Key challenges to becoming high-income country

[webfact]

Key challenges to becoming high-income country

By Wichit Chaitrong 
The Nation 

 

FILE photo

 

HUMAN RESOURCE development and decentralisation of politics and the economy will be key factors in lifting Thailand to a high-income country, after economic development over the past half century focused on infrastructure and urbanisation.
 

The National Economic and Social Development Council recently proposed raising Thailand from an upper middle-income country to a high-income one with per capita income of US$15,000 (Bt460,500) annually from $6,000 (Bt184,200) in 2016. Thailand has been trapped in the upper-middle income bracket for more than a decade as per the World Bank’s benchmark. 

 

The state-owned think tank forecast that annual economic growth of 5 per cent would see Thailand become a high-income country within 20 years, starting from 2017. The total factor productivity growth would need to accelerate to 3 per cent annually from 1.7 per cent in 2015. This is a highly ambitious goal judging from the “new normal” of slower GDP growth at around 3.8 to 4 per cent in recent years.

 

The junta-backed government initiated the flagship Eastern Economic Corridor (EEC) development project, which the current coalition government has vowed to continue with a combined public and private investment in the first five years of over Bt1 trillion (over $40 billion). Policymakers expect the EEC’s successful implementation to play a key role in driving the economy to the next stage. 

 

However, not everyone agrees. 

 

“Economic development over the past 40 years has been concentrated in the central and eastern coastal regions, while other parts of the country have not seen much development,” said Yongyuth Chalamwong, research director at the Thailand Development Research Institute (TDRI), an independent research house. The government has prioritised the EEC but special economic zones in the North, Northeast, West and South are not getting much attention, he said.

 

Over the course of many years, people from other parts of the country have migrated to the central and eastern regions to find higher-paying jobs. 

 

“What they have done is just send their money back to their hometowns where manufacturing bases have not been developed,” he said, adding that this was not enough to power their hometown economies.

 

Thailand needs to seriously develop border cities to act as the centre of gravity for border trade and investment with neighbouring countries, he said.

 

As the same time, Thai politics is also highly centralised, with Bangkok as the seat of political power. 

 

Political scientists such as Prajak Kongkirati often blame the centralised system for preventing other regions from being able to manage their own affairs. 

 

The Interior Ministry still controls the whole administration through its appointed provincial governors, who largely serve their bosses in Bangkok rather than cater to the needs of the local people. “The lack of political decentralisation has a wider impact, as the system inhibits new talents who can lead their local communities or bring about regional development,” said TDRI president Somkiat Tangkitvanich. 

 

“While economics and politics remain centralised, it is very hard for a large part of the population to have a high income,” said Yongyuth.

 

To achieve high-income status, the country would also need more skilled labour to replace a reduction in the workforce because of Thailand’s ageing society. 

 

The global technological shift is also affecting the country. 

 

“As disruptive digital technology changes the landscape of the global economy, Thailand will need a more skilled labour force to drive the agriculture and non-agriculture sectors,” said Yongyuth.

 

“Labour productivity growth in the agricultural sector is alarmingly low and has even been in negative territory in some years while productivity in the services and manufacturing sectors is about 3 per cent and 4 per cent respectively,” he added. 

 

“To achieve high-income country status, our labour productivity growth should accelerate to 5 per cent.” 

 

As technology drives industries towards semi- or full automation, we will need fewer workers and this could cushion any impact from a demographic change. But we need a more highly skilled workforce, he said. 

 

In the short-term, Thailand would need to depend on imported professionals to train local teachers or workers in order to upgrade education and skills of the labour force, then in the long-term the country could rely on its own skilled workforce. 

 

Several vocational schools and manufacturers in the eastern seaboard have already started training programmes. “We want more students graduating from vocational schools, but most Thai students still prefer studying in universities,” lamented Orapin Sermpraphasilp, chairperson of the Federation of Thai Industries of the Eastern Region. 

 

Sompop Manarungsan, president of Panyapiwat Institute of Management, said labour needs skills in four areas: finance, information technology, language (especially English), and professional standards. Many Thai workers lag behind in these areas compared with their Asean peers in Indonesia, Philippines and Vietnam, he said. He cited higher English skills among Filipinos and strong IT knowledge in the Indonesian and Vietnamese labour force.

 

Source: http://www.nationmultimedia.com/detail/business/30371915

 

-- © Copyright The Nation 2019-07-01

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[Chazar]

Christ, where to start, lazy , incompetent, addicted to phone screen, inability to think 'act on their own, subordinate.. Im sure ive missed some already

[Chazar]

1 hour ago, webfact said:

“Labour productivity growth in the agricultural sector is alarmingly low and has even been in negative territory in some years while productivity in the services and manufacturing sectors is about 3 per cent and 4 per cent respectively,” he added. 

Easier to hide up a corner in the store or congregate together to discuss the latest farcebook posting/comical boing video than get out in a  field and do some real work.

Dont want that nasty brown skin when we can spend all our salary being whiter than white  or applying Mens grooming products...............Jesus "grooming products for men" says it  all an insult to men!

[chainarong]

Thailand is nowhere near even becoming an emerging economy let alone a high income one , the structure of the system would need to be completely overhauled along with the the political system , the tourist industry who prides itself on cheap holidays would no longer exist in its present form ,   that twenty baht meal on the side walk cafe would become a three hundred baht meal, along with high income comes high costs and prices, its all very well talking about it, putting into practice is another.

[PatOngo]

While the greedy 1% at the top of the food chain control 66% of the countries wealth, there is little or no hope that this will ever happen!

[bkk6060]

Many of you with low money better hope it never become s a high income place as prices will greatly rise.

That fixed pension would become even more worthless then it is now.

[onera1961]

As long as poor girls in Issan dream of working in brothels (aka bars) of Bangkok, Pattaya, Hua Hin, Phuket, etc, meet 50 years old farang/Japanese sexpats and pimps and get married, there would not be any improvement in living standards. 

Edited June 30, 2019 by onera1961

[leeneeds]

2 hours ago, webfact said:

As technology drives industries towards semi- or full automation, we will need fewer workers

The world wide problem that is gaining momentum by years now and not generation

change, all still have to eat and looking at crop diversification is one area, as is renewable energy, mineral wealth is here in Thailand.

Investors  have  been plagued by governmental inadequate understanding, and miss management and has scared off investors. Being able to see and acknowledge faults is a starting point.

 

[Chazar]

11 minutes ago, leeneeds said:

Being able to see and acknowledge faults is a starting point.

???? no problem, its always the foreigners  fault!

[Lenny Jones]

1 hour ago, Chazar said:

Christ, where to start, lazy , incompetent, addicted to phone screen, inability to think 'act on their own, subordinate.. I'm sure i've missed some already

You forgot the millions of poverty-stricken rice farmers, rubber-tappers and other rural people.

 

[Chazar]

2 minutes ago, Lenny Jones said:

You forgot the millions of poverty-stricken rice farmers, rubber-tappers and other rural people.

 

Many of them become "construction experts" after theyve planted the rice , pumped the land full of chemicals and then sold it as "orgasmic  organic" right after theyve pawned the land to anyone who'll lend for their govt to give it them back to re  pawn it but thats not vote buying.

[RickBradford]

The key is education.

 

To improve education, you must improve the teachers. To improve the teachers, you must improve the education.

 

Not an easy conundrum to solve, and one that inevitably gets shoved inside the largest structure in Thailand - the Too-Hard Basket.

[JAG]

1 hour ago, Chazar said:

Christ, where to start, lazy , incompetent, addicted to phone screen, inability to think 'act on their own, subordinate.. Im sure ive missed some already

 

1 hour ago, Chazar said:

Easier to hide up a corner in the store or congregate together to discuss the latest farcebook posting/comical boing video than get out in a  field and do some real work.

Dont want that nasty brown skin when we can spend all our salary being whiter than white  or applying Mens grooming products...............Jesus "grooming products for men" says it  all an insult to men!

 

9 minutes ago, Chazar said:

???? no problem, its always the foreigners  fault!

 

2 minutes ago, Chazar said:

Many of them become "construction experts" after theyve planted the rice , pumped the land full of chemicals and then sold it as "orgasmic  organic" right after theyve pawned the land to anyone who'll lend for their govt to give it them back to re  pawn it but thats not vote buying.

You know, I have just the beginning of a feeling that you don;t think much of the people here?

 

[Lenny Jones]

19 minutes ago, leeneeds said:

The world wide problem that is gaining momentum by years now and not generation

change, all still have to eat and looking at crop diversification is one area, as is renewable energy, mineral wealth is here in Thailand.

Investors  have  been plagued by governmental inadequate understanding, and miss management and has scared off investors. Being able to see and acknowledge faults is a starting point.

 

Thailand WAS ONCE the world's biggest rice exporter.  Recent governments have stuffed that up and now other Asian countries are under-selling to those markets.

 

Allowing the baht to get stronger is killing exports - including a labor resource that attracted multi-national industries, like the automotive manufacturers.  Soon they'll be moving to Vietnam, Cambodia and Laos.

Devalue the baht.  Put rice back on the top of the list (the infrastructure is already there) and Thailand will be OK.

Between rice and tourism Thailand could be good once again

[Destiny1990]

39 minutes ago, bkk6060 said:

Many of you with low money better hope it never become s a high income place as prices will greatly rise.

That fixed pension would become even more worthless then it is now.

Stop patronizing others about their income  while you drive  a motorcycle  in Pattaya.

Edited July 1, 2019 by Destiny1990

[lamyai3]

11 minutes ago, RickBradford said:

The key is education.

Not go sakoon. 

[Lenny Jones]

6 minutes ago, JAG said:

 

 

 

You know, I have just the beginning of a feeling that you don;t think much of the people here?

 

Generalizing has scope.

 

Consider the Thailand's big picture and include drug use, crime rate, road fatalities, slavery, corruption - - -

 

Comparatively speaking - It is hard to consider a level of respect.

 

Anecdotally I could name a very large number of Thais who have my respect but - generalizing - - - - - - No

[Chazar]

43 minutes ago, JAG said:

 

 

 

You know, I have just the beginning of a feeling that you don;t think much of the people here?

 

Or the system which make the people, herein lies the problem. A  free country it certainly isnt.

[Chazar]

41 minutes ago, Destiny1990 said:

Stop patronizing others about their income  while you drive  a motorcycle  in Pattaya.

Like this cheap piece of........

[worgeordie]

Thailand is already a high income place......but only for certain

people,living off the backs of others,those that run the country

don't want better education for anyone,that would make the

population harder to control,keep them dumb,pay them a pitance,

that's going to be the way for a very long time.

regards worgeordie

[PatOngo]

7 minutes ago, worgeordie said:

Thailand is already a high income place......but only for certain

people,living off the backs of others,those that run the country

don't want better education for anyone,that would make the

population harder to control,keep them dumb,pay them a pitance,

that's going to be the way for a very long time.

regards worgeordie

Exactly, the mushroom method, keep them in the dark and feed them BS!

[Medway]

Thailand needs “Imported professionals” quote, unquote.

I have know thoughts in saying that within the expat community there is an abundance of skilled professionals Thailand just needs to seek it out. Importing those skilled people into Thailand with all the stumbling blocks and hurdles to jump.....well...a real incentive package would need to be put in place for people to come.

[mikebell]

3 hours ago, PatOngo said:

While the greedy 1%  at the top of the food chain control 66% of the countries wealth, there is little or no hope that this will ever happen!

Agreed - it's already a high income country, for a few politicians; police/army personnel; hi-so civil servants.

[Katipo]

I have 3 steps for you....

 

1. Eliminate government and corporate corruption
2. Eliminate government and corporate corruption
3. Eliminate government and corporate corruption

????

[manarak]

becoming a high income country involves becoming a police state, a ninny state and taking away much of people's personal freedoms.

[Enoon]

12 hours ago, worgeordie said:

Thailand is already a high income place......but only for certain

people,living off the backs of others,those that run the country

don't want better education for anyone,that would make the

population harder to control,keep them dumb,pay them a pitance,

that's going to be the way for a very long time.

regards worgeordie

 

It took 20 posts before someone hit the nail on the head.

 

The simple, plain, truth....that makes a mockery of all "their" claims of concern for and advancement of the people by an implied "benevolent stewardship".

 

Only when the people of Thailand truly wake up to the grotesque hypocrisy of their rulers (and their contempt for the people) will anything change.

 

 

Edited July 1, 2019 by Enoon