Bangkok chokes on growth

Genie writes*

Bangkok had quite a hazy start to 2019. In January, the city was blanketed in smog and had a concentration of PM2.5 particles that was at dangerous levels. The Bangkok Metropolitan Administration (BMA) tried washing up the streets and buildings with water cannons, but the smog persisted. This lead Bangkok residents to express their dissatisfaction on social media platforms. But, was there more that the BMA could have done? Maybe slowing down growth in Bangkok could help.

In the past 250 years, Bangkok grew from a village on the bank of the Chao Phraya River to a megacity with over 14 million residents. Today Bangkok is the centre of economic activity for Thailand. The gross regional product (GRP) per capita for Bangkok is double the national GDP per capita. Bangkok’s GRP also represents 44.2 percent of Thailand’s GDP. The primacy of Bangkok’s economy is a result of government policies that have devoted funding to Bangkok and preference of foreign investors. Bangkok also benefits from being a first-mover agglomeration economy which makes it difficult for other cities to compete with Bangkok.

With Bangkok’s economic growth comes air pollution (related post).  The concentration of economic activity in Bangkok has lead to an increase in the city’s population, and consequently, an increase in the quantity of vehicles needed to transport that population. The lack of adequate public transit developments early on has also made Bangkok residents dependent on private cars. Thailand’s Pollution department estimates that vehicle emissions is responsible for approximately 60 percent of Bangkok’s greenhouse gas emissions and particulate matter. Bangkok’s current air pollution situation is harmful to the health of residents and can cost up to 6.6 billion baht (€180 million) in losses for the healthcare and tourism sector. Thus, improving the air quality is crucial for both Bangkok’s economic growth and development.

The haze is an important wake-up call for Bangkok. Urban experts urge the BMA to improve transport policies and invest in public transportation in Bangkok. However, the growth in Bangkok may no longer be economic. The worsening air pollution is one example of the many challenges that Bangkok faces that has potential to undermine its long-term economic growth and residents’ quality of life. It may be an indicator that the additional costs for Bangkok’s economic growth exceeds the additional benefits, and growth is uneconomic. Bangkok already receives high levels of public investment as the Thai government attempts to uphold its deteriorating quality of life, so it may be worth investing in peripheral regions that can ease pressures in the capital.

Bottom line: Bangkok’s economic growth may no longer be economic because of increasing costs such as air pollution. Therefore, instead of investing more resources in Bangkok’s growth, allocating resources for the development of peripheral regions can help promote Thailand’s development.

* Please help my Growth & Development Economics students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).

Author: David Zetland

I'm a political-economist from California who now lives in Amsterdam.

6 thoughts on “Bangkok chokes on growth”

  1. Interesting post Genie! Why do you think it is that the government is not able to reduce emissions in the city (i.e. building public transport system etc.). Are they unwilling (too expensive, short-termism) or unable?

    1. Thanks Jereon! The government is building more public transport systems in Bangkok and has a “One Transport for All” plan in place. However, even though there are plans to reduce emissions, Thai politics is quite unstable and projects often don’t follow through because of political changes.

  2. Hi Genie, very interesting topic! It’s a classic case of economic growth vs. sustainability which is an issue i believe many rapidly developing countries are currently experiencing. Clearly changes will have to be made if Thailand wants to continue to grow in a sustainable way, but the question is what that change should be. I think it would be interesting for you to examine whether it would be better for the government to invest in making Bangkok “greener”( e.g. building a functioning public transport system, implementing regulations that limit emissions, etc.) or to invest in other regions and hereby make the pollution less concentrated. I can imagine that both options have quite significant costs and if you could make some type of cost-benefit analysis of the two options, that would be really interesting.

  3. Hey Genie, super interesting post! When reading your post the first thought that popped up was that (as mentioned by Jeroen above) investment in more public transport would be a relatively straight forward solution to reducing the emissions. I agree that it could be wise to invest in peripheral regions as this could benefit many. However, this would only help the problem of pollution if this was done in an environmentally friendly way. Otherwise this could just be shifting the pollution elsewhere.

    I recently read an article which talked about plans of the city of Bangkok to build a park aimed at alleviating the floods the city experiences. This seems to be a eco-friendly solution to the problem to me, maybe it similar solutions will be found for the pollution problem!

    1. Thanks Hanna! I do agree with you about how investing in peripheral regions might just shift the pollution somewhere else. Your comment made me realize that the policy have a large potential to go wrong as well. Although I didn’t mention it in the blog post, I do think that investing in public transport is an important solution. However, I am quite skeptical about it because of two main reasons: 1) Car ownership in Bangkok. In 2012 the government implemented a “First Car Buyer” policy that added 1.04 million new cars in Bangkok. Therefore, even though there are new public transport alternatives, the government will have to implement regulations about car use and norms about car use in Bangkok will have to change. 2) Urban governance. There is a lot of corruption in Thai bureaucracy and policies are often created through a top-down approach. So often projects are built that are often to use as much money as possible (ie. building the sky train rather than improving existing transportation systems).

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