Thailand At The Crossroads

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  • Thailand At The Crossroads

    1. 1. Suvit Maesincee December 16, 2005 Thailand At the Crossroads: High Performance Economy VS. Sufficiency Economy
    2. 2. <ul><li>Moving Towards High Performance Economy </li></ul><ul><li>Globalization </li></ul><ul><li>Thailand At the Crossroads </li></ul><ul><li>Renewal Strategy </li></ul>
    3. 3. Moving Towards High Performance Economy
    4. 4. Building a High Performance Economy High Performance People High Performance Enterprises High Performance Government High Performance Economy
    5. 5. Globalization Localization High Performance Economy <ul><li>Efficiency </li></ul><ul><li>Cost effective </li></ul><ul><li>Productivity </li></ul><ul><li>Innovation </li></ul><ul><li>Social Cohesion </li></ul><ul><li>Community Building </li></ul><ul><li>Cultural Identity </li></ul><ul><li>Family Value </li></ul>Driving Forces
    6. 6. Globalization
    7. 7. Source: The World is Flat <ul><li>• Started in 1492 </li></ul><ul><li>Driven by conquest and </li></ul><ul><li>empire </li></ul>Globalization 1.0 Globalization 3.0 Globalization 2.0 Globalization of Nation-States Globalization of Companies Globalization of Individuals and Small Groups <ul><li>• Started around 1800 </li></ul><ul><li>Driven by the first industrial- </li></ul><ul><li>era capitalist enterprises </li></ul><ul><li>organizing internationally </li></ul><ul><li>around market and labor </li></ul><ul><li>• Started around 2000 </li></ul><ul><li>Flattening the global playing </li></ul><ul><li>field and shrinking the world </li></ul><ul><li>of labor, markets and ideas </li></ul><ul><li>to person-to-person size </li></ul>Waves of Change
    8. 8. Global War World Power Delegitimation Challenger 1491-1516 Italian and Indian Ocean Wars 1516-1539 Portugal 1540- 1560 1560-1580 Spain 1580-1609 Spanish-Dutch Wars 1609-1639 Netherlands 1640-1660 1660-1688 France 1688-1713 Wars of Louis XIV 1714-1739 Britain I 1740-1763 1764-1792 France 1792-1815 Wars of French Revolution and Napoleon 1815-1849 Britain II 1850-1873 1874-1914 Germany 1914-1945 World Wars I&II 1945-1973 United States 1973-2000 2000-2030 Soviet Union Globalization of Nation-States
    9. 9. Globalization of Companies Source: Stanley Hoffmann The concern for global competitiveness limits the aptitude of states and other actors to address this problems Issues The logic of pure capitalism does not favor social justice Become a formidable cause of inequality among and within states The specialization and integration of firms make it poss ible to increase aggregate wealth Thrusts 46 of the largest 100 economies of the world today are companies, not countries
    10. 10. Globalization of Individuals and Small Groups <ul><li>November 9, 1989—a shape transition from “ A W orld of Wall to a World of Network” </li></ul><ul><li>August 8, 1995—the day Netscape went public, igniting the dot-com boom </li></ul><ul><li>and transforming the Internet into the WWW </li></ul><ul><li>The advent of “workflow”—all the software applications, standards, and electronic </li></ul><ul><li>transmission pipes, like middleware, that connected all computers and fiber optic cable </li></ul><ul><li>The creation of a platform for inexpensive worldwide collaboration among people, </li></ul><ul><li>enterprises, and software </li></ul><ul><li>Outsourcing/ Off-shoring </li></ul><ul><li>Open Sourcing </li></ul><ul><li>In-sourcing </li></ul><ul><li>Supply-chaining </li></ul><ul><li>Informing </li></ul><ul><li>Wireless access and voice communication over Internet </li></ul>
    11. 11. IN-OUT OUT-OUT IN-IN OUT-IN The New Competitive Landscape
    12. 12. Thailand At the Crossroads
    13. 13. Almost all Thai Industries Stuck in the Middle Leaders Technology and Design Followers Low Cost Competitive Advantage Differentiation Italy (2) China (1) Thailand (11) Design / differentiation based competition Low Cost-based competition Hong Kong (3) Competitive Nutcracker Low Cost Competitive Advantage Differentiation Factor Driven Economy investment Driven Economy Innovation Driven Economy
    14. 14. High Exports Accompanied by High imports Million USD
    15. 15. Internationalization of Thai People are Ranked Lower than Malaysia and Singapore 2001 2002 2003 2004 2005 Thailand China Singapore Malaysia Philippines Indonesia 30 57 47 48 46 48 53 51 57 54 1 3 4 2 1 20 20 18 20 19 34 52 52 33 32 38 59 58 59 60 Source: A.T.Kearney /Foreign Policy Magazine Globalization Index (64 Countries) Globalization Index Ranking
    16. 16. Developing Country MNCs (in Top 50) Hong Kong Korea China Taiwan India ASEAN 9 6 6 2 1 7 Source: UNCTAD 1999:11 No single Thai company was ranked in top 50 developing country MNCs.
    17. 17. Overall Infrastructure Quality Railroad Infrastructure Development General Infrastructure is still not ready to support the growth Port Infrastructure Quality Air Transport Infrastructure Quality Quality of Electricity Support Telephone Infrastructure Quality Postal Efficiency 29 (4.9) 38 (3.7) 36 (4.5) 20 (5.6) 41 (5.3) 41 (6.1) 38 (5.1) Rank/Score Mean Top Rank/Score 3.9 3.1 3.9 4.5 4.6 5.2 4.4 Singapore (6.8) Switzerland (6.7) Singapore (6.8) Singapore (6.9) Iceland (7.0) Finland (6.9) Iceland (6.9)
    18. 18. Technological Sophistication Firm Level Technology Absorption Quality of Scientific Research Institution Company Spending on R&D University/Industry Research Collaboration Availability of Scientists and Engineers Technology and innovation is behind that of other top leaders 36 (4.1) 30 (5.2) 43 (4.2) 36 (3.6) 25 (4.0) 63 (4.4) Rank (Score) Mean Top Rank (Score) 3.7 4.9 4.0 3.4 3.3 4.7 Finland (6.6) Finland (6.4) USA (6.2) USA (5.9) Finland (5.9) Israel (6.5)
    19. 19. Quality of the Education System Quality of Math and Science Education Disparity in Health care Quality Brain Drain Human resources skill level still below the market leading in many areas 41 (3.8) 42 (4.5) 43 (3.0) 12 (5.0) 3.5 4.1 3.0 3.5 Finland (6.0) Singapore (6.5) Iceland (6.6) USA (6.3) Rank (Score) Mean Top Rank (Score)
    20. 20. Nature of Competitive Advantage Value Chain Presence Comparison of Thailand corporate operation & strategy vs. that of global firms illustrates that Thai companies still lack behind in many capacity areas Extent of Branding Capacity of Innovation Ethical Behavior of Firms Extent of Marketing Control of International Distribution 34 (3.5) 39 (4.0) 37 (3.6) 48 (3.2) 42 (4.3) 33 (4.8) 51 (3.8) Rank/Score Mean Top Rank/Score 3.5 3.8 3.5 3.5 4.3 4.2 3.9 Japan (6.3) Finland (6.4) Germany (6.5) Finland (6.1) Finland (6.5) USA (6.3) France (5.7)
    21. 21. Low education and low income with high debt reinforce downward vicious circle at the bottom of pyramid Low Productivity High Debt/ Low Income Low Opportunity Low Education <ul><li>Access to capital </li></ul><ul><li>Access to market </li></ul><ul><li>Access to technology </li></ul><ul><li>Quality </li></ul><ul><li>Efficiency </li></ul><ul><li>Cost effectiveness </li></ul><ul><li>Market Intelligence </li></ul>
    22. 22. 0 100 , 000 200 , 000 300 , 000 400 , 000 500 , 000 600 , 000 0 50 , 000 100 , 000 150 , 000 200 , 000 250 , 000 300 , 000 350 , 000 400 , 000 GPP (Million Baht) GPP/Capita (Baht) GPP vs Per Capita GPP Remark: not including BKK A wide gap of wealth exists among 76 provinces
    23. 23. Renewal Strategy
    24. 24. Mandate for Change Agriculture Industry Services & Tourism Enabling Infrastructure Trade and Investment Policy Global Dynamics Capacity Building Trade & Investment Strategy Trade Facilitation Trade Measures Market Access
    25. 25. Thailand <ul><li>US </li></ul><ul><li>Japan </li></ul><ul><li>Europe </li></ul><ul><li>India </li></ul><ul><li>Russia </li></ul><ul><li>China </li></ul>Existing Triad New Triad <ul><li>Japan </li></ul><ul><li>Korea </li></ul><ul><li>China </li></ul>ASEAN + 3 Balance Geopolitics
    26. 26. Regional Hub Hub Hub Hub Hub Hub Hub Hub Hub
    27. 27. Global-local collaborative network would enhance competitiveness of the locals Global Network Local Network CEO Governor CEO Ambassador CEO Perm Secretary Global Competitiveness Local Competitiveness Local Link Global Reach
    28. 28. Example of unique provincial strategy which focuses on knowledge and skilled labor development <ul><li>Cultural Heritage ( Ayuthaya ) </li></ul><ul><li>Ayuthaya Foreign Village </li></ul>High Low High Low Touch Technology <ul><li>38 University TU, AIT, RU, EU, BU </li></ul><ul><li>Science park </li></ul><ul><li>M-Tech NECTECH </li></ul><ul><li>Museum </li></ul><ul><li>Rice research center </li></ul>Knowledge Center in Historical Tourism Knowledge Center in OTOP skill development Knowledge Center in Industrial Technology research Knowledge Center in Agriculture Technology research ANG TONG, AYUTHAYA, PATHUM THANI, NONTHABURI Fukuaka
    29. 29. <ul><li>Transports and Logistics </li></ul><ul><li>Water and Natural Resources </li></ul><ul><li>Energy </li></ul><ul><li>Information Communication Technology </li></ul><ul><li>Science & Technology </li></ul>Physical Capital Strategic Capital Investment Human and Social Capital <ul><li>Education </li></ul><ul><li>Total Well-Being </li></ul><ul><li>Healthy Aging </li></ul>
    30. 30. Building a Sustained High Performance Economy
    31. 31. Lesson Learned: Asian Financial Crisis Real Sector Public Sector Financial Sector Citizen Sector Attacked by Hedging Funds Unemployment Social Unrest Political Instability Bankruptcy Credit Crunch Collapse of Financial Institutions Thailand Indonesia Korea Argentina Etc. Capital Outflow
    32. 32. Sufficiency Economy Globalization Localization High Performance Economy The Missing Link
    33. 33. Sufficiency Economy High Performance Economy The Missing Link <ul><li>Gradualism </li></ul><ul><li>Frog-leap </li></ul><ul><li>Care and Share </li></ul><ul><li>Shape and Sharpen </li></ul><ul><li>Harmony and Happiness </li></ul><ul><li>Effectiveness and Efficiency </li></ul><ul><li>Cohesion </li></ul><ul><li>Competitiveness </li></ul>
    34. 34. Sufficiency Economy Appropriateness Driving by Wisdom & Knowledge Immunization
    35. 35. พระราชดำรัสของพระบาทสมเด็จพระเจ้าอยู่หัว จากวารสารชัยพัฒนา “ ... เศรษฐกิจพอเพียง เป็นเสมือนรากฐานของชีวิต รากฐานความมั่นคงของแผ่นดิน เปรียบเสมือนเสาเข็มที่ถูกตอกรองรับบ้านเรือนอาคารไว้นั่นเอง สิ่งก่อสร้างจะมั่นคงได้ก็อยู่ที่เสาเข็ม แต่คนส่วนมากมองไม่เห็นเสาเข็ม และลืมเสาเข็มเสียด้วยซ้ำไป ...”
    36. 36. พระบรมราโชวาทในพิธีพระราชทานปริญญาบัตร มก . ๑๙ กรกฎาคม ๒๕๑๗ “ ... ในการพัฒนาประเทศนั้นจำเป็นต้องทำตามลำดับขั้น เริ่มด้วยการสร้างพื้นฐาน คือความมีกินมีใช้ของประชาชนก่อน ด้วยวิธีการที่ประหยัดระมัดระวัง แต่ถูกต้องตามหลักวิชา เมื่อพื้นฐานเกิดขึ้นมั่นคงพอควรแล้ว จึงค่อยสร้างเสริมความเจริญขั้นที่สูงขึ้นตามลำดับต่อไป …การถือหลักที่จะส่งเสริมความเจริญ ให้ค่อยเป็นไปตามลำดับ ด้วยความรอบคอบระมัดระวังและประหยัดนั้น ก็เพื่อป้องกันความผิดพลาดล้มเหลว และเพื่อให้บรรลุผลสำเร็จได้แน่นอนบริบูรณ์ ...”
    37. 37. Human Capital Development Head Heart Hand Health Home
    38. 38. Individual Self Sufficiency Intra-Community Collaboration Cluster/ Institution Formation <ul><li>Increased Income </li></ul><ul><li>Reduced Expenditure </li></ul><ul><li>Savings </li></ul><ul><li>Decreased Unproductive Habit </li></ul><ul><li>Initial Collaboration </li></ul><ul><li>Extended Collaboration </li></ul><ul><li>Community-based Intelligence </li></ul><ul><li>Community Development Plan </li></ul><ul><li>Emerging of Basic Community- </li></ul><ul><li>based Enterprises </li></ul><ul><li>Cooperatives </li></ul><ul><li>Community-based </li></ul><ul><li>Enterprises </li></ul><ul><li>Community Business </li></ul>Path to Sustainable Economy : People Sector
    39. 39. พระราชดำรัสเนื่องในโอกาสวันเฉลิมพระชนมพรรษา ๒๓ ธันวาคม ๒๕๔๒ “ ... ถ้าพอมีพอกิน คือพอมีพอกินของตัวเองนั้น ไม่ใช่เศรษฐกิจพอเพียง เป็นเศรษฐกิจสมัยหิน สมัยหินนั้นเป็นเศรษฐกิจพอเพียงเหมือนกัน แต่ว่าค่อยๆพัฒนาขึ้นมา ต้องมีการแลกเปลี่ยนกัน มีการช่วยระหว่างหมู่บ้าน หรืออำเภอ จังหวัด ประเทศ จะต้องมีการแลกเปลี่ยน มีการไม่พอเพียง จึงบอกว่าถ้ามีเศรษฐกิจพอเพียง เพียงเศษหนึ่งส่วนสี่ก็จะพอแล้ว จะใช้ได้ ...”
    40. 40. Roots of Thailand’s Competitive Advantage Cultural Diversity Thai Boxing Bio-Diversity Thai Fruits Tourism Thai Movie OTOP Thai Cuisine X
    41. 41. OTOP Tourism Target Villages Bridging Local Wisdom with Global Opportunities Tea Mae Salong Nok Chiangrai Woodcraft Ban Tawai - Wiangkumkam Chiangmai Pottery Dan Gwian Nakornrachsrima Pottery Ban Chiang Uthornthani Pottery Ban Mon – Koh Kred Nonthaburi Jewelry Bang Sa Kao –Vegetable Garden Chanburi Flower for Para rubber leaf Ban Takuapa Phanga Batik clothes Ban Kiriwong Nakornsritummarat Product from Bamboo Ban Wad Yang Thong OngThong Jewelry Mae Sod Trak Pottery Chiang Sen Chiangrai Product Village Provinces
    42. 42. Corporate Self Sufficiency Intra- Industry Collaboration Cluster/ Institution Formation <ul><li>Increased Income </li></ul><ul><li>Reduced Expenditure </li></ul><ul><li>Savings </li></ul><ul><li>Decreased Unproductive </li></ul><ul><li>Investment </li></ul><ul><li>Good Governance </li></ul><ul><li>Local Collaborative Network </li></ul><ul><li>Industry-based Intelligence </li></ul><ul><li>Industry Development Plan </li></ul><ul><li>Emerging of Industry Norms </li></ul><ul><li>and Practices </li></ul><ul><li>Global Collaborative </li></ul><ul><li>Network </li></ul><ul><li>Regional/Global </li></ul><ul><li>Enterprises </li></ul><ul><li>Competitive Cluster </li></ul>Path to Sustainable Economy : Private Sector
    43. 43. Buy Make High Low Potential Value Creation Balance Industry Bases Endowment-based FDI-based e.g. Agro-industry Internationalization e.g. Electronics Seeds, Agro-machinery Food industry, Branding Joint-Venture, ASEAN linkages Own brands R&D, Design International Division of Labor e.g. Business Process Outsourcing
    44. 44. Capacity Building
    45. 45. Nation Province Village Global Social Cohesion Competitiveness <ul><li>Efficiency </li></ul><ul><li>Cost effective </li></ul><ul><li>Productivity </li></ul><ul><li>Innovation </li></ul><ul><li>Sufficiency </li></ul><ul><li>Community Building </li></ul><ul><li>Cultural Identity </li></ul><ul><li>Family Value </li></ul>Local Link – Global Reach Balance Locality-Globality
    46. 46. Sufficiency Economy Globalization Localization High Performance Economy Governing Directing Driving A New Dynamic Equilibrium
    47. 47. Economic Reform Macro Restructuring Industry Restructuring Corporate Restructuring Policy Implications Driving Forces Building a Sustained High Performance Economy Social Reform Political Reform Sufficiency Economy Globalization Localization High Performance Economy

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