As the global trade war upends developing nations everywhere, Thailand has a decidedly contrarian problem on its hands: too much winning.
The powerful rally of its currency, the baht, is laced with irony. In 1997, Southeast Asia's second-biggest economy was ground zero for the region's near-collapse. Its runaway debt, weak risk management and opacity were held up as Exhibit A for why the booming Asian Tiger economies crashed.
Bangkok's turnaround efforts have since morphed its bonds and stocks into safe havens from the global trade war. Yet Thailand has too much of a good thing on its hands as the baht trades at six-year highs. Asia's best-performing currency this year is putting the vital export and tourism sectors, which comprise 70% of gross domestic product, at risk.
There is an added irony here. The haven status investors bestow on Thailand comes despite some of the region's most notorious political chaos. Prime Minister Prayuth Chan-ocha is the former general who led the latest junta in a 2014 coup. In June, the parliament made it official as, following a contentious election, it named Prayuth prime minister.
Even so, Bangkok's solid fundamentals are winning the day. Its public debt is roughly 40% of GDP, besting peers Malaysia and Vietnam with their 60% ratios. Thailand also boasts a current account surplus, unlike India, Indonesia and the Philippines. The International Monetary Fund thinks it could swell to 6% of GDP by year end, topping even Japan by a wide margin.
Less positive, though, is Bangkok's fixation with battling currency traders.
On November 6, the Bank of Thailand cut its benchmark interest rate 25 basis points to 1.25%, tying a previous all-time low, to make it less attractive for investors to keep money in the currency, which has risen 6.6% this year.
That follows moves in July to curb foreign inflows. At the time, the BOT limited how much nonresidents can hold in the country to 200 million baht ($6.6 million) per individual, down from 300 million baht. This makes it harder for foreigners to make big local investments in bonds, stocks or property.
Authorities also increased monitoring efforts to police who holds large blocks of debt as a means of scaring off speculators. The baht's advance, though, continued apace.
Bangkok is only treating the symptoms of a strong baht, not the causes, which are, well, the price of success. Unlike in 1997, speculators are not testing Thailand's defenses but rewarding its success. Thai inflation is essentially flat, belying any concerns the economy risks overheating. Also, Bangkok's $220 billion stockpile of foreign currency reserves is more than ample to fend off any global risks.
It is time Thailand took responsibility for its progress since the 1990s. That means stepping up efforts to diversify the economy away from its outsized reliance on exports and beach resorts. These are great things to have, of course, but Bangkok needs to get busy upgrading education and productivity and incentivizing innovation to create well-paid jobs that do not rely on the external sector.
When critics pounce, the government points to its $45 billion Eastern Economic Corridor project. Set in the nation's industrial east, it is Thailand's attempt to cultivate high-tech industries. Of course, the enterprise aims to pull in billions of dollars of overseas investment, upping pressure on the baht.
Another problem: virtually all regional peers are engaged in comparable pursuits. Thailand should be transforming its entire economy into a special enterprise zone, not just one area 90 kilometers from Bangkok. Doing so is crucial to raise average wages and avoid the dreaded middle-income trap. This is when average incomes stall near the $10,000 mark. Thailand's is currently around $7,200.
Part of the challenge is eradicating corruption. Since Prayuth's junta grabbed power, Bangkok's ranking in Transparency International's corruption perceptions index worsened from 85th in 2014 to 99th now, putting it in league with Tanzania and Colombia.
Such inefficiencies keep the benefits of the 2.4% GDP growth the government has provided stimulus for from reaching the households that most need it.
The other part of the challenge is focus. Government officials rarely miss a chance to talk up the Thailand 4.0 program to create a digital economy heavy with fintech startups and potential unicorns. Fair enough, but then so does virtually every Southeast Asian economy. Indonesia, for example, has already produced four startups with $1 billion-plus valuations, and counting.
Execution is what really matters. At the moment, more attention and energy are aimed at lowering the baht than raising competitiveness. This focus presents its own risks in the Donald Trump era. The U.S. president is eyeing Thailand's $19 billion trade surplus with Washington. Thailand also risks being added to the U.S. Treasury Department's monitoring list of currency manipulators.
The bigger risk, though, is that today's currency dramas distract Prayuth's government from building a more vibrant and inclusive tomorrow. The money zooming Thailand's way is a vote of confidence for getting the foundation right these last 22 years.
Why not take the hint -- and the compliment -- and accelerate efforts to construct the economy Thailand 69 million people deserve? Moving upmarket would reap bigger dividends than fighting traders betting on Bangkok's success.
William Pesek is an award-winning Tokyo-based journalist and author of "Japanization: What the World Can Learn from Japan's Lost Decades."