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  • Why Thailand risks a lost economic decade

    Why Thailand risks a lost economic decade
    William Pesek
    July 26, 2017

    Junta must tackle underlying causes of low growth


    Chao Praya river and central Bangkok


    The group of generals running Thailand risk giving the military a bad name for economic management.

    In 2014, a junta led by General Prayut Chan-o-cha seized power, promising a return of public trust and the get-things-done competence that militaries use to justify coups. The key problem was a chaotic political system that had seen seven prime ministers in 15 years, complete legislative gridlock and massive protests clogging the capital.

    Thirty-eight months on, Prayut and his men have thrown away that argument. Instead of restoring the vibrancy of Southeast Asia's number two economy, attacking corruption, increasing transparency and fueling industrial output, the junta have made things worse.

    Scant progress on all these fronts is evidenced by lackluster growth. Thailand's roughly 3% pace is the slowest among Southeast Asian peers. The Philippines economy, by contrast, is expanding more than 6%, while Indonesia's is growing above 5%. Worse still, today's policy drift and short-termism are raising the odds of a lost economic decade for Thailand.

    The most obvious failing: moving too slowly to martial an ambitious infrastructure campaign -- roughly $67 billion -- off the strategy table and into action. Among the projects getting slow-walked into reality is a $5.2 billion high-speed rail undertaking with China. Just like Rodrigo Duterte in the Philippines, Prayut pledged to reduce red tape, cut out rent-seeking middlemen and bypass democratic checks and balances to get Thailand back in business. If Bangkok is going to encourage the Toyotas and Samsungs of the world to produce more there, it must upgrade ports, roads, bridges and power grids and make it easier to get projects completed.

    Another problem: Thailand still has some of the region's most highly leveraged consumers. Gross nonperforming loans at commercial banks jumped to nearly 3% of total loans in the first quarter, the highest since 2011. Fitch Ratings maintains a negative outlook for the Thai banking system. Investors, too, it seems. Bad-loan concerns are partly to blame for Bangkok`s SET stock index being among the worst performers in Asia this year.

    Human capital is another blind spot. As rising production costs confront a weakening U.S. dollar, Thailand is bumping up against a chronic skills gap. It ranks 54th out of 70 countries in the latest Organization for Economic Cooperation and Development student assessment study. Singapore topped the list, followed by Japan and Taiwan. China came in sixth, Vietnam eighth. Here again, the junta is practicing short-termism -- tossing cash at the problem, not modernizing a rote learning system ill-prepared for a future that prizes critical thinking and inventive solutions.

    Raising Thailand's global skills game is not easy when you are on your 20th education minister in 17 years. But it is vital as the military government talks of advanced industries, or "Thailand 4.0," to lift incomes and beat the middle-income trap. That goes, too, for moving up the value-added ladder with a $45 billion Eastern Economic Corridor project and developing "Green Agriculture Cities" around the nation. Again, the talk sounds great, but what about the execution?

    Thailand's demographic trajectory makes this moment especially crucial. The 67 million-person nation will see its working-age population shrinking about 11% by 2040. The answer is increased productivity. It is time, too, to improve English proficiency, still among the lowest in Asia. An ironic handicap for a place that gets Southeast Asia's biggest haul of foreign tourists each year.

    But the real skills mismatch may concern the generals themselves. A glaring irony of Prayut's reign is how his government has read from the playbook of the Thai leader whose influence they hoped to banish from modern history. The mercurial Thaksin Shinawatra served as prime minister from 2001 to 2006, until his ouster in a coup. A billionaire turned populist leader, Thaksin bought the loyalty of rural communities with lavish handouts, while bending Bangkok institutions to the benefit of his businesses.

    asia.nikkei.com
    http://thailandchatter.com/showthrea...ll=1#post45112

  • #2
    Too late for some time now.

    All the king's horses and men might struggle to put Humpty back together again.

    Plutocracy rarely changes courses.

    Comment


    • #3
      https://espresso.economist.com/e22c6...50738b15f3e533

      Comment


      • #4
        Originally posted by sabang View Post
        last year Bangkok was the most visited city on Earth.
        Tell me about it. Traffic is now completely gridlocked...
        God, the panic within the Dems, MSM, and left must be horrifying...realizing that Joe is really the best they've got.

        Comment


        • #5
          Whoever visits that shiteheap these days, probably deserves it. Holy cow- my Australian passport has expired, and I'm deliberately holding up renewing it until there are some other substantive reasons to bring me to that steaming cesspit. Hope my mum doesn't die in the meantime.

          Comment


          • #6
            Originally posted by sabang View Post
            Whoever visits that shiteheap these days, probably deserves it. Holy cow- my Australian passport has expired, and I'm deliberately holding up renewing it until there are some other substantive reasons to bring me to that steaming cesspit. Hope my mum doesn't die in the meantime.
            If you're driving, do the trip on a Sunday - better traffic conditions.
            God, the panic within the Dems, MSM, and left must be horrifying...realizing that Joe is really the best they've got.

            Comment


            • #7
              Originally posted by sabang View Post
              Whoever visits that shiteheap these days, probably deserves it. Holy cow- my Australian passport has expired, and I'm deliberately holding up renewing it until there are some other substantive reasons to bring me to that steaming cesspit. Hope my mum doesn't die in the meantime.
              I am sorry that you have been forced to admit to being Australian. If you were something else, anything else, then you might be able to appreciate the good things that Bangkok has to offer.

              Comment


              • #8
                Originally posted by Can123 View Post
                I am sorry that you have been forced to admit to being Australian. If you were something else, anything else, then you might be able to appreciate the good things that Bangkok has to offer.
                Yeah sabang - throw another shrimp on the barbie and chill out man...
                God, the panic within the Dems, MSM, and left must be horrifying...realizing that Joe is really the best they've got.

                Comment

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