The global success of elephant pants has brought to light Thailand's economic struggles, exposing the harsh truth that more than 70% of its pants are manufactured in China. The decline in the manufacturing sector, exacerbated by the Regional Comprehensive Economic Partnership (RCEP), has raised questions about the country's economic policies.
With Thailand's economy in crisis, Elephant Pants' global success seems like a silver lining. This clothing is selling like hot cakes all over the world. But the good news ends there. This week it was revealed that well over 70% of the elephant pants sold are actually made in China. This story highlights the decline of Thailand's manufacturing industry. Notably, this he started dramatically at the end of 2022. Since then, exports and associated production have slumped. Many economists prefer to blame this on geopolitical trends and the demographic crisis, but there are other potential causes as well. Regional Comprehensive Economic Partnership (RCEP) trade agreement. The world's largest trade agreement liberalized trade between China, Thailand and ASEAN countries. Furthermore, it will become fully effective in 2022.
In recent months, the global fashion world has been swept up in a surprising trend: elephant pants. These pants are admired for their comfort and uniqueness and have become a symbol of the cultural connection between Thailand and elephants.
But beneath the surface of this apparent soft power victory, challenges and controversies are already arising. In short, the question is: who are the real beneficiaries of this fashion phenomenon?
Entire resignation of Thailand's Soft Power Fashion Committee.Despite denials and public statements, discord and dissatisfaction swirled behind the scenes.
Indeed, the initial glow surrounding the elephant pants took a hit this week.
This followed the mass resignation of all 24 members of Thailand's “Fashion Soft Power'' subcommittee. This happened to him on February 1, 2024.
While the report officially cites completed tasks and time constraints, it suggests an underlying disagreement.
The complaints are believed to stem from promotions organized by other government agencies in parallel with the country's soft power drive. For example, an unconventional idea like setting up a stunt that will be entered in the Guinness Book of World Records.
Especially the ridiculous competition to wear as many elephant pants as possible in one minute.
The Panel Chair expressed concern that projects were being approved without prior consultation.Report points to elephant pants stunt entered in Guinness Book of Records
Committee chairperson Kamonath Onwandi expressed concern that the project would proceed without consultation.
She also highlighted the gulf between fashion experts and state institutions. This small disruption suggests challenges in coordinating diverse interests and talents within a soft power strategy.
In fact, the very idea of a government-led soft power program is contradictory. In fact, soft power should be free from government control and interference.
More than 70% of elephant pants are manufactured overseas, mostly in China with more competitive conditions such as machinery and labor costs.
Further complicating matters is the fact that a significant portion of the world's elephant pants are made in China, not Thailand.
Afterwards, Natawat Phuttasiriwat, Chairman of the Federation of Small and Medium Enterprises of Thailand, explained the current situation on the ground.
He revealed that only 30% of the clothing market in regions such as Bobae and Pratunam is produced in Thailand.
At the same time, the remaining 70% is mainly consigned or imported from China.
Reliance on production from overseas, particularly China, is a result of cost considerations. Thai manufacturers are struggling to compete on price due to rising production costs and slow delivery times.
The situation reflects a broader and disturbing trend. In fact, products designed in Thailand, such as elephant pants, are popular but are produced outside the country, impacting the local industry.
Major fashion retailers are calling for tariffs to be reimposed on imported goods to protect Thailand's fashion and clothing manufacturing sector from competitors.
Mr. Natawat, a clothing store owner in Pratunam district, acknowledged the long-standing problem. Paltunam is a huge clothing market located in the heart of Bangkok, with its tentacles spreading throughout Southeast Asia.
He pointed out in detail that it is directly related to Thailand's minimum wage increase. As a result, many manufacturers rely primarily on production or imports from China, Cambodia and Vietnam, he explains.
The retailer highlights its lack of competitiveness in Thailand, where labor costs exceed 300 baht per day. At the moment, Elephant Pants are manufactured in neighboring countries but labeled as Made in Thailand.
“This kind of thing has been going on for a long time. After domestic production groups faced the problem of raising the minimum wage to ฿300, which affected costs and caused the disappearance of Thai manufacturers. Some Components must be produced or imported from countries such as China, Cambodia and Vietnam,” he explained this week.
Indeed, he says the only answer is to protect Thailand's industry with tariffs. In other words, it's the same strategy as Trumponomics in 2017.
It worked for the United States, even though experts at the time confidently predicted it would fail.
It was then maintained and further strengthened by President Biden in 2021 and beyond.
Concerns that it may be related to the much-anticipated Regional Comprehensive Economic Partnership (RCEP), the world's largest free trade agreement, which will take effect in 2022.
At this point, the relationship with the giant Regional Comprehensive Economic Partnership (RCEP) trade agreement is not yet clear.
Following the implementation of this agreement in 2021 and 2022, trade between Thailand, ASEAN countries and China has been significantly liberalized.
Thailand officially ratified this trade agreement on October 28, 2021. China had previously ratified the agreement on March 22, 2021. However, it was not until 2022 that the economy began to gain momentum.
The government may need to take note of this.
Importantly, Thailand's manufacturing output decreased by 5.11% throughout 2023. Similarly, the decline rate in December 2023 alone was 6.27%.
World's biggest free trade agreement just signed will be a big boost to Thailand's economy and exports
Thailand and China are parties to the giant Regional Comprehensive Economic Partnership (RCEP), which has now been ratified by member states.
Small retailers this week stressed the need for government intervention. Thailand needs support both in promoting industry and in value-added manufacturing.
Indeed, he also felt that imports needed to be restricted to protect local creativity.
It also calls for stricter border controls and streamlined protection of copyright and creative rights.The elephant pants phenomenon highlights challenges
With the dissolution of the Soft Power Fashion Commission, the government faces challenges. The key is how to foster an environment in which local industry can grow.
The proposals include strict measures to prevent the flow of border products. Additionally, there are calls for faster copyright registration to protect Thai creativity.
But Prime Minister Sureta Thabyssin this week downplayed the drama surrounding the mass resignations. Additionally, he told reporters that the nomination and appointment of new members is imminent.
Dr Surapong Subwonri, Secretary of the National Soft Power Strategy Committee, thanked the outgoing sub-committee for its contribution. At the same time, he acknowledged their personal efforts.
This incident highlights the challenges associated with leveraging soft power by government agencies. Nevertheless, the bigger topic for Thailand is the elephant pants phenomenon.
Despite the country's success in attracting global attention, potential challenges for the fashion industry have also been revealed.
The story focuses specifically on the need for more consistency and realism in Thai government policy and how it impacts the country's real economy.
In short, this highlights the need for greater coherence in government policy. The country's manufacturing industry seems unable to compete with foreign competitors.
Furthermore, while the Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement with few restrictions, much of this competition is subsidized.
The slowdown and decline of Thailand's manufacturing industry may begin in 2022-2023.
Rather than macroeconomics and monetary policy causing economic decline and weakness, the lack of competitiveness of Thai industries at the grassroots level may be to blame.
This may actually be the problem as the government seems to be grasping at straws with its short-term economic stimulus measures and criticism of the central bank.
Essentially, this trend could spell disaster for the country's second-generation industrialized economy.
Additionally, this can be attributed to the policies of successive Thai governments that have opened up trade to China without considering whether Thailand's industry as a whole can compete.
Indian Prime Minister Narendra Modi chose to withdraw from the free trade agreement at the 2019 Bangkok Summit. Perhaps he was right, and so should Thailand's leaders.
For example, in November 2019, the Regional Comprehensive Economic Partnership (RCEP) was almost concluded in Bangkok.
However, Indian Prime Minister Narendra Modi announced his withdrawal at the last minute despite intense pressure to sign it.
RCEP agreement agreed with India opting out – Busy Bangkok ASEAN Summit ends on a low note
Simply put, he knew that India's industrial base was not yet ready for the competition ahead.
The question to be asked is whether Thailand's leaders at the time should not have come to the same conclusion.
Instead, emboldened by their position as summit organizers, they took a short-term view and optimistically assumed the best.
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