Beyond Bangkok: How Thailand’s Secondary Cities Could Power Its High-Income Economy by 2037

Thailand’s high-income ambition for 2037 depends on improving Bangkok’s productivity while developing specialised, well-connected secondary cities through coordinated investment. Success will require capable local institutions, resilient infrastructure and safeguards against congestion, regional inequality, displacement and environmental damage.

Thailand's ambition to become a high-income economy by 2037 will depend heavily on whether its cities can generate stronger productivity without worsening congestion, inequality and environmental pressure. A new report argues that Bangkok and a carefully selected group of secondary cities must become the foundations of the country's next growth model.

The report, Thailand Cities of the Future: Urban Foundations for a High-Income Economy, was co-authored by the World Bank, the Program Management Unit on Area-Based Development and the Urban Design and Development Center. Using spatial and economic data, international evidence and a general-equilibrium model covering 75 urban centres, it examines how urban investment could support advanced manufacturing, digital services, agribusiness, creative industries, and sustainable and wellness tourism.

The stakes are considerable. Thailand's real GDP per person grew by around 2.2 percent annually between 2021 and 2024, compared with the approximately 5.4 percent annual growth that may be required over the coming decade to reach the 2037 objective. With urban districts accounting for roughly 89 percent of national GDP growth between 2010 and 2020, cities will carry much of the responsibility for narrowing that gap.

Bangkok's Economic Strength Comes at a Rising Cost

Bangkok remains Thailand's dominant economic engine, producing close to half of national output and standing nearly 27 times larger economically than Chiang Mai. Its concentration of workers, companies, infrastructure and services gives businesses access to large markets, specialised skills and extensive supplier networks.

However, those advantages are being eroded by congestion and pressure on urban services. Traffic congestion alone is estimated to reduce Bangkok's gross regional product by between 7 and 10 percent annually. Long travel times affect worker productivity, raise logistics costs and reduce the reliability businesses need to compete.

Flooding and extreme heat introduce additional risks. Without improvements in public transport, drainage, land-use planning and climate-resilient infrastructure, Bangkok could become more expensive to operate in even while remaining indispensable to the national economy.

For policymakers, the immediate priority is not to weaken the capital but to reduce the costs that accompany its scale. Improving mobility and resilience could unlock productivity gains more quickly than attempting to construct entirely new growth centres.

Secondary Cities Offer Potential But Only at Sufficient Scale

The report presents secondary cities as complements to Bangkok rather than substitutes for it. Selected urban centres could develop specialised roles based on their location, workforce, natural assets and existing industries.

Better-connected cities could attract investment, bring jobs closer to communities and reduce the pressure driving workers toward Bangkok. They could also connect agricultural areas, tourism destinations and manufacturing zones with domestic and international markets.

The report's modelling, however, offers an important warning. When overall investment remains below a certain tipping point, concentrating resources in Bangkok produces stronger economic outcomes. Once investment exceeds that threshold, coordinated spending across multiple urban centres becomes increasingly beneficial.

The precise threshold is not contained in the available material. Nevertheless, the conclusion challenges the practice of distributing limited funding widely for political or administrative reasons. Small, disconnected projects across numerous cities may fail to generate the infrastructure, skills and business networks required for meaningful economic transformation.

Thailand will therefore need to identify cities with credible potential and provide investment at sufficient scale. Roads or railways alone will not be enough. Successful urban development will require coordinated improvements in utilities, digital connectivity, education, housing, land management and local administration.

Urban Reform Will Test Thailand's Institutions

The report identifies five foundations for a stronger urban network: complementary specialisation, productive density, reliable connectivity, resilient infrastructure and effective institutions.

Delivering these conditions will require cooperation across national ministries, provincial authorities and municipal governments. Transport investment must connect with industrial development, while education and training programmes must respond to the skills required by local employers. Climate considerations must shape decisions on buildings, drainage, energy systems and urban expansion.

Local governments will need greater technical capacity and reliable financial resources to plan and manage growth. If national agencies control funding while municipalities remain responsible for implementation, projects could be delayed or developed without adequate supporting services.

Selecting priority cities may also create political tensions. Provinces excluded from concentrated investment could regard the approach as unfair. Policymakers will need transparent selection criteria based on economic potential, development needs, climate vulnerability and implementation capacity.

New Opportunities Come With Social and Environmental Risks

Businesses could benefit from improved transport, more dependable infrastructure and access to new labour and consumer markets. Opportunities may emerge for investors in construction, logistics, digital networks, clean energy, tourism and environmental services.

Residents could gain better access to employment, education, healthcare and public transport. Stronger secondary cities may allow more people to find economic opportunities without relocating to Bangkok.

The gains are not guaranteed. Large urban projects can push up land and housing prices, displacing lower-income households and small enterprises. Poorly managed industrialisation may increase pollution and pressure on water, energy and surrounding ecosystems. Construction-focused spending could create temporary activity without producing long-term productivity gains.

Development partners can assist through financing, technical expertise, spatial data and project preparation. Private investors, meanwhile, will require transparent land-use rules, consistent regulation and confidence that public infrastructure will be maintained.

The next test will be whether Thailand identifies priority cities, mobilises investment above the modelled tipping point and gives local authorities the capacity to deliver. Progress should be measured through productivity, wages, travel times, housing affordability and climate resilience, not simply the amount spent.

Thailand's urban challenge is ultimately one of coordination. If Bangkok becomes more efficient while selected secondary cities acquire distinct economic roles, the country could build a broader platform for growth. If investment remains fragmented, its cities may struggle to close the distance between present performance and the high-income ambition set for 2037.