Thailand, Indonesia, and Vietnam have committed to achieving economic sustenance. They are competing among themselves and with the rest of the world in terms of infrastructure and technological advancement. These countries possess both unique advantages and unique disadvantages that make it hard to predict their economic trajectories in say 10 to 20 years. However, there are specific pointers that can provide guidance as to the potential of each country to becoming a developed country.
Factors that Determine Economic Growth in Indonesia, Thailand, and Vietnam
This refers to the quality and quantity of skilled labour in a country. Quality of human resources is determined by skills, creativity, ability, training, and education. The quantity refers to the number of non-disabled and skilled people. Asia, in general, is having a human resource crisis, as its population is rapidly aging. Indonesia has a stable human resource pool as it is growing in manageable numbers. However, it is less educated than Vietnam and Thailand. On the other hand, Thailand has an increasingly aging population without the resources to replace labour with technology.
This refers to the resources on land and beneath the land that can be utilized to a country’s economic advantage. The effective management and exploitation of these resources depend on skills and technology available. The three countries are well-known as tourist destinations. However, Thailand has positioned itself as the tourism hub in ASEAN countries. It receives more return tourists per year than their competitors.
This involves producing and acquiring resources such as land, building structures, machinery, power, and communication/transportation infrastructure. Capital formation increases capital per worker, capital/labour ration, increased input, and, ultimately, economic growth. Comparing the three countries in terms of infrastructure, Thailand comes first as it has better and wider road networks, Vietnam comes second, and Indonesia third.
In this era, technological development is perhaps the most important contributor to economic development. It helps increase production even with limited resources. It could be the determining factor in the race to becoming a developing country in the case of Indonesia, Thailand, and Vietnam. Especially now that the working population is aging in the three counties, technology can be used to replace human labour like in the case of Japan.
Social and Political Factors
These are the traditions, customs, values, and beliefs that are synonymous with a certain country. Political factors include participation in governance and the implementation of policies. Among the three countries, Vietnam has the most forward-thinking population and a government that is committed to making the country a trade-friendly place. Vietnamese people are relatively hardworking and progressive. However, according to Nationmaste Vietnam has a higher corruption rate than Thailand and Indonesia, with a culture that has normalized bribery.
For comparison sake, five countries in Asia made the transition from developing to developed countries; Japan, South Korea, Taiwan, Singapore, and Hong Kong. These countries have got universal development areas making their competition overly stiff.
Critical Areas of Development in Asian Countries
- Ambitious technological advancement.
- Attracting foreign investors.
- Visionary leadership.
- Improving home-grown economic drivers.
- Transforming the country into a self-reliant/sustainable space.
None of the three countries, Vietnam, Indonesia, and Thailand, has realized all of the above. However, Vietnam scores big on attracting foreign investment and having visionary leadership. According to Voanews, Vietnam has also been recognized as the number leader of economic growth in Southeast Asia, moving past Indonesia and Thailand.
In 23 years, 1995 to 2018, Vietnam’s per capita income increased from $ 288 to $ 2894. That is a 900% increase compared to Thailand’s 134% and Indonesia’s 209% in the same period. Of course, this presents Vietnam with a unique problem to maintain constant growth. However, if the political, social and natural conditions remain the same, Vietnam has the potential to become the next developed country in Asia.