In 1990s, Thailand ranked second in ASEAN for state performance, behind only Singapore. Today, we trail several neighbours. This decline has unfolded gradually over three decades—through repeated economic crises, institutional stagnation, and reforms that never quite went far enough. What is different today is that the cost of inaction has become far more dangerous. 

Thailand now faces a far more demanding global environment. Our population is ageing rapidly to the point of becoming a complete aged society. Climate risks are no longer abstract; they are already disrupting production and livelihoods in several areas. Global trade has become fragmented and uncertain. Technology is reshaping industries and labour markets faster than our education and skills systems can respond. These pressures are structural, not cyclical. They cannot be managed with short-term fixes or familiar policy instruments. 

This article is written as a direct proposal to the newly elected government. The message is simple but urgent: if Thailand is to return to a path of high, inclusive, and sustainable growth, economic reform is unavoidable—but economic reform alone will not be enough. The binding constraint today lies in how the state functions. Without strengthening state capacity, new strategies will struggle to translate into real outcomes. 

Political scientist Francis Fukuyama defines state capacity as the ability of the state to design policies, implement them effectively, and enforce laws credibly. By this definition, Thailand is not a failed state. International indicators show that Thailand delivers relatively solid outcomes in infrastructure provision, macroeconomic management, public health, and poverty reduction. 

However, weaknesses become increasingly visible as policy tasks move up the complexity ladder. Thailand performs far less well in areas that matter most for future growth—education and environment quality, innovation, and industrial policy. Especially on industrial policy, which is crucial to revive the economic growth and depends heavily on state capacity, several indicators show that Thailand scores below the global average and behind regional peers. 

For examples, the International Country Risk Guide, which measures quality of government, bureaucratic quality, and rule of law, shows Thailand slipping steadily since the 1997 economic crisis. While Singapore remains at the frontier, countries such as Malaysia and Vietnam have improved their relative positions and now outperform Thailand on overall government quality. 

Industrial competitiveness presents an even sharper warning. According to UNIDO’s Competitive Industrial Performance Index, Thailand currently ranks 28th globally, well behind global industrial leaders such as Germany, China, and Japan, as well as regional peers like Singapore and Malaysia. It also highlights weaknesses in technological depth and innovation intensity. This is not merely a matter of rankings; it reflects structural constraints that directly limit productivity growth and industrial upgrading. 

Thailand’s state capacity is no longer adequate for shaping the economy of the future. Industrial transformation is among the most demanding tasks any government can undertake. International experience shows that success depends not only on selecting priority sectors, but on sustained coordination, learning, and credible implementation over time. 

Countries such as Japan and South Korea succeeded with strong, professional bureaucracies that worked closely with business while maintaining discipline and performance standards. Thailand cannot replicate these models wholesale. Coordination across agencies remains weak, bureaucratic incentives are misaligned, and policy continuity is often undermined by political cycles. Expecting the state to lead industrial transformation on its own would therefore be unrealistic. 

This is precisely why a more structured partnership with the private sector is essential—not as ad-hoc consultation or policy capture, but as a rules-based collaboration focused on problem-solving and delivery. For such cooperation to work, the state must strengthen several core capacities that international indicators consistently identify as Thailand’s weak points. 

First, coordination. Fragmentation across ministries and agencies is now a measurable drag on policy effectiveness. Data systems remain poorly integrated, mandates overlap, and accountability is diluted. Even well-designed policies falter at the implementation stage because no single actor has the authority or incentive to align efforts across institutions. 

Second, mediation. Industrial upgrading inevitably redistributes costs and benefits. A capable state must be able to assess trade-offs across sectors and groups, negotiate compromises, and design adjustment mechanisms. Where this capacity is weak, reforms stall or provoke resistance that ultimately undermines growth. 

Third, transparency and performance management. Thailand performs reasonably well in delivering basic services, but much less well in outcome-based monitoring. International indicators point to weaknesses in open data, innovation governance, and results-based evaluation. Without clear KPIs tied to real outcomes, reform efforts dissipate into process rather than impact. 

Fourth, credibility and commitment. Policy uncertainty—frequent rule changes, inconsistent enforcement, and politically driven interventions—raises risk premiums and discourages long-term investment. Restoring credibility does not require new announcements; it requires consistent follow-through. 

In this context, the proposal known as “Reinvent Thailand” offers a pragmatic pathway forward. Initiated by major private-sector institutions and supported by key economic agencies, it seeks to institutionalise state–private collaboration around industrial transformation rather than rely on episodic dialogue. Its value lies not in ambition, but in structure: a joint forum to identify constraints and track solutions, clearly designated issue owners with coordination authority, and shared data and KPIs to monitor progress over time. 

TDRI’s proposal is to complement this platform with focused workstreams on three areas where Thailand’s international indicators reveal the largest gaps: skills, innovation, and regulations.  

Thailand’s experience across sectors illustrates this clearly. In pet food, where Thailand is already a global exporter, growth is increasingly constrained by skills gaps in branding, product development, and market intelligence. In high-tech manufacturing, Thailand struggles to anchor advanced investment because human capital and innovation ecosystems lag behind competitors. In high-value services like wellness tourism, fragmented standards and capabilities prevent quality upgrading and limit value creation. These constraints are solvable. But they require a state that can listen, coordinate, and commit—one that acts as an enabler of private-sector dynamism rather than a bottleneck. 

The newly elected government has an opportunity to reset how the Thai state works. The challenge is not to produce more plans, but to change operating norms: to break silos, strengthen coordination, and engage the private sector as a genuine partner in delivery. Thailand still has strong firms, capable people, and untapped potential. What is needed now is a state that can rise to meet the demands of a new economy—and a government willing to lead that transformation. 

Note: Boonwara Sumano, PhD, is a Senior research fellow of the Thailand Development Research Institute (TDRI). This article appear in the Bangkok Post  on 11 February 2026.