Thailand is an economy where despite the big shocks from COVID-19, the downside risks to the economy remain quite limited. That is the result of our low vulnerabilities in a lot of critical areas. First, our external position: the Thai economy has a very low external vulnerability. We are very resilient to the balance-of-payment-type shocks because we have a very low level of external debt and a relatively high amount of foreign reserves relative to external debt. Recently, we have seen a weakening of the baht by about 10 percent year-to-date, which has outpaced other regional currencies. Nonetheless, the resiliency of the Thai economy and the external front remains solidly intact. The reason underpinning the weakening of the baht is due to the current account, which traditionally has been in surplus, that has swung into a deficit as a result of the contraction in tourism. Meanwhile, the size of the current account deficit relative to the amount of international reserves is not worrisome. This year, on the current account side, we have observed a current account deficit of around 9 billion US dollars. On portfolio flows, we have seen outflows from the equity markets of around 3.2 billion US dollars. At the same time, there were inflows into the bond markets of 2.2 billion US dollars. Thus, on the net of portfolio side, there were outflows of around a billion US dollars. Adding together the current account deficit of 9 billion US dollars, there have been outflows of around 10 billion US dollars year-to-date.
It was only by acquiring these skills that workers could transition to where new jobs were being created. By keeping one step ahead of the machine, technological unemployment could be avoided. A shorter, more seamless skills transition reduced the hit to workers’ incomes and lowered the risk of skills atrophy, which might otherwise cause lasting damage to employment. This social infrastructure might be called “enabling” institutions. Another set of institutions provided workers with support to cushion the hit to their finances and well-being during the painful and lengthy period of job transition. This might be financial support, in income or loans. It might be housing or shelter. Or it might be social or emotional support. This social insurance ensured that lives were underpinned, inequalities held in check and the social fabric held together. It reduced recession risk, for individuals and for societies. These might be called “insuring” institutions. 32  29  Allen (2005) documents the stagnation of real wages in Britain from 1800 to 1840. IMF (2017). 31 Allen (2009) discusses Engels’ pause in the context of the British economy from 1760 to 1913. 32 Of course, many other institutions played a role in the labour market beyond the “enabling” and “insuring” ones mentioned here. For example, the ‘Poor Laws’ in the 1800s meant that the poor had to enter workhouses with terrible conditions to receive help in the form of clothes and food.