Thailand envisions high-income status

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Thailand’s wealth is unevenly distributed

Thailand is hoping to achieve high-income status in 15 years, raising gross national income (GNI) to $12,400 per capita, a goal outlined in the National Economic and Social Development Board’s (NESDB) Country Strategy that was approved by the cabinet on November 2.

However, Thailand’s GNI per capita was only $4,420 last year and the country’s lack of investment into research and development coupled with rising inequality will prove potent barriers to escaping the middle-income trap.

Similar to Malaysia’s strategy of becoming a modern industralised nation by 2020, Thailand too is outlining economic guidelines to reach high-income goals.

A high-income economy is defined by the World Bank as a country with a GNI per capita of $12,476 or more as of 2011.

Thailand was stuck in the lower-middle income club for some 20 years, however, and has only just recently joined the upper-middle income bracket, according to definitions by the World Bank.

To reach goals set out in the NESDB’s strategy, Prime Minister Yingluck Shinawatra’s administration is aiming to increase research and development investment to over 1 per cent a year of GDP, compared to 0.24 per cent in 2011.

In order to achieve the jump in average income, average economic growth of 5 to 6 per cent a year with have to be maintained over 10 to 15 years compared with average growth of 4.2 per cent from 2002 to 2011.

Researchers have shown that Thailand is a vastly economically disparate nation, an issue that also must be whole-heartedly addressed, analysts say. A recent study on income disparity found that the richest Thais earn approximately 23 times more than the poorest groups in the nation.

World Bank bullish on Thailand

Meanwhile, the World Bank has said it is likely to revise up its forecast for Thailand’s 2012 economic growth in mid-December, citing robust domestic consumption in the third quarter. The bank currently projects Thailand’s economy to grow 4.7 per cent in 2012 and exports by 2.4 per cent.

For 2013, the World Bank estimates Thailand’s economy will grow by 5 per cent and exports by 8 per cent despite flat growth in the global economy. This is based on an assumption that global trade volume will grow by 5.5 per cent next year, up from 3.7% this year, with even countries such as China experiencing stable growth.

However, core challenges remain. The World Bank said to move out of a middle-income trap, Thailand must upgrade its workforce skills in the service sector, but the government has focused mainly on the industrial sector. Thai professionals must improve their creativity, leadership, technology and English-language skills, the bank added.

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Reading Time: 2 minutes

Thailand’s wealth is unevenly distributed

Thailand is hoping to achieve high-income status in 15 years, raising gross national income (GNI) to $12,400 per capita, a goal outlined in the National Economic and Social Development Board’s (NESDB) Country Strategy that was approved by the cabinet on November 2.

Reading Time: 2 minutes

Thailand’s wealth is unevenly distributed

Thailand is hoping to achieve high-income status in 15 years, raising gross national income (GNI) to $12,400 per capita, a goal outlined in the National Economic and Social Development Board’s (NESDB) Country Strategy that was approved by the cabinet on November 2.

However, Thailand’s GNI per capita was only $4,420 last year and the country’s lack of investment into research and development coupled with rising inequality will prove potent barriers to escaping the middle-income trap.

Similar to Malaysia’s strategy of becoming a modern industralised nation by 2020, Thailand too is outlining economic guidelines to reach high-income goals.

A high-income economy is defined by the World Bank as a country with a GNI per capita of $12,476 or more as of 2011.

Thailand was stuck in the lower-middle income club for some 20 years, however, and has only just recently joined the upper-middle income bracket, according to definitions by the World Bank.

To reach goals set out in the NESDB’s strategy, Prime Minister Yingluck Shinawatra’s administration is aiming to increase research and development investment to over 1 per cent a year of GDP, compared to 0.24 per cent in 2011.

In order to achieve the jump in average income, average economic growth of 5 to 6 per cent a year with have to be maintained over 10 to 15 years compared with average growth of 4.2 per cent from 2002 to 2011.

Researchers have shown that Thailand is a vastly economically disparate nation, an issue that also must be whole-heartedly addressed, analysts say. A recent study on income disparity found that the richest Thais earn approximately 23 times more than the poorest groups in the nation.

World Bank bullish on Thailand

Meanwhile, the World Bank has said it is likely to revise up its forecast for Thailand’s 2012 economic growth in mid-December, citing robust domestic consumption in the third quarter. The bank currently projects Thailand’s economy to grow 4.7 per cent in 2012 and exports by 2.4 per cent.

For 2013, the World Bank estimates Thailand’s economy will grow by 5 per cent and exports by 8 per cent despite flat growth in the global economy. This is based on an assumption that global trade volume will grow by 5.5 per cent next year, up from 3.7% this year, with even countries such as China experiencing stable growth.

However, core challenges remain. The World Bank said to move out of a middle-income trap, Thailand must upgrade its workforce skills in the service sector, but the government has focused mainly on the industrial sector. Thai professionals must improve their creativity, leadership, technology and English-language skills, the bank added.

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