Transcript Free Flow of Goods and Services

Thailand At the Crossroads:
High Performance Economy
VS.
Sufficiency Economy
Suvit Maesincee
December 16, 2005
• Moving Towards High Performance Economy
• Globalization
• Thailand At the Crossroads
• Renewal Strategy
Moving Towards High Performance Economy
Building a High Performance Economy
High
Performance
Economy
High Performance
People
High Performance
Enterprises
High Performance
Government
Driving Forces

Efficiency
 Cost effective
 Productivity
 Innovation
Globalization
High
Performance
Economy




Social Cohesion
Community Building
Cultural Identity
Family Value
Localization
Globalization
Waves of Change
Globalization
3.0
Globalization
2.0
Globalization
1.0
Globalization of
Companies
Globalization of
Nation-States
• Started in 1492
• Driven by conquest and
empire
Source: The World is Flat
Globalization of
Individuals and
Small Groups
• Started around 2000
• Flattening the global playing
• Started around 1800
field and shrinking the world
• Driven by the first industrial- of labor, markets and ideas
era capitalist enterprises
to person-to-person size
organizing internationally
around market and labor
Globalization of Nation-States
Global War
World Power
Delegitimation
Challenger
1491-1516
Italian and Indian
Ocean Wars
1516-1539
Portugal
1540- 1560
1560-1580
Spain
1580-1609
Spanish-Dutch
Wars
1609-1639
Netherlands
1640-1660
1660-1688
France
1688-1713
Wars of Louis XIV
1714-1739
Britain I
1740-1763
1764-1792
France
1792-1815
Wars of French
Revolution and Napoleon
1815-1849
Britain II
1850-1873
1874-1914
Germany
1914-1945
World Wars I&II
1945-1973
United States
1973-2000
2000-2030
Soviet Union
Globalization of Companies
46 of the largest 100 economies of the world today are
companies, not countries
Thrusts
The specialization and integration of firms make it possible
to increase aggregate wealth
The logic of pure capitalism does not favor social justice
Issues
Become a formidable cause of inequality among and
within states
The concern for global competitiveness limits the aptitude of
states and other actors to address this problems
Source: Stanley Hoffmann
Globalization of Individuals and Small Groups
• November 9, 1989—a shape transition from “ A World of Wall to a World of Network”
• August 8, 1995—the day Netscape went public, igniting the dot-com boom
and transforming the Internet into the WWW
• The advent of “workflow”—all the software applications, standards, and electronic
transmission pipes, like middleware, that connected all computers and fiber optic cable
• The creation of a platform for inexpensive worldwide collaboration among people,
enterprises, and software
• Outsourcing/ Off-shoring
• Open Sourcing
• In-sourcing
• Supply-chaining
• Informing
• Wireless access and voice communication over Internet
The New Competitive Landscape
IN-OUT
OUT-OUT
IN-IN
OUT-IN
Thailand At the Crossroads
Almost all Thai Industries Stuck in the Middle
Leaders
Competitive Nutcracker
Italy (2)
Followers
Technology
and Design
Innovation
Driven
Economy
Hong Kong (3)
Design/
differentiation
based
competition
investment
Driven
Economy
Thailand (11)
Factor
Driven
Economy
China (1)
Low Cost-based
competition
Low Cost
Differentiation
Competitive Advantage
Low Cost
Differentiation
Competitive Advantage
High Exports Accompanied by High imports
Million USD
12,000
10,000
8,000
6,000
4,000
Import
Export
ม.ค.05
ม.ค.04
ม.ค.03
ม.ค.02
ม.ค.01
ม.ค.00
ม.ค.99
ม.ค.98
ม.ค.97
ม.ค.96
ม.ค.95
ม.ค.94
0
ม.ค.93
2,000
Internationalization of Thai People are Ranked Lower
than Malaysia and Singapore
Globalization Index Ranking
Thailand
China
Singapore
Malaysia
Philippines
Indonesia
2001
2002
2003
2004
2005
30
48
1
20
34
38
57
53
3
20
52
59
47
51
4
18
52
58
48
57
2
20
33
59
46
54
1
19
32
60
Source: A.T.Kearney /Foreign Policy Magazine Globalization Index (64 Countries)
No single Thai company was ranked in top 50
developing country MNCs.
Developing Country MNCs (in Top 50)
Hong Kong
Korea
China
Taiwan
India
ASEAN
Source: UNCTAD 1999:11
9
6
6
2
1
7
General Infrastructure is still not ready to support the
growth
Rank/Score
Mean
Top Rank/Score
Overall Infrastructure
Quality
29 (4.9)
3.9
Singapore (6.8)
Railroad Infrastructure
Development
38 (3.7)
3.1
Switzerland (6.7)
Port Infrastructure Quality
36 (4.5)
3.9
Singapore (6.8)
Air Transport
Infrastructure Quality
20 (5.6)
4.5
Singapore (6.9)
Quality of Electricity
Support
41 (5.3)
4.6
Iceland (7.0)
Telephone Infrastructure
Quality
41 (6.1)
5.2
Finland (6.9)
Postal Efficiency
38 (5.1)
4.4
Iceland (6.9)
Technology and innovation is behind that of other top
leaders
Rank (Score)
3.7
Mean
4.9
Top Rank (Score)
Technological Sophistication
36
(4.1)
Firm Level Technology
Absorption
30
(5.2)
4.0
Finland (6.4)
Quality of Scientific
Research Institution
43
(4.2)
3.4
USA (6.2)
Company Spending on R&D
36
(3.6)
University/Industry Research
Collaboration
25
(4.0)
Availability of Scientists and
Engineers
63
(4.4)
Finland (6.6)
3.3
USA (5.9)
4.7
Finland (5.9)
Israel (6.5)
Human resources skill level still below the market
leading in many areas
Rank (Score)
Mean
Top Rank (Score)
Quality of the Education
System
41 (3.8)
3.5
Finland (6.0)
Quality of Math and Science
Education
42 (4.5)
4.1
Singapore (6.5)
Disparity in Health care
Quality
43 (3.0)
3.0
Iceland (6.6)
Brain Drain
12 (5.0)
3.5
USA (6.3)
Comparison of Thailand corporate operation & strategy vs. that
of global firms illustrates that Thai companies still lack behind
in many capacity areas
Rank/Score
Mean
Top Rank/Score
Nature of Competitive
Advantage
34 (3.5)
3.5
Japan (6.3)
Value Chain Presence
39 (4.0)
3.8
Finland (6.4)
37 (3.6)
3.5
Germany (6.5)
Capacity of Innovation
48 (3.2)
3.5
Finland (6.1)
Ethical Behavior of Firms
42 (4.3)
4.3
Finland (6.5)
Extent of Marketing
33 (4.8)
4.2
USA (6.3)
Control of International
Distribution
51 (3.8)
3.9
France (5.7)
Extent of Branding
Low education and low income with high debt reinforce
downward vicious circle at the bottom of pyramid
Low
Opportunity
• Access to capital
• Access to market
• Access to technology
• Quality
• Efficiency
• Cost effectiveness
• Market Intelligence
Low
Productivity
Low
Education
High Debt/
Low Income
A wide gap of wealth exists among 76 provinces
GPP vs Per Capita GPP
GPP/Capita (Baht)
600,000
500,000
400,000
300,000
200,000
100,000
0
0
50,000
Remark: not including BKK
100,000
150,000
200,000
250,000
300,000
350,000
400,000
GPP (Million Baht)
Renewal Strategy
Mandate for Change
Trade and Investment Policy
Agriculture
Market Access
Trade &
Investment
Strategy
Global
Dynamics
Trade
Facilitation
Trade
Measures
Industry
Capacity
Building
Services & Tourism
Enabling Infrastructure
Balance Geopolitics
• China
New
Triad
• Europe
• US
• Japan
Thailand
Existing
Triad
• China
• Japan
• Korea
• India
• Russia
Regional Hub
Hub
Hub
Hub
Hub
Hub
Hub
Hub
Hub
Global-local collaborative network would enhance
competitiveness of the locals
Local Link Global Reach
CEO
Ambassador
Global
Network
Local
Network
CEO
Perm Secretary
CEO
Governor
Global Competitiveness
Local Competitiveness
Example of unique provincial strategy which focuses on
knowledge and skilled labor development
ANG TONG, AYUTHAYA,
PATHUM THANI, NONTHABURI
High
• 38 University
Knowledge
Center in
Industrial
Technology
research
TU,
• Science park
• M-Tech
NECTECH
• Museum
• Rice research
center
Technology
AIT, RU, EU, BU
Fukuaka
Knowledge
Center in
Agriculture
Technology
research
Knowledge
Center in
OTOP skill
development
Knowledge
Center in
Historical
Tourism
Low
Low
Touch
• Cultural Heritage (Ayuthaya)
• Ayuthaya Foreign Village
High
Strategic Capital Investment
•Transports and Logistics
•Information Communication Technology
Physical Capital
•Water and Natural Resources
•Energy
•Science & Technology
•Education
Human and Social
Capital
•Total Well-Being
•Healthy Aging
Building a Sustained High Performance Economy
Lesson Learned: Asian Financial Crisis
Thailand
Credit Crunch
Collapse of
Financial Institutions
Capital
Outflow
Real
Sector
Attacked by
Hedging Funds
Korea
Public
Sector
Financial
Sector
Indonesia
Bankruptcy
Citizen
Sector
Unemployment
Political
Instability
Social Unrest
Argentina
Etc.
The Missing Link
Globalization
High
Performance
Economy
Sufficiency
Economy
Localization
The Missing Link
Sufficiency
Economy
High
Performance
Economy
• Gradualism
• Frog-leap
• Care and Share
• Shape and Sharpen
• Harmony and Happiness
• Effectiveness and Efficiency
• Cohesion
• Competitiveness
Sufficiency Economy
Appropriateness
Driving by
Wisdom
& Knowledge
Immunization
“...เศรษฐกิจพอเพียง เป็ นเสมือนรากฐานของชีวติ รากฐาน
ความมัน่ คงของแผ่ นดิน เปรียบเสมือนเสาเข็มทีถ่ ูกตอกรองรับ
บ้ านเรือนอาคารไว้ นั่นเอง สิ่ งก่ อสร้ างจะมัน่ คงได้ กอ็ ยู่ทเี่ สาเข็ม
แต่ คนส่ วนมากมองไม่ เห็นเสาเข็ม และลืมเสาเข็มเสี ยด้ วยซ้าไป
...”
พระราชดารัสของพระบาทสมเด็จพระเจ้ าอยู่หัว
จากวารสารชัยพัฒนา
“...ในการพัฒนาประเทศนั้นจาเป็ นต้ องทาตามลาดับขั้น เริ่มด้ วยการสร้ าง
พืน้ ฐาน คือความมีกนิ มีใช้ ของประชาชนก่ อน ด้ วยวิธีการที่ประหยัด
ระมัดระวัง แต่ ถูกต้ องตามหลักวิชา เมือ่ พืน้ ฐานเกิดขึน้ มัน่ คงพอควรแล้ ว จึง
ค่ อยสร้ างเสริมความเจริญขั้นที่สูงขึน้ ตามลาดับต่ อไป …การถือหลักที่จะ
ส่ งเสริมความเจริญ ให้ ค่อยเป็ นไปตามลาดับ ด้ วยความรอบคอบระมัดระวัง
และประหยัดนั้น ก็เพือ่ ป้องกันความผิดพลาดล้ มเหลว และเพือ่ ให้ บรรลุผล
สาเร็จได้ แน่ นอนบริบูรณ์ ...”
พระบรมราโชวาทในพิธีพระราชทานปริญญาบัตร มก.
๑๙ กรกฎาคม ๒๕๑๗
Human Capital Development
Heart
Head
Home
Hand
Health
Path to Sustainable Economy : People Sector
Cluster/
Institution
Formation
IntraCommunity
Collaboration
Individual
Self
Sufficiency
• Cooperatives
• Community-based
Enterprises
• Community Business
• Extended Collaboration
• Community-based Intelligence
• Community Development Plan
• Emerging of Basic Communitybased Enterprises
• Increased Income
• Reduced Expenditure
• Savings
• Decreased Unproductive Habit
• Initial Collaboration
“...ถ้ าพอมีพอกิน คือพอมีพอกินของตัวเองนั้น ไม่ ใช่ เศรษฐกิจพอเพียง
เป็ นเศรษฐกิจสมัยหิน สมัยหินนั้นเป็ นเศรษฐกิจพอเพียงเหมือนกัน แต่
ว่ าค่ อยๆพัฒนาขึน้ มา ต้ องมีการแลกเปลีย่ นกัน
มีการช่ วยระหว่ างหมู่บ้าน หรืออาเภอ จังหวัด ประเทศ จะต้ องมีการ
แลกเปลีย่ น มีการไม่ พอเพียง จึงบอกว่ าถ้ ามีเศรษฐกิจพอเพียง เพียงเศษ
หนึ่งส่ วนสี่ กจ็ ะพอแล้ ว จะใช้ ได้ ...”
พระราชดารัสเนื่องในโอกาสวันเฉลิมพระชนมพรรษา
๒๓ ธันวาคม ๒๕๔๒
Roots of Thailand’s Competitive Advantage
OTOP
Thai
Movie
Tourism
Thai
Cuisine
Thai
Boxing
Thai
Fruits
Cultural Diversity X Bio-Diversity
Bridging Local Wisdom with Global Opportunities
OTOP Tourism Target Villages
Provinces
Village
Product
Chiangmai
Ban Tawai - Wiangkumkam
Woodcraft
Chiangrai
Mae Salong Nok
Tea
Chiangrai
Chiang Sen
Pottery
Trak
Mae Sod
Jewelry
OngThong
Ban Wad Yang Thong
Product from Bamboo
Nonthaburi
Ban Mon – Koh Kred
Pottery
Chanburi
Bang Sa Kao –Vegetable Garden
Jewelry
Uthornthani
Ban Chiang
Pottery
Nakornrachsrima
Dan Gwian
Pottery
Nakornsritummarat
Ban Kiriwong
Batik clothes
Phanga
Ban Takuapa
Flower for Para rubber leaf
Path to Sustainable Economy : Private Sector
Cluster/
Institution
Formation
• Global Collaborative
Network
• Regional/Global
Enterprises
• Competitive Cluster
IntraIndustry
Collaboration
Corporate
Self
Sufficiency
• Local Collaborative Network
• Industry-based Intelligence
• Industry Development Plan
• Emerging of Industry Norms
and Practices
• Increased Income
• Reduced Expenditure
• Savings
• Decreased Unproductive
Investment
• Good Governance
Balance Industry Bases
e.g. Electronics
Buy
FDI-based
Own brands
R&D,
Design
International
Division of
Labor
e.g. Business Process Outsourcing
Internationalization
Joint-Venture,
ASEAN linkages
e.g. Agro-industry
Endowment-based
Make
Low
High
Potential Value Creation
Seeds,
Agromachinery
Food industry,
Branding
Capacity Building
Tariff level
Shifting the S-Curve
Capability Building
Time
Protective
Environment
Pro-Competitive
Environment
Balance Locality-Globality
Local Link – Global Reach
Village
Social Cohesion




Sufficiency
Community Building
Cultural Identity
Family Value
Province
Nation
Global
Competitiveness




Efficiency
Cost effective
Productivity
Innovation
A New Dynamic Equilibrium
Globalization
High
Performance
Economy
Sufficiency
Economy
Localization
Governing
Directing
Driving
Building a Sustained High Performance Economy
Driving Forces
Policy Implications
Political Reform
Social Reform
Globalization
Economic Reform
High
Performance
Economy
Sufficiency
Economy
Localization
Macro
Restructuring
Industry
Restructuring
Corporate
Restructuring