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Six steps to achieve Thailand 4.0

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Bangkok – The Thai government is obsessed about Thailand 4.0 – making the Thai economy to become a digital economy. Is this possible? In the past Thailand succeeded in labor intensive manufactured goods against its competitors India, China, Vietnam, and Indonesia. In the future Thailand has to move to higher value-added activities and therefore move up in the global supply chains.

Thailand should not focus on productivity and efficiency anymore instead of concentrate on stability, infrastructure, education and entrepreneurs.

What is Thailand 4.0?

A survey from 2016 has shown that most firms have little idea of what Thailand 4.0 really means. Thailand 4.0 is the fourth economic model that aims to unlock the country from several economic challenges like leaving the middle-income trap[1] and today’s topic which is to digitalize and connect the industry.

What must be done to achieve Thailand 4.0?

Firstly, it must begin with the government. Thailand faced natural and political problems such as floods and several coup d’états in the last decades. Besides that, bureaucratic inefficiency and corruption are concerns which have a negative influence on the business climate. With changing governments, there was no steady policy for innovation which results in slower processes needed to achieve Thailand 4.0.

Secondly, Thailand needs to focus on Research and Development (R&D). Thailand’s gross expenditure on R&D was only 0,21% of the GDP which is far below its competitors (e.g. Singapore, Malaysia) and will be increased at least to 0,5% of the GDP even it is questionable if this amount will push innovation forward. The issues of government and research are related. Thai Government may have started too late to give incentives for the industry to adapt with latest technology and developed countries have for sure a time advantage.

Thirdly, Thailand needs to develop digital infrastructure. The OECD claims that the Ministry of Industry prioritized the growth of incoming FDI and export growth instead of the development of technological capabilities. Digital infrastructure starts with availability and accessibility of the internet. In 2015 nearly 40% of the Thais had access to internet which might be good for a developing country but competitors like Vietnam (52%) and Singapore (82%) fulfill the starting criteria for digitalization more. It will take time to bring broadband to every village but Thailand is on the right path to fulfill this requirement.

Fourth point is about how easy it is to start a business in the country. Top performers like New Zealand and Singapore get the first places in the 190-country ranking by the World Bank. Thailand performed well in the past but cannot hold this good position. In contrast to others Thailand has still a good score but unfortunately Thailand keeps a very corrupt country.

Fifth issue is related to education. Even though the increased Government spending for the access to secondary and tertiary education was leading to adequate expenditures compared to competing countries, the graduates are not competitive and therefore get a low rank in Asia. The outcome shows that Thais are lagging in mathematics and science and innovate less than countries with comparable education. Thailand’s universities show persistent quality weaknesses, especially in the R&D field which is important for new thinking and therefore for Thailand 4.0. The result is a skilled labor supply shortage and just a few start-ups from university graduates. Another reason is little communication and collaboration between universities and the industry.

Sixth point concerns the industry. Most of the workers only learn how to work efficiently at their working station but do not get the chance to gain more knowledge of modern working processes or R&D methods (lack of technology transfer). The Government supports the digital development of the industry but they often do not see opportunities from collaborations with one of many public research institutes. Entrepreneurship and the creation of innovative SME’s have not been supported for a long time. On top of that many firms have a traditional thinking and do not see a need for improvement. As result, patents per capita are very low and only 12% of the firms invest in R&D.

Finally, Thailand 4.0 might be out of the countries league because the requirements to reach Thailand 4.0 are not fulfilled and Thailand 3.0 is not fully transformed. Although the targets might be too hard to reach, it is good that the country is striving for competitiveness in the future instead of taking the risk of falling back.

© Bangkok Post on May 15th, 2017


 [1] The middle-income trap is a situation in which a country’s GDP growth slows after having reached the middle-income level. Middle-income countries like Thailand are squeezed between their low-wage competitors that dominate the mature industries on one side and the rich-country innovators that dominate industries of rapid technological change on the other side. (Languepin, Oliver: Thailand 4.0, what do you need to know? (2016))

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Southeast Asia

A struggle for rule of law: Detained Bahraini footballer catapults Thailand to centre stage

Dr. James M. Dorsey

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Mounting pressure on Thailand to release from detention soccer player Hakeem al-Araibi has not only refocussed international attention on alleged abuse of human rights and due course of law in Bahrain but also the apparent continued ability of autocratic and authoritarian regimes to enlist global police organization Interpol in efforts to silence critics.

The arrest by Thai authorities of Mr. Al-Araibi, acting on an Interpol red notice arrest warrant issued despite the fact that he had been granted political asylum in Australia, raises questions about the effectiveness of Interpol safeguards against exploitation of its powers.

It is also a reflection of a far broader global battle for continued rule of law that is being challenged by autocrats, authoritarians, populists and nationalists on multiple fronts.

“It’s really emblematic of this breakdown of multilateral institutions, particularly those premised on western liberal democratic values which in the wake of the cold war we saw come into ascendance. These institutions were not built with the internal safeguards and mechanisms to protect them against bad faith actors. Once you let them inside the gates, nothing prevents them from poisoning the well,” said Jonathan Reich, an attorney who has worked with Russian business people and anti-corruption dissidents targeted by Russia via Interpol.

Mr Al-Araibi’s case further highlights the incestuous and inextricable relationship between sports and politics that international sports associations strenuously deny.

Nowhere is that relationship increasingly more evident than in the Gulf with Mr. Al-Araibi’s arrest; the politicization of the Asian Cup as a result of the rift between Qatar and its boycotting detractors, Bahrain, the United Arab Emirates and Saudi Arabia; Saudi and UAE efforts to substantially increase their influence in global soccer governance, and the Saudi-Qatar dispute over broadcasting rights.

Qatar’s winning of the Asian Cup on Friday was as much a sports achievement as it was a political statement of the country’s resilience and ability to host the 2022 World Cup that had been called into question from day one and was targeted by its Gulf detractors since they declared a diplomatic and economic boycott of the Gulf state 18 months ago.

Mr. Al-Araibi has been kept in prison to allow Bahrain to formally request his extradition even though Interpol withdrew the non-binding red notice a week after issuing it. He was on Friday remanded for another 60 days in prison as a Thai court held hearings on the request.

The focus on Interpol safeguards as a result of Mr. Al-Araibi’s continued detention and the organization’s inability to ensure that its mistakes can be corrected was bolstered this week by documents leaked by dissident Turkish journalists in Europe that allege abuse of Interpol procedures by Turkish law enforcement and intelligence.

The documents allege that Turkey has obtained through Interpol information about dissidents in Belgium, Germany and Poland on the basis of purported false charges that nonetheless failed to result in the issuance of a red notice warrant.

Mr. Al-Araibi’s detention since November when he arrived with his wife in Bangkok for their honeymoon and the Turkish leak are but the two latest incidents that point fingers at Interpol procedures.

Fair Trials, an international criminal justice watchdog, has documented numerous cases of abuse of Interpol procedures, applauded the organization for efforts to avoid abuse, and called on it to introduce further safeguards.

In one prominent case, Interpol was put in an embarrassing position in October when its then president, Meng Hongwei, was arrested on a visit to his native China after the police organization had accepted a resignation letter purportedly signed by Mr Meng and tendered by the Chinese government, which said he was being probed over suspected corruption. Interpol said it had no choice but to comply with the request.

Mr. Al-Araibi’s case bolsters the call for further safeguards and focuses attention on the need for mechanisms to counter the fallout of abuse.

A player for Bahrain’s national team, Mr. Al-Araibi was arrested in November 2012 while walking to a cafe in Bahrain to watch a Real Madrid-Barcelona game and beaten in detention. He was accused of vandalizing a police station at a time when he had been playing in a match that had been aired on live television.

Mr Al-Araibi spent three months in detention and was sentenced to ten years in prison but managed to flee to Australia before the verdict was issued by a judge, who like Asian Football Confederation (AFC) president and world soccer body FIFA vice president, Sheikh Salman bin Ebrahim Al Khalifa, is a member of Bahrain’s ruling family.

Mr. Al-Araibi’s case erupted as Sheikh Salman is running for another term in AFC elections scheduled for April.

Mr. Al-Araibi asserted that Sheikh Salman, who at the time of his arrest in the Gulf state was head of the Bahrain Football Association (BFA) and has long been accused of involvement in the arrest and abuse during mass anti-government protests in 2011 of some 150 Bahraini athletes and sports executives, had failed to respond to requests for help from the player’s family and lawyers.

Sheikh Salman has said he had not received a request for assistance. Sheikh Salman has consistently denied any association with the 2011 events despite the fact that Bahrain’s state-run news agency linked him to the arrests in several reports at the time.

Conspicuously, Sheikh Salman has remained silent about Mr. Al-Araibi’s case while the AFC only this week called for the first time for his return to Australia in a statement by its vice president, Praful Patel.

The AFC this week said Mr. Patel rather than Sheikh Salman was responsible for Middle Eastern affairs. It said Sheikh Salman had been recused from overseeing the region because of potential conflicts of interest. It was the first time that the AFC disclosed the recusal.

FIFA secretary general Fatma Samoura and International Olympic Committee president Thomas Bach have been calling for Mr. Al-Araibi’s release for several weeks.

For Bahraini exiles like S. Yousif Almuhafdah, a Berlin-based human rights activist, Mr. Al-Araibi’s case is one way of focusing attention on Bahrain and trying to ensure that others are spared the soccer player’s fate in a world in which the cards are stacked against them.

Says Mr. Almuhafdah, who was detained in the same cell as Mr. Al-Araibi before both men left Bahrain: “Nothing will change any time soon. But we have a responsibility to those who stayed behind and remain behind bars.”

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France returns to Laos

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The geographical location of Laos, a small landlocked state surrounded by China, Thailand, Myanmar, Vietnam and Cambodia, has made it imperative for this country to pursue a well-balanced multi-faceted foreign policy that hinges on the development of a mobile system of economic and political counterbalances.

Regional integration is key to the economic development of Laos. A major integration mechanism is ASEAN, of which Laos has been a member since 1997. 99% of Laos’ residents believe that their country’s membership in this organization yields tangible economic benefits; 92.5% say it has improved their personal financial standing.

As a member of ASEAN, Laos is committed to developing relations with China, Thailand and Vietnam but pursues a preferential policy as regards each of them.

China remains number one investor in the Laotian economy ($ 8.5 billion) with the bulk of the finances channeled into the mining, transport infrastructure and energy sectors. In 2016, trade turnover between the two countries reached $ 2 billion , a significant amount for Laos with its less than 7 million population. The largest Chinese-Lao project is the railway from Kunming Province (PRC) to Laotian capital, Vientiane. China is ready to inject more than $ 6 billion in the project

Meanwhile, Laos has been stepping up cooperation with Vietnam, which maintains a wait and see position in relation to China. Laos views Vietnam as a political and ideological counterweight to China. Cultural ties with Vietnam serve as an additional means of preventing the transformation of Beijing’s economic influence into the ideological one. Members of the ruling People’s Revolutionary Party of Laos receive training in Vietnam.

With a view to diversify foreign economic and foreign policy relations, Laos is developing contacts with France, whose colony it used to be in the past. Paris is seen as a remote neighbor of Laos, a partner in the economic and cultural spheres. Since 1991 Laos has been a member of the international organization for the cooperation of the francophone states “Francophone”. According to the French Embassy in Vientiane, the number of Laotians who speak French amounts to 3% and has been increasing over the past 12 years.

Laos is home to two branches of the Institut Francais du Laos (IFL) – an organization that promotes the French language and culture abroad; the French language is on the curriculum of three of the country’s five universities. In March 2018, Laos was visited by leaders of “Francophone”, and in May 2018 – by representatives of the Francophone University Agency. The official mission of the latter is to create a new French-language communication and educational space. The visits resulted in the signing of agreements on further cooperation with both organizations.

The period that saw a catastrophic fall in the demand for the French language in Laos since the mid-1970s is coming to an end. Nevertheless, the Lao Ministry of Education has designated English as a compulsory subject in schools for the 2019 academic year. The decision was prompted by the currently prevailing position of English worldwide and Vientiane’s intention to develop economic ties not only with the Francophone, but also with the Anglosphere.

Along with the cultural influence, France is trying to build up its economic presence in Laos. In May 2018, a French delegation led by French Ambassador Claudine Ledo visited a special economic zone in the province of Savannakhet to examine the prospects for French investment. For Laos, France is the ninth largest trading partner accounting for only 0.2% of the Lao market but it holds top position among non-Asian countries in the volume of investment.

Trade turnover between Laos and France has been fluctuating in recent years between $ 34 and $73 billion. France is prepared to invest in the Lao economy but the volume of investment is determined by the extent of Vientiane’s openness to foreign investment flows and the ability of the Lao economy to ‘digest’ them.

The year 2019 will mark greater cooperation within ASEAN for Laos. Last year, economic issues within ASEAN prevailed over political ones in connection with trade conflicts between the United States, the European Union and the People’s Republic of China. ASEAN countries are planning to launch the Regional Comprehensive Economic Partnership program (RCEP).

If the program is fulfilled, it will become the largest trade agreement in the world. The cumulative GDP of the countries participating in it makes up 25% of the global GDP, the population accounts for 45%, and the trade turnover amounts to 30% (5). Australia, New Zealand, Japan, South Korea may all be attracted to the program. This will provide Vientiane with more opportunities to diversify foreign economic relations amid China’s growing financial presence in Southeast Asia.

France was the first European country to sign a partnership agreement with ASEAN. Paris regards this organization as key to its policy in the Indo-Pacific region and a major economic partner. The volume of French investments in the ASEAN economy in 2017 reached € 16 billion. France’s share in the ASEAN market is 1.6%. This figure has not changed for ten years.

Paris aims to give cooperation with ASEAN a new impetus, which will impart more momentum to French-Lao relations.

First published in our partner International Affairs

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On Refugees… And Myanmar: It’s Not Just The Rohingya

Dr. Arshad M. Khan

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… And my life’s cold winter that knew no spring; Of my mind so weary and sick and wild,  Of my heart too sad to sing.  — Paul Laurence Dunbar

The world now has more refugees than at any time since after WW2, more than the population of Britain.  They are often the consequence of wars usually instigated by great powers directly or through proxies.  Civil strife accompanied by the demonization of minorities, killing and expulsion is another reason.  Such is the story of the Rohingya in Burma, or Myanmar as it now likes to be known.

It is a country with the river Irrawaddy as a central artery.  Bordering it is the heartland, peopled by the Bamar who make up 68 percent of the population and are Buddhist.  The Rohingya are Muslim, look different and have lived in Rakhine state for at least five centuries.  During WW2 they supported the British while the Buddhist Burmese supported the Japanese, their coreligionists.  It brought lasting enmity.  After years of propaganda and vilification, the Rohingya were stripped of citizenship.  Not unlike Nazi Germany targeting Jewish people, new restrictive laws curtailed liberties, marriage rights, even children — limited to two.  The vilification turned most neighboring Buddhist villages against the Rohingya, and those attacking and burning their villages were often these neighbors when not the military.

In this latest violence, 90 percent of the Rohingyas were driven out and about three-quarters of a million sought refuge across the border in Bangladesh.  The story does not end with the Rohingya for there are other threatened minorities in Burma occupying the periphery in the north and south:

In northern Shan state, a simmering conflict with the Taang National Liberation Army dating back to 1963 has displaced 300,000.  The army emboldened by the relatively meek response to the assault on the Rohingyas have intensified their efforts also against the ethnic Kokang’s  Myanmar National Democratic Alliance Army.  The consequence is an addition to the tens of thousands that had streamed from earlier conflicts over the border into China.  Also in the north the largely Christian Kachin minority formed the Kachin Independence Army to defend their villages.   The ongoing conflict has displaced more than 135,000 internally.  And in the south the conflict with the Karen (Buddhist, Animist and 15 percent Christian) resulted in over 100,000 refugees … this time in Thailand, plus a 100,000 diaspora to the rest of the world including some 65,000 in the US.  Myanmar’s perverse antipathy towards all its minorities makes a mockery of the Nobel Peace Prize awarded to Aung San Suu Kyi, its leader.  Is meaningful censure an answer, or is innate tribalism an unconquerable primitive amygdala response?

The top five refugee hosting countries might also come as a surprise.  Amid all the news of Angela Merkel’s generous offer to accept everyone entering her country, Germany is not one of them.  Shortly thereafter her party lost by-elections and she is departing.  The actual figures are Turkey (3.5 million), Pakistan (1.4 million), Uganda (1.4 million), Lebanon (1 million) and Iran (0.98 million).  The chaos in countries adjoining them (think of Afghanistan, Iraq, Syria and Somalia) explains why, and the great power with a finger in each pie, when not actually baking it, is also not difficult to discern.

Imagine being forced to flee with just the clothes on your back or just a bag.  A word here also for the people who had to do just that to escape wildfires.  They all have our heartfelt sympathy, often taking a concrete form through donations to help.  A happy new year to everyone and a better one for the unfortunate among us.  We can try to make it so.

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