Thailand’s economy is built around exports. The country is a leading regional exporter when it comes to cars, rice, and manufactured goods, as well as services like tourism. One export we probably don’t associate with Thailand immediately is movies, but the country actually has one of the better developed ecosystems for film production in Southeast Asia.
There is a government agency, the Thailand Film Office, whose task it is to market Thailand to foreign production companies. There are a number of government incentives designed to make shooting in Thailand attractive, such as rebates for productions that meet minimum expenditures and hire locals. In 2023, there were 460 foreign productions in Thailand which generated the equivalent of about $208 million in economic activity.
Thailand has long courted foreign productions and is known as a reliable and relatively low-cost regional destination to shoot in. Major Hollywood movies like “The Hangover II” and “The Beach” have been filmed in Thailand, and HBO’s hit show “The White Lotus” is another. The show, now in its third season, is a dark comedy that lambastes the ultra-wealthy as they vacation in luxury resorts. The first two seasons were set in Hawaii and Italy, and the third was filmed in Thailand.
But Thailand also deals in another kind of cinema export which seems to be increasing in popularity lately: locally made movies. One of this year’s biggest hits in Thailand is a film called How to Make Millions Before Grandma Dies, which earned over $10 million at the domestic box office. It has also been popular outside of Thailand, earning $9 million in Indonesia and nearly $9 million more in the rest of Southeast Asia. Netflix recently acquired the streaming rights.
This illustrates two points about the political economy of Thailand, and the wider region. One, it shows the extent to which Thailand is oriented toward exports across sectors, including the movie business. The economic activity generated by film production is not that large compared to Thailand’s other big export engines, like tourism. But the use of policy tools such as rebates to attract foreign productions is typical of how the country seeks to gain competitive advantages in exports.
This can be contrasted with nearby Indonesia. Indonesia is sometimes compared unfavorably to Thailand in terms of its export competitiveness, including a less attractive regulatory and investment climate for foreign firms. White Lotus is a good case in point. A show about out-of-touch wealthy foreigners unwittingly being the butt of the joke as they holiday in an exclusive Southeast Asian resort could easily have been set in Bali. Presumably, the showrunners went with Thailand, at least in part, because of the incentive scheme and the depth of the local film production ecosystem.
It is true that Indonesia has room to improve its export competitiveness. But one thing that’s often overlooked in this discourse is that Indonesia doesn’t need exports as much as Thailand does, because the domestic market is so much bigger and consumption can serve as a more reliable engine of growth.
Just look at “How to Make Millions,” this year’s big blockbuster Thai film. It made almost as much money in Indonesia as it did domestically in Thailand. Indonesia’s film industry has also been pretty hot lately, but growth is being driven mostly by domestic demand rather than exports. In fact, demand for movies in Indonesia is so hot that it can even be a sizable overseas market for successful Thai films.
What is really interesting to me is that the development of the cinema business in these two countries mirrors the development of auto manufacturing. Thailand very successfully uses policy tools like tax breaks and subsidies to attract foreign auto manufacturers to the country, with the specific goal of boosting exports. After many false starts, Indonesia also eventually became a competitive car exporter but it did so mainly on the strength of domestic demand rather than specific export-oriented policies (I detailed this here).
Now we see the same story playing out in the movie business, with Thailand focused on making itself attractive to foreign productions and exporting successful local films, while Indonesia’s booming film industry is being driven mainly by domestic demand. That this same pattern replicates across industries, from cars to movies, suggests that it’s a structural feature of the political economy of these two countries.