreneurs and investors who maintain trade ties with Southeast Asia will be watching the results closely; a prosperous Thailand strengthens the entire regional ecosystem, paving the way for more robust business and investment opportunities across the board.