Thailand's challenge: Rich in ambitions, poor in people skills?
- Published: May 22, 2017 15:42
- Writer: Christopher Bruton | 2,294 viewed
Announcement of visionary and ambitious plans has become almost routine. The year 2017 will apparently not be an election year (nothing new about that) but has begun with boom times in the planning sector. In January 2017, we were treated to announcements about "Thailand 4.0". These were soon followed by further revelations about the "Eastern Economic Corridor". These schemes are all part of government strategies to move Thailand into "Thriving in the 21st century: security, prosperity and sustainability". The 21st century has been going for quite a while now, but "better late than never", and "never" had become quite a routine in recent years.
The concept of "Thailand 4.0" has become quite well-known by now, and several of Thailand's leading companies have adopted their own corporate versions along the same lines. The concept is that Thailand had slumbered for centuries, with an agrarian society and small industries, the basis of "Thailand 1.0". This was transformed by import substitution policies based on low-cost labour and natural resource processing with Board of Investment support in the 1960's. This stage was quickly followed by export promotion with heavy industries, funded partly by foreign direct investment in the 1970's.
However there are limits to what can be achieved in a highly competitive export-oriented market place, so Thailand needs to move forward to resolve imbalances, inequalities and middle income traps. To achieve the next stage of progress, Thailand needs to move forward and transform the economy into a demand-driven, value-creating environment, with trade in services rather than goods, along with trade facilitation rather than regulation.
"Thailand 4.0" is born: 20 years after 1997
This new "Thailand 4.0" needs to take-off into sustained development right away, in 2017, with transformation led by investment in people and technology, concentrating on futuristic industries and massively-expanded and integrated infrastructure investment.
The new industries are described as "S-Curve" industries. The strategy starts out with industries for which Thailand already has the basics: next-generation automotive, smart electronics, medical services and wellness, bio-technology based agriculture, and sophisticated food production.
Beyond this first stage are to be robotics, aviation and logistics, biofuels and bio-chemicals, digital economy and smart cities, plus an integrated medical hub serving the ASEAN Region.
This means logging into state-of-the-art new technologies, setting up new industries, and developing skills in food technology, health technology and robotics, all based on advanced e-commerce and design technologies.
It is recognised that all this visionary transformation does not take place overnight, so that although the strategy appears to have been devised at in high-speed train style, realisation is to be part of a 20-year national plan. A 20-year program seems a long time, but it is perhaps significant that 20 years ago was 1997, the year of the Asian Financial Crisis, set in motion by the July 1, 1997 Thai Baht devaluation. How far has Thailand really moved forward in that time, and how much has been learned? There have been two coups, in 2006 and 2014, and three constitutions, but progress in real terms has been limited.
Eastern Economic Corridor: Gateway to Paradise?
The Eastern Seaboard of Thailand, although slow in its earliest stages, has been a powerhouse of development for a quarter century. The growth of Map Ta Phud petrochemical complex, the Laem Chabang Seaport, and a large number of industrial estates have all been developed, with double digit growth of industry and exports. This region has been the base for Thailand's automotive industry, as well as one of the most successful tourism areas in the world, right next door to heavy industry.
The Eastern Economic Corridor was approved by the Thai Cabinet in October 2016 with fast track progress towards enabling legislation already in advanced development. Investment during the first five years is targeted at US$47 billion, including industries, transport, tourism and "smart cities". The first announcements of the scheme, in February 2017, take account of everything. Everything, that is, except one detail: human resource supply, education and training, which does not yet get much mention.
Various estimates are being made of technical and labour requirements, including a calculation of 1.6 million trained people per year for each of the first 15 years up to 2032. But it is not as yet evident where these people are going to come from, or how they are going to be trained up to the standards required to meet the expectations of "Thailand 4.0".
Thailand Human Resource Situation
Recent comments on the current human resource situation have not been encouraging. International comparative studies have rated Thailand relatively poorly in terms of human resource capacity. The OECD Program for International Student Assessment (PISA) ranked Thailand at 54th out of 72 countries assessed, compared with Singapore in first place, and Vietnam in 8th place. The World Economic Forum Human Capital Index ranked Thailand at 48th place, compared with Singapore at 13th place, although in this case, Vietnam ranked at 68th place, below Thailand. Perhaps more significantly, Thailand's own assessments of student performance have recently indicated that a substantial proportion of Thai students are failing to reach pass grades throughout their primary and secondary education.
Despite various successive attempts at educational reform, the mass of the student population continues to be subjected to traditional rote educational systems which defeat the purposes of modern education, generating subservient characteristics rather than questioning and analytical attitudes.
Thailand's elite parents tend to overlook these shortcomings because their own children attend leading public or private schools where educational techniques are more advanced, and in keeping with good international standards. These enable secondary graduates to enter top international universities, resulting in misleading beliefs that the entire Thailand educational system is on the move forwards to match futuristic economic and technical development and progress.
Apart from shortcomings in the educational system, there is also a somewhat belated realisation that Thailand's workforce, and the population as a whole, is ageing, and that ever higher proportions of the population structure will soon be beyond working age. These trends will result in smaller intakes into the educational system and from education into workforce.
The conclusions are that in order to meet the requirements of "Thailand 4.0", and, in particular, the demands of the Eastern Economic Corridor, it will be necessary to conserve and develop to a maximum extent the increasingly scarce resources of educable workforce that may be available. At this point of time, at least, the outlook has much need for improvement.
Christopher F. Bruton, over 46 years in Thailand, is Executive Director of Dataconsult Ltd, a local consultancy. He can be reached at email@example.com. Dataconsult's Thailand Regional Forum provides meetings, seminars and extensive documentation to update business on present and future trends in Thailand and in the Mekong Region.