This article takes the case of Thailand to present the distribution of income and the evolution of the profit rate in a low-wage country which belongs to the second generation of newly industrialising countries. We show that during the boom years the high rate of profit was not based on a continous process of modernisation, but rather on a redistribution of income in favour of capital. We also analyse the link between the distribution of income and competitiveness. We show that labour income repression is not necessary to maintain competitiveness. Quite to the contrary, in this period of international crisis the labour income share should recover lost ground if Thailand and other Asian countries want to rebalalance growth in favour of domestic demand.