TDRI study notes stagnant strategies
A targeted industrial policy should prioritise creation of good jobs in Thailand rather than focusing solely on attracting high levels of investment, says Thailand Development Research Institute (TDRI).Nopparuj Chindasombatcharoen and Puttipan Hiranyatrakul, researchers at TDRI, issued a study titled "A New Industrial Policy for Sustainable Growth" that argues the nation's stagnant industrial policy stems from the cumulative effects of three structural factors: an outdated growth model; support measures that fail to develop human capital; and an insufficiently rigorous process for selecting target industries.
In the past, Thailand's growth model relied on a formula centred on attracting foreign direct investment to establish manufacturing facilities in the country, utilising large numbers of low-wage workers.
Economic success was measured primarily by GDP growth and export volume. This approach was underpinned by the belief that as the economy expanded, prosperity would naturally trickle down to the broader population.
In reality, this model is no longer capable of delivering sustainable growth, note the researchers. Thailand no longer enjoys a comparative advantage in low labour costs relative to emerging regional competitors.
