Unleashing Urban Productivity: How Thai Cities Can Drive High-Income Growth

The World Bank urges Thailand to raise Bangkok’s productivity and strengthen secondary cities to boost investment, jobs, and national resilience. Thailand can accelerate its transition to a high-income economy if it unleashes the full productive potential of its cities, according to a new World Bank report.

Key Takeaways

• The World Bank report Thailand Cities of the Future highlights that unleashing urban productivity is essential for Thailand to achieve high-income status by 2037.
• Bangkok currently drives nearly half of the national output but faces mounting challenges from congestion, climate risks, and high urban costs.
• To ensure sustainable growth, Thailand must complement Bangkok’s economic anchor role by strategically investing in secondary cities, improving infrastructure, and fostering better coordination between local and national governments

The study Thailand Cities of the Future: Urban Foundations for a High-Income Economy argues that the country’s economic growth is already concentrated in urban areas and that improving their productivity will be essential to meet the goal of achieving high-income economy status by 2037. According to the paper, about 89% of gross domestic product growth recorded between 2010 and 2020 came from urban districts. However, the country will need an annual per capita GDP growth of approximately 5.4% over the next decade to close the gap and reach its high-income target.

“Building Thailand’s cities of the future is not simply an urban planning agenda. It is an agenda for growth, competitiveness, jobs, and resilience,” said Stephen N. Ndegwa, World Bank Country Director for Thailand and Myanmar. The report suggests that Bangkok must continue to function as the main national economic anchor, but argues that secondary cities need to take on more relevant and complementary roles. The goal would not be to displace the capital, but to build a more balanced urban network.

Bangkok concentrates the economy

The capital generates nearly half of the national output and is almost 27 times larger than Chiang Mai, the country’s second city. This concentration has favored Thailand’s economic development, but has also created ever-increasing costs. Congestion accounts for between 7% and 10% of Bangkok’s gross regional product every year. At the same time, climate risks, pressure on infrastructure, and rising housing costs complicate the capital’s ability to maintain its pace of expansion.

The World Bank believes the question is no longer choosing between Bangkok and secondary cities. The priority is to establish a more efficient economic division: a productive and connected capital, supported by cities with their own specializations, better infrastructure, and the capacity to attract investment.

The report warns that many Thai cities have not yet reached the scale or productivity needed to become regional engines of growth. The problem is not limited to a lack of infrastructure. It also includes fragmented planning, weak coordination among agencies, and funding that does not always match the economic strengths of each territory.

The World Bank proposes concentrating investments in places where they can reinforce each other. A city with tourism potential, for example, not only needs new roads or airports. It also requires digital services, urban management, workforce training, climate resilience, and efficient connections with suppliers and markets.

“The key is to invest more strategically,” said Poon Thiengburanathum, Deputy Director of Strategic Planning and Management of the Program Management Unit for Area-Based Development.

The institutional challenge

Urban transformation will also depend on the ability of local and national governments to work in a coordinated manner. A city may receive new infrastructure and still fail to generate growth if it lacks planning, talent, efficient transportation, or institutions capable of executing projects.

The report was prepared by the World Bank together with the Program Management Unit on Area-Based Development and the Urban Design and Development Center. The study gathers international, national, and local knowledge on the challenges and opportunities of Thai urban development.

Bangkok will remain indispensable, but its size no longer guarantees a limitless advantage. Congestion, climate, and urban costs are turning economic concentration into a vulnerability. The alternative proposed by the World Bank is not to abandon the capital, but to build a network capable of making Chiang Mai and other cities play stronger economic roles.

For Thailand, the 2037 goal will depend less on a single megacity and more on the ability to connect urban centers with clear objectives, coordinated investments, and differentiated economic responsibilities. If the country succeeds in doing so, its cities could become the engine of a high-income economy. If not, Bangkok’s congestion and the untapped potential of secondary cities will continue to be a drag on the next phase of development.