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Team to zero in on competitiveness

May 30. 2019
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By The Nation

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DEPUTY Prime Minister Somkid Jatusripitak has instructed the country’s top planning agency to set up a high-powered team drawing on business leaders that will examine ways to boost Thailand’s competitiveness amid signs of slippage on key measures.

The National Economic and Social Development Council  (NESDC) has been tasked with putting the team together with input from the Federation of Thai Industries (FTI) and the Thai Chamber of Commerce.

The team will also consider how Thailand can adjust its economy to cope with technological changes.

Somkid, after giving the guidance at a meeting with NESDC officials, said that Thailand had advanced five places, to 25th, in the IMD World Competitiveness ranking due to improved economic performance, government efficiency and infrastructure. But he added that the picture was not all rosy.

The Swiss-based International Institute for Management Development (IMD) grades 63 economies for their economic performance, government efficiency, business efficiency and infrastructure each year.

The challenge for Thailand is how to maintain its good position in the competitiveness score and increase this further, Somkid said.

Despite its improved ranking in economic performance and government efficiency, Thailand performed worse in business efficiency, particularly concerning productivity and efficiency, as well as on attitudes and values. 

Thailand’s business efficiency ranking fell two places, to 25th, hampered by a decline in productivity and efficiency, from 40th to 43rd. 

The attitudes and values of Southeast Asia’s second largest economy posted the biggest fall, to 26th from 17th. The country’s labour market also declined, to ninth from sixth place.

If these sub-factors continued to fare poorly in the rankings, Thailand is expected to perform lower in business efficiency in the future, the deputy prime minister said.

“The NESDC is an important agency that presents information and study results,” he said. “It must set up a team to discuss measures with the private sector, talking to the FTI and the country’s chamber of commerce in parallel with developing a workforce to match the targets for the country’s future development in regard to the quality of workers’ skills in order to promote industrial development and economic growth.”

 Aside from the public sector, the private sector may have to drive the required investment, he said.

The country needs to pursue mega-investment projects as a means of gaining from the global economic recovery, he said. If Thailand has this infrastructure in place, the country will be able to accommodate private investment on the domestic front and from abroad.

Somkid also urged the NESDC to set up a committee to screen project proposals for transparency and compliance with the national strategy and the targets set for the country’s development.

The Fiscal Policy Office (FPO) of the Finance Ministry yesterday said the economy is expected to recover in the second quarter of this year from the first quarter, thanks to an improved month-on-month performance for exports in April.

 Pornchai Triraveja, economic and monetary adviser to the FPO and its spokesman, said the April export figure still marked a 2.6 per cent year-on-year contraction and the figure in the first four months of this year shrank 1.9 per cent.

Exports in the second half of this year are also forecast to improve from the first half. The FPO is awaiting the Ministry of Commerce’s export figures before the office makes its economic review in July. Exports are a key determinant of the country’s economic expansion.

The FPO projects that this year the economy will grow 3.8 per cent, with exports expanding 4 per cent.

 “The export sector is the only risk to this year’s Thai economic growth. We must closely monitor it. Thai exports are impacted by the global economic slowdown and the prolonged trade war [between the United States and China],” Pornchai said.

He said that the 2020 budget disbursement would not encounter difficulties if the bill for budget for expenditure is delayed.

According to the FPO, the Thai Regional Economic Sentiment Index (RSI) in May indicated economic expansion in all regions of Thailand - led by a gain of 70.4 in the North, 69.7 in the East, and 69.4 in the Northeast.

 

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