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Thailand’ S Competitiveness
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Thailand’ S Competitiveness


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  • 1. Thailand’ s Competitiveness : The New Paradigm Under Globalisation Office of the National Economic and Social Development Board (NESDB) TDRI Year-end Seminar 14-15 December 2002
  • 2. Mechanism for Competitiveness Driving NCC Advisory Team Economic Restructuring Committee Strategy Setting Strategy Execution Resource Allocation Manage- ment NESDB : CMU Visioning MOF MOL MOAC MOC MOI MOE ... National Committees
  • 3. Globalisation and Thailand’s Economy
  • 4. Globalisation and Thailand’s Economy Thailand’s Trade Proportion of GDP (in value term), 2002 Source : NESDB, June 2002 Billion Baht
  • 5. Source : Bank of Thailand, November 2002 Thailand’s Investment Flows Globalisation and Thailand’s Economy Billion Baht
  • 6. Conceptual Framework
  • 7. Conceptual Framework Old Paradigm New Paradigm
    • Export-Oriented
    • Higher Export Lower Import
    Export Sustainable Economic Value Domestic Balance Local and Global
  • 8. Globalisation/ External Factors Conceptual Framework Internal Factors (Competitive- ness Potential) 8 Value Creation = Opportunities Strategies Capabilities X X
  • 9. Opportunities Value Creation = Opportunities Strategies Capabilities X X
  • 10. Global Forces & Trends : Implications to Thailand 10
  • 11. Change in Demography Overcapacity More Interdependence Knowledge Divide Global Forces & Trends
    • The End of Single Market
    • Increase Social Budget
    • Mobility of Labour
    • New Product Development
    • Global Deflation
    • Growth with Unemployment
    • Incresing Roles of Businesses & NGOs
    • Efficiency Based Government
    • Power of Information Occupants
    • Good Governance
    • Increase Formal and Continuing Education
    • More R&D and Innovation
  • 12. Population growth will continue to shift toward developing countries, leaving developed countries with high aging population proportion Change in Demography 12
  • 13. Over Capacity Mass Market Competitive Paradigm Scale Driven Economy Tragedy of the Common Over Investment Shortage of Demand Scale, Standardization, Replication, Efficiency, Hierarchy Overcapacity
  • 14. Ethnic diversity are developing tension in several parts of the world. One example is an illicit trafficking network that need international cooperation among states and non-state actors. More Interdependence 14
  • 15. To leap into knowledge economy, society needs a complete set of information , human capital and technology
    • Key Enabler
    • Information Technology
    • Human Capital
    Data Information Knowledge Social Wisdom Lacking one will create knowledge divide problems Example: Lack of IT infrastructure Example: Lack of adequate education Example: Lack of free flow of information Knowledge Divide
  • 16. Lower Efficiency of Fiscal & Monetary Policies Expansion of BKK and Vicinities Higher Competition Decreasing Prices Global Trends : Implications to Thailand
    • Labour Problems
    • Lack of Knowledge
    • and Skilled Labour
    More Non-tariff Barriers Implication to Thailand Opportunities for Potential Product Development 16
  • 17. Danger Signs Lack of Clear Strategy in Geopolitics and Geo-economics Stuck in the Competitive Nutcracker Profitless Growth Trap Low Responsiveness to the Global Changes Few Investment for the Future Danger Signs
  • 18. Competitiveness Capabilities 18
  • 19. Sources of Capability PC Physical Capital HC Human Capital FC Financial Capital SC Social Capital Value Creation = Opportunitie s Strategies Capabilities X X
  • 20. Thailand’s Competitiveness Ranking Source: IMD, World Competitiveness Yearbook , 2002 WEF, The Global Competitiveness Report, 2002
  • 21. Physical Capital Human Capital Financial Capital Social Capital
    • Strengths
    • Fertile Natural Resorces
    • Weaknesses
    • Low access capabilities to tech.
    • Low R&D expenditure/ investment
    • Low IT skills
    • Strengths
    • Low Dependency Ratio
    • Good Remuneration of mgt. & service professions
    • High Rate of Employment
    • Weaknesses
    • Low education
    • Low skilled labour
    • Low labour productivity
    • High youth unemployment
    • Low HRD index
    • Strengths
    • Efficiency in tax collection +tax rate
    • Stabilised capital index
    • Low cost of capital
    • Attractive investment policy
    • Weaknesses
    • Credit access
    • No freedom to acquire control in domestic companies
    • Strengths
    • Low cost of living
    • No discrimination
    • Identity + attractive national culture
    • Weaknesses
    • Low efficiency of medical assistance
    • Too open for globalisation
    Source: IMD, 2002 21
  • 22. Thailand’ s Competitiveness Strategy
  • 23. Strategic Position What to do? How to do? Strategies Value Creation = Opportunitie s Strategies Capabilities X X
  • 24. Dual Track : Global Local Links Social Cohesion International Competitiveness
    • Efficiency
    • Cost effective
    • Productivity
    • Innovation
    • Sufficiency
    • Community Building
    • Cultural Identity
    • Family Value
    Community- Urban Trade Community- Global Trade Between- Community Trade Within-Community Self-Sufficiency Surplus Specialization
  • 25. H igh Performance Economy (HPE) Desired Strategic Position
  • 26. Positioning Thailand
    • Macro Economic Foundation
    • Fiscal & Monetary Policies
    • Trade and Investment Policies
    • International Policies
    • Generic Factors
      • Human Resources
      • S&T
      • Management
      • Infrastructure
    Knowledge-Based Economy Active International Player Owner of Advance Technology Global Niches Society of Good Living HPE Public Sector Reform PrivateSector Reform 26
  • 27.
    • English/Chinerse will be the 2nd language of Thailand
    • ICT accessibility and literacy
    • Substantial investm ent in R&D (Hardware- Software-Peopleware)
    • Strong sense of lifelong learning
    • Empowering education and creativity
    What to do? Knowledge-Based Economy
    • Aggressively move towards Asian economic integration
    • Leverage Bi-lateral and Muti-lateral Negotiation
    • Stimulate and support local business for going global
    Active International Player 27
  • 28.
    • Preserve and leverage Bio-deiversity
    • Mobilize resources towards advance technology development
    • Intense collaborative partnership between businesses and education and research institutions
    Owner of Advance Technology What to do?
    • Efficient and impartial law enforcement
    • Preventive health care focus
    • Balance the ways of life
    • Efficient urban mgt.
    • Empowering local people and institutions
    • Lean, efficient, and honest bureaucracy
    Society of Good Living 28
  • 29. What to do?
    • Kitchen of the World
    • Tourism Capital of Asia
    • World Tropical Fashion
    • Detroit of Asia
    • World Graphic Design Centre
    Global Niches 29
  • 30. Level of Customization Level of Sophistication High Tech Low Tech Low Touch High Touch
    • Software
    • Foods
    • Tourism
    • Auto industry
    • Fashion
    Example Tourism Foods Fashion Auto Software Asia Tourism Capital Kitchen of the World World Tropical Fashion Detroit of Asia World Graphic Design Center Potential Global Niches 30
  • 31. Issues for Discussion
    • 1. Thailand’s Position
      • - Knowledge-based Economy
      • - Active International Player
      • - Owner of Advance Technology
      • - Global Niches
      • - Society of Good Living
    • 2. Comment on “What to do?”