BANGKOK (NNT) – Prime Minister and Defense Minister, Gen. Prayut Chan-o-cha, has presided over the opening of “Digital Thailand Big Bang 2019: ASEAN Connectivity”, an international exhibition aimed at encouraging all sides to use using digital technology to benefit all sides and promote cybersecurity.
“Digital Thailand Big Bang 2019: ASEAN Connectivity” was organized by the Digital Economy Promotion Agency, under the administration of the Ministry of Digital Economy and Society.
At the event, Gen. Prayut presented the Prime Minister’s Awards to outstanding individuals and delivered a speech on the role of Thailand as the current ASEAN Chair and ASEAN Connectivity.
The Prime Minister said Thailand has to create an environment that supports digital economic development in ASEAN.
It is necessary to promote connectivity among ASEAN member states and in the global community. Digital technology has to benefit all groups. It has to be further developed to enhance the business sector.
The government has continued to utilize advanced technology in all respects according to the National Strategy, with the aim of turning Thailand into a fully developed country. Cybersecurity is also an important issue and the government has been working to combat different cybersecurity threats, such as investment scams and cases of fraud. All sides have to work together to strengthen cybersecurity capabilities.
The Prime Minister said today digital technology has to be utilized to enhance business competitiveness.
The government has been working on this issue, with Thailand being the 40th most competitive nation in the world out of 140 countries, according to the World Economic Forum’s (WEF) “Global Competitiveness Index 4.0” ranking last year.
Digital technology has been used to improve the banking sector in terms of efficiency and security. The government has promoted the Smart City project and used modern technology to set up its infrastructure. The government has applied digital technology in the agricultural sector, from growing and harvesting crops to processing and marketing, and set up the Big Data system to help rice farmers.
The Prime Minister said the use of digital technology must also take natural resources and the environment into consideration. Digital technology can help improve water management. It can also be used to improve the government’s administrative work and services, as the government has to listen to all sides.
The Prime Minister added that it is important for children and youth of Thailand to follow technological development so they can initiate successful start-ups and developments in the future. They also have to keep up with technological change and demand in the country.
Assessing the economic impacts of COVID-19 on ASEAN countries
All ASEAN countries are dependent on tourism flows but Thailand is probably the most dependent.
Author: Jayant Menon, ISEAS–Yusof Ishak Institute
The COVID-19 pandemic is first and foremost a human tragedy. Measures introduced to deal with the pandemic could save lives but are having wide-ranging economic effects and inducing economic contagion.
There are already studies estimating the economic impact of the virus. But greater focus is needed on the transmission mechanisms of the economic contagion and in critiquing how assessments of the economic impacts are made, concentrating on the ASEAN region.
The effects of COVID-19 are hitting ASEAN economies at a time when other risk factors, such as a global growth slowdown, were already rising.
COVID-19 is disrupting tourism and travel, supply chains and labour supply
Uncertainty is driving negative sentiment. This all affects trade, investment and output, which in turn affects growth. Tourism and business travel, as well as related industries, especially airlines and hotels, were the first to be affected. And the conditions are worsening as more countries go into shutdown.
The supply disruptions emanating mostly from China will reverberate throughout the value chain and disrupt production. Since China is the regional hub and accounts for 12 per cent of global trade in parts and components, the cost of the disruption in the short run will be high.
The negative effects of quarantine arrangements on labour supply could also be high depending on duration and sector. Manufacturing has been hit harder than service industries, where telecommuting and other technological aids limit the fall in productivity.
All these disruptions will lead to sharp declines in domestic demand. And their impact on economic growth will further propagate these disruptions. This compounding effect can magnify and extend short-run effects into the long run.
The highest economic cost could come from the intangibles
The effects of negative sentiment about growth and general uncertainty — which is already affecting financial markets — will feed into reduced investment, consumption and growth in the long run.
Rolling recessions around the world now appear inevitable, despite the stimulus measures being contemplated. If so, there will be sharp increases in unemployment and poverty. Some degree of decoupling from China, or de-globalisation in general, may also be a permanent reminder of this pandemic.
Among ASEAN countries, Singapore, Malaysia and Thailand are heavily integrated in regional supply chains and will be the most affected by a reduction in demand for the goods produced within them. Indonesia and the Philippines have been increasing supply chain engagement and will also not be immune.
Vietnam is the only new ASEAN member integrated into supply chains with China and is already suffering severe supply disruptions.
Given time, supply-side adjustments will alter trade and investment patterns. The main adjustment will involve relocating certain activities along the supply chain from China to ASEAN countries. Although the pandemic will disrupt the relocation phase, ASEAN countries can benefit from the new investments, mitigating overall negative impacts.
Thailand is probably the most tourism dependent Asean country
All ASEAN countries are dependent on tourism flows but Thailand is probably the most dependent. Cambodia and Laos receive most of their investment and aid from China, and a marked growth slowdown in China will affect them the most.
The Philippines and Mekong countries have large overseas foreign worker populations and restrictions on their movement or employment prospects as COVID-19 spreads will affect sending and receiving countries. Brunei and Malaysia are net oil exporters and the price war indirectly induced by the pandemic will hit them hard. Others will benefit from lower oil prices, as will the struggling transport sector.
In measuring the impacts of COVID-19, it is important to separate its marginal impact from observed outcomes. This is important because the remedy may vary depending on the cause of the disruption. This requires an analytical framework that can measure deviations from a baseline scenario that incorporates pre-existing trends. A model-based analysis, rather than casual empiricism, is required to reduce the problem.
Even before the outbreak, risks of a global growth slowdown were rising
The restructuring of regional supply chains had started, driven initially by rising wages in China and accelerated by the US–China trade war. While COVID-19 may further hasten the pace and extent of the restructuring, it is only partly responsible for what may happen. It would be misleading to attribute all of the current disruption to COVID-19. Had the trade war not preceded it, COVID-19 may have resulted in greater disruption to supply chains.
Any assessment of impacts must recognise that the spread of COVID-19 is unpredictable, and so too the response by governments. It is difficult to estimate the impacts of a shock that is uncertain in itself. This reiterates the need for rigorous modelling and scenario analyses. The current trend points to risks rising, often accelerating, as with previous epidemics. This uncertainty underscores the need for caution in assessing, and regular recalibration in producing assessments.
Jayant Menon is a Visiting Senior Fellow in the Regional Economic Studies Programme at the ISEAS–Yusof Ishak Institute, Singapore.
A version of this article first appeared in ISEAS Commentary.
This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.
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