The Kingdoms of Norway and Thailand possess great geographical and cultural distinctions. Although research reveals it to be true, they also exhibit particular economic similarities that can be explored. Understanding them will surely contribute to a broader comprehension of comparative politics and these Kingdoms commonalities. Notably, natural resources, global trade, social welfare, and their challenges will be a few of the sub-topics that will be highlighted throughout these texts to bring awareness in regards to their diverse paths to economic success or failure. In the subsequent lines, this blog post will further analyze the systems and trajectories taken by these countries to provide insights into the political and social choices made by each.
The Midnight Sun (Norway) is well renowned for its reserve of oil and gas and is a co-founder and steadfast strategic Ally in the North Atlantic Treaty Organization (NATO). For years, they have played a huge role in shaping its economy and maintaining its wealth. Because the country is the third largest exporter of natural gas in the world, behind Russia and Qatar, it managed to further establish itself and reach a freedom score of 76.9 in 2023. The heritage foundation article says, ““Norway’s economic freedom score is 76.9, making its economy the 12th freest in 2023.” This further establishes that Norway has been robust and benefiting society as a whole (both national and on a global level.) To ensure a safe and stable country, the establishment of the government’s Pension Fund Global was created. The reliance of the Norwegian economy leaves it vulnerable to fluctuations in the global oil prices which can easily impact revenue as well as other sectors. In wikipedia, it asserts, “The purpose of the fund is to invest parts of the large surplus generated by the Norwegian petroleum sector, mainly from taxes of companies but also payment for licenses to explore for oil as well as the State’s Direct Financial Interest and dividends from the partly state-owned Equinor.” However, to fix this issue, Norway needs to find a long and more sustainable solution.
Because Norway has a mixed economic system with a combination of free-market activity and government intervention, it invests in renewable energy technologies – such as significant amounts of wind power. Norway utilized the money and wealth obtained by the profit gained by the oil. In the business Norway article, it states, “In Norway, approximately 96 per cent of all electricity is generated by renewable hydropower.” Still, today because of its high production, hydropower remains the backbone of its power system (more than 90%). “Hydropower has been the basis for the development of a welfare society since we started utilizing the energy in rivers and waterfalls to produce energy in the late 1800s.” Because of this, the country’s trade volume has been high, with total exports and imports accounting for a substantial portion of its GDP highlighting the significance in international trade. Moreover, Norway has actively engaged in free trade agreements, both independently and as a member of the EFTA, which has facilitated trade relations with countries outside the European Union.
Norway has created policies aiming to reduce income inequality and guarantee a high standard of living for its citizens. The high standard of living equals a high cost of living (it is seen through high wages, high taxes) and affects mostly businesses and investments. The local newspaper asserts, “ There’s hard competition in the Norwegian retail market, and all our shops compete daily. We can’t pass on all the price rises to our customers – that’s why you can see our profitability going down.” It directly impacts and decreases entrepreneurship and innovation for the young adults. Nevertheless, these policies help create an environment for universal healthcare, free education and generous social benefits, but the aging population and the declining birth rate has placed a strain on public finances. Life in Norway written by Davil Nikel asserts, “In 2022, there were a total of 51,480 newborns in Norway. That might sound a lot, but it actually marks a drastic drop in the fertility rate within the country.” In the previous blog post, called Norway and Thailand: The Epitome of Democracy and the Complexity of the Political Landscape. It further elaborates on the good social welfare established by Norway’s government.
Norway’s fund has been largely contributing to its citizens’ standard living, their economic stability and their extensive welfare system. Thanks to its progressive taxation and labor regulations, the income inequality is low. The facts and research proves that while the country did undergo a process of industrialization in the early 20th centuries, Norway can arguably be primarily revolving around modernization (education, democratic governance, sustainability)
However, unlike Norway, The Land of Smiles (Thailand) benefits from its strategic location. Given where it is situated, the labor force and the support accorded for foreign investment brings a diverse economy. Despite the economic growth spur, Thailand is grappling with issues such as poverty and unequal access to services. The Kingdom has a mixed economic system in which there is a variety of private freedom, combined with centralized economic planning and government regulation which demonstrates why it relies on natural resources as much as the Kingdom of Norway, nonetheless a significant wealth disparity exists between the rural and the urban areas. The gap between the rich and the poor has only widened and hampers sustainable development and undermines social cohesion.
Thailand is a member of ASEAN, which was established in 1967. ASEAN comprises ten members, including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Moreover, natural gas and rubber, rice have all contributed plenty to the economic growth of the country. Thailand is the biggest exporter of Natural rubber and second largest exporter of rice and has a 33.3% share of global export that is worth $13 billion annually, as well as their rice export being worth $25 billion annually. Although these natural resources have greatly benefited the country throughout the past several decades into supporting a livelihood for its citizens, watersheds, forests and mineral resources – to say the least have been instrumental in supporting Thailand’s manufacturing and tourism industries. Thailand has free trade agreements with countries such as China, Japan, Australia, and New Zealand. These agreements have facilitated market access, and the reduction of tariffs. In spite of that, the country has been struggling with environmental issues. Water scarcity and pollution have been challenges that impact public health but also pose a risk to agriculture (their natural resources as a whole.)
In the Thailand development article, it demonstrates that In Thailand, it has been estimated that applying green growth policies that understand these trade-offs, may be worth US$2.06 billion to the national economy in terms of the potential to enhance the net present value of ecosystem services supplied by forests, wetlands, mangroves and coral reefs. This represents a 7.8% increase in economic growth when compared to a ‘business as usual’ scenario.”
Furthermore, the Kingdom realized the importance of transitioning towards cleaner energy and like Norway, has embarked on renewable energy initiatives in order to continuously improve their electricity by 50 percent. Although in the article written by Danielle Fallin, Karen Lee and Gregory Pollin “Thailand has pledged to be carbon neutral by 2050 and reach net-zero GHG emissions by 2065. The 2022 National Energy Plan aims to generate 50 percent of the country’s electricity from clean energy by 2040,” the country continues to promote solar power and has set ambitious targets in regards to agricultural products and automotive industry, but the corruption erodes the public’s trust and diverts the resources available away from productive sectors. Thailand is a country that has experienced a significant amount of industrial transformation in the later half of the 20th century, the growth of its industries contributed to increased employment opportunities, urbanization, and improved infrastructure. Although industrialization is a big part of Thailand’s development, its political and cultural changes have slowly reconstructed the country into modernization.
Both countries today are benefiting from international trade because of the relationships constructed and nurtured with many countries worldwide. Nonetheless, they continue to require reform of governmental policies, international support and cooperation as well as private sector innovation.
Work cited
- “The Norwegian Economy and Business Sector.” Norgesportalen, www.norway.no/en/central-content/en/values-priorities/the-norwegian-economy-and-business-sector/#:~:text=Oil%2C%20gas%2C%20seafood%2C%20and,and%2070%20%25%20of%20our%20exports. Accessed 11 June 2023.
- “Norway.” Norway Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption, www.heritage.org/index/country/norway#:~:text=Norway%20is%20one%20of%20the,world%27s%20largest%20sovereign%20wealth%20fund. Accessed 11 June 2023.
- Pines, Lawrence. “Thailand’s Economy: Learn How It Benefits from Rubber and Rice Exports.” Commodity.Com, 5 Mar. 2021, commodity.com/data/thailand/.
- “Environment and Natural Resources.” Open Development Thailand, 19 Dec. 2017, thailand.opendevelopmentmekong.net/topics/environment-and-natural-resources/#:~:text=Thailand%20is%20a%20country%20rich,%2C%20export%2C%20and%20tourism%20industries.
