Strategic Framework for Economic and Social Restructuring in Thailand

1. Strategic Frameworkfor Economic and Social Restructuring in Thailand Office of the National Economic and Social Development Board (NESDB) 28April2005 Kampanat Pensupar, Ph.D

2. Roles and Responsibilities of NESDB • Strategic Planning Agency • Socio-Economic Policies Advisory • Intelligence Unit

3. The past 4 years Today GDP growth average 5.2 % Consumption Investment Employment TRACK I GDP 2004 6.5 Tril. baht Stability Export of goods and services TRACK II Inflation 2.7% Current account 6.2% of GDP Public debt 46.2% of GDP NPLs 11.4% of total loans Foreign reserves 48.9 bill$

4. Dual Track Development Model Parallel emphases on two pillars First track emphasizes foreign direct investment and manufactured exports under economic integration with rest of the world Second track: domestic and grassroots Domestic demand element Local enterprise element • OTOP • Village Funds • SMEs Bank and People Bank • Venture Capital • Housing project and housing loans for • GPF member and SOEs employees • Capital Creation • Low price computer and internet fees • 30 Baht health care • Life insurance policy for low income Global competitiveness

5. Economic Forecast as ofDecember 7, 2004

6. Poverty Income Distribution

7. 2010 1960 1970 1980 1990 2000 Goal: What will be Thailand’s next real sector development path? • Electrical Machinery • Computer-Parts, Accessories • Seafood • Telecom Equipment • Apparel • Tourism • What’s Next??? • Agri… • Manuf…… • Service GDP Mil Baht • Clothing • Electrical machinery • Seafood • Other Machinery • Rice & Rubber • Rice • Fruit & Vegetable • Non-ferrous Metal • Crude rubber • Electrical machinery • Rice • Crude Rubber • Fruit & Vegetable • Non-ferrous Metal • Textile Fiber • Rice • Crude Rubber • Ores & Metal Scrap • Textile Fiber • Fruit & Vegetable Key Policies/Drivers: Import Substitution, Export-led growth, FDI Innovation + Knowledge

8. Trends of Economic Development Growth Adaptive Advantage Competitive Advantage Understanding the world Comparative Advantage Understanding marketplace Developing products 1950 1960 1970 1980 1990 2000 2010 2020 Dare to dream Thailand from now to 2020 Dare to dream Thailand from now to 2020

9. Key Points Past 4 years Future 2008 Paradigm shifts GDP 9.5 Tril. baht Economic restructuring Dual Track Policies • Economic integration • Technology • Population and social change • Environment and natural resource • Consumption trend • Economic growth with stability • Expand opportunities to grassroot level 4 Principles • Economic stability • Value creation • Proactive social policy • Regional economic cooperation 6 strategies • Agricultural value creation • Industrial value creation • Services base expansion • Proactive social policy • Security and international cooperation • Public sector reform

10. International Economic Policies Prosper The Neighbours: ACMECS, GMS International Economic Policies Global Reach and Local Link: Bilateral FTA

11. Technology Population & Social Envi. & Nat. Resource Consumption Trend Economic Integration 5 Paradigm shifts

12. Sustained Prosperity More Balanced Structure Better Distribution Guiding Principles for Economic and Social Restructuring Economic stability and sustainability Value creation from knowledge applicationล Global and regional positioning Proactive social policy to create positive externality

13. People • Natural resources • Cultural values • Indigenous Knowledges • “Thainess” Existing Resource Endowment New Demand  • Repackaging/Branding Real Products & Services • Value Creation • Balancing Economic & Social investment New Technology Knowledge Management

14. Strategies for Economic and Social Restructuring • Agricultural value creation and natural resources • Industrial value creation • Services base expansion • Proactive social policy • Security and international cooperation • Public sector reform

15. Agricultural value creation & natural resources

16. Industrial value creation

17. Services base expansion

18. Proactive Social Policy • Improve housing standard and public services in order to create good social environment and reduce health expenditure of people • Improve basic infrastructure and accessibility for aging and disability groups • Promote community strength and role in managing safety and security in life and assets • Promote social protection for people in informal economy • Promote role of family in nurturing discipline, life-skill and social responsibility Human and Social Security Housing • Promote varieties of savings scheme for retirement and increase opportunities for work for aging group • Promote appropriate health behavior for aging group • Plan for the establishing of long-term healthcare system • Revive traditional value and culture of cohabitation of different age groups in society • Increase opportunities to utilize knowledge of aging group in economic and social development e.g. expanding the Brain Bank scheme Aging Society

19. Security and International Cooperation International Cooperation • Accelerate ACMECS and JDS to support bordered economy including economic and social cooperation and seeking development partners • Negotiate trade agreement and cooperation at bilateral, regional and mutilateral levels in order to expand market access, arrange inter-agency mechanism for comprehensive and coordinated negotiation Warning Systems • Build an early warning system of natural disaster and network of regional cooperation in early warning systems

20. Public sector reform Capacity Building of Central Agencies Domestic Regional Development • Building capacity of central agencies in order to be intelligence agency supporting trade negotiation and cooperation dialogue • Develop regional planning strategy to be management tools for CEO governor, provincial cluster and region • Build capacity for management and administration at regional level such as sub-district administration and CEO governor • Design urban plan and land usage plan, and expand infrastructure to support urban expansion and livable-city development • Establish resource allocation mechanism for public infrastructure investment with clear and efficient responsibility of central and local agencies Building Social Harmony Enabling Competitiveness of Private Sector • Campaign and ingrain Thai value and Thainess identity • Build mechanism in public sector and civil society for protection and reduction of conflict • Promote mechanism for people participation in economic and social development e.g. participate as Advisory board of CEO governor • Promote socially responsible and constructive media • Reform law, rule, regulation and tax system • Reform bureaucracy and public services • Anti-corruption at every levels and professions • Increase government budget for social, environment and natural resource while diversify sources of fund for infrastructure development

21. Government Policies • Poverty Eradication Policy • Human Development and Quality of Life Policy • Restructuring Policy toward a balance and competitive economy • Natural Resources and Environmental Policy • Foreign and International Economic Policy • Legal System Development and Good Governance Policy • Policy to Promote Democracy and Civil Society Process • National Security Policy

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