By WICHIT CHAITRONG
Thailand is among three countries down graded in Southeast Asia. The IMD says Singapore retains its lead in Southeast Asia among the regional economies, aided by its strong government efficiency. Malaysia is the only economy to register an improvement of two positions driven by a strong rebound in economic performance, especially in international trade. The remaining three economies decline, particularly significant in Thailand (down three spots) and Indonesia (down one spot). The Philippines experiences the most significant drop in the region, shifting nine places to 50th. The reasons for such a drop include a decline in tourism and employment, the worsening of public finances and a surge in concerns about the education system. Investing in quality infrastructure and strengthening investment in human capital are the key challenges for the Philippines.
For Thailand, declines are in areas such as worsening of budget deficits, issue of exchange rate stability, long term unemployment, youth unemployment, lower rate contribution of employers to social welfare scheme and adaptability of government policy and decision.
Improving areas include rising number of patent applications and paten in force, increasing spending on research and development by both business and pubic sectors and rising number of researchers in R&D field.
Dr Bandid Nijathaworn, President & CEO of the Thai Institute of Directors (IOD), said that this is a disappointment from a policy perspective but a good reality check on what Thailand needs to focus more on to boost the country's competitiveness.
“Most of our problems are structural such as education, infrastructure, corporate innovative capability, and public sector efficiency and governance. Effectively addressing these issues will go a long way in raising the country's competitiveness," he said.
The IMD said Thailand is facing many challenges in 2018 and the country need to create public awareness on the urgency and the magnitude of disruptive change, accelerate education reform, and retraining/reskilling of workforce to cope with future challenges, take immediate action on applying technology and digital platforms for access to social services i.e. education and healthcare, enhance government/public services transformation to support changing needs of businesses and citizens and manage political transformation and public conflict during election process.
The top five most competitive economies in the world remain the same as in the previous year, but their order changes. The United States returns to the first spot, followed by Hong Kong, Singapore, the Netherlands and Switzerland. The United States improves three positions from last year while Hong Kong drops one spot and Singapore remains 3rd. The return of the United States to the top is driven by its strength in economic performance (1st) and infrastructure (1st). Hong Kong takes a somewhat different approach exploiting its government efficiency (1st) and business efficiency (1st).
China (13th) continues its steady rise in rankings over the past five years, rising 10 spots since 2014. This is fuelled by a strong economic performance of its domestic market and workforce employment. Improvements in infrastructure, are however marred by limited government efficiency. Stimulating domestic consumption, institutional reforms and resolving trade disputes are the key challenges for China. And Austria (18th) also advances notably.
Arturo Bris, director of the IMD World Competitiveness Center, says “economic growth, reduction of government debt and increased business productivity enable Austria to move up. In the case of China, investment in physical and intangible infrastructure as well as improvement on some institutional aspects such as the legal and regulatory framework boost its performance.”
The bottom five economies show a slight change in their performance especially those countries that have experienced economic and political distress in the last few years. While Mongolia (62nd) and Venezuela (63rd) remain in the last positions, Ukraine (59th) and Brazil (60th) improve. Brazil’s improvement is the first since 2010 due to a positive shift in real GDP and employment. Ukraine increases because of its business efficiency. Their rise pushes Croatia down two places to 61st.
Bris notes that “This year’s results reinforce a crucial trait of the competitiveness landscape. Countries undertake different paths towards competitiveness transformation.” He adds “countries at the top of the rankings share an above the average performance across all competitiveness factors, but their competitiveness mix varies. One economy, for example, may build its competitiveness strategy around a particular aspect such as its tangible and intangible infrastructure; another may approach competitiveness through their governmental efficiency.”