INVESTMENT

The competitiveness challenge

Chatrudee Theparat

IMPROVING THE country's competitiveness, one of the national agenda priorities of the Thaksin government, has shown satisfactory progress to date. Thailand has been moving up in the international competitiveness rankings by the Institute for Management Development, standing 29th this year against 30th, 31st and 34th in the three years previous.

Experts agree that Mr Thaksin is more serious than most government leaders about the issue. He personally chairs a competitiveness committee and pushed for the establishment of a special-purpose competitiveness office last year. A huge budget of 16 billion baht was also set aside for related programmes.

At a meeting in Chiang Mai held shortly after Mr Thaksin was sworn in as prime minister in early 2001, the government set a number of goals known as the "seven dreams", which include the transformation of the country into a knowledge-based nation, the creation of an entrepreneurial society and the push for Thailand to be a regional leader.

Three years later, some of these goals, such as a study to design an economic development platform, have shown some progress. The Fiscal Policy Research Institution Foundation, which conducted the study, reported that information and communications technology should play a more significant role in expanding the economy.

The concept of industrial clusters has also been introduced. Michael Porter, a Harvard Business School professor and author of several books on competitiveness, was invited to Thailand to give talks on the idea and help some industries create niches by grouping them into clusters so that costs of training, development and logistics could be shared.

The government's plan to promote Thailand as one of the world's fashion hubs is also regarded as an effort to create a niche for Thai apparel.

But a lot needs to be done in educational reform, which has yet to materialise, according to the deputy secretary-general of the NESDB Wilaiporn Liwgasemsan.

However, an economist warned that the projects designed to strengthen competitiveness had to be handled efficiently so that the huge budget would not be wasted.

He urged the public to monitor the approved 59-billion-baht budget earmarked to boost competitiveness this year. Of the amount, 38 billion baht has already been allocated to improving infrastructure, not industrial competitiveness.

To keep the competitiveness programmes running efficiently and transparently, a body needs to be set up to evaluate the programmes, the economist added.