Country still held back by the same old problems

Thailand has moved up one notch in the Executive Opinion Survey for the World Economic Forum. But rising one rank in the Global Competitiveness Report is not necessarily a cause for celebration.

Thailand has advanced in this year’s Global Competitiveness Index to No 38, after falling six years in a row. But our neighbours like Singapore and Malaysia have gone far ahead.

The 38th slot simply reflects the status quo. In fact, Thailand should be higher. After all, the country enjoys a favourable business environment. Our location in the region has been considered as an economic driver, given our proximity to China. We have a geographical advantage. 

Over the past decade, Thailand did not fully utilise its economic capital, which started from the government’s policy to promote foreign investment and the automobile industry by providing incentives. 

What happened in Thailand in recent years suggests that we failed to maintain the momentum. Our Asean neighbours, namely Singapore and Malaysia, have managed to achieve better rankings due to their success in advancing technology, improving infrastructure, upgrading the quality of education and combating corruption.

Singapore was the world’s second most competitive country after Switzerland. Malaysia is No 25.

Thailand, over the past decade, was instead looking over its shoulder at the emerging countries such as Vietnam and Cambodia.

Thais may be content to stay ahead of Indonesia, the Philippines and Vietnam.

But that could change soon. Vietnam, for instance, is fast catching up, especially in the areas of research and development and education, which would pave the way for a stronger economic foundation in the long run.

The prospects for the Thai economic environment also suggest we are at risk of losing competitiveness, because the same old problems have not been fixed.

First of all, the ongoing political instability is still a risk to the implementation of a continuous economic policy. Development of basic infrastructure has also been lagging behind other countries, because of the instability. The ratio of investment to GDP here has declined from 34 per cent from 1991-2000 to only 25.5 per cent from 2001-2010.

The country’s pervasive corruption has never been eradicated. In fact, it is getting worse, as graft scandals have often come along with the government’s massive spending policies.

The country’s measures to protect intellectual property rights are not conducive to promoting research and innovation either. Thailand performed poorly in basic education and technological application, which are the building blocks for future competitiveness. In the future, Thailand’s competitiveness could be further eroded by a string of populism policies, which would stretch the country’s finances.

Even without the survey, Thailand should strive to boost its economic edge by focusing on four areas – fiscal stability, macroeconomic stability, institutional framework, political stability and human resource development.

Therefore, instead of being satisfied with a slight rally in the world economic standings, everyone should try to address our weaknesses urgently. The improvements must be done in all aspects with in-depth and comprehensive coverage. 

The private sector can play an influential role by pressing the government to implement policies for long-term sustainable growth.

Big corporations can no longer simply call for government assistance without taking any steps to improve national competitiveness.

This is a responsibility shared by all.