WEF report shows Thailand performed well in most areas except 'corruption and rents'

“The Inclusive Growth and Development Report 2015” was unveiled yesterday amid increasing concerns about rising income inequality and its negative economic and social impact. 

Covering 112 economies, the report seeks to improve understanding of how countries can use a diverse spectrum of policy incentives and institutional mechanisms to make economic growth more socially inclusive without dampening incentives to work, save and invest. 

 

Low-income economies 

Out of 38 lower-middle income economies categorised in the study, Thailand is ranked third on the education and skills pillar (score 5.21); ninth on employment and labour compensation (score 4.17); eighth on asset building and entrepreneuship (3.62); first on financial intermediation of real economy investment (4.28); fourth on basic service and infrastructure (5.03); and fourteenth on fiscal transfers (tax code and social protection) criteria (3.56).

However, the Kingdom is rated twenty-third on corruption and rents pillar (score 3.47), which includes sub-criteria such as business and political ethics; measures to combat corruption and bribery; concentration of rents; extent of market dominance; intensity of local competition; and concentration of banking sector.

Rick Samans, a member of the Managing Board of the WE F, said the report shows that all countries have room for improvement. 

There is considerable diversity in performance not only across but also within countries. No country scores above average for its peer group in all 15 sub-pillars and only a few come close.

It is possible to be pro-inclusiveness and pro-growth at |the same time. This is demonstrated, for example, by the fact that several of the strongest |performers in the Forum’s Global Competitiveness Index also have a relatively strong inclusive growth and development profile.

Fiscal transfers can be helpful – but so can other policies. Many economies with high levels of tax and redistribution are highly competitive. However, use of policy space in other areas could reduce the need for these levers.

Effective promotion of social inclusion is not solely a luxury of high-income countries. In many sub-pillars – such as business and political ethics, financial system inclusion, and educational quality and equity – some developing countries do better than others with much higher incomes.

There are significant regional similarities. This suggests a strong role of shared culture, historical traditions or political-economy reflexes, in areas such as tax systems in Eastern Europe and educational equity in Latin America.

The current debate on inequality is unduly narrow and polemical. The debate usually focuses on redistribution and upskilling labour, but these are only a minority of the policy options available to “structurally adjust” an economy for inclusive growth. 

Several other crucial factors relate to improving the investment and business climate. 

Therefore, it is possible, even necessary, to be pro-labour and pro-business; pro-growth as well as pro-equity.

“The most appropriate approach to be taken by countries will depend on their specific circumstances.

However, our analysis shows that all countries have room for improvement for placing their economies on a more inclusive growth path,” said Jennifer Blanke, chief economist at the WEF.