thailand - bic.moe.go.th · the asian century. global gdp* % 1820. 70. 1913. 50. 73. 2005....

Thailand Thailand in the New Age of Global Capitalism in the New Age of Global Capitalism

Suvit MaesinceeSasin Institute for Global Affairs (SIGA)

•• The World AheadThe World Ahead

•• Strategy in Response to Strategy in Response to the New Global Landscapethe New Global Landscape

•• ThailandThailand’’s Competitive Positions Competitive Position

•• The New Economic AgendaThe New Economic Agenda

•• Transforming towards Transforming towards the First World Countrythe First World Country

The Asian Century

Global GDP* %

1820 70 1913 50 73 2005

Developing CountriesDeveloping Countries

Developed CountriesDeveloped Countries

25

50

75

The Rise of the RestThe Triad

The Rest of the World The Rise of Asia

China/IndiaThe Rest of Asia

World Economic Structure

Source: The Economist

The New USA

Source: ADB (2011)

The Plurilateralism

South AfricaIBSA

Brasil

ChinaIndia

Russia

IndonesiaJapanSouth Korea

BruneiCambodiaLaosMalaysiaMyanmarPhilippinesSingaporeThailandVietnam

ASEAN +3

KazakhstanKyrgyzstanTajikistanUzbekistan

ShanghaiCo-operationOrganization

G20

ArgentinaAustraliaBritainCanadaFranceEuropean UnionGermanyItalyMexicoTurkeySaudi ArabiaUSA

BASICs

ASEAN

ASEAN + 3

ASEAN + 6

585 Mil (9% World Population)

2,068 Mil (31% World Population)

3,284 mil (50% World Population)

Asean Economic Community

12,250 bil US$ (22% World GDP)

1,275 bil US$ (2 % World GDP)

9,901 bil US$ (18 % World GDP)

• Brunei• Singapore

TPP Vs. Asean+

• Malaysia• Vietnam

• Indonesia• South Korea• Japan

• PNG• Thailand• Philippines

• Australia

• Chile

• NZ• US• Peru

• Mexico• Canada

• RussiaAsia

America

GlobalLocal

Glo

bal

Loca

l

• Terrorism• Mass Production

of Refugee

• Extreme Poverty• Genocide• Civil War

• Financial Turmoil• Economic Crisis• Pandemics• Climate Change

Global Commons

The GlobalEconomic

Crisis

The GlobalFinancialTurmoil

The Commodity

PriceBubble

The RealEstateBubble

The DotComBurst

The AsianFinancial

Crisis

European European Sovereign Sovereign Debt CrisisDebt Crisis

Perpetual CrisesPerpetual Crises

For much of the next decade following the economic crisis, we expect to see

• Weak global growth

• Pressure from overcapacity

• Persistently high unemployment

• Volatility in the financial markets

• A rise of economic nationalism

• A more expanded role for governments

• A much larger burden of regulation

Asean countries are likely to face more severe consequences of the climate change than the global average due to limited adaptive capabilities

Thailand: Extreme Risk

An emergence of the Northern Rim Countries

•• CanadaCanada•• Northern USNorthern US•• GreenlandGreenland•• NorwayNorway•• SwedenSweden•• IcelandIceland•• FinlandFinland•• RussiaRussia

The eight nations will become increasingly prosperous, powerful and essential to the world reshaped by crowded megacity, coastal flooding and scarcer resources

Offshore Farming

Food & Agriculture

The 1st

WaveThe 2nd

WaveThe 3rd

Wave

Manufacturing Services

- Cash-rich Arab and Asian governments are buying up arable farmland all over developing world

- Chinese businesses are investing in South America and Africa, not only to gain access to commodities, but to get in position to profit from sales to the emerging middle class

- China is also buying up large tracks of land throughout Africa to produce biofuels and to produce food

- India's companies have formed a consortium to invest in corporate farming of oilseeds in Latin America, most notably Uruguay and Paraguay

Vertical Farming

Advantages

• Year-round crop production• No weather-related crop failure• No agricultural runoff• Allowance for ecosystem restoration• No use of pesticides, herbicides, or

fertilizers• Us of 70-95 % less water• Greatly reduced food miles• More control of food safety and security• New employment opportunities• Purification of grey water to drinking water• Animal feed from postharvest plant • materials

Sources: Dickson Despommier

Aging Society

Under-Population Issue

Thailand’sPotential

Supportive Ratio

7

6

5

4

3

2

1

02000 2020 2050

Source: Kua Wongboonsin

Strategy Strategy in Response to in Response to

the New Global Landscapethe New Global Landscape

Leading Change

• Global Imbalance• Global Common• Democratization of Power & Wealth

• The New USA• The Non-Polar World

GlobalGlobalDynamicsDynamics

New Reality

New New Mental ModelMental Model

• Philanthro-Capitalism• Global Financial Regime• Global Civic Society• Constitutive Governance• Free Culture• Sufficiency EconomyPhilosophy

New Mind-Set

NewNewOperating ModelOperating Model

• Global Coordinating Mechanism• Global Standards• Public Private Partnership• Open Collaborative Platform• Carbon Minimization• Climate Resilience

New Skill-Set

ยุทธศาสตร New Growth Strategy ของญี่ปุนJapan’s New Growth Strategy 2010 – 2020

ยุทธศาสตร New Growth Strategy ของญี่ปุนJapan’s New Growth Strategy 2010 – 2020

Korea Model

Korea 1.0Korea 1.0

Korea 2.0Korea 2.0

Korea 3.0 ?Korea 3.0 ?

Heavy IndustryHeavy Industry••Ship BuildingShip Building••SteelSteel••ChemicalChemical

•• EntertainmentEntertainment SoftwareSoftware

•• Telecommunications Telecommunications EquipmentEquipment

TimeTime

Wea

lth o

f the

Nat

ion

Korea 3.0

New Growth Engines

Green Technologies

High-Tech Convergence

Value Added Service

• Renewable energy technologies

• Water treatment technologies

• Low carbon energy technologies

• IT convergence citywide

• LEDs

• Broadcast & Communications media

• Intelligent robots• Biopharmaceuticals

& Medical Devices• Information Technology • Food Industry• Nano-Convergence

• Healthcare• Green Financing• Education• Mice & Tourism-

Related Industries• Cultural Content

& Software

China’s Five-Year Plans

Pro-Consumption Framework of 12th Five Year Plan

Strategic Emerging Industries •Biotechnology•New Energy•High-end Equipment Manufacturing •Energy Conservation& Environmental Protection •Clean Energy Vehicles •New Materials•Next-Generation IT

1, Establishing a united Malaysian nation made up of one Bangsa Malaysia

2. Creating a psychologically liberated, secured and developed Malaysian society

3. Fostering and developing a mature democratic society

4. Establishing a fully moral and ethical society

5. Establishing a matured liberal and tolerant society

6. Establishing a scientific and progressive society

7. Establishing a fully caring society

8. Ensuring an economically just society, in which there is a fair and equitable distribution of the wealth of the nation

9. Establishing a prosperous society with an economy that is fully competitive, dynamic, robust and resilient

Vision Malaysia 2020

ThailandThailand’’s s Competitive PositionCompetitive Position

Thailand’s Overall Competitive Position

First SphereFirst Sphere

Second SphereSecond Sphere

Third SphereThird Sphere

PoliticalDisorder

Stable Liberal Democracy

Stable Market Economy

ChaoticEconomy

••ThailandThailand

• Singapore

• South Korea• Vietnam

• India

Source: Tanaka Akihiko

• China

Overall Thai Industry’s Competitive Position

Lead

ers

Tech

nolo

gyan

d D

esig

n

Follo

wer

s

Low Cost

Competitive Advantage

Differentiation

Italy (2)

China (1)

Thailand (11)

Design/ Differentiationbased competition

Low cost-based competition

Hong Kong (3)

Apparel

Apparel

Competitive Nutcracker

Global Market Share

2004 2005 2006 2007 2008 2009

Thailand

Indonesia

Malaysia

Philippines

China

India

1.15 1.17 1.22 1.30 1.25 1.36

0.85 0.91 0.94 0.91 0.96 1.04

1.50 1.50 1.50 1.40 1.40 1.41

0.47 0.44 0.44 0.40 0.34 0.34

0.76 8.09 9.02 9.69 10.02 10.75

0.90 1.06 1.13 1.17 1.37 1.46

Foreign Investment Stock: Inward and Outward

Source: BOT

Outward Investment (Mil US$) Inward Investment (Mil US$)

IMD Overall Competitiveness 2007 – 2011

Source: IMD World Competitiveness Yearbook 2011

Ranking

59

Remark: Total 59 countries

The New Economic AgendaThe New Economic Agenda

Desired States of the EconomyDesired States of the Economy

Competitive Competitive Work ForcesWork Forces

ProductivityProductivityDriven EconomyDriven Economy

Strong Strong Domestic MarketDomestic Market

Enabling Enabling EcoEco--StructureStructure

World ClassWorld ClassInfrastructureInfrastructure

Entrepreneurial Entrepreneurial SocietySociety

Balanced Balanced GrowthGrowthGlobal Global

ConnectedConnected

Internationalization Internationalization of Thai Enterprisesof Thai Enterprises

World Leader World Leader in Global Nichesin Global Niches

Regional Regional Strategic PartnershipStrategic Partnership

Low Carbon Low Carbon SocietySociety

Green GrowthGreen GrowthIndustriesIndustries

Climate Resilient Climate Resilient EconomyEconomy

Nation’s Strategic Intent

Rapidly Changing

Global Economic

Environment

Dynamic Response

FailedResponse Le

vel o

f Inn

ovat

ion

Level of Internationalization

Nation’sStrategic

Intent

One of the

Leading Nationin the 21st century

A second-tier Nation

Thailand’s New Economic Agenda

Agriculture

Manufacturing

Services & Tourism

Enabling Infrastructure

Thailand’s Economic Agenda

Capacity Building

Local

Regional

Global

1960s: Import Substitution 1970s: Export Promotion1980s: Foreign Direct Investment1990s: Trade Liberalization2001-2007: Dual Track Development2007- 2010: ??2011- Regionalization & Transformation

What’s Next ?

Thailand’s Trade Policy

Affluent: Affluent: Brunei, SingaporeBrunei, Singapore

Mainly Middle Class: Mainly Middle Class: Malaysia, ThailandMalaysia, Thailand

Transitioning to Middle Class: Transitioning to Middle Class: Indonesia, Philippines, VietnamIndonesia, Philippines, Vietnam

Low Income: Low Income: Cambodia, Laos, MyanmarCambodia, Laos, Myanmar

ASEAN Class Structure

ASEAN Middle Class – Landscape and Trend

• ASEAN Middle Class: 156 million people (26% of ASEAN population)

• Financial Times expects ASEAN to have middle class population at approximately 300 million people by 2015

• By 2030, the number of middle class segment in Indonesia could rise by more than 50 million, in Malaysia by 20 million and in Thailand by more than 25 million

Source: CIA World Fact book

Economic Structure of all ASEAN Nations

38.50 41.00 36.80 39.20

54.60

38.30

49.3044.00

72.80

25.30

31.70 30.00

20.00

40.20

31.70

46.80

41.6045.60

27.20

74.10

29.80 29.00

43.20

20.5013.70 14.90

9.10 10.400.00 0.70

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Agriculture

Manufacturing

Service

Resource

Production

Service• Singapore

• Thailand• Malaysia• Indonesia• Philippines• Vietnam

• Brunei• Cambodia• Laos• Myanmar

Global CitiesGlobal CitiesSingapore, Kuala LumpurSingapore, Kuala Lumpur

National Cities: National Cities: Bangkok, Jakarta, ManilaBangkok, Jakarta, Manila

Second Cities: Second Cities: Surabaya, Penang, Cebu, Surabaya, Penang, Cebu, Chiang MaiChiang Mai

Place in Competition

Source: Trademap, SIGA analysis

Source: Trademap, SIGA analysis

Source: Trademap, SIGA analysis

Source: Trademap, SIGA analysis

Source: Trademap, SIGA analysis

Trade competition among Asean members

Source: TDRI (2008)

, SIGA Analysis

Thailand

Malaysia

Singapore

Philippines

Indonesia

Vietnam

Laos

Cambodia

Cambodia

Malaysia

Singapore

Philippines

Indonesia

Vietnam

Laos

0.27

0.46

0.39

0.31

0.23

0.43

0.34

0.21

0.33

0.49

0.29

0.14

0.41

0.43

0.26

0.16

0.09

0.29

0.23

0.34

0.31

0.15

0.08

0.34

0.30

0.43

0.40

0.28

0.18

0.07

0.35

0.26

0.42

0.40

0.45

0.41

Myanmar

AEC-Thailand Trade Structure

AEC

Dynamic Countries

Advanced Countries

Emerging Countries

• African Countries• Middle East

• The US/Canada• Western Europe• Japan/South Korea

• China/India• Russia• Argentina/ Brazil/ Chile• Mexico• South Africa

Using AEC as a stepping stone to enhance Thailand competitiveness in the global markets

Thailand

Challenges & Issues Facing Thailand’s Trade Policy

Trade with a Developmental

Rebalance

Trade with aSectoral

Rebalance

Trade with Global-Local Rebalance

Trade with Value

Creation

Trade with Free & Fair Practices Thailand’s

Trade Policy

• Resource/ energy use• Waste management practices• Water & air quality• Integrity of supply chain• Compliance with standards

• Labor practices• Maintenance of human rights• Impact on the communities• Taking responsibilities for products• Human value• Human creativity & value creation• Intellectual independence• Individual autonomy• Free culture

• Growth• World market share• Market penetration• International market control

Trade with a Developmental Rebalance

EconomicWealth

SocialWell-being

EnvironmentalWellness

HumanWisdom

Econ

omic

Envi

ronm

enta

lSo

cial

Hum

an

Trade with Sectoral Rebalance

17.6 Mil

5.4 Mil.

14.7 Mil.

Labor ForcesLabor Forces

Agr. Manu.Service

GDPGDP

Industry Transformation

Revitalizing Agricultural

Sectors

RestructuringManufacturing

Sectors

Reorienting Service Sectors

Hum

an-T

echn

olog

y C

onne

cted

• Food &Fuel Security

• Green Growth Industry

• High Value Services

A New Sustainable Industry Portfolio

SocialCentric

Industries

EconomicCentric

Industries

Human Centric

Industries

EnvironmentalCentric

Industries

• Creative Economy

• ServiceIndustries

• Knowledge Industries

• OTOP• BOP• Social Production• Peer Production• Distributed

Creativity

• AlternativeEnergy

• RecycleBusiness

• Manufacturing

ResourceSpendingContent

SocialContent

Knowledge/CreativeContent

ResourceSavingContent

Efficiency CreativitySustainability Co-Prosperity

Trade with Global-Local Rebalance

Cluster Cluster of Provinceof Province

ProvinceProvinceVillageVillage GlobalGlobalRegionalRegional

Social Cohesion

International Competitiveness

Efficiency Cost effectiveProductivityInnovation

SufficiencyCommunity BuildingCultural IdentityFamily Value

IN-OUT• FOB → CIF• Merger & Acquisition • Franchising• Licensing

OUT-OUT• Off-shoring Businesses• Film/Animation• Talent• Construction Industry• Kitchen of the World

IN-IN• Regional Hub• MICE • Clusters of Production

OUT-IN• Inward FDI• Global Sourcing• Tourism• Education• BPO

Trade with Global-Local Rebalance

Baht

Value

Cost

Price

Less for More

Morefor Less

Morefor More

Trade with Value Creation

• Reduces NTB for freer & fairer trade• International Cooperation among regions

Trade Competition &

ConsumerProtection

Policies

• Awareness in consumer rights protection• Consumer protection network• Nationalism

• International market access capability• Practical international standard

cooperation

• Deregulation

• Law improvement

• Increase capacity building

• Trade Culture Development

(Ethic & Morality)

• Transparent Government Procurements

Harnessing Unfair Trade PracticesTrade Liberalization

Facilitate Competitiveness

Strengthening Consumer Protection

Trade with Free & Fair Practices

Transforming Transforming towards towards

The First World CountryThe First World Country

Middle Income Trap

Middle Income TrapAsean Middle Income Trap

Smile Curve

FactorFactorDrivenDriven

EfficiencyEfficiencyDrivenDriven

InnovationInnovationDrivenDriven

Economic Transformation

More for Less Less for More

• Business Sophistication• Higher Education• Science & Technology

Economic Performance Government Efficiency Business Efficiency Infrastructure

IMD Competitiveness Landscape 2011

Source: IMD World Competitiveness Yearbook 2011

Advanced Education

Crossing the Chasm

Market-led Economy

Knowledge based Society

Entrepreneurial Spirit

Regional Integrated

Remove the systemic impediment that currently render Thailand enterprises uncompetitive and make Thailand an unattractive place for place for multi-national corporations to do business

Move forward to overcome the shortfall in both managerial and technical knowledge by drawing heavily on the outside world. There is no way back. Thailand must move forward to be knowledge-based.

For Thailand to be adaptable in its AEC strategy, and to re- energize the growth engine in the economy, entrepreneurialism will be crucial.

Thailand’s greatest opportunities, and greatest competitors, lie within 2000 km. of Bangkok. Thailand needs to become a tightly integrated insider in this region

Globally Connected

Thailand has long history of self reliance, but will fail to realize its potential if it continues to pursue this approach. The country’s real opportunities going forward are to become the best globally connected country in this region and to put an end to xenophobia

Building a Strong Economic Platform…

…as well as a Strong Social Platform

Clean & Clear SocietyClean & Clear Society

Free & Fair SocietyFree & Fair Society

Care & Share SocietyCare & Share Society

• Rule of Law• Governance

• Civic Society• Open Society• Social Justice

• Social Protection• Plural Society• Social Collaboration

• Social Exclusion

• Socio Economic Disparity

• Social Disempowerment

• Social Fragmentation

• Social Inclusion

• Socio Economic Security

• Social Empowerment

• Social Cohesion

Transforming towards the First World EconomyTransforming towards the First World Economy

CompetitionCompetition

ScienceScience

DemocracyDemocracy

MedicineMedicine

ConsumerismConsumerism

Work EthicsWork Ethics

Civilization : The West & the RestCivilization : The West & the Rest