Three Strategies for Thailand’s Economic Transformation

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BANGKOK – Speaking at the “Thailand Taking off to New Heights” seminar organised by the Thailand Board of Investment (BOI) yesterday, Thailand’s Deputy Prime Minister Somkid Jatusripitak talked three strategies – investments in mega projects, the development of the Eastern Economic Corridor (EEC), and the promotion of digital technological advances – to transform Thailand’s economy into an engine of Southeast Asia’s economic growth.

Deputy PM Jatusripitak added that in the past two years the government has implemented various initiatives resulting driving significant economic expansion, high export values, more investment applications and increasing numbers of foreign tourists. He also highlighted improvement in Thailand’s competitiveness ranking by the International Institute for Management Development (IMD) and World Economic Forum (WEF). Thailand’s 2017 ranking in the World Bank’s Ease of Doing Business improved by 20 positions to the 26th rank in one year. Thailand was also ranked 1st in US News’ Best Countries to Start a Business and 8th in US News’ Best Countries to Invest in.

Mr Jatusripitak added the government encourages participation from members of the private sector, local and foreign, in the implementation of every project.

Mega projects

This includes development of mega projects to improve physical infrastructure, such as the electric train system in Bangkok and suburban areas; new electric trains in other provinces; a dual-track rail system for enhanced transportation across the country, a high-speed rail system connecting with neighboring countries; the expansion of Suvarnabhumi Airport phase 2, Don Mueang International Airport development phase 2, Phuket International Airport development phase 2, Chiang Mai International Airport development phase 1; as well as investments in energy surveys and the construction of natural gas infrastructure and pipelines.

Eastern Economic Corridor (EEC)

The second key strategy comprises Investments in the EEC with an aim to create seamless transport and logistic systems linking roads, rails, sea routes and air transport in the EEC and peripheral areas.

Projects under this strategy to drive Thailand 4.0 [1] policies include the construction of the Bangkok-Rayong high-speed train system linking three airports, the improvement of U-Tapao International Airport to make it an aviation hub of the region; the development of Laem Chabang Deep-Sea Port and Mab Ta Phut Port Phase 3; and the development of Eastern Economic Corridor of Innovation (EECi).

Digital advances

This includes projects supporting Thailand 4.0 development such as investment in village-level broadband internet. The government’s submarine cable network connecting Thailand, Hong Kong and China is also aimed at making Thailand an international gateway for this region.

The government supports digital trading and digital transformation in the manufacturing and service sectors. This has also raised private sector awareness and enhanced its ability to embrace digital technology faster. Meanwhile, e-government initiatives have been introduced to increase public service efficiency.

Kobsak Pootrakool, Minister Attached to the Prime Minister’s Office, in charge of BOI, said that the Thai government was committed to economic reform by supporting the adoption of advanced technologies and boosting innovation. An economic reform scheme has been prepared by the government, encompassing plans to increase people’s capabilities, to empower the business sector and to increase efficiency in the public sector. The three major action plans are:

Increasing productivity and efficiency in the major industries in which the country has expertise, strengthening high potential industries of the future, and improving competitiveness through people development

(There are 10 targeted industries under Thailand 4.0, divided into two segments: 1) First S-curve or five existing industrial sectors (which can be developed by adding value through advanced technologies and 2) New S-curve or five sectors which can serve as growth engines to accelerate Thailand’s future growth)

• Encouraging partnerships and economic integration in the region, starting from investment in basic infrastructure, and liberalisation of trade and services, to achieve sustainable economic growth
• Creating an enabling research and innovation ecosystem by improving measures promoting the use of innovation in production, which are crucial to increase national competitiveness

Mr. Pootrakool emphasised that the realisation of these ambitions will require close cooperation among a variety of stakeholders.

At the event, which was attended by over 3,000 participants, including Thai and foreign investors, representatives from government agencies, and members of the Thai and international press, a number of key government agencies held exhibitions and provided up-to-date information to investors. These agencies included the Industrial Estate Authority of Thailand, the Eastern Economic Corridor Office (EECO), Ministry of Digital Economy and Society, and Ministry of Science and Technology, for example.

In addition, also on display were exhibitions of local products and innovations funded by government agencies, including the Thailand Research Fund, the Thailand Institute of Scientific and Technological Research, and the National Research Council of Thailand.

[1]  Background information on Thailand 4.0

The Thailand 4.0 strategy aims to help the country escape the middle-income trap, achieve sustainable growth and reduce income disparities. The Thai Government is promoting the Eastern Economic Corridor (EEC) development plan as one of the key measures to realise the Thailand 4.0 vision. The Government is setting up an Internet of Things (IoT) Institute and a government big data analytics centre at the EEC. The IoT institute, being set up through public-private partnership, will be a part of the Digital Park to be built in Chon Buri province, as a flagship project under the EEC.

A Manufacturing Automation and Robotics Academy (MARA) is also being established at the EEC, to focus on the development of robotics, mechanics, artificial intelligence and automation and ensure that these technologies play a larger role in the business and industrial sector.

In January 2018, Thailand officially launched a new 4-year professional visa scheme for professionals, also known as Smart Visa, to attract foreign highly-skilled talents. The Smart Visa targets foreign entrepreneurs, high-level executives, new business start-ups or digital independents in 10 target industries.

BOI has a range of activity-based, technology-based, area-based and merit-based investment incentive schemes in the EEC. Earlier this year, the Government announced New Investment Promotion Measures in the EEC—starting January 1, 2018.

By Priyankar Bhunia