Interview: Prime Minister Prayut Chan-o-cha
What is the government doing to show investors that the country is a politically stable and attractive investment destination?
PRIME MINISTER PRAYUT CHAN-O-CHA: The government has worked to maintain peace, order and stability throughout the country, and to bring an organised effort to the national administration, following the steps outlined in the country’s roadmap. For the past two years, the government has followed this roadmap and is currently in Phase 3, which will ultimately lead to the adoption of a permanent constitution, democratic elections and a change to a new government following the election. During this time, the government must lay the foundation for a clear and stable transition to the next government. Thailand will have the opportunity to be a constructive contributor to the global community and become an attractive investment destination.
In recent years, the government has been successful in enhancing the investment climate, as demonstrated by the International Management Institute’s announcement that Thailand’s competitiveness in 2016 improved in both score and rank. The overall score in 2016 was 74.681 compared to 69.786 in 2015, and the country’s rank improved to 28th in 2016 from 30th in 2015. Of the five ASEAN countries in this ranking – Singapore, Malaysia, Thailand, the Philippines and Indonesia – Thailand is the only country with an improved ranking, while the others fell in rank between one and six places. This conveys that Thailand’s economic fundamentals are quite strong. Although in recent years every country has suffered from the global economic crisis, the Thai government has undertaken various measures to stimulate the economy and facilitate its business environment, together with strengthening the private sector, and most economic indicators are improving.
For the World Bank’s 2017 ease of doing business index, Thailand was ranked third in ASEAN, ninth in Asia and 46th out of 190 countries, up three places from 2016. Thailand clearly improved in three areas: starting a business, getting credit and resolving bankruptcy. Although the ease of doing business in Thailand is improving, greater efficiency is needed in the public sector. For the next ranking, our goal is for Thailand to place in the world’s top 30 countries.
What are the short-term priorities for the government under its Thailand 4.0 initiative?
PRAYUT: Thailand 4.0 is intended to prepare Thais for the 21st century, and several economic priorities for the government include: business incubation for entrepreneurs and fostering innovation-driven enterprises; improving technology clusters and targeted industries; strengthening local economies through the mechanisms of six regions, 18 provincial clusters, and 76 provinces; and integrating ASEAN while connecting Thailand to the global community. In terms of infrastructure, the focus is on improving the country’s physical infrastructure, network infrastructure, management mechanisms, intellectual infrastructure and social infrastructure. In January 2016, the government established the committee for national administration under the frameworks of national reform, national strategy, and reconciliation, in moving the country forward through Thailand 4.0.
To move Thailand toward this goal, the key success factor is ensuring that the Thai population is well-prepared. Therefore, improving the workforce and human resources are urgent government priorities. However, the government also needs cooperation from all sectors in Thailand, including the public and private sectors, as well as educational institutions and parents to support the younger generation of Thais by helping them acquire requisite skills and knowledge, especially in science, technology, engineering and mathematics, and foreign languages. Following the principle of creating learning with clear objectives that will lead to improved results and benefits to society, these steps are necessary to prepare the Thai workforce to serve the needs of the markets and entrepreneurs that will invest in Thailand, and also to be ready for national economic improvements in technology and innovation.
As a leader within ASEAN, how can Thailand address economic, social and security issues?
PRAYUT: ASEAN has always been an important pillar of Thai foreign policy and a key platform for engaging with the international community. After all, the ASEAN Declaration, which was the building block of what ASEAN is today, took place here in Bangkok on August 8, 1967. Since then, Thailand has been working in partnership with all nine of the other member states to build a regional order based on mutual interest and shared values. Peace and stability is the underlying foundation of the ASEAN Community, and we therefore attach importance to developing regional norms that promote the peaceful settlement of disputes while promoting an ASEAN-centred regional architecture to encourage dialogue and build trust and confidence amongst the major powers.
What has attracted the attention of the international community – and particularly the international business community – is the added value of ASEAN’s economic integration; the region could become the world’s fourth-largest economy by 2050. It is therefore important for Thailand to support ASEAN’s economic integration, expansion and interaction with the global economy. But the emphasis should not just be on economic growth alone, and Thailand places great importance on the reduction of development gaps and greater access to opportunities for all people, with the goal being for everyone in ASEAN to have a better standard of living. Over the five decades of ASEAN’s existence, Thailand has used its resources and assets to help promote a more effective, dynamic and people-centred ASEAN Community. With its record for moderate and pragmatic policies, it is a natural bridge-builder between South-east Asia and other regions.
How can equitable economic development across all of Thailand be ensured, and what role do special economic zones (SEZs) play?
PRAYUT: Apart from focusing on the country’s economic development in regards to the targeted industries and technologies in each sector, the government is also considering the possibility of creating an area-based development policy to increase prosperity throughout Thailand, and to connect Thailand strategically to different regions in Asia.
Under Thailand 4.0 the government has given priority to the development of border areas that are connected to neighbouring countries in 10 provinces in the form of SEZs which will play a major role in expanding the economies of these regions. These aim to enhance the quality of life for residents, while promoting increased trade and investment to support the ASEAN Economic Community. This will occur as a result of linking major production bases with their neighbouring countries. This will increase economic opportunities, strengthen the competitiveness of the region, while also helping with alleviating the continual problem of illegal migrants.
In addition to the development of SEZs around border areas, the government also plans to establish a target area for the industries of the future. Therefore, a policy on the development of the Eastern Economic Corridor (EEC) has been adopted, and the implementation of this plan will include the provinces of Rayong, Chonburi and Chacoengsao.
Thailand’s government intends to accelerate its development and its readiness to support all aspects of investment and economic growth in infrastructure, transportation and logistics, as well as human resource development. According to the government’s forecast, the economy in the EEC will be the best and most modern in the region, leading with an investment value estimated at some THB1.5trn ($42.3bn) for both the public and private sectors in the first five years.
Read More from OBG
