Vietnam is emerging as Asia's rising economy, with signs that it could overtake Thailand on all fronts.
Vietnam has launched a $42 billion infrastructure plan to boost 8% GDP growth and become a high-income country by 2045, raising concerns that Thailand is falling behind.
Vietnam has unveiled an ambitious national development plan aimed at investing the equivalent of 10% of its GDP, or around 1.5 trillion baht, in infrastructure projects.
The program, which includes 250 infrastructure and housing projects nationwide worth 1.28 trillion dong (1.5 trillion baht), aims to achieve GDP growth of 8 percent by 2025 and maintain double-digit growth in subsequent years.
The ultimate goal is to transform Vietnam into Asia's next "tiger economy" and achieve high-income status by 2045.
Vietnam's economy has long relied on exports and foreign direct investment (FDI), making it vulnerable to external shocks such as the retaliatory tariffs recently imposed by U.S. President Donald Trump.
To reduce this risk, Hanoi is now stimulating domestic demand through massive infrastructure investments.
In late 2024, the new Communist Party General Secretary, To Lam, announced the start of a "new era of development," marking Vietnam's most sweeping economic reform in decades.
The government's strategic vision is to emulate South Korea and Taiwan in lifting millions of people out of poverty and joining the ranks of Asia's most advanced economies.
Vietnam's rapid growth is underlined by its increasing income:
Hanoi's annual per capita income has risen from US$1,200 in 1990 to US$16,385 today, thanks to the country's transformation into a global manufacturing center.
However, challenges remain.
Vietnam's traditional growth model, based on exports and low costs, is slowing, forcing the country to turn to high-tech industries, green energy and private sector expansion.
Will Vietnam really overtake Thailand?
Even though Vietnam is experiencing rapid growth and ambitious reforms, some experts remain cautious.
The country still faces structural challenges, such as dependence on exports, rising labor costs, and the urgent need for high-tech industries.
Thai experts sound the alarm
Flags of Thailand and Vietnam.
Nonarit Bisonyabut, a senior researcher at the Thailand Development Research Institute (TDRI), warned that Vietnam's progress should worry Thailand.
Thailand once had its own national strategy to achieve high-income status by 2036 under Prime Minister Prayut Chan-o-cha, but that ambition has faded with the pandemic and other crises.
He explained that before COVID-19, Thailand's potential growth rate was 3.6% per year.
After the pandemic, it slowed to between 2.7 and 3.0%, pushing back the attainment of high-income status to 2088-2093, about 7 to 12 years later than initially planned.
“Thailand once tried to keep pace with rapidly developing countries such as China and Malaysia, which are on track to achieve high-income status by 2025 and 2030 respectively.
"Today, Thailand is likely to reach this target only around the same time as Vietnam, between 2088 and 2093, whereas it had set it several decades earlier," said Mr. Nonarit.
He argued that Vietnam was implementing evidence-based reforms, such as restructuring the bureaucracy to improve efficiency, which enabled rapid economic progress.
On the other hand, Thailand is slow to act despite being aware of its problems.
Most of Thailand's current projects focus on short-term populist measures or unsustainable initiatives.
Such as the liberalization of cannabis , casinos and the deregulation of alcohol, as well as the land bridge project, which several studies have deemed unfeasible.
See: Land bridge project threatens to destroy southern Thailand
"In the future, China and South Korea will favor Vietnam over Thailand.
These two countries are the big winners of the digital age, with China rising alongside the United States as a leader in the field of artificial intelligence.
"If Thailand does not carry out serious reforms, it risks losing its competitiveness and ending up being left behind by Vietnam," concluded Mr. Nonarit.
Manufacturers demand urgent response
Assembly plant. Photo: Exim
Kriengkrai Thiennukul, president of the Federation of Thai Industries (FTI), told Krungthep Turakij newspaper that Vietnam was undergoing restructuring, taking advantage of changes in US tariffs and global trade rules.
Vietnam is much more dependent on the US market than Thailand, with over 30% of its exports going to the US, compared to 18% for Thailand.
At the same time, Vietnam has had to face an increase in transshipment fees of up to 40%.
"Vietnam knows that the world has changed, so it must rely more on itself and carry out structural reforms," Kriengkrai said.
"They started with bureaucratic reforms, reducing the number of ministries and spending to reduce redundancies.
They know that if they do not restructure, they will lose out in global competition.
This is a good example that Thailand should follow.”
He warned that if Vietnam succeeded first, Thailand would inevitably be affected.
“Vietnam already has stronger competitiveness, better skills, higher GDP growth and stronger export figures.
That is why they are acting urgently.
If we just talk and don't act, or if we act too slowly, Thailand will lose ground and find it harder to compete."
Mr Kriengkrai stressed, however, that it was not too late for Thailand, provided it learned the lessons of Vietnam and acted decisively.
"This crisis could be a turning point, an opportunity to reform ourselves, as Vietnam did.
Thailand still has strengths and advantages, but if we don't act, we will continue to fall behind.
We must remove the laws that stand in the way and all sectors must cooperate, with the government leading the necessary reforms for sustainable progress."
Businesses demand infrastructure plan
University of the Thai Chamber of Commerce. Photo: watpanamjone.org
Poj Aramwattananont, president of the Thai Chamber of Commerce, highlighted Vietnam's massive infrastructure investments as a strategy to support growth and counter Trump-era tariffs.
“This is an important measure.
The Thai government also needs to act quickly on economic restructuring and infrastructure projects, such as the delayed high-speed rail network, which still lacks airport connections.
Economic recovery measures must also be accelerated.”
He praised Vietnam's efforts to attract investment through its infrastructure, but maintained that Thailand remained attractive because of its strengths.
Such as its location at the center of the CLMV, its role as a bridge between two oceans, its robust manufacturing and exports with strong upstream, midstream and downstream sectors, as well as its expansion into new sectors.
CLMV is an acronym for a group of Southeast Asian countries: Cambodia, Laos, Myanmar (Burma) and Vietnam, which are the newest members of ASEAN.
"But investors are hesitant because they don't see clear government policies.
"The private sector is ready to cooperate with the government, but we need stability and trust," Poj said.
He warned of a slowdown in Thailand's GDP after years of strong growth, similar to China's, which once posted double-digit growth but is now experiencing a slowdown.
“Vietnam is experiencing growth driven by exports and the launch of major infrastructure projects.
We are too slow.
We need faster execution, clear policies and political stability."
Thailand's infrastructure is more advanced than Vietnam's
Hybrid solar power plant with floats on the Sirindhorn dam. Photo: EGAT
Danucha Pichayanan, Secretary General of the National Economic and Social Development Council (NESDC), said:
“Thailand already has a long-term infrastructure plan covering transport, water management and energy, with investments being steadily rolled out over decades.
This allows Thailand to be better prepared than Vietnam, which is now rushing to catch up, as many of its infrastructure is still problematic.
Thailand's infrastructure remains an asset, even as investors increasingly demand the development of clean energy (RE100).
Investors, particularly in the Eastern Economic Corridor (EEC), are seeking more renewable energy options.
"Thailand has sufficient electricity reserves, but private sector demand for clean electricity continues to grow."
He stressed that Thailand's infrastructure investment plans are already established, but they must be implemented based on budgetary availability, the public debt-to-GDP ratio and remaining fiscal space.
See also:
Thailand dethroned: Vietnam becomes the 2nd largest rice exporter
Tourism, economy: Vietnam poised to overtake Thailand
Thailand's position as leading durian exporter threatened by Vietnam
Traveling to Thailand or Vietnam? The guide
Source: The Nation Thailand
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5 comments
I quote:
"Vietnam knows that the world has changed, so it must rely more on itself and carry out structural reforms," Kriengkrai said.
They started with bureaucratic reforms, reducing the number of ministries and spending to reduce redundancies." End of quote
The article as a whole is quite comprehensive in detailing and comparing the situation of the two countries in their ability to react and adapt to the current global economic situation...
I would highlight two things in this process: first, the fact that the population of Vietnam is not indebted to 90% of the country's GDP and therefore has a population that can actively participate in increasing purchasing power and the country's domestic economy.
And secondly, at the level of administration and the conduct of the State by official, political and economic institutions, Vietnam has a political stability that cannot be compared with the chronic instability of Thailand, which is plagued by corruption that affects all institutions and levels of power...
Of course, one could argue at length about the fact that Vietnam is politically ruled by a totalitarian communist regime, but that is not the subject of this article and the facts discussed, the conclusions and the long-term economic projections undeniably speak in favor of Vietnam, in the face of a politically unstable Thailand consumed by personal ambitions and the corruption of those in power.
And to change this state, which is deeply rooted within the Thai "nomenklatura", fundamental changes almost worthy of a popular, political, economic and social revolution will be necessary, which has very little chance of happening, given that the ambitions of the leaders of this country are personal, hierarchical and financial in the short term, just for the duration of a legislature or more...
It is still necessary for these legislatures to come to an end in order to implement their program, which in practice happens very rarely!!!
In short, while Thailand is pedaling in the semolina and rowing in its boat, Vietnam is speedboating towards its future...
Who needs life jackets the most???
It is not only by investing money that one becomes a tourist power.
We need to educate people, understand etiquette, demand respectful and quality tourism, and master English for the less educated.
The education of a people is the secret of success.
Would this alarm bell be enough to finally make the Thai government act?
May the legendary Thai smile return and the real one propel its Kingdom into the hearts of those who have cherished the country!
Thailand is a step forward, a step to the right, then to the left, a small or a big step back, and they are surprised to be behind Burma.
I point out to Thai politicians that with their laws on starting a business in Thailand, Apple, Microsoft, Alphabet (Google) companies could not have been created here.
Always believing that we are the best while looking at our own navels is not a sign of prosperity.
They all started in a garage.
I'm not sure that massive investment and destroying everything to put concrete everywhere is a good vision for the future.
To write more zeros on a computer, then "yes", but this civilization will surely collapse...
In view of the dubious, unstable, destructive choices made by the USA, Europe, China, which are destroying themselves trying to keep up, and AI can turn everything upside down.
Where will we go, robots everywhere, what will we do?
Personally, the faster our societies move forward, the more I put on the brakes, because the accident risks being violent.
I don't think you can go faster and faster without risking "having a blast."
How do you see things?
Make more money to buy more?
Less reliable devices to consume more.
The number of companies that go bankrupt.
How do you feel about the latest generations, education, the future, families moving away, etc.?
But above all, this general instability.
I don't want to have more desires or more needs.
The more we have, the less sensitive we are to the ratio of effort made to reward obtained, and is this really necessary?