Title: Strategic Framework for Economic and Social Restructuring in Thailand
1Strategic Frameworkfor Economic and Social
Restructuring in Thailand
Kampanat Pensupar, Ph.D
- Office of the National Economic and Social
Development Board (NESDB) - 28 April 2005
2 Roles and Responsibilities of NESDB
- Strategic Planning Agency
- Socio-Economic Policies Advisory
- Intelligence Unit
3Today
The past 4 years
GDP growth average 5.2
Consumption Investment Employment
TRACK I
GDP 2004 6.5 Tril. baht
Stability
Export of goods and services
TRACK II
Inflation 2.7 Current account 6.2 of
GDP Public debt 46.2 of GDP NPLs 11.4 of total
loans Foreign reserves 48.9 bill
4Dual Track Development Model
Parallel emphases on two pillars
First track emphasizes foreign direct
investment and manufactured exports under
economic integration with rest of the world
Second track domestic and grassroots
Domestic demand element
Local enterprise element
- OTOP
- Village Funds
- SMEs Bank and People Bank
- Venture Capital
- Housing project and housing loans for
- GPF member and SOEs employees
- Capital Creation
- Low price computer and internet fees
- 30 Baht health care
- Life insurance policy for low income
Global competitiveness
5Economic Forecast as of December 7, 2004
2002 2003p 2004f 2005f
GDP (current price, bil.B) 5,446.0 5,930.4 6,523.4 7,130.1
GDP Growth (const. p., ) 5.3 6.9 6.2 gt lt 5.5-6.5
Gross Investment (const. price, ) 6.5 11.9 12.7 12.2
Aggregate Consumption (constant price, ) 4.8 5.8 5.9 5.6
Export Value () 4.6 18.6 22.5 11.8
Import Value () 4.4 17.0 25.7 15.5
Trade Balance (Bill.US) 2.7 3.1 2.8 -0.4
Current Account (Bill.US) 7.0 8.0 10.1 8.7
Current Account/ GDP () 5.5 5.2 6.2 4.6
Inflation () 0.7 1.8 2.7 2.9-3.2
6Poverty
Income Distribution
1998 2000 2002
GINI coefficient 0.51 0.53 0.51
Income share of highest 20 () 56.5 57.8 55.2
Income share of middle 60 () 39.3 38.3 40.6
Income share of lowest 20 () 4.2 3.9 4.2
1998 2000 2002
Poverty line (baht/person/month) 882 916 922
Number of poor (mil.person) 8.88 8.16 6.22
Poverty ratio () 14.22 12.96 9.76
7Goal What will be Thailands next real sector
development path?
- Electrical Machinery
- Computer-Parts, Accessories
- Seafood
- Telecom Equipment
- Apparel
- Tourism
- Whats Next???
- Agri
- Manuf
- Service
GDP Mil Baht
- Clothing
- Electrical machinery
- Seafood
- Other Machinery
- Rice Rubber
- Rice
- Fruit Vegetable
- Non-ferrous Metal
- Crude rubber
- Electrical machinery
- Rice
- Crude Rubber
- Fruit Vegetable
- Non-ferrous Metal
- Textile Fiber
- Rice
- Crude Rubber
- Ores Metal Scrap
- Textile Fiber
- Fruit Vegetable
Key Policies/Drivers
Import Substitution, Export-led growth, FDI
Innovation Knowledge
8Trends of Economic Development
9Key Points
2008
Future
Past 4 years
Economic restructuring
GDP 9.5 Tril. baht
Paradigm shifts
Dual Track Policies
- Economic integration
- Technology
- Population and social change
- Environment and natural resource
- Consumption trend
- Economic growth with stability
- Expand opportunities to grassroot level
- 4 Principles
- Economic stability
- Value creation
- Proactive social policy
- Regional economic cooperation
- 6 strategies
- Agricultural value creation
- Industrial value creation
- Services base expansion
- Proactive social policy
- Security and international cooperation
- Public sector reform
10International Economic Policies
Prosper The Neighbours ACMECS, GMS
International Economic Policies
Global Reach and Local Link Bilateral FTA
11Economic Integration
5 Paradigm shifts
12Guiding Principles for Economic and Social
Restructuring
Economic stability and sustainability
Value creation from knowledge application?
Global and regional positioning
Proactive social policy to create positive
externality
13- People
- Natural resources
- Cultural values
- Indigenous Knowledges
- Thainess
Existing Resource Endowment
New Demand
?
- Repackaging/Branding Real Products Services
- Value Creation
- Balancing Economic Social investment
New Technology
Knowledge
Management
14Strategies for Economic and Social Restructuring
- Agricultural value creation and natural resources
- Industrial value creation
- Security and international cooperation
15 Agricultural value creation natural resources
Measures
Factors of production Increase irrigated land by 6 mil.rai (incl. small reservoirs and pipe system) to reduce risks and divest main crops Efficient water management for agriculture and other usages Land quality improvement and increase biodiversity Agricultural price stability by management of demand and supply of products, regional producers coordination, and ensure regional food security Promote production and utilization of Ethanol and Biofuel created from main crops such as cassava, sugar cane and oil palm Promote animal farming especially cows and increase researches on artificial insemination Asset capitalization in fisheries sector (Seafood Bank) Develop agricultural product standard and food safety system, and GAP Increase investment in research and development (esp. horticulture and husbandry) Support OTOP to create non-farm incomes for farmers Improve marketing and distribution channel to deliver fresh products to consumers
16 Industrial value creation
Measures
Cluster development Entrepreneur development for SMEs and community enterprises Develop national innovation system and intellectual property system Develop science and technology infrastructure Promote branding and design Increase IT application in SMEs Develop excellent centers for future technology Promote investment in new automobile model and improve quality in order to reach 1.8 cars production target Develop Energy Hub Promote green production and waste reduction
17 Services base expansion
Measures
Tourism Expand aviation networks through open sky policy and low cost airline Linking tourism networks especially cultural package tour with neighboring countries Develop new tourism sites and prevent deterioration of tourism environment Establish standard for tourism facilities such as hotel, spa and traditional massage Develop tourism standard and human resource Health Promote talented overseas medical doctors and teachers to work in Thailand Negotiate FTA to allow reimbursement of healthcare expenditure in Thailand from home (foreign) countrys social security system Financial Promote Bangkok to be a region business and financial hub Develop financial market, and new instruments Develop secondary market for mortgage loans, and establish building and loan associations infrastructure Develop logistics system and expand infrastructures Develop broadband communication infrastructure
18 Proactive Social Policy
- Promote community strength and role in managing
safety and security in life and assets - Promote social protection for people in informal
economy - Promote role of family in nurturing discipline,
life-skill and social responsibility
Human and Social Security
Housing
- Promote varieties of savings scheme for
retirement and increase opportunities for work
for aging group - Promote appropriate health behavior for aging
group - Plan for the establishing of long-term healthcare
system - Revive traditional value and culture of
cohabitation of different age groups in society - Increase opportunities to utilize knowledge of
aging group in economic and social development
e.g. expanding the Brain Bank scheme
Aging Society
19 Security and International Cooperation
20 Public sector reform
21Government Policies
- Poverty Eradication Policy
- Human Development and Quality of Life Policy
- Restructuring Policy toward a balance and
competitive economy - Natural Resources and Environmental Policy
- Foreign and International Economic Policy
- Legal System Development and Good Governance
Policy - Policy to Promote Democracy and Civil Society
Process - National Security Policy
22Think Economicand Social Strategy,Think
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