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From MDGs to SDGs:New Challenge for Trade and Development
ITD International Conference on Post -2015 Development Challenges: Implication for Trade and Development in ASEAN Community
2 September 2015, The Landmark Bangkok, Thailand
Thanin Pa-EmDeputy Secretary-General,
Office of the National Economic and Social Development Board
2
Agendas
1. Thailand on the move!
2. The 11th Plan and Results
3. Future Strategy
3
Eradicate Poverty
and Hunger Achieved Halving
the proportion of people living in poverty but inequality has remained high
Hunger has been eradicated but nutritional problem should be highly concerned
Achieve Universal
Primary Education Gross Enrolment
Rate is higher than 100%, but the Net Rate is not.
Quality of Education is a major problem
Promote Gender Equality
Gender disparity in primary and secondary education has been eliminated
However, proportion of women in the national Parliament and executive positions have remained low
?? Reduce Child Mortality
Very low U5MR and IMR that it is not realistic to expect a two-thirds reduction
However, the U5MR and IMR is decreasing except in the highland and the 3 southernmost provinces
?? Improve Maternal Health
Maternal mortality ratio is too low to expect three-quarters reduction
However, the rate is decreasing except in the highland
Adolescent Pregnancy and Reproductive health are now an emerging issues
Combat HIV/AIDS, Malaria and Other Disease
Have halted the spread of HIV/AIDS but the HIV infection among the population at high risk has remained high
Tuberculosis infection and coronary artery disease is rising
Ensure Environment Sustainability
Potentially achieved the target as the proportion of protected areas and wetlands have increased
However, natural resources has been degraded and energy usage, waste management, water quality and air quality are still a problem
Develop a Global Partnership
Achieved the target by providing academic assistance to Lao PDR, Myanmar and Cambodia
Impeding factors such as staff’s capacity, policies, regulations and budget have remained exist
Achieved Potentially Achieved ?? Not Applicable
MDGs: Progress
Source: NESDB
Goal
1Goal
2Goal
3Goal
4
Goal
5Goal
6Goal
7Goal
8
4
From MDGs to SDGs
2000
2015
MDGs: 8 Goals Aiming to enhance people’s standard of living
SDGs: 17 GoalsFor sustainable
development
5
SDGs: New Development Goals for Post-2015
17 Sustainable Development Goals (SDGs)
Post-2015 Development Agenda
Social dimension (9)
Economic dimension (2)
Environmental dimension (5)
Management dimension (1)
6
The World and Thailand: SAME GOAL!
The 12th Plan (2017 – 2021)
Sustainable Development
The 11th Plan (2012 – 2016)
7
Thailand’s New Growth Model: Proactive & Balancing Act
Human Capital /
Quality of Life /
Knowledge / Fairness
Infrastructure /
Productivity/
Research & Development
Growth and Competitiveness
Towards
greater per
capita income
Towards
Inequality
Reduction
Towards
environmental friendly
Towards
Balanced
and
improved
Public Sector Management
Legal
FrameworkInclusiveGrowth
GreenGrowth
Internal Process
8
Remarks: APEC (Asia-Pacific Economic Cooperation); TPP (Trans-Pacific Partnership); RCEP (Regional Comprehensive Economic Partnership); ASEAN (Association of Southeast Asian Nations)
Source: Asia Briefing Ltd.
Regional and Global Links
9
Subscribe: Jul 5, 2004Effective: Jan 1, 2005
Japan
Thailand
Under the Negotiation
Under the Negotiation Subscribe: April 19, 2005Effective: Jul 1, 2005
Subscribe: Oct 9, 2003Effective: Sep 1, 2004
Subscribe: June, 2006Effective: Nov 1, 2007
Subscribe: Nov 19, 2005Effective: Dec 31, 2011
KoreaChina
ASEAN AEC2015
Subscribe: Feb 27, 2009Effective: Jan 1, 2010
Subscribe: Aug 13, 2009Effective: Jan 1,2010
Subscribe: Apr 11, 2008Effective: Jun 1, 2009
Subscribe: Nov 29, 2004Effective: Jan 1, 2006
Subscribe: Feb 27, 2009Effective: Mar 12, 2010
EU
India
Peru
Chile
New Zealand
Effective: Dec 29, 2002
Effective: Oct 1, 2003
Bahrain
Australia
Source: Ministry of Commerce
Leveraging Regional Integration under FTA
107
Share 8.1%
Share 5.1%
Share 11.8%
Share 5.4%
Share 0.8%
Share 25.4%
Share 16.7%
Share 18.2%
Share 8.4%
Myanmar
Laos PDR
Thailand
Vietnam
Philippines
Brunei
Cambodia
Malaysia
Indonesia
Singapore
Tradingpartners
Totaltrade value
(Bil Baht)Share(%)
ASEAN 3,243.5 100Malaysia 824.8 25.4Singapore 591.9 18.2Indonesia 542.4 16.7Vietnam 381.4 11.8Philippines 273.5 8.4Myanmar 263.5 8.1Laos 175.5 5.4Cambodia 164.7 5.1Brunei 25.8 0.8
Total trade value between Thailand and ASEAN was 3,243.5 Billion baht (or about 100 Billion USD) or sharing about 22 percent of total Thailand’s trade value. CLMV border trade value was 100 Billion baht, and also shows robust expansion over time.
Source: Ministry of Commerce, processed by NESDB
0
200
400
600
800
1000
1200
2007
2008
2009
2010
2011
2012
2013
2014
BilBaht
Thailand’s Border trade
CambodiaLaosMyanmar
Trade Value between Thailand and ASEAN Trading Partners
11
Agendas
1. Thailand on the move!
2. The 11th Plan and Results
3. Future Strategy
12
Human and Social Development towards a Quality Society
11th Plan
Restructuring the Economy toward Inclusive Growth
Management of Natural Resources and the Environment toward SustainabilityGood Governance
and implementation of 11th Plan
• Promoting a Just Society (Strategy 1)
• Human Development toward a Sustainable
Lifelong Learning Society (Strategy 2)
• Strengthening of Agriculture Sector
to Foster Food & Energy Security (Strategy 3)
• Restructuring of the Economy toward
Quality and Sustainable Growth (Strategy 4)
• Building Interconnectivity across
Countries in the Region toward
Socio-Economic Security (Strategy 5)
• Preparing for Climate Change and
promoting Low-Carbon Society (Strategy 6)
The 11th National Economic & Social Development Plan (2012-2016)
13
Happiness =
Equity
Beyond Gross Domestic Product…
…Living peacefully among people, between people, nature and environment sustainablySu
ffic
ien
cy E
co
no
my P
hil
oso
ph
y
Green
Creativity
National well-being
f
Development Goal: HAPPINESS
14
Development Result: Green & Happiness Index (GHI)
66.33
67.60
68.78
66.28
67.35
70.48
71.68 71.75
6364656667686970717273
2549 2550 2551 2552 2553 2554 2555 2556
Green & Happiness Index (GHI), Thailand, 2549 – 2556
9th Plan 10th Plan 11th Plan
Health Warm & loving family
Empowerment of communities
Democratic society with good governance
Surroundings & ecological system
Economic strength & equity
Source: NESDB
15
Sub-Index9th Plan 10th Plan 11th Plan
2549 2550 2551 2552 2553 2554 2555 2556
1. Health 71.21 70.16 71.09 69.63 69.35 72.11 71.52 71.76
2. Warm and loving family 62.24 61.65 63.97 63.18 63.08 65.17 68.31 66.28
3. Empowerment of communities 33.74 46.38 55.73 60.89 66.07 76.47 81.00 86.35
4. Democratic society with good governance
69.92 73.65 70.27 71.57 77.20 75.85 79.46 78.73
5. Surroundings and ecological system
69.77 75.16 73.08 70.11 68.92 74.30 68.46 64.89
6. Economic strength and equity 75.42 70.45 74.95 60.37 55.70 53.75 55.56 53.16
Green & Happiness Index (GHI) 66.33 67.60 68.78 66.28 67.35 70.48 71.68 71.75
Remark: Score >90-100 = very good >80-89.9 = good>70-79.9 = moderate >60-69.9 = need to improveless than 59.9 = need to manage urgently
Development Result: Green & Happiness Index (GHI)
Source: NESDB
16
The Thai economy has started to expand since Q2/2014, and showed a clear sign of recovery in Q3 and Q4. Key contributions expanded in particular from the public sector.
2013 2014 2015
Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Q1 Q2 H1
GDP (%YoY) 2.8 5.3 2.7 2.6 0.7 0.9 -0.4 0.9 1.0 2.1 3.0 2.8 2.9
GDP (%QoQ sa) - 0.2 -0.7 0.9 0.2 - -0.7 0.4 1.2 1.1 0.3 0.4
0.8 2.5 2.1
-4.8 -3.3
2.2
-6.2 -6.1
3.3
-0.7
0.4 1.4
-0.6 -0.5
6.5
-8.0-6.0-4.0-2.00.02.04.06.08.0
Q2-14 Q3-14 Q4-14
Private Consumption Private Investment Hotel and Restaurant (Tourisms) Manufacturing Public Investment
Private consumption started to expand
Private consumption and manufacturing
production expanded
Domestic demand expand as well as
Industrial and tourism sectors
Thai economy in 2014 Thai economy in Q1-Q2 of 2015Public investment accelerated while hotel
and restaurants also grew strongly in line with the expansion of tourism sector
2.4 1.5 1.8 2.7
13.5 18.7
2.3
-0.7
44.2
25.6
-5.0
5.0
15.0
25.0
35.0
45.0
55.0
65.0
Q1-15 Q2-15
%YoY
Current Situation of Thai Economy
17Source: NESDB, 17 August 2015
The Thai economy in 2015 is projected to expand in the
range of 2.7 – 3.2 percent, accelerating from 0.9 percent
in 2014. The headline inflation rate is expected to lie
between (-0.7) – (-0.2) percent and the current account is forecasted to register a surplus of 4.8 percent of GDP.
%YoY 2013 2014 2015F
GDP 2.8 0.9 2.7-3.2
Investment -0.8 -2.6 6.2
- Private -0.8 -2.0 1.8
- Public -1.0 -4.9 21.8
Private consumption 0.8 0.6 1.8
Public consumption 4.7 1.7 3.8
Export value (US$) -0.1 -0.3 -3.5
Import value (US$) -0.2 -8.5 -5.5
Current Acc. to GDP (%) -0.8 3.3 4.8
Inflation (%) 2.2 1.9 (-0.7)-(-0.2)
• Public expenditure and investment continues to
be strong engines of growth
• Depreciation of Thai Baht improves income and
liquidity for exporters.
• Tourism sector is expected to grow at a strong rate
and continues to support the economy.
• Global crude oil prices and inflation is expected
to remain low which would help enhance real
purchasing power and continue to support the
expansionary monetary policy.
• The global economy tends to grow at a slow
pace and possibly become volatile over time.
• Depreciation of trade partners’ and
competitors’ currencies
• Main agricultural commodity prices remain low.
• The drought impacts.
• The adjustment of commercial banks’ interest
rates remained slow while commercial banks
have still posed high restriction on credit provision.
Supporting Factors
Risk factors and limitations
Thai Economic Outlook for 2015
18
Pre-industrialization
Initial FDI absorption
Internalizing parts & components
Internalizing skills & technology
Internalizing innovation
Stage IMonoculture, subsistence agriculture, aid dependency
Stage IISimple manufacturing under foreign guidance
Stage IIIHave supporting industries, but remains Under foreign guidance
Stage IVManagement technology mastered, can produce high quality goods.
Stage VFull capability in innovation and product design as global leaderArrival of manufacturing FDI
Agglomeration
Technology absorption
Creativity
Vietnam
Malaysia
KoreaTaiwan
Japan, US, Germany France Italy
Low Income Middle Income High Income
Thailand
Where are we now?Thailand is on the move! But there are still some steps to climb up.
19
Source: Doing Business (EoDB) by the World Bank, Global Competitiveness Report by the World Economic Forum, and World Competitiveness Yearbook by IMD
S&T Infrastructure Ranking, 2009 – 2015
Source: IMD (2009–2015)
IMD 2009 2010 2011 2012 2013 2014 2015Overall Rank 26 26 27 30 27 29 30
Infrastructure 42 46 47 49 48 48 46- Technology 36 48 52 50 47 41 44- Science 40 40 40 40 40 46 47
Number of countries 57 58 59 59 60 60 61
Where are we now? – Competitiveness Ranking
Compared to other countries, the S&T infrastructure of Thailand has been ranked quite low. Moreover, it is likely on a downward trend.
20
• Spending on R&D of Thailand has been increasing over a decade. It was 0.48% of GDP in 2013, increasing from 0.37% in 2011.
• The ratio of private to public sector investments in R&D was 47:53 in 2013, changing from 51:49 in 2011.
• Meanwhile, most of developed countries spend on R&D about 1-4% of GDP, which is significantly higher than Thailand.
Source: STI & NRCT (2015)Spending on GDP, selected countries, 2007-2012 (% of GDP)
Country Year 2007 2008 2009 2010 2011 2012
China 1.23 1.23 1.42 1.70 1.84 1.98India 0.85 0.84 0.61 0.80 0.90 0.90Australia 1.59 1.69 1.84 2.24 2.27 2.27USA 2.72 2.66 2.61 2.77 2.75 2.79Japan 3.07 3.20 3.32 3.45 3.25 3.35Korea 2.50 2.80 3.20 3.57 3.74 4.03Taiwan 2.27 2.39 2.57 2.94 3.02 3.06
Source: IMD (2014)
Spending on R&D, Thailand, 2000 – 2013 (% per GDP)
Spending on R&D: an upward trend but still far behind the target!
Private sector Public sector, universities, non-profit org, state-enterprises R&D spending per GDP
Mill
ion
Baht
Perc
enta
ge
21
TFP Growth is high but stock of technology remains relatively low and it needs time for accumulation process
• Increase total factor productivity to reach an
average growth rate of at least 3% per year.
• Diversify creative products and services by at
least 5% per year.
• Raise Thailand’s economic competitiveness
rank to 16 in the IMD assessment, and be among
the world’s top ten countries for ease of doing
business.
• Increase funding of research and development
to at least 1% of GDP and up to 2% in the future.
• Reduce logistics costs to less than 15% of GDP,
and increase the share of rail transport to 5%.
• Investment privileges for Priority Activities
that included R&D.
Technology Development Strategiesin the 11th NESDB
Medium-term growth strategy will highlight
investment & regional connectivity
Technology Development under the 11th Plan
THAILAND
22
Implementing, Monitoring, and Evaluating the Plan
Strategy Policy Action PlanProgram
Budgeting
Monitoring & Evaluating
23
Agendas
1. Thailand on the move!
2. The 11th Plan and Results
3. Future Strategy
24
“Stability, Prosperity & Sustainability”
Vision of the 12th Plan
To be a high-income country with Stability, Prosperity and Sustainability, and also with Happiness.
National Strategic Positioning
Thailand will be a high-income country with fair income distribution, a hub of transportation and logistics of ASEAN, a trading and service nation, a center of organic and safe agricultural products, creative industries and environmental-friendly innovation.
To be a high-income country
To be a quality ageing society with
quality human resources
To be a society with reduced
inequality
To be a environmental-friendly society
To have efficient bureaucracy, good
governance and transparency
Targets
(Draft) The 12th Plan (2016-2020)
25
To be a high-income country
To have life-long
development and quality
ageing society
To reduce inequality
To prepare for regional
connectivity and
urbanisation
To be environmental
-friendly society
To have efficient bureaucracy,
good governance and
transparency
- R&D
- Laborproductivity
- Entrepreneurs
- Digitalcommerce
- Infrastructure
- Economic restructuring
- Educationalreform
- Life-long learning
- Cares for the elderly
- Healthcare and services
- Income and employment
-Social welfare
-People’s participation
-Accessibility to resources
- Just society
- Infrastructures for cities
-Connectivity (transportation and logistics) with neighboring countries
-Trades across borders
-Special Economic Zones (SEZs)
-Green growth (natural resources protection)
-Green employment, green investment, and green production
-Pollution management
-Concerns on climate changes and disaster/risk management
-Transparency,non-corruption
-HR development in public sector
- Local administration development
-Efficient monitoringand evaluating systems
(Draft) The 12th Plan – Roadmap to Success!
26
Infrastructure Development PlanNew Transportation Development Strategies (2015 – 2022) – Key Programs
Program 1Inter-city rail
network
Program 2Public
transportation network
development plan for Bangkok Metropolitan
Region
Program 3Capacity enhancement for highway network to link with key areas in the country and with neighboring countries
Program 4Maritime transport
development
Program 5Air transport
capacity enhancement
o Upgrade rail infrastructure and overall system
o Build double-track in 6 main rails with their extension to respective borders
o Extend mass transit railway system in Bangkok and vicinity
o Procure 3,183 NGV buses
o Improve quality of service & safety of mass transit bus
o Develop 4 lane-road networks linking key economic regions and borders areas
o Construct new motor ways
o Develop facilities along the main roads such as container yards
o Improve seaport on both Thai gulf and Andaman sea
o Enhance capacity of airports to be the regional center of air transportation
o Establish the aviation industrial estates
Source: Ministry of Transport
27
New BOI’s Investment Promotion Strategy (2015-2021): focusing on promoting valuable investment, both investment in Thailand and Thai Overseas Investment to enhance Thailand’s competitiveness, aiming to overcome the “Middle Income Trap” and to achieve sustainable growth.
Promote Investment that helps enhance national competitiveness
Promote activities that are environmental friendly
Promote Clusters
Promote investment in border provinces in Southern Thailand
Promote special economic zones
Promote Thai overseas investment
Promote Investment that helps enhance national competitiveness by encouraging R&D, innovation, value creation, SMEs, fair competition and inclusive growth.
Promote activities that are environmental friendly, save energy or use alternative energy to drive balanced and sustainable growth.
Promote clusters to create investment concentration in accordance with regional potential and strengthen value chains.
Promote investment in border provinces in Southern Thailand to help develop the local economy, which will support efforts to enhance security in the area.
Promote special economic zones, especially in border areas, both inside and outside industrial estates, to create economic connectivity with neighboring countries and to prepare for entry into the ASEAN Economic Community.
Promote Thai overseas investment to enhance the competitiveness of Thai businesses and Thailand’s role in the global economy.
Source: BOI
Investment Promotion
28
Knowledge-based activities, focusing on R&D and design to enhance the country’s competitiveness
A1
Activities in infrastructure for the country’s development, activities using advanced technology to create value added, with none or very few existing investments
A2
High technology activities which are important to the country’s development, with a few investments already existing
A3
Activities with lower technology than A1-A3 but add value to domestic resources and strengthen supply chain
A4
Supporting industries that do not use high technology but are still important to value chain
B1 B2
Incentives• 8-year CIT exemption
without cap• exemption of import
duty on machinery/ raw materials
• non-tax incentives
• 5-year CIT exemption• exemption of import
duty on machinery/ raw materials
• non-tax incentives
• 3-year CIT exemption• exemption of import
duty on machinery/ raw materials
• non-tax incentives
• B1 : Exemption of import duty on machinery/raw materials and non-tax incentives
• B2 : Exemption of import duty on raw materials and non-tax incentives
Sample of enterprises
• Production of electricity or electricity and steam from garbage or refuse derived fuel
• Creative product design and development center
• Electronics design• R&D
• Manufacture of active ingredients from natural raw materials
• Manufacture of technical fiber or functional fiber
• Manufacture of vehicle parts using high technology
• Manufacture of parts for organic and printed electronics (OPE)
• Manufacture of Active Pharmaceutical Ingredients
• Manufacture of products from agricultural by-products or agricultural waste
• Assembly of machinery and machinery equipment
• Industrial estate or industrial zone for environmental protect
• Manufacture or preservation of food, beverages, food additives or food ingredients using modern technology
• Manufacture of automobile engines Manufacture of biological fertilizers, organic fertilizers, nano-organic chemical fertilizers and bio-pesticides
• Manufacture of Recycled Fiber• Heat Treatment• Manufacture of products from
hygienic paper
• Mining• Mineral exploration• Ceramics industry
• Refineries• Docking business for ships
in tourism sector
Group
• 8-year CIT exemption• exemption of import
duty on machinery/ raw materials
• non-tax incentives
Focused and Prioritized Industries
Source: BOI
Investment Promotion
29
5 Targeted Clusters
ClusterPetrochemical and
Environmental-friendly Chemical Products
Cluster Automotive and Parts
Cluster IT
Cluster Electric Appliances
and Electronic
ClusterRubber Industry
Source: BOI
Cluster Development Policy
30Source: Value add – current market price (NESDB)
Food and beverage
22% Petrochemical and products
8%
Rubber and plastic
7%
Electric Appliances and
Electronic15%
Vehicle10%
Others38%
62%of total value add of industrial sector
18%of Thailand’s GDP
(1,000 Million Baht)719
58209
38 34 51 25
211 272 227 159 182
498327
0200400600800 Value Add by industry
Cluster Development PolicyEconomic performance of some significant industries
31
Cluster Development Policy
Academic and R&D Agents
Public Sector
Producing quality human resource and developing innovation
Developing technical skills and gathering together
Associations/Clubs
Facilitator, Supporter & Regulator
Core Businesses
Supporting Industries
Industries that support main ingredients for core industries
Core Industries Related Industries
Industries that enhance
competitiveness of core industries
Supply Chain
32
Tourism Cluster in Thailand
ClusterLANNA Culture
ClusterSOUTH I-SAN
นครราชสีมา
อุบลราชธานี
บุรีรัมย์สุรินทร์ ศรีสะเกษ
เชียงใหม่
เชียงราย
ล าพูน
ล าปาง
พังงา
ภูเก็ตกระบี่
ตรัง
สตูล
ชลบุรี
ระยองจันทบุรี
ตราด
เพชรบุรี
ประจวบคีรีขันธ์
ชุมพร
ระนอง
ClusterANDAMAN
ClusterROYAL COAST
ClusterACTIVE BEACH
พะเยา
ตากสุโขทัย
ก าแพงเพชร
พิษณุโลกCluster
World Heritages(on-going)
เลย
หนองคายบึงกาฬ
นครพนม
มุกดาหาร
ClusterMekong River
(on-going)
สิงห์บุรีอ่างทอง
พระนครศรีอยุธยาปทุมธานี
นนทบุรี
ClusterChao Phaya River
(on-going)
Source: National Tourism Committee
Creative Lanna culture tourism, connecting with GMS
World-class sea-sand-sun tourism, along with Andaman culture
To be a quality destination with balanced and sustainable
development
Marketing
Manage-ment
Products & Services
Tourism Strategy (2015 – 2017)
Colorful beach ecotourism in the East of Thailand, connecting with Cambodia and Vietnam
Modern I-San cultural tourism, connecting with Laos, Cambodia, and Vietnam
33
Special Economic Zones (SEZs)
Framework• Competitiveness
enhancement• Inclusive growth• Security
Site identificationInvestment incentivesLabourOne-Stop ServiceInfrastructure & Custom facilitiesBuying and distribution center for agricultural products
Source: NESDB
Mae SotMukdahan
Aranyaprathet
Trat
Sadao –Padang Besar
Other 6 potential zones in the 2nd Phrase: (1) Mae-sai, (2) Chiang Khong, (3) Sangkhla Buri, (4) Nakhon Phanom, (5) Nong Khai, and (6) Su-ngai Kolok
34Source: NESDB
Target Areas for Thai SEZ Development Key highlights
Target SEZ in Thailand
> 10 target areas under the 1st and 2nd phase SEZ development are located along the GMS Economic Corridors
> focusing industries and services :• Agro-industry, fishery industries• Ceramic products manufacturing• Textile and garment industries, and manufacture of leather
products• Manufacture of furniture or parts• Manufacture of gems and jewelry or parts• Manufacture of medical devices or parts• Manufacture of engine and vehicle parts, and manufacture of
machinery, equipment, and parts• Electronics and electrical appliances industries• Manufacture of plastic products• Manufacture of Medicine • Logistics • Industrial zones / industrial estates• Tourism promotion service
Centralcorridor
East –West corridor
Eastern corridor
North-South corridor
Westerncorridor
Southern Coastal corridor
Northern corridor
Southerncorridor
Special Economic Zones (SEZs)
35
SMEs & OTOP
Catagory GDP (Million Baht) % of GDP
Non-agricultural SMEs 4,454,940 37.44
LE 5,477,138 46.03
Unidentified 540,849 4.55
Agricultural 1,425,783 11.98
Total 11,898,710 100
Catagory Number Percentage (%) Employment (people) Percentage (%)
SMEs 2,763,997 97.16 11,414,702 80.96
LE 7,349 0.26 2,682,323 19.03
Unidentified 73,411 2.58 1,538 0.01
Total 2,844,757 100 14,098,563 100
Source: Office of SMEs Promotion (OSMEP)
Number, Employment and Value of SMEs (2013)
2012 2013
79,461.09 Million Baht
86,984.15 Million Baht
OTOP RevenueInternatio
nal Market,
10,172.11, 12%
Domestic Market,
76,812.04, 88%
Share of OTOP Market (2013)
36
On 25th Nov 2014, Cabinet approved in principle the setting up International Headquarter (IHQ) and International Trading Centers (ITC) in Thailand
IHQ
ITC
International
Headquarter
International
Trading
Centers
Being a company founded under Thai law to provide services on technical management, supporting or financial services for its subsidiaries or related enterprises, whether located in Thailand or abroad. International trade companies are included
Being a company founded under Thai law, focusing on procuring and selling goods, raw materials, and parts,as well as providing relevant services for companies located abroad. This may be done in the form of buying and selling of goods outside Thailand (Out-Out) or buying from inside Thailand and selling abroad (In-Out)
Has a registered capital of no less than 10 Mil THB, has at least 1 subsidiary or local branch abroad on the date of registration, and has expenses related to IHQ no less than 15 Mil THB/year in Thailand
As for tax incentives, the authority to grant such incentives belongs to the Cabinet. Relevant agencies are in the process of preparing laws, regulations, criteria, and relevant Cabinet resolutions in the past. If such provisions are under the preview of the Cabinet, its approval will be required in order to proceed.
Has a registered capital of no less than 10 Mil THB, and has expenses related to IHQ no less than 15 Mil THB/year in Thailand
Criteria & Condition for incentives
Investment and Business Opportunities: IHQ & ITC
37
1,000 ppl(%)
1.22% 1.20% 1.17% 1.15% 1.12%
1.02% 1.00%0.94%
0.85%
0.73%
0.53%
0.42%
0.32%0.25%
0.20%
0.07%0.02%
-0.03%-0.11%
-0.21%
-0.36%-0.43%
-0.50%-0.56%
-0.60%-0.70%-0.74%-0.77%-0.80%-0.82%
-1.00%
-0.50%
0.00%
0.50%
1.00%
1.50%
30000
35000
40000
45000
50000
55000
60000
65000
70000
75000
80000
2543
2544
2545
2546
2547
2548
2549
2550
2551
2552
2553
2554
2555
2556
2557
2558
2559
2560
2561
2562
2563
2564
2565
2566
2567
2568
2569
2570
2571
2572
2573
Labour force (1,000 people) Total population (1,000 people) Growth of labour force (%) (right axis)
9th NESDP 10th NESDP 11th NESDP 12th NESDP 13th NESDP
ประม
าณกา
ร
Ageing society & smaller labour force
Labour force
Total population
Growth of labour force
Thailand will have smaller number of population and labour force in the near future.
38
Demographic change and labour movement in Thailand
• Decreasing number of working-aged population; smaller labour force
• Decreasing proportions of children and working-age population
• Increasing proportion of elderly people
60.456.3 55.6
51.7 50.0 50.2 50.9 48.0 48.4 45.8 45.9 44.7 42.3 42.6 42.2 41.6 42.5 41.6 40.7 41.1
15.116.7 17.2
18.8 19.6 18.5 16.717.3 17.8
18.8 19.7 19.720.5 20.3 20.7 20.7 19.6 19.6 19.1 19.3
24.5 27.0 27.1 29.5 30.4 31.2 32.4 34.6 33.7 35.4 34.3 35.6 37.1 37.1 37.1 37.5 37.9 38.9 40.1 39.6
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2535 2536 2537 2538 2539 2540 2541 2542 2543 2544 2545 2546 2547 2548 2549 2550 2551 2552 2553 2554
ภาคเกษตร
ภาคอุตสาหกรรม
ภาคบริการ
Service Industry AgricultureSource: NSO (2014) Source: NESDB (2014), NSO (2014)
Number of labour and value-added, by sectorProportion of labour, by sector
39.7%
7.3%
14.1%
31.8%
46.3%60.9%
(Value Added)
2555
42.5%
8.7%
15.4%
31.1%
42.1%60.2%
(Value Addded)
2545
Thailand’s labour force - decreasing proportion of working-age population
39
•Nutrition•Education•Morality• IQ - EQ Balance•Etc.
•Employment and wage•Labour productivity•Demand-supply matching (labour market)•Saving for retirement/preparation for retirement•Social welfare
children working-age population
• Healthcare• Active ageing• Life-long education• Flexible working condition• Saving after retirement• Wisdom of the kingdom• Social activities
elderly people
Human Resource Development: Life Cycle Development
baby children
labour
elderly
youth
0 5
15
21
60
L i fe Cycle
Developmentพัฒ นาคนตลอดช่ ว ง ชี วิ ต
41
BACK UPI n f ras t ructure
42
Overview
Road National HighwayMotorway & Expressway
63,100 km.226 km.
Rural road Local road
39,254 km.101,845 km.
Water Total International Deep Sea Port- Laem Chabang Port
67.7 M
TEU/year
Rail Single TrackDouble and Third Track
3,885 km.234 km.
Air Airports- Suvarnabhumi Airport- Don Mueang Airport- Phuket Airport- Chiang Mai Airport
3645 M ppl/y36 M ppl/y6.5 M ppl/y
8 M ppl/y
• Expressway Network rank 33 out of 133 countries• Road Density 0.13 km. per sq.km rank 43
• Ship vessels rank 34 out of the first 35 ranks• Laem Chabang Port rank 19
• Rail Density 0.009 km. per sq.km rank 42
• Infrastructure Quality rank 26• Airline rank13• Route Network rank 2
International Comparison
Infrastructure
43
Transportation and Logistics
7.1 7.3 7.3 7.4
6.6 6.5 6.1 5.7
1.4 1.4 1.3 1.3
2009 2010 2011 2012
Cost of Logistics per GDP (2009 – 2012)
Transportation Cost per GDP Inventory Holding Cost per GDP Administration Cost per GDP
15.1 15.214.7 14.4
Rail, 1.40
Maritime,
11.05
Air, 0.02
Road, 87.50
Source: NESDB & Ministry of Transport
Transportation Cost (2013)
Road2.12 Baht/Ton-km
Rail0.95 Baht/Ton-km
Maritime0.65 Baht/Ton-km
Air10.0 Baht/Ton-km
%Transportation (2013)
44
1. Nong Khai – Mab Ta Put (737 km.) (Urgent)
2. Chiang Khong –Ban Pachi(655 km.) (Urgent)
3. Tak – Ban Pai(2565-2572)
4. Nong Khai –Ubon
Ratchathani(2565-2572)
5. Ban Pachi– Padang
Besar(2565-2572)
5. Loburi –Paknampo(2559-2563)
2. Prachubkirikan - Chumporn(2558-2561)
6. Hua Hin – Prachubkirikan(2559-2563)
3. Nakornpathom – Hua Hin(2558-2561)
4. Map Kabao –Nakornratchasrima
(2559-2563)
1. Jira – Konkhan(2558-2561)
Investment Projects: Railway Development
The plan consists of
• Rehabilitation of equipment and
infrastructure
• Development of 5 dual track rail
system for 5 routes that are most
prepared
• Push for construction of dual track
to reach Phang Nga, Phuket, and
border checkpoint at Nong Khai,
Mukdahan, Nakhon Phanom,
Chiang Rai, Ubon Ratchathani,
and Padang Besar
Expected Outcomes
• Rail network covers 6 additional
province, with 1,300 km
• Increase of speed from 29 to 60
km/hr.
• Ratio of domestic rail transport will
increase from 1.5% to 5% by 2020
• Rail service becomes more
accessible to people. Rail travel
and transport becomes more
punctual and safer. Double Track: Standard Gauge
Double Track: Meter Gauge
45
The plan consists of
• Push for expansion of rail transport in BKK area for greater access.
• Bring in new buses so that better and cleaner services are available
• Rehabilitate roads and bridges to reduce traffic density in BKK, and to consider constructing road along side Chao Phraya River
แบร่ิง – สมุทรปราการ (13 กม.)
หมอชิต – สะพานใหม่ – คูคต (25 กม.)
บางซื่อ – รังสิต (26.3 กม.)
บางซื่อ – ตลิ่ง (15.263 กม.)
บางใหญ่ – บางซื่อ (23 กม.)
หัวล าโพง – บางแค,บางซื่อ - ท่าพระ (27 กม.)
Expected outcomes
• Urban rail network has 5-8 million passengers/day capacity
• 299-km urban rail network in 5 years
• Better quality of buses and BMTA garage & Purchases of 3,183 NGV buses
• Less dense traffic in inner and outer BKK area
Investment Projects: Urban transport network development plan for Bangkok & Metropolitan area
46
The plan consists of
• Rehabilitation of road network connecting tourist and agricultural
hubs
• Expanding roads connecting key cities and border checkpoint
into 4 lanes
• Construction of new inter-city highways per necessity
• Push for development of facilities for road transport, such as truck
stops,
4-lane Highway construction (phase 2)
Expected outcomes
• Minimum standard for country-wide is paved road with 461,221
km of road available.
• 1,864 km of 4-lane highway across the country
• Roads with safety standard and facilities to reduce accidents
• Encouraging spreading out of settlements, regional production
bases for Thailand and ASEAN.
Investment Projects: Highway capacity enhancement for domestic and inter-country connectivity
47
The plan consists of
• Development of ports and seaports on Andaman sea and
Golf of Thailand
• Development of domestic maritime transport
• Rehabilitation and improvement of waterway
Laem Chabang Port
Pa sak River
Songkhla Port
Chumphon Port
Expected outcome
• 20% increase in domestic maritime transport
• Option of low-cost and environmentally friendly transport for
new area.
• Creating a gateway which can connect between seaports
on Andaman sea with those on Gulf of Thailand
• Expanding port cities from Eastern to Southern ThailandPak Bara deep-
sea Port
Angtong
Investment Projects: Maritime transport development plan
48
The plan consists of
• Increase the standard of country’s main airport
• Promoting utilization of regional airports
• Developing domestic Aviation Industries
• Improving the use of Thai air space
Suvarnabhum
Donmuang
Tak
Expected outcomes
• Safe, fast, and more choices of air transport
• An increase in goods and passengers going through
Suvarnabhumi Airport
• An increase in country-wide capacity for flights
Investment Projects: Air transport capacity development plan
49
BACK UPMega Trends
50
Mega-trends: Challenges for Thailand
MULTI-CULTURAL SOCIETY
AGING SOCIETY
TECHNOLOGY & INNOVATION
URBANIZATION
INDIVIDUALISM
High-speed ageing society
Asia becomes dominant
Urbanization and
Westernization
High technology and
Innovation
Global Warming and
Climate Change
Deteriorated Environment
51
60,000
62,000
64,000
66,000
68,000
70,000
72,000
40,000
41,000
42,000
43,000
44,000
45,000
46,000
47,000
2543
2545
2547
2549
2551
2553
2555
2557
2559
2561
2563
2565
2567
2569
2571
2573
1,000 people1,000 people Population and Labour force
Labour force
Growth
Total Population (right axis)
Growth of Labour force
Pro
jec
tio
n
แผนฯ 10 แผนฯ 11 แผนฯ 12 แผนฯ 13
0.81 0.25 - 0.14 - 0.56
Source: NESDB
Labour force is downsizing!Mega-trends: Challenges for Thailand
52
BACK UPPover ty
53
Over the past 3 decades, Thailand has experienced remarkable rise in income
Source: National Income of Thailand by Office of the National Economic and Social Development Board, NESDB
1,559.8 2,263.5 2,935.6 3,689.1 4,638.6 4,701.6 5,069.8 5,769.6 6,954.3 8,400.7 9,076.3 9,706.9 9,654.0 10,802.4 11,300.5 12,354.7 12,910.0
13.3
11.2
9.28.0
5.7
-7.6
4.5
6.1 6.3
5.05.4
1.7
-0.7
7.5
0.8
7.3
2.8
(10.0)
(5.0)
-
5.0
10.0
15.0
0
2000
4000
6000
8000
10000
12000
14000
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2007 2008 2009 2010 2011 2012 2013
GDP at Current Market Prices (million Baht) and GDP Growth Rate (%)
GDP (billion Baht) Growth Rate (%)
Per capita GDP28,712 Baht 193,394 Baht ฿ ฿฿
฿฿
฿
USD ~ 1,100 USD ~ 6,000
Social Aspect: Overview of Poverty and Development in Thailand
54
65.17
57.97
50.04
42.54
35.25 38.63
42.33
32.44
26.76
21.94 20.04 20.43
17.88 16.37 13.22 12.64 10.94 10.53
34.1 31.6 27.8 24.1 20.3 22.7 25.8 19.9 16.5 13.8 12.7 13.1 11.6 10.8 8.8 8.4 7.3 7.1
879960
1,0861,157
1,3061,533 1,555
1,6061,719
1,9342,006
2,172 2,1742,285
2,4152,492
2,572 2,647
-
500
1,000
1,500
2,000
2,500
3,000
3,500
0
10
20
30
40
50
60
70
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2007 2008 2009 2010 2011 2012 2013 2014
Poverty Line, Poverty Rate and Number of Poor (Consumption Expenditure)
Poverty Rate (%) Number of Poor (persons) Poverty Line (Baht/Person/Month)
Along with economic growth, overall poverty rate continuously declined over time
Source: Socio-economic Survey (SES) by National Statistical Office, compiled by Office of the National Economic and Social Development Board, NESDB
Poverty in Thailand
55
Poverty is more concentrated in rural than urban areas
Rural, 4.8
Urban, 2.4
43.35
22.21
8.80 7.70
73.97
51.43
15.96 13.89
0
10
20
30
40
50
60
70
80
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2007
2008
2009
2010
2011
2012
2013
Poverty Rate by Area (%)Urban
Rural
Source: Socio-economic Survey (SES) by National Statistical Office, compiled by NESDB
Across regions, poverty is most prevalence in the North and Northeast
Number of poor in 2013 (million persons)
Source: Socio-economic Survey (SES) by National Statistical Office, compiled by NESDB
2007 2013
Who are the Poor in Thailand?
56
10%richest/
own most
land
10%poorest/
own least land
฿ 36.81%of all incomes
1.06%of all incomes
∆=34.9 times
฿
=10.9 timesdebt to household
income ratio
=29.8 timesdebt to household
income ratio
∆ =18.9 times
58.33m raiLand ownership
=0.07m raiLand ownership
∆ =853.6 times
<B10 m(99.9%)
Ratio to total
accounts
49.2%
Ratio tototal credit
50.8%
INCOME DEBT LAND
Source: Data from SES, National Statistics Office, calculated by NESDB / World Development Indicator 2013, World Bank
>B10 m(0.1%)
SAVING
Inequality in Economic Dimension is apparently Large
57
Age (yrs.) Workers in formal sector (37.4% ) Workers in informal sector (62.6%)
0-3 Cash transfer: 400 baht/person/month Child Support Grant (under Proposal)
4-6 400 baht Cash
TransferFree education for 15 years
Child Support Grant
(under Proposal)
7-18 Free education for 15 years
19–59 Social security scheme Some forms of social security scheme
60 up Pension fund Pension fund: 600 to 1,000 baht/person/month
Disability•50% compensation of regular income
•Disability fund: 500 baht/monthDisability fund: 500 baht/month transfer
HIV/AIDS Social Cash Transfer: 500 baht/mth
All age
groupsUniversal Health Care/social security/compulsory migrant health Insurance
Social Protection as a Mean to Reduce Poverty
