Thailand2020

Apirak Kosayodhin
Advisor to Prime Minister of Thailand

Thailand has significantly

g
y changed
g in the p
past 20 yyears
Improved quality of life and a shift away from agriculture

Econom
mic

Exports of G&S (% of GDP)

Agriculture/ GDP
Industry/ GDP
Services/ GDP
GDP per head ($ at PPP)
Net Direct Investment flow/ GDP

33.01
14.71
36.05
49.24
2,240.00
1.79

75.70
10.80
45.80
43.40
8,340.00
2.90

238.60
0
33.80
66.20
43,490
123.20

111.50
9.70
44.40
45.90
14,110
43.90

Mortality rate, under -5 (per 1,000)

Life expectancy at birth (years)
School enrollment, primary (% net)
Income shared held by lowest 20%

N/A
68
N/A
5.00

8
70
94.2
6.10

3
80
781
49

12
74
99
54

Agricultural land (% of land area)

Energy used (kg of oil equiv/ capita)
Electric power consumption (kWh /
capita)

42.00
637
562

36.40
1,588
1,988

1.2
7,056
8,507

24
2,389
3,262

En
nviron
mental
m

1988

Social

Singapore Malaysia
2008
2008

Thailand
2008

Note: World bank, EIU

1 UNESCO data from 2002

What awaits Thailand?

Comparison
p
to selected countries

Countries with similar profile are up

to ~10x wealthier than Thailand

Potential to triple per-capita income?

$ at PPP
40,000

Nominal GDP (USD bn)

4,000
2,000

20,000
2,592

2,064
687

0
France

Italy

South Korea

268

194
194

Thailand

Malaysia

50

78

8,340

14,110

France

It l
Italy

South Korea

Th il d
Thailand

M l
Malaysia
i

Domestic sectors may grow in

importance
% of GDP

26

72

3
40

11

10

Agriculture

46

44

Industry

200

France
100

58

43

46

Italy

South Korea

Thailand

Note: Countries with similar population size and geographic size

Source: EIU 2008 data

Malaysia

It l
Italy
South Korea

Service

0
France

26,400

Percentage of GDP
20

31,360

Nominal GDP

Sector mix may need to be shaped

100

35,100

Thailand
Malaysia

Competitiveness - Overall

Thailand more competitive than Philippines and Indonesia,

but lags behind Malaysia
IMD 2008 Ranking in selected Asian
countries
Economic
performance

IMD 2005-2008 Overall Ranking

Worst
60

Ranking
60

Malaysia
y
improved
p
ranking
g from
22 to 19 while Thailand ranking
lowered from 25 to 27

50

Indonesia

Philippines

Th il d
Thailand

Malaysia
China

Hong Kong
Singapore

40
40

30
20

Infrastructure
Worst

10
0
Best

Government
efficiency
Worst
20

Singapore

0
2005

Hong Kong
China
Malaysia
Thailand
Philippines
Indonesia

Worst

Business
efficiency

2006

2007

2008

Competitiveness - Strengths

Thailand's major strengths are low cost of living

and healthy environment for employment
IMD competitive ranking analysis of major strengths
Healthy
environment
for
employment2
(24)

High

Appropriate
consumption
tax rates
(22)

Gap in ranking
a
g bet
between
ee
overall IMD index of
Thailand with subfactor
(+101)
score

Low inflation
and cost of
living
(23)

Key strengths Thailand

can leverage
Economic performance
Mgmt
practice
(8)

Government efficiency
Business efficiency

Attitudes
and values
(7)

Infrastructure

High
Low
Low
1.
2.

Factor
F
t effect
ff t on ability
bilit off Thailand
Th il d to
t develop
d
l
High
sustainable competitive advantage and prosperity

Difference between overall IMD ranking of Thailand (27) and sub factor scores. Use 10 to approximate 1 standard deviation difference. Source: IMD Competitiveness Report
2008
Healthy environment for employment contains fair compensation level, high employment rate and high labor force number and business friendly regulations

Competitiveness - Weaknesses

Infrastructure and business efficiency

identified as major weaknesses of Thailand
IMD competitive ranking analysis of major weaknesses
High

Low GDP
per capita
(-21)
Low direct
investment
stocks abroad
(-20)

Low
productivity
& efficiency
(-21)
Insufficient
health
quality2 (-20)

Tech low
penetration
of internet
users
(-16)

Gap in ranking between

overall IMD index of
(-101)
Thailand with subfactor
score

Highest priority
gap
to address

Insufficient
education
quality
(-16)
Insufficient
scientific
infrastructur
e (-10)

Economic performance

Societal
framework
((-9)
9)
Finance:
bank
efficiency
(-4)

Government efficiency
Business efficiency
Public
finance
( 2)
(-2)

Basic
infrastructu
re
(-2)
Business
legislation
High
(-2)

Infrastructure

Low
Low

Factor
F
t effect
ff t on ability
bilit off Thailand
Th il d to
t develop
d
l
sustainable competitive advantage and prosperity

High

1. Difference between overall IMD ranking of Thailand (27) and sub factor scores. Use 10 to approximate 1 standard deviation difference. Source: IMD Competitiveness Report 2008
2. Weakness in low number of care providers

Several mega-trends with high relevance on

Thailand's
Thailand
s future development
People
1

Aging society

Urbanization

Health &
safety concerns

IInternational
t
ti
l
mobility

C
Connectivity
ti it

Environment
6

Climate changes

Scarcity and deteriorating

quality of resources

Business
8

Shifting economic
leadership to Asia

Stronger focus on
governance

SWOT analysis for Thailand shows several

opportunities for action
Competitiveness analysis

Mega-trend analysis

Strengths

Opportunities

Central physical location

High-quality service
Sufficiency and diversity of
agricultural
g
resource
Low inflation & cost of living
Healthy environment for
employment

Aging society (developed

countries)
International mobility
Connectivity
y
Shifting economic leadership
to Asia
Health and safety concerns

Weaknesses

Threats

Insufficient scientific
infrastructure
Low
L
productivity
d ti it and
d
efficiency
Insufficient education quality
Insufficient health quality

Aging society (Thailand)

Climate change
Scarcity
S
it and
dd
deteriorating
t i ti
quality of resources (water,
energy, food, soil)
Urbanization
Strong
St
focus
f
on governance

Source: NESDB 2570 Vision Paper, IMD competitiveness, BCG Analysis

Strategic focus
"What Thailand
should be known for"
Strategic pillars
"How Thailand
should operate"
operate
Strategic
foundation
"What Thailand
needs to have"

Potential 2020 vision for Thailand

Transformation from commodity supplier to high value, branded, green economy

High
value-added economy

Strategic Focus

1 World's food supplier

Leader
in creative products
2
3 Magnet for cultural & eco-tourism
high-value added services
4 Regional logistics hub

" What Thailand

should
h ld b
be kknown
for"

Strategic pillars
"How Thailand
should operate"

Foundation
"What Thailand
needs to have"

Open
economy
y
with high
social
mobility

Alternative
energy &
green
technology

Culture of
tech/
entrepreneur
-ship &
excellence

Knowledge
& creativity
based
communities

World-class
work ethics
&
governance

High quality physical & technological infrastructure

High quality & wide access to social services
Sufficiency & sustainable resource management
Prudent fiscal & monetary policy

Transformation towards sustainable

higher value green economy and well
well-being
being society
National agenda is key to drive transformation
Thailand Today

Thailand 2020

Commodity products / OEM

Higher value-branded products

Basic use of rich cultural

heritage in commercialization
of products and services

Cultural
C
lt
l tourism
t
i
and
d heritageh it
based product / services
Add value

Basic infrastructure

Build brand

Drive GDP Growth

Invest in
infrastructure and
green energy
Leverage Thai
heritage
g

Higher-quality
Hi
h
lit physical
h i l and
d
technological infrastructure

Sustainable
S
t i bl development
d
l
t/
well-being society


Thailand2020

Apirak Kosayodhin
Advisor to Prime Minister of Thailand