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Thailand

Thailand steps up reforms to make doing business easier

Ulrich Zachau's picture

A Thai business owner in Chiang Mai might open a small resort serving local people as well as tourists. It would probably take him about two months to set up his business after finding the location, staff and getting the company registered. He would find it reasonably easy to start his business.    

At the same time, a foreign investor living in Vietnam and considering whether to invest 3 million baht in Thailand to start a restaurant might have a different experience. She would likely find the process a bit complex and challenging. Most websites with the relevant information are written in Thai, the paperwork involved in registering a company can be pretty daunting for foreigners, and getting work permits and a business license can take longer than expected.

How do we achieve sustained growth? Through human capital, and East Asia and the Pacific proves it

Michael Crawford's picture
Students at Beijing Bayi High School in China. Photo: World Bank


In 1950, the average working-age person in the world had  almost three years of education, but in East Asia and Pacific (EAP), the  average person had less than half that amount. Around this time, countries in  the EAP  region put themselves on a path that focused on growth  driven by human capital. They made significant and steady investments in  schooling to close the educational attainment gap with the rest of the world. While  improving their school systems, they also put their human capital to work in  labor markets. As a result, economic growth has been stellar: for four decades  EAP has grown at roughly twice the pace of the global average. What is more, no  slowdown is in sight for rising prosperity.

High economic growth and strong human capital accumulation  are deeply intertwined. In a recent paper, Daron Acemoglu and David Autor explore  the way skills and labor markets interact: Human capital is the central  determinant of economic growth and is the main—and very likely the only—means  to achieve shared growth when technology is changing quickly and raising the  demand for skills. Skills promote productivity and growth, but if there are not  enough skilled workers, growth soon chokes off. If, by contrast, skills are abundant and  average skill-levels keep rising, technological change can drive productivity  and growth without stoking inequality.

The Future is Here: Technology trends currently shaping the world of Logistics

Karuna Ramakrishnan's picture
Also available in: Spanish

Emerging technologies are transforming global logistics. The evidence is everywhere: Logistics companies are exploring autonomous fleets and “lights-out” warehousing, and are looking to Big Data for transport management and predictive analytics. Crowdsourcing start-ups are using a high-tech/asset-light business model. And e-brokerage platforms are providing real-time information from pickup to delivery.
 

How to effectively manage metropolitan areas?

Ede Ijjasz-Vasquez's picture
​Today, a quarter of the world’s population lives in urban “agglomerations”—supersized metropolitan areas that cut across jurisdictional boundaries and bring together one or more cities along with their surrounding areas.

These metropolitan areas face a common challenge: effectively coordinating planning, infrastructure development, and service delivery across multiple jurisdictions. This is particularly difficult in developing countries, which often lack the necessary legal, institutional, and governance apparatus to undertake such coordination. The New Urban Agenda issued by the Habitat III conference in 2016 identified metropolitan planning and management as one of the most critical needs to ensure sustainable urbanization.

Fortunately, there is growing evidence and good practice from various countries on how to effectively manage and govern metropolitan areas. To help spread existing good practice and co-create new solutions, the World Bank has been supporting a community of practice (CoP) on metropolitan governance, or MetroLab, which brings together officials from metropolitan areas in both developing and developed countries for peer-peer knowledge and experience sharing.  Since its launch in 2013, MetroLab has held eight meetings in various cities, including Bangkok, Mumbai, New York, Paris, Rio de Janeiro, and Seoul.

​The most recent meeting took place in Tokyo from January 30 through February 2. Organized by the World Bank’s Tokyo Development Learning Center, the Tokyo MetroLab brought together mayors, city planners, and finance officials from nine developing cities. They were joined by experts from the World Bank, New York’s Regional Plan Association, the Seoul Metropolitan Government, and Advancity—Paris’ Smart Metropolis Hub.

In this video, Lydia Sackey-Addy, one of the participating officials from Accra, Ghana, as well as the World Bank’s Senior Director Ede Ijjasz-Vasquez (@Ede_WBG) and Lead Urban Economist Maria Angelica Sotomayor (@masotomayor) tell us how they are working together to make the Accra metropolitan area more resilient and sustainable for its residents.


 

Providing quality education to one million students in Thailand’s small schools

Lars Sondergaard's picture

The Organization for Economic Cooperation and Development’s latest Program for International Student Assessment (PISA) results brought several pieces of alarming news for Thailand.
 
First, Thailand’s ranking slipped further (from 51st to 64th in reading; 50th to 55th in Mathematics; and 50th to 54th in Science).
 
Second, the education system produces a disturbingly small share of “high performers” – only 1.4 percent of Thai students demonstrated superior problem solving and analytical reasoning skills compared to 35 percent of students in Singapore, and 15 percent, on average, in the OECD.
 
Third, the share of functional illiterate students rose further: from 33 percent in 2012 to 50 percent in 2015.
 

Skilled workforce and strong R&D keys to Thailand 4.0 success

Dilaka Lathapipat's picture



Several of the government’s recent economic initiatives have the potential to kick-start Thailand’s economy. To achieve the economic transformation it has been aspiring for, having a skilled workforce and much more strategic investments in research and development (R&D) will be important.

Following nearly four decades of impressive economic growth at 7.7 percent, the Thai economy has slowed sharply to 3.3 percent over the last decade from 2005-2015. At this rate of growth, it would take Thailand well over two decades to achieve high-income status.

A new World Bank report “Getting Back on Track: Reviving Growth and Securing Prosperity for All” cites that a main reason for the slowdown is a loss of competitiveness.

Ten years ago, Thailand was ahead of its neighbors and peers on virtually all the competitiveness indicators tracked by World Economic Forum in its Global Competitiveness rankings.

Today, other middle-income countries have caught up, while more advanced economies in the region have surged further ahead, particularly in technological readiness, higher education and training, innovation, financial market development, institutions, and business sophistication.

Looping in local suppliers rather than forcing out international firms

Anabel Gonzalez's picture



An instructor at the Savar EPZ training center in Dhaka, Bangladesh, helps young women being trained to make shirts. Photo Credit: © Dominic Chavez/The World Bank


Increasing economic prosperity for developing countries is related not only to rising trade, but also – and more important – to transforming the traditional composition of what they produce and export. In the world today, many developing countries strive to diversify away from exporting commodities toward higher-value-added goods and services.

The evolution of trade and investment flows over the last three decades shows that foreign direct investment (FDI) can be a powerful driver of exports, a creator of well-paid new jobs and a crucial source of financing. More important, FDI may become a very rapid and effective engine to promote the transfer of technology, know-how and new business practices, helping to raise productivity and setting a country on the course of convergence. This is particularly the case of efficiency-seeking FDI – that is, FDI that locates productive processes in a country seeking to enhance its ability to better compete in international markets-.
 
The benefits of FDI are further leveraged when local firms can catalyze the presence of foreign investors to connect to global and regional value chains (GVCs). As a result of new international firms investing in a host country, great new opportunities arise for local enterprises to supply the inputs – be it goods or services – that their international counterparts need.

This has been the experience of Bangladesh, where local suppliers have grown in tandem with foreign investors in the garment sector. It is through linkages with international investors that local firms can gradually be lured into producing new goods and services that, until then, were not produced in the host country.  This is how economic diversification and greater value added are generated.

Multinational enterprises (MNEs) and their key partners (Tier 1 suppliers) are generally keen to source locally if a competitive local supplier can be found. However, they are also reluctant to absorb high search-and-find costs, and they will typically not invest in assisting local suppliers with upgrading efforts. Likewise, local firms are generally keen to supply to foreign firms, but are often not ready to make the necessary investments in technology and in processes to meet strict quality standards without a clear line of sight on potential payoff for such investment.

Providing better education for children in Thailand’s small schools

Lars Sondergaard's picture



During a recent trip to Udon Thani, we visited several small schools in the outskirts of the city. In several ways, these small schools were typical of Thailand’s 15,000 schools with less than 120 students.
 
In past decades, the schools had nearly three times as many students but, over time, their enrollment numbers had gradually fallen as a result of shrinking birth numbers; and with better roads that allowed some families to place their children in better schools located in Udon Thani city itself.  
 
Several other schools were located in their close vicinity. In fact, a total of seven schools – many of which had also shrunk into small schools – were now located within a 3-kilometer radius.
 
The schools struggled to provide quality education for their students because they had a hard time attracting and retaining qualified teachers. During our visit, the principal of one of the schools explained that the school had no qualified English language teacher and that many of their teachers were recent, and mostly inexperienced university graduates. The principal feared that many of these new teachers would only stay at the school for a short while before seeking to move to Udon Thani city or another urban area, and to teach at a city school.

Which region in the world has the smartest kids? According to the OECD, it’s East Asia

Harry A. Patrinos's picture
Students from Tran Dai Nghia High School near Can Tho, Vietnam (Photo: D7K_4030 by makzhou, used under CC BY-NC 4.0 / cropped from original)


With the release last month of the latest PISA (Program for International Student Assessment) results by the OECD (Organisation for Economic Co-operation and Development), it is apparent that many of the highest achieving students in the world are in East Asia.
 
Just as in the recently released TIMSS (Trends in International Mathematics and Science Study) results, Singapore leads the world in every subject in PISA, outperforming other economies and countries by a significant margin. Students in Singapore perform at a level that is up to two years ahead of their regional and OECD counterparts in science, mathematics and reading. Moreover, almost all Singaporean students have reached a basic level of proficiency or higher. And they just keep getting better, having significantly reduced performance below basic proficiency.
 
Japan also outperforms most participating economies in science, mathematics and reading. However, its score in reading has declined since the last round. Still, as in Singapore, 90% of students have reached a basic level of proficiency or above.

Services as a new driver of growth for Thailand

Ulrich Zachau's picture

There’s a good chance you work in the service sector. Services account for 17 million jobs in Thailand, or approximately 40 percent of the Thai labor force. It encompasses diverse industries such as tourism, retail, health, communications, transportation and many sought-after professions such as architects, engineers, lawyers and doctors. Many Thai parents aspire for their children to join the service sector, and the sector carries many of Thailand’s economic hopes and ambitions.


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