Women on the rise

Leading independent economist Sethaput Suthiwart-Narueput is less certain about how the economy will develop but is sure about one future trend: “more women will be bosses”.
One of the structural changes and “micro-segments” that will reshape the business landscape is the gender mix. There will be 1 million more women than men in Thailand in 2020, partly because most women live longer than men do, he said.
“Another interesting trend is that you will see more and more influential women. Now, anywhere you go, especially in the professional service industry, you will see many women executives. It’s hard to think of a profession where there are more men than women, except security guards,” Sethaput, a former chief economist at Siam Commercial Bank, told a recent seminar held by global consultancy Hay Group.
One major reason for the increasing role of women executives in the workplace is that women have been doing better at school than men, which lets them enrol in higher-education institutions and increase their participation in the labour force. The top 10 faculties of the top 10 universities in Thailand have more women students than male students except for accounting and education.
“Now only the engineering faculty has more male than female students. But 30 years ago, males constituted 99 per cent of engineering students and now it is 75:25. At the medical, law, economics, political science faculties, all have more female than male students,” he said.
Pointing out the global economic uncertainties, Sethaput said the United States continues to face a structural problem that cannot be solved over the short term, while many good economic figures that have been reported are misleading, especially the unemployment figures, which do not include those who have given up vying for a job. The US labour force participation rate is 65.5 per cent, which is even lower than during the recession when it was 63.5 per cent.
The US securitisation market, which indicates activities in real estate, auto loans and other important sectors, is at only one-tenth of its normal size.
The European Union’s economic problems are more complicated than they appear to be in the news, and their political structures will make correction attempts that too often lag behind the problems.
“The chance of contagion [of the crisis from Greece to other EU countries] is not minimal. An indicator is Portugal’s five-year government bond yield, which is being traded at almost 20 per cent.
“Don’t be delighted by the stock market figures. Don’t forget that even in 2007 the stock markets were performing well [prior to the recession in 2008]. I believe the bond markets are ‘smarter’ than the stock markets in mirroring the [economic] risks,” he said.
Both Greece and Portugal will eventually exit from the euro zone but nobody knows if their departures will be in an orderly manner.
“I believe [the euro-zone nations] are buying time and trying to build a ‘Great Chinese Wall’ [to contain possible contagion]. But markets can evolve fast and are ever changing,” he said.
China deserves to be watched the most as its economy is slowing down. More troubles are emerging. Because the country is undergoing a leadership transition, it will emphasise stability rather than growth.
However, despite the problems plaguing the world economy, Thailand is expected to sail through, thanks to its strong economic fundamentals, particularly its relatively low public debt, which stands at 44 per cent of gross domestic product. It also has a high foreign reserves, low non-performing loans at commercial banks and strong corporate balance sheets.
“Certainly, as global growth comes down, Thai exports and GDP growth will also be lower. But Thailand is like a small boat which is rather firm and concealed. Only if the crew is not fighting, ‘burning’ themselves or hitting their captain, [the country will survive],” he said.
While surviving, Thailand’s growth prospects are not expected to be great over the coming years, unless the government can tackle some structural problems, including low labour productivity and low investment by the public and private sectors, and the “stalled urbanisation” of the economy as prosperity fails to spread out of Bangkok. While there are 2 million consumers with incomes of at least Bt15,000 a month in Bangkok, each of the major provinces has merely 60,000 of the “urban consumer class”.
“This has made no critical mass for businesses,” he said.
Urbanisation is usually an important driver of economic growth that has made investors bullish on the prospects of a country such as China and Indonesia, as consumers in urban areas tend to spend more and demand a higher standard of living than people living in rural areas.
The “urban consumer class” population in Thailand had grown from 3 million in 2002 to 3.7 million in 2009, but has started to stall. Of the additional people, 75 per cent were in Greater Bangkok.
Other future trends facing businesses are the ageing population and changing household structure, as more people are not getting married or divorced.
Because of these changing macro- and micro-economic landscapes, businesses should find new markets and shift their thinking from geographically to demographically.
“Businesses should look where their targeted customers are beyond the border. Hospitals, for instance, are attracting many foreign patients. There are also many Indian couples flying to marry in Thailand,” he said.
Low labour productivity was due to the low investment by the government and private sector, which is still reluctant to spend more in the country, as well as the labour force structure. There are only about 8 million monthly wage earners out of the 38 million-strong labour force, he added.

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