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OECD MULTI-DIMENSIONAL COUNTRY REVIEW - THAILAND INITIAL ASSESSMENT REPORT Bangkok, 9 April 2018 OECD Team for MDCR of Thailand http://www.oecd.org/eco/surveys/multi-dimensional-review-thailand.htm

OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

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Page 1: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

OECD MULTI-DIMENSIONAL COUNTRY REVIEW - THAILAND

INITIAL ASSESSMENT REPORT

Bangkok, 9 April 2018

OECD Team for MDCR of Thailand

http://www.oecd.org/eco/surveys/multi-dimensional-review-thailand.htm

Page 2: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

• Sustained economic growth has brought about impressive social progress.

• However, there remain development constraints across each of the 5 pillars of the sustainable development goals (SDGs).

• Further reform is needed to meet the SDGs and transition to an inclusive, high-income country.

2

Main messages

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People: Towards better lives for all

3

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4

Regional inequalities have narrowed but remain pronounced

0

5

10

15

1995 2000 2005 2010 2015

Thailand’s ratio between the richest and poorest region Regional GDP per capita gap

0

5

10

15

20

Korea OECD average China Thailand Malaysia Indonesia

Regional GDP per capita gap

Ratio between the richest and poorest region, 2015

Source: Panel A: Thailand National Statistical Office (2014), Economic Indicators; Panel B: calculations based on OECD (2013a), OECD Regional Database, and national statistical office data from Thailand, Malaysia and Indonesia

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5

Precarious employment remains widespread

Source: World Bank, World Development Indicators

% of precarious employment in total employment, 2017

0

10

20

30

40

50

60

Sing

apor

e

South

Afric

a

OECD

Polan

d

Kore

a

Malay

sia

Mexic

o

Turke

y

China

Philip

pines

Colom

bia

Thail

and

Indon

esia

Vietn

am

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6

The old-age allowance alone cannot guarantee income security for the elderly

0

200

400

600

800

1000

1200

1400

60 65 70 75 80 85 90 95 100+

Universal old age allowance National poverty line

Monthly universal old-age allowance by age, THB

Source: Schmitt, V., T. Sakunphanit and O. Prasitsiriphon (2013) Note: The national poverty line refers to the minimum monthly cost of basic food.

Page 7: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

7

Social protection is comparatively well targeted but still disproportionately benefits the non-poor

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

Indonesia Philippines Thailand Viet Nam China Singapore Malaysia Korea

Non Poor Poor

Social Protection Index, 2013

Source: Asian Development Bank (2013), The Social Protection Index Assessing Results for Asia and the Pacific, Mandaluyong. Note: The Social Protection Index (SPI) is total expenditures on social protection divided by the total number of intended beneficiaries of all social protection programmes, normalised by poverty-line expenditures (which for cross-country comparability purposes is set uniformly at 25% of GDP per capita). A SPI of 0.10 would thus be equivalent to 2.5% of GDP per capita. A higher SPI denotes better social protection.

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8

The quality of education needs to improve

350

390

430

470

510

550

2003 2006 2009 2012 2015

Maths Reading Science

350

390

430

470

510

550

Indonesia Thailand Malaysia OECDaverage

Viet Nam China

Maths Reading Science

Source: OECD (2016b), PISA: Programme for International Student Assessment; OECD Education Statistics (database). Note: China refers to the four PISA-participating Chinese entities: Beijing, Shanghai, Jiangsu and Guangdong. Coverage of Malaysian schools in PISA 2015 fell short of the standard PISA response rate so results may not be comparable to those of other countries.

PISA scores

Page 9: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

9

Too few students graduate in courses meeting industry needs

0

5

10

15

20

25

30

35

40

45

Thail

and

South

Afric

a

Indon

esia

Viet

Nam

OECD

Turke

y

Polan

d

Colom

bia

Mexic

o

Kore

a

Malay

sia

Sing

apor

e

Source: UNESCO-UIS (2017), Education (dataset), UIS Data Centre, http://data.uis.unesco.org/. Note: STEM courses include natural sciences, mathematics and statistics programmes; information and communication technology programmes; and engineering, manufacturing and construction programmes.

Enrolment ratio in STEM subjects, Latest available year, %

Page 10: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

• Encourage formalisation through tax and regulatory measures. Harmonise social protection schemes

Social protection system excludes many

informal workers

• Index non-contributory allowance for older people to minimum required living costs

Inadequate pension benefits

• Strengthen teacher capacity, curriculum coherence, student assessment procedures and ICT use in schools

Poor education outcomes

• Expand co-operation between vocational institutions, academia and the private sector in course development

Large skills mismatches

10

People - key constraints and selected recommendations

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Prosperity: Boosting productivity

11

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12

Faster growth is needed to catch up

0

10

20

30

40

50

60

70

80

90

100

1970 1980 1990 2000 2010 2016

Indonesia Malaysia Philippines Korea Thailand Viet Nam

GDP per capita, % of OECD average, computed at 2016 PPP USD

Source: Conference Board (2017), Total Economy Database, Datastream, and OECD calculation Note: In 2016, Thailand’s per capital GDP in USD PPP was 17 359, versus an OECD average of 41 776

Page 13: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

13

Labour productivity can be boosted

-202468

101214

OECD

aver

age

South

Afric

a

Mexic

o

Kore

a

Colom

bia

Malay

sia

Polan

d

Sing

apor

e

Turke

y

Thail

and

Philip

pines

Indon

esia

Viet

Nam

China

%

2001-05 2006-10 2011-16

Average labour productivity growth per employee per year

Source: OECD calculations based on data provided by national statistical office and Datastream; OECD, Productivity Statistics database

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14

R&D outlays remain below some comparators

Note: The 2% R&D expenditure target included in the STI Plan was subsequently revised down in the 12th Plan to 1.5%. 2013 for Indonesia, Philippines, Viet Nam, and South Africa, 2014 for Turkey and Singapore. Source: UNESCO-UIS (2017), Science, Technology and Innovation (dataset); UIS data Centre; OECD, Gross domestic spending on R&D

Gross expenditure on R&D, % of GDP, 2015

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Indon

esia

Philip

pines

Colom

bia

Viet

Nam

Mexic

o

Thail

and

South

Afric

a

Polan

d

Turke

y

Malay

sia

China

Sing

apor

e

OECD

Kore

a

%

2011 level 2021 target

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15

There are high barriers to services trade Pilot exercise of OECD Services Trade Restrictiveness Index

00.10.20.30.40.50.60.7

CHL

KOR

JPN

DEU

LVA

IRL

CZE

NZL

GBR

LTU

AUS

NLD

FRA

ZAF

LUX

EST

DNK

SVK

ITA

SVN

POL

ESP

FIN

AUT

CAN

BRA

USA

CRI

SWE

COL

PRT

HUN

MEX

TUR

BEL

CHN

CHE

GRC

NOR

RUS

IND

ISR

THA

IDN ISL

Construction services Regulatory transparency Barriers to competition Other discriminatory measuresRestrictions on the movement of people Restrictions on foreign entry AverageSTRI 2014

00.10.20.30.40.50.60.7

LVA

CHL

DNK

JPN

AUS

NLD

KOR

USA

LTU

SWE

NZL

IRL

DEU

COL

CAN

LUX

NOR

MEX

FIN

ESP

CHN

GRC

GBR

ZAF

BRA

CRI

CZE

ITA

TUR

RUS

CHE

IDN

AUT

HUN

ISR

BEL

ISL

SVN

EST

PRT

THA

POL

FRA

SVK

IND

Architecture services

Regulatory transparency Barriers to competition Other discriminatory measuresRestrictions on the movement of people Restriction on foreign entry AverageSTRI 2014

Note: Full openness to trade in services gives a score of zero, while complete closure to foreign services providers gives a score of one. Source: OECD (2017), Services Trade Restrictiveness index database

Page 16: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

• Invest in lifelong learning and skills training

• Upgrade business skills and foster greater ICT use in agriculture

Slow economic advancement, notably

in the agriculture sector

• Ensure institutional coordination. • Boost public R&D spending to no less than

1.5% of GDP by 2021, as planned

Low innovation and commercially viable

research

• Create a lower-cost bourse in the stock exchange

• Improve co-ordination across agencies responsible for SMEs development

SME development is constrained by costly

financing

• Review regulations on foreign business operations including restrictions on foreign firms’ entry and movement of people

High cross-border barriers to services

trade and investment

16

Prosperity - key constraints and selected recommendations

Page 17: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

Partnerships: Sustainably financing development

17

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18

The population is ageing rapidly

0

0.1

0.2

0.3

0.4

0.5

0.6

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050OECD average Regional comparators Thailand

Elderly dependency ratio

Note: The elderly dependency ratio refers to the number persons (aged 65 and above) per working age population (aged 15 to 64). Regional comparators refers to the average elderly dependency ratio for Malaysia, Philippines, Indonesia and Viet Nam. Source: UN Population projections, 2017 revision.

Page 19: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

19

Fiscal revenue will need to rise

General government revenue in % of GDP, average over 2011-15

Source: Datastream, OECD Revenue Statistics (2017)

0

5

10

15

20

25

30

35

40

45

Indon

esia

Sing

apor

e

Philip

pines

Thail

and

Kore

a

Viet

Nam

Mexic

o

Malay

sia

Colom

bia

China

South

Afric

a

Turke

y

Polan

d

OECD

% of GDP

Page 20: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

20

There is room to improve PPP processes

20

40

60

80

100

Malay

sia

Turke

y

Thail

and

Polan

d

Indon

esia

China

Sing

apor

e

Viet

Nam

Colom

bia

Kore

a

Mexic

o

South

Afric

a

Philip

pines

PPP preparation PPP procurement PPP contract management Average

Note: The higher the score, the more aligned with international best practice. Scores for unsolicited proposals are not considered in the above analysis as Thailand, Malaysia, Turkey, Poland and Singapore do not have any regulatory procedures. Source: World Bank Group/PPIAF (2017), Benchmarking Public-Private Partnerships Procurement 2017.

Page 21: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

• Boost tax efficiency, increase compliance and rely more heavily on less distortive taxes

Revenue needs to increase to fund

future commitments

• Make greater use of alternative infrastructure financing such as Thai baht infrastructure bonds

• Align PPP policies with OECD Principles for Public Governance of PPPs

Inefficient and costly infrastructure

financing

• Invest in preventative and primary care. • Reduce exemptions to healthcare co-

payments • Increase pensionable age

Escalating public healthcare and

pension burdens

21

Partnerships - key constraints and selected recommendations

Page 22: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

Planet: Conserving nature

22

Page 23: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

23

Droughts and floods affect many areas

40

55

70

85

100

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

% A. Share of provinces affected by drought or flooding

Drought Flooding

0

10

20

30

40

50

2009 2010 2011 2012 2013 2014 2015

% B. Share of agricultural land affected by

drought or flooding Drought Flooding

Source: NESDB (2017), Social and Quality of Life Database System, http://social.nesdb.go.th/social/Default.aspx?tabid=40; OAE (2017), Agricultural Statistics of Thailand 2016.

Page 24: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

24

Towards better waste management

0

200

400

600

800

1000

1200

1400

1600

Philippines Colombia Poland Mexico Korea Turkey Thailand OECD Singapore

Kilograms per capita

Municipal waste

Source: OECD countries from OECD (2017); Thailand from PCD (2017b); Philippines and Singapore from http://unstats.un.org/unsd/ENVIRONMENT/qindicators.htm

Page 25: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

25

Coal will form a bigger part of power generation by 2036

2015

Natural gas

Imported coal

Lignite

Renewable

ImportedhydropowerDomestichydropowerNuclear

2036

Source: MOE (2016), Thailand Integrated Energy Blueprint.

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26

Emissions have increased

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Colom

bia

Sing

apor

e

OECD

Turke

y

Indon

esia

Mexic

o

Philip

pines

Kore

a

Polan

d

Thail

and

Malay

sia

China

South

Afric

a

Viet

Nam

CO2 per GDP

2015 1990

Kg per 2010 USD

Source: IEA (2017), CO2 Emissions from Fuel Combustion 2017 Edition.

Page 27: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

• Ensure co-ordination across existing agencies, at all levels of governance

Management of water resources is fragmented

• Improve disaster prevention and response capacity at the local level to effectively provide services

Floods and droughts often cause economic disruption

• Make polluters pay more directly, including wastewater tariffs on water usage

Pollution and inadequate waste management undermine

environmental quality

• Step up investments in renewables and consider increasing environmental taxation

Power sector plans will lead to a more carbon intensive path

• Carry out Strategic Environmental Assessments more frequently and effectively

Environmental issues are not well integrated into public

plans and policies

27

Planet - key constraints and selected recommendations

Page 28: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

Peace: Strengthening governance

28

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29

Improving reform implementation

Note: Capacity for State reform measures the “authorities’ ability to decide and actually implement reforms” (scores range from 0 for very low capacity to 4 for strong capacity). Long-term strategies indicate whether “the public authorities have a long-term strategic vision” (scores range from 0 for very weak strategic vision to 4 for strong strategic vision). Source: Centre d’Études Prospectives et d’Informations Internationales, Institutional Profiles Database 2016

0

1

2

3

4

South

Afric

a

Thail

and

Indon

esia

Mexic

o

Turke

y

Sing

apor

e

OECD

Ave

rage

Kore

a

China

Polan

d

Colom

bia

Malay

sia

Philip

pines

Capacity for State reform Long-term strategies

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30

Improving government online presence

0

10

20

30

40

50

60

70

80

90

100

Indon

esia

Thail

and

South

Afric

a

Viet

Nam

Turke

y

Philip

pines

Polan

d

Malay

sia

China

Colom

bia

OECD

Ave

rage

Mexic

o

Kore

a

Sing

apor

e

Government's online service Online e-participation

Note: The higher the score, the closer to world best practice Source: Cornell University et al. (2017), Global Innovation Index

Page 31: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

31

Local governments rely heavily on revenue from the central government

11%

17%

33%

39%

Local government revenue sources, 2016

Locally collectedrevenue

Central government:VAT redistribution

Central government:other tax redistribution

Central government:grant funding

Source: Fiscal Policy Office

Page 32: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

32

Corruption persists

Corruption perception index, 2017

Note: Index ranges from 0 (highly corrupt) to 100 (very clean). Source:Transparency International Corruption Perception Index (2017), https://www.transparency.org/news/feature/corruption_perceptions_index_2017

0

10

20

30

40

50

60

70

80

90

Page 33: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

• Review role of ministries and clarify responsibilities across all levels of government

Lacking institutional capacity

• Pursue decentralisation by empowering local administrations

Imbalance between central and local

government

• Strengthen capacity of the Trade Competition Commission

Weak enforcement of competition law

• Further strengthen existing integrity measures and streamline the anti-corruption mandates of various institutions

Corruption remains problematic

33

Peace - key constraints and selected recommendations

Page 34: OECD MULTI-DIMENSIONAL COUNTRY REVIEW OF THAILAND ... … · 2020. 2030. 2040. 2050. OECD average. Regional comparators. Thailand. Elderly dependency ratio Note: The elderly dependency

34

For more information, please see

http://www.oecd.org/eco/surveys/multi-dimensional-review-thailand.htm

Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

@OECD Economics

@OECD