Thailand - Systematic Country Diagnostic: Getting Back on Track - Reviving Growth and Securing Prosperity for All
Thailand - Systematic Country Diagnostic:
Getting Back on Track - Reviving Growth and Securing Prosperity for All
The report identifies the challenges and opportunities now facing Thailand to help guide future development policies for strong, shared and sustainable growth.
Thailand made tremendous progress toward eliminating poverty and boosting shared prosperity.
Thailand is a country of vast potential but recent growth has been slowing; it has also lost the competitive edge it once enjoyed over other countries in the region.
- The economy grew at an average annual rate of 7.7% for nearly four decades prior to the 1997 Asian Financial Crisis.
- Per capita income rose by 4.2% per year on average in 2000-2013.
- Exports grew at a very impressive annual rate of 15% from 1986-1996. In the same period, private investments averaged more than 30% of GDP.
- High growth helped reduce poverty from 67% in 1986 to 10.5% in 2014.
- As of 2014, 7.1 million Thais still live in poverty and 6.7 million are vulnerable to falling back into poverty with pockets of poverty concentrated in the Northeast, North and Deep South.
- The gap between Bangkok and rural areas are widening especially in terms of household income, consumption, education, skills and productivity levels.
- Growth has slowed sharply to 3.3% over the last decade (from 2005-2015). At this rate of growth, it will take Thailand more than 20 years to achieve high-income status.
- Key engines that drove poverty reduction in the past has lost steam:
- Record-high agricultural prices which raised farmers’ incomes in the past have dropped by 13% in just one year between 2013-2014
- Slowdown of labor productivity growth from 6.8% (1986-1996) to 2.6% (2004-2014)
- Faltering export growth to less than 1% (2012 to 2014) from 15% (1986-1996)
- Countries like Cambodia and Vietnam are catching up on virtually all competitiveness indicators including infrastructure, higher education and training, innovation, technological readiness and business sophistication.
The report identifies key measures for Thailand to get back on track, revive growth, and secure prosperity for all.
- Creating more and better jobs by boosting investments in infrastructure; increasing competition through free trade agreements and deregulation; and increasing firm-level competitiveness through technology and innovation.
- Providing more support to the bottom 40% of the population by improving workforce education and skills; boosting agricultural productivity; and building smarter protection systems.
- Making growth greener and more resilient by managing Thailand’s natural resources and environment; reducing vulnerability to natural disasters and climate change; and promoting energy efficiency and clean energy.
- Strengthening the institutional capability of public sectors to implement reform priorities.