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Addressing Thailand’s Fundamentals for Sustainable Growth

Thailand has yet to get rid of the reputation that fueled its economic growth during the last decade : a cheap labour intensive country hugely relying on its exports for growth. Prime Minister Yingluck Shinawatra said that she aims to address Thailand’s fundamentals in order to promote sustainable growth in the long term and build a better Thailand for future generations.

Boris Sullivan

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Thailand has yet to get rid of the reputation that fueled its economic growth during the last decade : a cheap labour intensive country hugely relying on its exports for growth. Prime Minister Yingluck Shinawatra said that she aims to address Thailand’s fundamentals in order to promote sustainable growth in the long term and build a better Thailand for future generations.

The statement was part of her keynote address at the Foreign Correspondents’ Club of Thailand 2013 Annual Correspondents’ Dinner with the Prime Minister. The event “An Evening with the Prime Minister” took place on 11 March 2013 at the Grand Ballroom, InterContinental Bangkok Hotel.

https://www.facebook.com/Y.Shinawatra

Thailand has yet to get rid of the reputation that fueled its economic growth during the last decade : a cheap labour intensive country hugely relying on its exports for growth. Picture : https://www.facebook.com/Y.Shinawatra

 

The Prime Minister said that the Government is implementing a strategy to move the country forward. Even with growth in 2012, the Government must do more to ensure that it can achieve consistent growth rates of around 4-5 percent in the long term. To achieve this, it needs to move up each of the value chain to enhance productivity while creating new competitive advantage. This requires new approaches in agriculture and industry.

In the case of industry, she said, the current sectors where Thailand has competitive advantage will continue to be promoted. Some of these include rubber, agro-business, petrochemical, electronics, and automotive industries. Moreover, the Government will also develop and explore new industries, such as bio-materials, clean energy, health, and creative industries.

New BOI policy to support sustainable growth

Under the new policy, the BOI will no longer support businesses that provide low added value, apply low technology or have low complexity of production processes, including those that have low linkage with other industries and those that are labour- intensive and environmentally unfriendly, those that consume high energy, and those that have a monopoly in concession-type of business activities

One sector that Thailand has a clear competitive edge is the service industry. The Government plans to promote this sector further by creating a new comprehensive service experience, which will help promote longer stays by tourists. This includes the integration of hospitality to key attractions, including Thai food, local products or OTOP, spas, and visits to cultural sites.

Moreover, service will be expanded to medical tourism, where Thai hospitality will enhance the patient’s experience of post-surgery rehabilitation, complementing the high-quality health care and doctors.

In the agricultural sector, the Government will develop better zoning to allow the right products to be grown in the most effective areas. This will allow Thailand to support global food security by better managing demand and supply and developing more effective storage facilities.

Transportation and logistics need more investment

With regard to investments in transportation and logistics, the Government has long underinvested in this sector and has had to rely on roads for around 86 percent of its transportation. This is very high when compared with other countries, and it has led to high energy costs, thus reducing Thailand’s competitiveness. In order to urgently address this issue, the Cabinet has just approved the initial plans to invest around 66 billion US dollars in transportation and logistics. Some of these projects include high-speed trains and dual train track development, a better overall road network for connecting ASEAN economic corridors, improved sea ports, and more border facilities to enhance border trade.

The Prime Minister explained that the shift from road to rail will significantly reduce time and cost of transportation of products to Thailand’s neighbors and Asia. Better linkages will lead to development of new towns, cities, and regional hubs in other parts of Thailand, and ultimately, neighboring countries, the ASEAN Community, and beyond. This will generate more income and consolidate Thailand’s role as the region’s connectivity and logistics hub.

She said that better infrastructure can boost demand and support long-term growth by linking various revenue-generating zones, from industrial areas to agricultural zones, new areas for tourists, and border areas. Living standards and quality of life of all citizens should increase through reduction of traffic and pollution in city areas. Faster and more convenient transportation to work leads to better productivity.
Source: Inside Thailand — Addressing Thailand’s Fundamentals for Sustainable Growth and Future Generations

A New Investment Promotion Strategy to Drive Thailand’s Sustainable Growth

The BOI aims to restructure the Thai economy for sustainable development and to overcome the middle income trap through competitiveness development and value creation in the industrial sector and also by promoting new industrial clusters in the regions to create new investment concentration and improving of facilitations for investors, including both inward and outward investment.

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