A country’s economic development depends on the its stability, its reliability, & openness to business/investment/entrepreneurship; & small due to natural resources/geography. In this, Malaysia scores better than Thailand in almost all points here.

Thailand was never colonised by a Western power.

While the Thais are proud of being the only Southeast Asian country to have not been colonised, this is a double-edged sword for it. Thailand had to build its pillars of the state such as the Rule of Law, political stability (covered in another point), a sound legal system, good infrastructure, a decent civil service, from scratch. The patronage in Thailand exists till today.

Meanwhile, Malaysia inherited all (or most) of this from the British upon a bloodless independence. Sure, past kings of Thailand such as Mongkut & Chulalongkorn did a great deal in consulting multiple Western powers in different fields to modernise Siam, but never to the point of a decent former British colony like Malaysia. The British also abolished a great deal of patronage when they took over.

Malaysia is also extremely lucky that the British actually made sure we had the right institutions & people to run a newly independent country. They did not pack their bags & leave us in a mess like what happened in India & Pakistan. Heck, they even helped fight a Communist insurgency & military aggression from Soekarno’s Indonesia. Of course, the British helped us because they wanted to fight off the domino effect of Communism in the Cold War & to preserve their investments which were still substantial at that time, but in return we were placed with a system that has more of less been the same since independence.

Thailand is politically less stable than Malaysia.

Since the start of its constitutional monarchy in 1932, Thailand’s incredible political divisions & it’s military’s unique role in politics had resulted in 20 coups d’état, the most recent in 2014. Multiple civilian parties & military factions have struggled for political power. Even when the government reverts to civilian rule, it can be very fragile. Violence can also descend quickly- such as the 2010 Thai political protests.

Conversely, Malaysia, with the help of a historically fragmented opposition & rigged elections only had one ruling coalition since its independence 61 years ago- the National Front (Barisan Nasional, BN), headed by the United Malays National Organisation (UMNO). That’s not to say things in Malaysia were easier to run- the BN has withstood multiple events & scandals such as the Communist insurgency, Indonesia’s Konfrontasi, expulsion of Singapore, the May 13th racial riots, the 1988 Constitutional crisis, the Reformasimovement, & most recently the 1MDB scandal; all by iron fisted moves. Even then, protests & scandals don’t usually end up in violence, unlike Thailand.

However, of late, Thailand’s junta has ironically provided the much needed political stability for a sound business environment. Since 2014 (the year the current military junta came to power) economic growth has beaten expectations & tourist arrivals are at a record-breaking high.

Thailand has lesser natural resources than Malaysia.

Malaysia had & currently have many cash-cow commodities. Historically there was tin, rubber, timber, & gold. Nowadays, its mostly palm oil, & oil (petroleum). Commodities have very high profit margins especially when prices are high. However they are also susceptible to price swings. Hence the Malaysian Ringgit is a much more volatile currency.

While Thailand’s primary sector is big on agriculture such as rice & fruits, they do not yield as much profits as commodities. It does, however, make Thailand a self-sufficient country for food.

Also, Malaysia’s secondary sectors (like high-value manufacturing) & tertiary sector (such as banking) is also bigger. However Thailand’s tourism industry is a much bigger.

Geographically, Thailand is in a less advantageous position than Malaysia.

Peninsular Malaysia is flanked by the Strait of Malacca, the world’s busiest natural strait. Hence Malaysia (& Singapore) catches most of port traffic in Southeast Asia. Port Klang, near Kuala Lumpur and Port of Tanjung Pelepas in the border of Singapore are busy ports.

Thailand, while occupying a central position in Indochina & the only land bridge connecting the Peninsular Malaysia & Singapore, is certainly impressive. However, 90% of the world’s freight is by sea, making ground freight less relevant. This is so important to the point that the southern provinces of Thailand export their goods via Penang Port & Port Klang in Malaysia instead of Laem Chabang port near Bangkok due to proximity & ease of movement.

Widespread use of English in Malaysia.

While detractors say that English isn’t important by using examples of countries like Japan, Germany, South Korea, China, Taiwan, etc. Malaysia’s widespread use of English certainly makes business done by foreigners easier. Also, STEM resources & materials are mostly found in English, thus making the teaching of STEM subjects much easier.

Malaysia has a larger overseas Chinese & community.

While Thailand has the largest population of overseas Chinese in the world, Malaysia has the highest percentage of overseas Chinese as a minority, at 25%, versus Thailand’s 12%. Their entrepreneurship has spearheaded the economic growth of their respective countries. Malaysia also has a significant overseas Indian minority, who occupy many professional positions such as doctors, lawyer, engineers, accountants, etc.

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