Economic Outlook for Southeast Asia, China and India 2024

Thailand

Introduction

Thailand is exposed to natural hazards including floods, droughts, cyclones, landslides, earthquakes, tsunamis, wildfires and heat waves. It is ranked 23^rd in the WorldRiskIndex 2023. Floods represent by far the single most frequent and impactful hazard, while floods, droughts and storms combined inflict the highest combined damage and losses. Between 2000 and 2023, 116 disasters triggered by natural hazards caused over 11 000 deaths and affected more than 81 million people (CRED, 2024[1]).

Thailand: Disaster occurrences (from 1981 to 2023) and WorldRiskIndex

Source: EM-DAT and WorldRiskIndex.

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The hazardscape

Thailand is heavily affected by storms and floods. In particular, Thailand is one of the most flood-affected countries in the world and is exposed to riverine, coastal and flash flooding (World Bank and ADB, 2021[2]; Inter-Agency Standing Committee and the European Commission, 2023[3]). The large-scale flood of 2011 ranks among the most damaging flood disasters globally in recent decades. The flood covered about 100 000 square kilometres, resulted in more than 800 deaths, affected more than 13 million people across 66 provinces and caused approximately USD 46 billion in damage and losses (Loc et al., 2020[4]; World Bank, 2012[5]). At the same time, the impact of floods is increasing. Between 2010 and 2030, the number of people affected annually by riverine flooding is projected to rise from 630 000 to 1.3 million, and annual urban damage is projected to increase from USD 2.1 billion to USD 11 billion (WRI, n.d.[6]). The high risk of flooding is associated with Thailand’s numerous river basins, canal networks and floodplains. Flood risk is exacerbated by human factors including rapid urbanisation; deforestation; and excessive extraction of groundwater leading to land subsidence (Fernando et al., 2022[7]; Olson and Kreznor, 2021[8]; Seemuangngam and Lin, 2024[9]).

Comparison of the 2011 Thai Floods to floods in other countries

Source: (Ikeda and Palakhamarn, 2020[10]), “Economic damage from natural hazards and local disaster management plans in Japan and Thailand”, ERIA Discussion Paper Series, No. 346, Economic Research Institute for ASEAN and East Asia, https://www.eria.org/publications/economic-damage-from-natural-hazards-and-local-disaster-management-plans-in-japan-and-thailand/.

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Thailand is also highly exposed to droughts and drought trends have been increasing in recent decades (Zhao et al., 2022[11]). Between 2000 and 2022, droughts in Thailand affected more than 33 million people and caused economic damage exceeding USD 4.7 billion (CRED, 2024[1]). A severe 2015-17 drought episode led to estimated damage and losses of USD 3.3 billion (Khadka et al., 2021[12]). Droughts severely impact the agricultural sector, causing heavy damage specifically to the rice and sugarcane crops. Agriculture employs approximately one-third of the labour force, and rice is a major export, so these impacts have significant economic implications (World Bank, n.d.[13]; Ikeda and Palakhamarn, 2020[10]). Furthermore, droughts can lead to severe water shortages and increase fire risks (Pak-Uthai and Faysse, 2018[14]). Vulnerability to droughts varies across the country, with areas without reservoirs and irrigation infrastructure being more vulnerable (Tingsanchali and Piriyawong, 2018[15]). The proportion of irrigated areas is especially low in the southern and the northeastern regions of the country.

Thailand is also exposed to earthquakes and tsunamis. While only five large seismic events were recorded between 1989 and 2018, these events caused a disproportionate number of fatalities. The catastrophic 2004 Indian Ocean tsunami was the deadliest disaster in the country’s history, causing more than 8 000 deaths and more than USD 1 billion in damage (CRED, 2024[1]; Ikeda and Palakhamarn, 2020[10]).

Landslides generally occur due to heavy rainfall, with the landslide risk and the number of people affected increasing in recent decades (Schmidt-Thomé et al., 2018[16]). Landslides are most frequent and impactful in the rural hilly regions, with most of the damage caused by debris flow due to heavy rainfall and landslides upstream (Schmidt-Thomé et al., 2018[16]). Settlements in landslide-prone areas are expanding, leading to increasing landslide exposure (Schmidt-Thomé et al., 2018[16]). Human factors such as uncontrolled deforestation, land clearing and use of land for cultivation are contributing to the landslide risk. Thailand also faces the risk of wildfires, with the majority of fire events occurring between January and March, in the northern regions of the country. Forest fire events caused more than USD 5.8 billion in damage between 1999 and 2014. However, the damage from wildfires has been decreasing in recent years (Ikeda and Palakhamarn, 2020[10]).

Climate change perspective

Climate change is expected to increase the frequency and intensity of climate-related disasters in Thailand, including floods, droughts, cyclones and heatwaves, and this will likely lead to an increase in the cascading hazards of landslides, wildfires, and damage to the built environment (World Bank and ADB, 2021[2]; Supratid and Aribarg, 2022[17]; Thilakarathne and Sridhar, 2017[18]). Extreme precipitation caused by climate change is projected to further increase the landslide risk.

Given its long coastlines and the concentration of urban and tourism assets on the coasts, Thailand is also highly vulnerable to sea-level rise, ranking as the sixth most impacted country in the world (Supratid and Aribarg, 2022[17]). Sea-level rise is expected to inundate some areas permanently and to exacerbate the impacts of coastal flooding and storm surges, with Bangkok projected to be among the worst affected cities globally (Hallegatte et al., 2013[19]; Dutta, 2011[20]). Sections of the Thai coastline are also projected to experience an increase in storm surges due to a southward shift in cyclone tracks (Wood et al., 2023[21]).

Disaster vulnerability is high in agricultural areas, as these tend to be characterised by relatively higher rates of poverty and inadequate social safety nets, while highly developed urban areas are characterised by high disaster exposure associated with high population density (Christenson et al., 2014[22]). Changes in land use and the expansion of economic activity increase disaster risk by altering ecosystems and reducing their protective functions. For example, the replacement of mangroves by shrimp farms is exacerbating vulnerability to coastal inundation (Pumijumnong, 2013[23]; UNDP Thailand, 2018[24]). Another example is the development of roads and railroads over floodplains that limit natural drainage and exacerbate flood risks in the cities of Hat Yai and Khon Kaen, and the district of Lat Krabang (Friend et al., 2016[25]). The process of urban expansion has generally not been well informed by disaster risk assessments. This generated increase in risk became especially evident during the 2011 floods, as a significant fraction of the damage was associated with high-value infrastructure located in flood-prone areas (Friend et al., 2016[25]).

Challenges for disaster risk management policy

The National Disaster Prevention and Mitigation Plan of 2021-2027 describes a set of strategic objectives to guide disaster risk management including inclusive disaster risk reduction; integrated emergency management; effective recovery and resilience building; and strengthened international co-operation, adopting multi-agency and multi-sectoral approaches.

Thailand’s disaster risk management processes are largely ad hoc and response-based (though the National Disaster Response Plan 2015 provides a robust guide to making them thorough) (DDPM, 2015[26]), but there remains insufficient focus on long-term planning (Kitagawa, 2020[27]; UNDRR, 2020[28]). There is room to integrate disaster risk management into development planning more thoroughly, especially at subnational levels, and investment in comprehensive disaster risk data – including disaggregated information about vulnerabilities – would help maximise the mutual benefits of disaster risk management and other aspect of development. The role and capacity of local governments to mobilise human and financial resources to implement risk reduction measures needs to be strengthened (UNDRR, 2020[28]). Improved co‑ordination is needed between disaster risk management activities related to prevention, mitigation and preparedness – within the government, relief organisations, the private sector and the community (CFE, 2022[29]). Making this a priority in the next national and provincial Disaster Prevention and Mitigation Plans would benefit all stakeholders (Ikeda and Palakhamarn, 2020[10]).

Other disaster risk management-related priorities include reducing poverty among vulnerable and exposed populations; improving large-scale water management, including water sustainability, to meet rising demand; and increasing the participation of local communities in disaster risk management activities (CFE, 2022[29]). Following the severe impacts of the 2011 floods, the government increased its flood prevention and mitigation efforts, and many structural and emergency response measures were implemented, mainly in the Chao Phraya River Basin (where most of the damage occurred). Current flood-risk prevention strategies could be improved upon but greater consideration of non-structural measures, such as regulation, land-use planning and flood education (Laeni, van den Brink and Arts, 2019[30]; Singkran, 2017[31]; Singkran and Kandasamy, 2016[32]). Moreover, some of the implemented water development projects could have their capacities enhanced. In the Mun River basin, introduction of additional measures such as small farm ponds, a subsurface floodwater harvesting systems, and oxbow lake reconnections may prove beneficial (Prabnakorn et al., 2021[33]). Some forest protection policies may be causing upland communities to farm in disaster-prone areas, exacerbating disaster exposure. Integrated forms of land-use such as agroforestry may be beneficial in these cases (Beckman, 2015[34]). Potential areas of focus within tsunami risk management include enhancing evacuation procedures through improved planning and novel systems (e.g. coloured streetlamps and modern geographical information technology), crowdsourcing disaster-related information through social media, encouraging the provision of evacuation manuals by hotels and resorts, and proper maintenance of evacuation shelters (Leelawat et al., 2020[35]).

Disaster risk management is financed primarily through the central government budget and borrowing (UNDP, 2023[36]). However, Thailand’s disaster risk management financing could be better targeted by a shift to a more proactive approach underpinned by state-of-the-art risk assessments (UNDRR, 2020[28]). Risk-transfer mechanisms currently in use include some insurance for public assets and a national crop insurance scheme (UNDP, 2023[36]), but there is room to increase risk transfer in breadth and scope particularly as regards insurance options for firms and households, and of the use of alternative ex-ante national-level funding mechanisms such as catastrophe (CAT) bonds or a disaster fund. Limited uptake of contingency fund advances for disaster relief and emergency assistance in the past (UNDP, 2023[36]) may contribute to why these instruments have not been prioritised, suggesting there is room for improvement in financial literacy as it pertains to risk management.

References

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