The Political Economy of Cinema in Thailand – The Diplomat

Thailand’s economy is based on exports. The country is a leading regional exporter when it comes to cars, rice and manufactured goods, as well as services such as tourism. One export we probably don’t immediately associate with Thailand is films, but the country actually has one of the more developed film production ecosystems in Southeast Asia.

There is a government agency, the Thailand Film Office, whose job it is to market Thailand to foreign production companies. There are a number of government incentives designed to make filming in Thailand attractive, such as discounts for productions that meet minimum spending requirements and hiring locals. In 2023, there were 460 foreign productions in Thailand, generating economic activity equivalent to approximately $208 million.

Thailand has long courted foreign productions and is known as a reliable and relatively inexpensive regional filming destination. Major Hollywood films such as The Hangover II and The Beach were filmed in Thailand, and the hit HBO series The White Lotus is another. The series, now in its third season, is a dark comedy that harshly criticizes the super-rich as they vacation at luxury resorts. The first two seasons took place in Hawaii and Italy, the third was filmed in Thailand.

But Thailand also engages in another type of cinema export that seems to be becoming increasingly popular lately: locally produced films. One of the biggest hits in Thailand this year is the film “How to Make Millions Before Grandma Dies,” which grossed over $10 million at the domestic box office. It also enjoyed widespread popularity outside of Thailand, grossing $9 million in Indonesia and nearly $9 million more in the rest of Southeast Asia. Netflix recently acquired the streaming rights.

This highlights two points about the political economy of Thailand and the region as a whole. First, it shows the extent to which Thailand is export-focused across industries, including the film industry. The economic activity generated by film production is not as large compared to Thailand’s other major export drivers, such as tourism. But the use of policy tools such as rebates to attract foreign production is typical of how the country seeks to gain a competitive advantage in exports.

This can be compared to nearby Indonesia. Indonesia is sometimes compared to Thailand at a disadvantage in terms of its export competitiveness, including a less attractive regulatory and investment climate for foreign companies. White Lotus is a good example of this. A series about out-of-touch, wealthy foreigners who unwittingly become the butt of jokes while vacationing at an exclusive Southeast Asian resort could easily have been set in Bali. Presumably the showrunners chose Thailand, at least in part, because of the incentive system and the depth of the local film production ecosystem.

It is true that Indonesia has room to improve its export competitiveness. However, what is often overlooked in this discourse is that Indonesia does not need exports as much as Thailand because the domestic market is much larger and consumption can serve as a more reliable engine of growth.

Just look at “How to Make Millions,” this year’s big blockbuster film from Thailand. Almost as much money was made in Indonesia as domestically in Thailand. The Indonesian film industry has also been pretty hot lately, but growth is driven primarily by domestic demand rather than exports. In fact, the demand for films in Indonesia is so great that it can even be a sizeable overseas market for successful Thai films.

What really interests me is that the development of the cinema business in these two countries mirrors the development of automobile manufacturing. Thailand has been very successful in using policy instruments such as tax breaks and subsidies to attract foreign car manufacturers to the country with the specific aim of boosting exports. After many false starts, Indonesia also eventually emerged as a competitive car exporter, but this happened mainly due to the strength of domestic demand rather than any specific export-oriented policies (I have described this in detail here).

Now we see the same story in the film business: Thailand is focused on attracting foreign production and exporting successful local films, while Indonesia’s booming film industry is driven primarily by domestic demand. That this same pattern repeats itself across industries, from cars to films, suggests that it is a structural feature of the political economy of these two countries.