The World Bank has warned that Thailand’s average annual economic growth will be stuck below 3% if there is no significant increase in investment and productivity growth.
In doing so, World Bank implies Thailand’s education system, meant to help the establishment, is costing Thailand’s US$ billions in GDP growth.
But increase in productivity is linked to quality of education & in Thailand’s case, Thai students rank among the lowest globally, stemming from an education system that stress respect to tradition and culture, above critical thinking & independent analysis skill.
Productivity growth fell to 1.3% during 2010-16 from 3.6% during 1999-2007. Private investment has halved from 30% of GDP in 1997 to 15% in 2018, as foreign direct investment slowed and progress stalled on projects related to the Eastern Economic Corridor.
To become a high-income country by 2037, Thailand will need to sustain long-run growth rates of above 5%, which would require a productivity growth rate of 3% and for investment to make up 40% of GDP, said Kiatipong Ariyapruchya, a World Bank senior economist for Thailand.
“Boosting productivity will be a critical part of Thailand’s long-term structural reform,” he said. “Increasing productivity, particularly among manufacturing firms, will depend on increasing competition and openness to foreign direct investment and improving skills.”
The global lender recommends higher productivity growth to remove constraints that prevent new firms, especially foreign companies and skilled professionals, from entering Thailand’s market.
The country needs to develop policies to build skills and human capital for an innovative knowledge-based economy. In particular, Thailand must develop scientific knowledge, which is a barrier to the country’s R&D investment.
Thailand’s scientific knowledge and skills in the field are inferior to those of peer nations, Mr Kiatipong said.
The World Bank has downgraded Thailand’s economic growth outlook for this year to 2.7%, but the latest revised figure is still higher than the bank’s growth estimate of 2.5% for 2019.
Risks to Thailand’s economic outlook stemming from both external and domestic factors persist.
The trade tensions between the US and China and trade policy uncertainty, a sharper-than-expected downturn in major economies and financial turmoil in emerging markets and developing economies will continue to be external key risk factors impacting the economy this year.
Last October, the World Bank predicted Thai economic growth of 2.7% in 2019 and 2.9% in 2020. The growth forecast for Thailand this year is slightly higher than the 2.8% predicted by the Bank of Thailand but below the 3.3% projection of the Finance Ministry’s Fiscal Policy Office.
The World Bank predicts that the global economic growth rate for 2020 will edge up to 2.5%.
In 2019, declining exports and growing weakness in domestic demand weighed on Thai economic growth.
The baht, which has appreciated by 8.9% since last year, has also dealt a blow to international tourism and merchandise exports, the World Bank said.
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Just today the current US administration was told the same thing. US was talking of increasing ‘Legal’ immigration but the real issue of growth and preparedness is not immigration but spending monies internally for actual citizens long denied and closed out of US production. Maybe Thailand like most countries are being ruled by the elite whose only interest is staying in power instead of empowering their citizens