3. Economic restructuring policy to create equilibrium and Competitiveness

Mr. President,

The future challenge that remains is to maintain a substantial growth of the Thai economy in order to facilitate employment and income creation. More important, however, is the restructuring of economic growth to ensure its quality and sustainable expansion, thorough economic and wealth distribution, and immunization from global transformations in the globalization age. Therefore, in the next four years, there is an urgent need to strengthen Thailand’s economic foundation.

The Government will restructure the entire economic system with the aim of increasing product value based upon knowledge and Thainess, by combining a natural resource base, and Thai culture and local ingenuity with new entrepreneurs, good management, commercial innovation, establishment of acceptance of Thai brands, and restructuring of the market system in order to match production and services with global consumer demand to ensure Thailand’s future sustainable expansion.

In restructuring the agricultural sector, the Government will support the value increase of agricultural products by encouraging research and development of technological innovations and biotechnology alongside local ingenuity and promoting community enterprises in adding product value. Importance will be given to food security, transformation of agricultural products into alternative energy such as palm oil, sugar cane and cassava. Agricultural products that have high marketing potential and opportunities for adding value are, for example, rubber, livestock, coastal aquaculture breeding. The Government aims to promote agricultural products processing in line with food safety standards, by developing systems to control the quality and standard of both exported and imported agricultural products consistent with global standards. Furthermore, the Government will promote and support sustainable agriculture along the lines of the new theory and organic farming in order to preserve and restore natural resources and environment.

As for the industrial sector, which is a highly competitive production sector, the Government intends to transform those entrepreneurs who are still hired producers, receiving only a small profit from the business, into knowledgeable entrepreneurs who are able to use technology to its utmost benefit so as to produce high quality goods which cater to market demands. The aim is to develop an industrial sector that can effectively compete in the world market.

The Government will promote the use of domestic raw materials and adding value to goods by focusing on high potential industries and newly emerging industries and by improving the efficiency of weaker industries. The Government will also encourage the development of industrial networks as well as of value added products on a knowledge basis by promoting knowledge management process at all levels, ranging from local enterprises, small and medium enterprises and large enterprises.

At the same time, the Government will develop a supporting system to increase the capability to compete in the following areas:

1. Develop research systems for science, technology and innovation for production and trade. Promote Thai intellectual property by cooperating with the private sector in research, development and innovation. Encourage Thais to register for copyrights and patents domestically and internationally as well as to be able to apply such intellectual property for commercial purposes;

2. Develop human resources for the industrial sector to generate creative ideas, entrepreneurial instinct, ability to learn, and skills in developing new sectors in science and technology that are consistent with the needs of the business sector in order to be prepared for changes in economic infrastructure in the future. The Government will organize training for the workforce that is in line with the needs of the labor market by focusing on developing a workforce of international standard, ready to compete in the world market for upmarket consumers, with the objective that the entire workforce must be trained continuously on a regular basis. The Government will raise awareness and understanding among employees regarding the benefits of human resources development by using tax incentives;

3. Stimulate the development of an enterprise network to increase value added and networking in food, fashion, automobile, electronics, software and tourism industries as well as support other enterprise networks e.g. energy, health, biology, services, creation and design;

4. Build a strong economy and upgrade the production and services sectors in the provinces by expanding science and technology infrastructure e.g. science park, technology incubator; and

5. Encourage clean technology production. Encourage alternative energy in manufacturing, including rehabilitate environment affected by the industrial activity.

With regard to the service sector and tourism, the Government will focus on adding value rather than increasing quantity. As such it will cooperate with the private sector, local entities and communities in safeguarding natural resources and environment related to tourism from deterioration, organize a certification system for hotels and service providers, increase the capabilities of organizations related to tourism, and develop human resources in tourism to meet international standards. In this regard, the Government will speed up revitalization of tourist destinations that have experienced degradation or which have been affected by natural disasters, such as the Andaman coastline, and develop cultural tourism by linking with neighboring countries as well as developing environmental tourism and health tourism.

The Government will expand the service sector to generate new sources of income in areas such as health, education, international meetings and seminars, air transport, film production, software development, wholesale/retail, and regional business hub.

Regarding small and medium sized enterprises, the Government will create opportunities for entrepreneurs to be able to access financial resources, product development and innovation, and local and international marketing, so as to build competitiveness through various mechanisms that have already been initiated i.e., village fund and bank, assets capitalization, and development of standards and quality of OTOP products.

The Government will create opportunity to develop SMEs by supporting knowledge in sales, marketing, and accounting system, providing knowledge in improving product quality and production, including assistance in registering intellectual property of local populations and communities, as well as setting up of Thai exhibition centers in large cities abroad to create markets and promote Thailand.

The Government will change the management system of goods transportation to be efficient, high quality, and timely, able to support the expansion of the economy and link production to markets at all levels. This will reduce costs at all stages of distribution within a multi-modal transportation network, whether by car, ship, train or pipeline. Importance will be given to linkages to Laem Chabang Deep Sea Port and Suwannabhumi International Airport as windows to the world market.

The Government will expand networks and services for information and communication technology to be fully up to date and covering all areas of the country, at a fair cost and in sufficient quantity to support economic expansion. It will also utilize such technology to add knowledge for society, public administration and electronic commerce.

In the current situation in which oil prices in the world market are still high and volatile, the Government will implement energy policy which is central to the production system, transportation and livelihood of the people so as to be able to use energy efficiently, reduce energy imports and develop alternative energy such that we can be more self-reliant, including through developing the best utilization of natural gas, creating energy security in the region and increasing value in the country by developing the petrochemical industry, downstream industries and bio-energy industry, and encouraging the use of ethanol and bio-diesel from agricultural products to replace petrol.

To ensure efficient investment and provision of infrastructure services, the Government will increase the potential of state enterprises by improving management and introducing privatization, and forming clusters to monitor these companies to operate in accordance to the country’s strategy, including strengthening monitoring mechanisms related to infrastructure services. The Government will monitor the management and development of state enterprises, bearing in mind the best interests of consumers as the customers.

In order to efficiently alleviate poverty, develop quality human resources and society, strengthen the economic system and develop infrastructure, significant investment is necessary. In this regard, the Government will consider appropriate sources of capital, strictly adhering to the principle of having stable expansion of the economy and strict financial discipline. It will accordingly draw up a budget that is consistent with the economic climate, manage inflation to be at appropriate level, maintain foreign capital reserves and current account at sufficient level, as well as maintain the country’s status as a net lender.

In terms of financial market policy, the Government will create transparency and strength as well as provide the business sector and people in all parts of the country with opportunities and channels for greater access to sufficient financial capital. In term of capital market policy, the Government will develop both capital and debt instruments as long-term capital for the business sector. The Government will also promote private savings to enhance security in the lives of the people and as a source of funds to reduce dependency on foreign capital in expanding investment.

As for international finance, the Government will continuously push for financial cooperation in the region by developing Asian Bond markets as an important mechanism for capital mobilization for the common interest of Thailand and the region as a whole.