Transcript Thailand

Thailand
in the New Global Landscape
Suvit Maesincee
Sasin Institute for Global Affairs (SIGA)
• Thailand
from the Outside-In Perspective
• Thailand
from the Inside-Out Perspective
We are facing with perpetual crises
During this decade
Asian
Financial
Crisis
Dot
Com
Burst
Real
Estate
Bubble
Commodity
Price
Bubble
Global
Financial
Turmoil
Global European
Economic Sovereign
Crisis Debt Crisis
For much of the next decade after the economic crisis,
we can reasonably expect to see
• Weak global growth
• Pressure from overcapacity
• Persistently high unemployment
• Volatility in the financial markets
• Costlier capital
• A great expanded role for governments
• A much larger burden of regulation and taxation for all
Post crisis Trade-Related Scenario
• The rising tide of economic nationalism temps nations to look
inward-driven more by self interest rather than by the outwardlooking aspirations of collective interest that shape a deeper
commitment to globalization
• A tough business cycle exacerbated by sharply rising
unemployment and a muted recovery, could well reinforce the
tendencies of the localization alternative
• An era of heightened trade friction, increased protectionism
Global Structural Change
Change in
Geo-Climatics
Change in
Geo-Politics
Change in
Geo-Economics
Change in
Geo-Demographics
Change in Geo-Economics…
The New World Economic Structure
World Economic Structure
Global GDP* %
75
Developed Countries
The Triad
The Rise of the Rest
50
Developing Countries
The Rest of the World
25
1820
70
1913
50
73
The Rise of Asia
2005
The Rest of Asia
China/India
Spending power has already been shifting away from the
richest countries towards a growing middle income bloc
• In 1980, the seven largest economies in the world in USD terms
were all developed economies
• That list now includes all of the BRICs
By 2050 China and India will together account for
nearly 50% of global GDP--about the same as the
G7’s current share, which is expected to decline to 25%
The Asian Century
China in the Global Landscape
BASICs
G20
Argentina
Australia
Britain
Canada
France
European Union
Germany
Italy
Mexico
Turkey
Saudi Arabia
USA
Kazakhstan
Kyrgyzstan
Tajikistan
Uzbekistan
Brasil
Russia
India
China
South Africa
IBSA
Indonesia
Japan
South Korea
Shanghai
Co-operation
Organization
ASEAN +3
Brunei
Cambodia
Laos
Malaysia
Myanmar
Philippines
Singapore
Thailand
Vietnam
The New USA
ASEAN + 6
ASEAN + 3
ASEAN
3,284 mil
(50% World Population)
2,068 Mil
(31% World Population)
585 Mil
(9% World Population)
12,250 bil US$
(22% World GDP)
9,901 bil US$
(18 % World GDP)
1,275 bil US$
(2 % World GDP)
Change in Geo-Politics…
Retrospectively, the 20th century was dominated by
the American ideologies
Americanization
American Ideology
American Democracy
• Democracy is better than Dictatorship
American Capitalism
• Capitalism is better than Socialism
American Culture
• Western culture is better than all the rest
Challenges facing Americanization
Political Landscape
Non-democratic state e.g., China has had the
greatest success meeting the basic human needs
of its people and pulling them out of poverty
Economic Landscape
Capitalism is now split into distinctive and
competing forms, with government owning and
directing large parts of the economy in some of
the most critical sectors
Cultural Landscape
Modernization did not bring homogenization;
culture and identity are powerful enduring
forces between and within societies
By hosting the Olympic Games, China, for example,
has symbolically and emotionally reclaimed its
historic centrality and its international legitimacy
Globalization from Above VS. Globalization from Below
Multipolarity
Territorialization
of Politics
State Actors
Nation-State
Nonpolarity
Non-State Actors
Global Civil Society
De-territorialization
of Politics
From a “World of Enemies” to a “World of Threats &
Risks”
Corsairs
Private Armies
Terrorists
Pirates
Mercenaries
Hyper-conflict
Totalitarian regimes slaughter one another to establish supremacy
without acknowledging any law of war or even any arbitrators
In the age of perpetual uncertainty, fear determines
the attitude towards life
Change in Geo-Climatics…
Four Southeast Asian countries are likely to face more
severe consequences than the global average due to
limited adaptive capabilities
Climate-Related Multilateral Arrangement
Mexico Accord
Copenhagen Accord
•Reduction of GHG Emission by
both developed & developing
countries;
•Low Carbon Development
Pathway;
•Reduction of emissions through
deforestation and degradation
(REDD+);
•Copenhagen Green Climate Fund
& Technology Transfer.
Linkage to trade
measures
Carbon
Credits
REDD+
Emission
Trading
Adaptation
Nationally Appropriate
Mitigation Actions
(NAMAs)
Carbon Off-shoring
Numerical targets
of emission
reductions
Sectoral Approach for
Heavy Emitters - e.g. Steel,
Cement, Electricity , Paper
pulp …(possibly including
agriculture sector)
Finance
Carbon Leakage
Technology
A handful of mutually agreed concepts are noted in the
“Copenhagen Accord”, yet loads of contentious issues with
diverting views on details remain
Global Forces & Trends Towards Low Carbon Society
Government
• Green Growth as a new
economic growth engine
• Stricter rules on “less green”
imports & provision of
adaptation support to maintain
competitive edge of domestic
industries.
Citizens
Business
• Improvement of energy
efficiency to reduce costs
• Voluntary emission reduction
• Environmentally Awareness
/ Go Green
• Health Concern
for “green” image
• Low Carbon, Technologydriven
Carbon Leakage/Off-shoring to
Developing Countries??
Manufacturing 
Services
Change in Consumers’
Preferences - “Eco-buying”
Examples
•
•
•
Korea  To become the World 7th Green Power by 2010 and 5th by 2050
Japan  Carbon Minimization in All Sectors
US,
Toward a Simpler Life Style that Realize Richer Quality of Life
Coexistence with Nature
UK, China, India etc.
CC is affecting or will affect a wide range of industry
sectors, some more than others
Environmental Climate Dimension (+)
Double
Winners
Beneficiaries from Climate Change
under Government Control
Construction&
Associated Sector
Tourism
Building Materials,
AutoPaper Industry
motive
Metal Industry
Energy Sector
(-)
(Fossil Fuels)
Chemical
Industry
Textile
& Clothing
Transportation
Mechanical
& Electrical
Engineering
Finance
Renewable
Energies
Agriculture
& Forestry
Regulatory
Market
Economy
Condition
(+)
Food
Industry
Beneficiaries from Government
Measures with Climate Risks
Double
Losers
(-)
Source: DB Research
Are Thai’s Companies still fitting in ?
Green
Green
Global Supply Chain
Green
Green
Change in Geo-Demographics…
Towards the Century of Geo-Demographical Imbalance
Developed
Countries
Developing
Countries
Aging
Society
Dynamic Young
Society
A First World of the aging industrialized nations
North America, Europe, and Asia’s
Pacific Rim (Including Japan,
Singapore, South Korea, and Taiwan,
as well as China (after 2030)
Developed
Countries
Developing
Countries
Aging
Society
Dynamic Young
Society
A Second World of fast growing & economically dynamic
countries with a healthy mix of young and old inhabitants
Developed
Countries
Brazil, Iran, Mexico,
Thailand, Turkey,
and Vietnam, as well
as China (until 2030)
Developing
Countries
Aging
Society
Dynamic Young
Society
Demographic Challenges & Issues Facing Thailand
Potential
supportive ratio
7
Economic
Shortage of Labor
6
5
Socioeconomic
4
Lower potential
supportive ratio
3
2
1
Sociological
0
2000
2020
Source: Kua Wongboonsin
2050
1:2:4
A Third World of fast growing, young, and increasingly
urbanized countries with poorer economies and often
weak governments
Developed
Countries
The rest of
the world
Developing
Countries
Aging
Society
Dynamic Young
Society
Three Great Waves of Outsourcing
The First
Wave
Manufacturing
The Second
Wave
Services
The Third
Wave
Foods & Agriculture
Resource War
--The world will demand
70 percent more food by
2050, outstripping
population growth
Global Structural Changes
Change in
Geo-Climatics
• Asian Century
• Geo-Demographic Imbalance
• The New Global Middle Class
Change in
Geo-Economics
Change in
Geo-Politics
• The Impact from Climate Change
• The Third Wave of Outsourcing
• The World at Risk
Change in
Geo-Demographics
• The Age of Philanthro-Capitalism
A) Asian Century
A1) Internal Consumption
A2) Regional Logistics
A3) Increase Pan-Regional Integration
A4) Similar Culture/Easy Market Access
A5) Internationalization
A6) Strong Competitors in world market
A7) Strong Trade Bloc
D) The Impact from Climate Change
D1) Food & Fuel Security0
D2) Carbon Footprint
D3) NTBs
D4) Green Products
D5) Waste Management
D6) Higher cost of imported products
E) The Third Wave of Outsourcing
B) Geo-Demographic Imbalance
B1) Halal Food / Kosher / Hispanic
B2) Long Stay
B3) Senior Tourism
B4) Brain Drain
B5) Service Trade (Medical,Education)
B6) Imported Labour
C) The New Global Middle Class
C1) Increase in Commodities Prices
C2) Demand for High Protein Content Food
C3) Demand for Health Food/Health Products
C4) Tourism Industry Opportunity
C5) Service Trade (Healthcare/Education)
E1) Global Land Grab
E2) Technology Transfer
F) The World at Risk
F1) Security/ Terrorist
F2) Higher cost of imported products
F3) Insurance Service & Security Service Opportunity
G) The Age of Philanthro-Capitalism
G1) CSR
G2) Higher cost of imported products
G3) Service Trade (certify body)
Opportunities & Threats Matrix
Probabilities
H
A1
A6
B1
C1
D1
E1
F1 G3
A2
A7
B2
C2
D2
E2
F2 G2
A4
B3
C4
D3
A5
B4
C5
D4
B5
F3 G3
D5
D6
M
C3
A3
L
L
Source: Dept. Export Promotion, MOC
M
H
Impact
Change in
Geo-Climatics
Change in
Geo-Economics
Change in
Geo-Politics
Change in
Geo-Demographics
Opportunities
Can Thailand accommodate global risks and
opportunities?
The Rise of the Rest
The Age of Africa
The Rise of Asia
Relationship w/ China, India
AEC
Mekong Region
Regional Hub
Thailand
Political Turmoil
World
Asia
ASEAN
Border
Conflict
Myanmar
Migration
North Korea
Terrorism
Risks
• Climate
Change
• Endemic/
Chronic
Disease
• Economic
Crisis
• Thailand
from the Outside-In Perspective
• Thailand
from the Inside-Out Perspective
Revisit the Asian Financial Crisis 1997
Credit Crunch
Collapse of
Financial Institutions
Capital
Outflow
Real
Sector
Public
Sector
Financial
Sector
Attacked by
Hedging Funds
Bankruptcy
People
Sector
Unemployment
Political
Instability
Social Unrest
Closing Strategic Gaps--1997
High Performance
Economy
Gap II
Economic
Restructuring
A Nation
in Crisis
Gap I
Economic Recovery
The Current Compounding Crisis
Pandemic
Social
Fragmentation
Climate
Change
People
Sector
Global
Economic
Crisis
Political
Turmoil
Public
Sector
Private
Sector
Economic
Vulnerability
Closing Strategic Gaps: 2010
High Performance
Economy
Gap II
Competitiveness
A Nation
in Crisis
Gap I
Cohesiveness
Current Political Battlefield
Political
Conflict
Social
Conflict
Economic
Conflict
Cohesiveness…
A huge gap between ultimate & perceived reality
Perceived
Reality
Distortion
Ultimate
Reality
Bias
Cohesiveness…
Dangerous Zone
Bias
Reconsider
Vs.
Ignore
Dangerous
Zone
Framed
Vs.
Ignore
Unbias
Undistorted
Distorted
• No mutual trust
• No mutual respect
• No shared value
• No collaboration
• Hyper-conflict
• Instability
• Insecurity
Cohesiveness…
Future Scenario
War against
Communism
Last
Decades
PreMay 19, 2010
War against
Poverty
This
Decade
Post-May 19, 2010
Scenario
War against
Terrorism
Competitiveness…
Thailand’s Overall Competitive Position
• Singapore
Mature/Stable
Market Economy
First Sphere
• Dubai
•Thailand
Second Sphere
Stagnant/Chaotic
Economy
Third Sphere
Political
Disorder
Source: Tanaka Akihiko
• South Korea
• Vietnam
Mature/Stable
Liberal Democracy
Competitiveness…
Overall Thai Industry’s Competitive Position
Competitive Nutcracker
Leaders
Hong Kong (3)
Design/ Differentiation
based competition
Thailand (11)
Followers
Technology
and Design
Italy (2)
China (1)
Low cost-based competition
Low Cost
Differentiation
Competitive Advantage
The Current Compounding Crisis
Developmental Imbalance
Current Development Position
Social Development
(+)
Ideal
Position
(-)
Initial
Position
(+)
Actual
Position
(-)
Economic Development
Economic Success
From the year 1946 to 2009
• Population increased 3.7 times
(From 17mil to 63mil)
• GDP increased 32 times
(From 0.133bil to 4.2bil)
• Income/capita increased 10 times
(From 6,600 Bahts to 64,500 Bahts)
• People under poverty line
(From 24mil in 1986 to 5 mil in 2007)
Social Failure
Vulnerable Social Capital
• One in every ten children are born from the adolescent parent
• High divorcing rate of 1 in every 4 new spouses
• One fourth of the elementary school students does not live with their parents
• 39 % are families which are violent to their children
• 62% are families with alcoholic parents
• 46% are families with smoking parents
Income Inequality
64.5
Namibia
47.2
44.7
Bolivia
South Africa
Malaysia
Sri Lanka
Hong Kong
Thailand
China
Singapore
Vietnam
USA
India
Indonesia
Canada
Norway
Finland
Korea
Sweden
Japan
4
.7
3.4
38.4
37.8
5.3
.7
.8
.9
34.9
33.4
33.1
32.8
3.2
.9
3.9
3.6
29.9
29.9
28.5
28.5
.6
3.9
4
2.9
24.8
23.4
22.6
22.5
3.6
4.8
22.2
21.7
0%
10%
20%
Poorest 10 Percentile
30%
40%
50%
Share of Income (%)
60%
70%
80%
90%
100%
Richest 10 Percentile
A wide gap of wealth exists among 76 provinces
GPP vs Per Capita GPP
GPP/Capita (Baht)
600, 000
500, 000
400, 000
300, 000
200, 000
100, 000
0
0
50, 000
Remark: not including BKK
100,000
150,000
200, 000
250, 000
300, 000
350,000
400,000
GPP (Million Baht)
Turning from Constructive to Destructive Social
Structure
Not
Clean
& Clear
Power
Corruption
Inequality
Not
Care
&Share
Wealth
Privilege
Opportunity
Not
Free
& Fair
Destructive
Social
Structure
Building a Clean & Clear Society
Governance
Good
Bad
Loose
Tight
Anti-corruption Measures
Building a Free & Fair Society
Fair Practice
Yes
No
No
Yes
Degree of Freedom
Clean & Clear Society
Building a Care & Share Society
Yes
No
No
Yes
Free & Fair Society
Unacceptable Inequality
Level of Inequality
Felt
Inequality
Forced
Inequality
Natural
Inequality
Acceptable Inequality Level
Sufficiency Economy
Perceived
Over
Sufficient
Under
Under
Sufficient
Actual
Over
Norms & Value
• Materialism
• Consumerism
• Hedonism
Economic
Political
• Authoritarianism
• Profitism
• Populism
Social
• Parochialism
• Nepotism
• Cronyism
Instrumental Reform
• Law & Regulation Reform
• Tax Reform
• Land Reform
.
.
.
.
.
• Budgeting Reform
Closing Strategic Gaps: 2010
High Performance
Economy
Gap II
Competitiveness
A Nation
in Crisis
Gap I
Cohesiveness
What’s Next ?
Thailand’s Trade Policy
1960s:
1970s:
1980s:
1990s:
2001-2007:
2007:
Import Substitution
Export Promotion
Foreign Direct Investment
Trade Liberalization
Dual Track Development
??
Thailand’s Strategic Intent
Market-led
Economy
Remove the systemic impediment that currently render Thai
enterprises uncompetitive and make Thailand an unattractive
place for place for multi-national corporations to do business
Knowledge
based Society
Move forward to overcome the shortfall in both managerial and
technical knowledge by drawing heavily on the outside world.
There is no way back. Thailand must move forward to be
knowledge-based.
Entrepreneurial
Spirit
For Thailand to be adaptable in its AEC strategy, and to reenergize the growth engine in the economy, entrepreneurialism
will be crucial.
Regional
Integrated
Thailand ’s greatest opportunities, and greatest competitors, lie
within 2000 km. of Bangkok. Thailand needs to become a tightly
integrated insider in this region
Globally
Connected
Thailand has long history of self reliance, but will fail to realize its
potential if it continues to pursue this approach. The country’s real
opportunities going forward are to become the best globally connected
country in this region
Thailand’s Trade & Investment Architecture
Trade & Investment Policy
Agriculture
Market
Access
Manufacturing
Global
Dynamics
Market
Penetration
Services & Tourism
Market
Facilitation
Enabling Infrastructure
Capacity
Building
ASEAN Economic Community
Singapore
Thailand/
Malaysia/
Indonesia/
Philippines/
Vietnam
Brunei
Cambodia
Laos
Myanmar
Service
Production
Resource
• Rubber
• Automotives
• Tourism and Aviation
• Fashion
• Food
• Education
• Logistics/Transportation
• Agriculture and Fisheries
• Wood
• ICT and Healthcare
• Electronics
• Financial Services
• Energy
• Construction
AEC-Thailand Trade Structure
Using AEC as a stepping stone to enhance Thailand
competitiveness in the global markets
• The US/Canada
• Western Europe
• Japan/South Korea
•
•
•
•
•
Advanced
Countries
China/India
Russia
Argentina/ Brazil/ Chile
Mexico
South Africa
Matured
Countries
AEC
Thailand
Emerging
Countries
• African Countries
• Middle East
Regional Hub
Cultural Tourism
Jewelry: THA,MYN,CAM
Land Transportation: THA,MYN,
LAOS,CAM,VIET,MAL,SING
Food & Restaurant: THA
Textile
Aviation/
Education/
Healthcare
Automotives
Rubber/
Leisure Tourism
Global Reaches, Local Links
Village
Province
Social
Cohesion




Sufficiency
Community Building
Cultural Identity
Family Value
Cluster
of Province
Regional
Global
International
Competitiveness




Efficiency
Cost effective
Productivity
Innovation
Rebuilding Thailand
Economic
Wealth
Environmental
Wellness
Sustainable
Value Creation
Development
Economy
Entrepreneurial
Culture
Caring
Society
Self Expression
Value
Care & Share
Culture
Communal
People
with Knowledge Value
& Morality
Human
Wisdom
Social
Well-Being
The New Nation Architecture
Value Creation
Economy
Welfare
State
• Social Assistance
• Social Safety Net
• Social Insurance
• Entrepreneurial Society
• Innovation Driven
• Pro-competitive Eco-structure
• Local Linked, Global Connected
Green
Society
Democratic
Culture
• Open Society
• Rule of Law
• Plurality
• Civility
• Low Carbon Economy
• Climate Resilient Society
• Green Growth Industry
Willingness to Change
Challenges facing our nation
Yes
Frustrated
Nation
Adaptive
Nation
Impotent
Nation
Arrogant
Nation
No
No
Yes
Ability to Change
Ability to Change
Know What
to Change
Know Why
to Change
Know How
to Change
Know When
to Change
Leadership in the New Global Landscape
Hard Power
Soft Power
• Assertive
• Competition
• Authoritarian
• Focuses on commanding
the behavior of others
• Collaborative
• Participative
• Integrative
• Aims to co-opting the behavior
of followers
Mandate for Change
Willingness
to Change
Leadership
Ability
to Change
Mandate
For Change
Every morning in Africa, a gazelle wakes up.
It knows it must run faster than the fastest lion or
it will be killed.
Every morning a lion wakes up.
It knows it must outrun the slowest gazelle or it
will starve to death.
It does not matter whether you are a lion or a
gazelle.
When the sun comes up, you better start running.
African Proverb
“If You want to go quickly,
go alone;
if you want to go far,
go together.”
African Proverb
“It is not the strongest of
the species that survive,
nor the most intelligent,
but the one most responsive
to change.”
Charles Darwin