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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

Indonesia: Balanced politics amid major powers

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In 2020, Russia and Indonesia will mark 70 years to the establishment of  diplomatic relations between the two countries. Given that the epicenter of the geopolitical activity is currently shifting towards the Asia-Pacific Region (APR), the role of Indonesia as the planet’s strategically important location increases.

Along with Russia, there are a number of other countries that are as keen on developing ties with Indonesia. One of them is Australia, which is particularly active due to its geographical location.

Indonesia and Australia boast a comprehensive bilateral strategic partnership agreement, which defines them as “strategic anchors of the Indo-Pacific Region”. According to tradition, each newly elected Australian Prime Minister pays his first foreign visit to Indonesia. Prime Minister Scott Morrison, who took office on August 24, 2018, kept the tradition as well.

In Jakarta, Morrison met with Indonesian partners to discuss the details of a strategic cooperation agreement, which envisages economic cooperation, security measures, exploitation of marine resources, ensuring stability in the Indo-Pacific Region and social projects.

According to the Jakarta Maritime Policy Strategy (Global Maritime Fulcrum), Indonesia is regarded as the fulcrum between the Indian and the Pacific. Canberra also sees Jakarta as key to Australia’s defense strategy.

Indonesia’s territory embraces most of the archipelagoes north of Australia and these make a convenient springboard for a hypothetical threat to the Australian coast. In addition, Indonesia stands at the junction of marine and air routes from Australia to Europe and from Australia to Asia-Pacific countries. Joint naval exercises run by the Indonesian and Australian defense ministries account for 24% of the total, while 33% of the drills are held by the Air Forces, 30% by special services and special task forces, and 2% by the peacekeeping contingents.

Australia became the third country with which Jakarta signed a comprehensive strategic cooperation agreement after the United States (2013) and China (2015). In 2017, the two parties signed the Joint Declaration on Maritime Cooperation, in 2018 – the Maritime Cooperation Action Plan, covering 85 areas with the participation of 17 Australian and 20 Indonesian departments and agencies.

Australia finds Indonesia more important than Indonesia finds Australia. As a single continent, Australia attaches particular importance to foreign policy with a view to ensure its national security. As for Indonesia, it has a more introverted policy. Being the largest island nation on the planet, Jakarta aims to guarantee its security through internal consolidation of the many islands that make up the Indonesian state.

Pursuing the policy of “non-alignment”, Indonesia seeks to diversify foreign economic and foreign policy relations. This becomes clear from the previous development of the Indonesian-Australian relations: Jakarta would quickly freeze projects with Canberra once it spotted a disproportionate presence of Australia in Indonesian politics.

That was the case in 1999 when Jakarta withdrew from the Security Agreement, signed in 1995, in 2013 when it suspended defense cooperation and cooperation between special services, and 2016 when it suspended the language training of military personnel.

For Indonesia, a multi-vector foreign policy is crucial for maintaining a healthy balance of power in the region. For this reason, Moscow is an attractive economic partner for Jakarta. That Russian-Indonesian contacts have been developing at fast pace can be concluded from the fact that there have been several meetings between the two countries’ presidents, that Russia has been supplying Indonesia with weapons, that the two countries’ armed forces have held joint exercises, that Indonesian representatives have participated in business forums in Russia and that the Russian capital has revealed in interest in Indonesia’s projects in the mining industry.

Jakarta and Moscow are considering prospects for the introduction of a free trade zone in Indonesia and the EEU. Indonesia is also ready to join the Chinese global infrastructure project “One Belt, One Road.”

Under the project, Chinese investments in the Indonesian transport infrastructure amount to $ 6 billion, which is clearly not enough for a rapid growth of transit of commodities and haulages from China and the Asia-Pacific countries through Indonesia. Indonesia’s medium-term economic development plan stipulates local financing at 63% (4). The rest should come from foreign investors, which could include Russia.

First published in our partner International Affairs

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Southeast Asia

Improving Vocational Education in Thailand: An interview with Khunying Sumonta Promboon

Rattana Lao

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Her Royal Highness Princess Maha Chakri Sirindhorn visited Chitlarada Technology College with a welcome by Associate Professor Khunying Sumonta Promboon, the President of Chitralada Technology College

Bangkok – When robots are advancing and industries are playing catch up to technological advancement, vocational education plays a pivotal role in national development. Instead of arcane theory, vocational education trains students with sophisticated, hands on and practical skills needed to excel in the world of work. Vocational training offers an up to date and cutting edged techniques for students not only comply but push technical boundaries forward. Countries that excel in their industrialization all champion vocational education – Germany, China and Taiwan to name but a few.

Thailand, despite setting its eyes for Thailand 4.0 to transform its economy to digitalization, automation and robotics, is falling behind the race to the top. The World Bank found that 40% of the top tier international firms reported the inadequate skills as the major constraint. While the country is in much needed position for vocational education, there are only 1 million students in vocational school comparing to 2.5 millions in higher education. Although the country has more than 900 vocational colleges, students opt for higher education because better images and prestigious. When news about vocational education in Thailand are filled with images of violent students and gang fights amongst students, there is a dire need to reform this important sector. Rattana Lao, Program Officer in Policy and Research at the Asia Foundation, talked to Associate Professor Khunying Sumonta Promboon, the President of Chitralada Technology College on ways in which Thailand vocational education can reform itself to better respond to national demand: One step at a time.

What role should vocational education play in Thailand?

Vocational education should be the main educational track to educate and encourage young students to partake in the national development of the country. After receiving basic education of grade 1 to 9, the majority of students should enroll in vocational education. However, the case of Thailand is different. The majority of Thai students like to enroll in basic education of grade 10 to 12 and continue to enroll in universities rather than vocational education.

How can one promote vocational education?

Many factors need to be taken into account in order to incentivize more students to enroll in vocational education.

Firstly, students need to have guaranteed employment. Such employment should begin when they are still students, an internship of some sorts. This requires a close collaboration between educational institutes and corporates. A symbiosis between the two stakeholders is necessary. This is not widespread in Thailand. The opportunities are still inadequate and limited to a few top students in colleges rather than available equally to all students.

Secondly, the social attitude must change. In Thailand, parents want their children attend higher education and receive bachelor degrees, master degrees and PhD. To change this attitude, it will take time. It goes back to the first point that students need secure employment.

We incorporated these ideas into the creation of Chitralada Technology College. We want to take lead in enabling students who take vocational education with us being able to transfer into higher education later on– making the opportunities for education and employment aligned.

What are the problems of vocational education in Thailand?

The first problem is the social bias. People prefer basic education because its more prestigious. The second problem is students do not know the diversity of career paths. They know only limited choices of teachers, soldiers and doctors. The educational counselling in Thailand needs an improvement.

What does Chitralada Technology College try to do?

There are two institutes within the same umbrella. The first is Chitralada Vocational School and the second is Chitralada Technology College. There are total number of 800 students in these two institutes. Although we are small in sizes, we would like to lead best practices in term of vocational educational practices. There are many programs that we offer for students.

What is your strategy to promote vocational education in Thailand that is different from others?

We have extensive networks of 67 businesses throughout Thailand as well as partnered with other organizations. In total, we have MOUs with more than 80 institutions. We partnered with Singapore, China and Germany.

Can you give examples?

With China, we partnered with Leshan Vocational Technical College. They accept our students’ exchanges for culinary school. There is also Tienjin Sino-German Vocational Technical College that we partner about mechatronics. With Singapore, we work with Singapore Polytechnique. We are beginning to initiate exchanging programs with Temasek and Singapore Polytechnique. Last year, we took Singapore students to Sumutsongkarm to visit local communities who produce shrimp pastes. It’s impressive idea they are creating. There is also Senior Expert Project we partner with Germany. Mostly it is about mechanics and mechatronics.

How do these collaborations help Thailand?

These are successful countries who implemented vocational education and we can learn from them.

There are a lot of pictures of Her Royal Highness Princess Maha Chakri Sirindhorn. How does HRH inspire this college?

Her idea is to educate students according to their talents. Those who do not like academic track should have the opportunity to pursue other alternatives. Her Royal Highness plays a monumental role to guide our college’s direction and inspires us to excel. When HRH visits other countries, HRH enables the college to expand our collaboration with successful institutions from abroad.

We want to change the images of vocational students in Thailand from being violent students to be responsible students.

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Indonesia shaping the South East Asian foreign policy of India and Sri Lanka

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Authors: Srimal Fernando and Megha Gupta*

Indonesia with more than 17,000 islands, occupies a key geopolitical position in the ten-member Association of Southeast Asian Nations (ASEAN) regional bloc. In the recent past Indonesia has been trying to strengthen its foreign policy outlook both diplomatically and economically through bilateral or multilateral means.

Indonesia with its large population, military capabilities, vast territory and rich natural resources in Southeast Asia is trying to align with India possessing similar power potentialities in South Asia. With this strategy in mind Indonesia has been trying to access the 1.3 billion Indian consumer market and also has been trying to cooperate with Sri Lanka due to its vital geographical position in the Indian Ocean. In this regard, there has been a growing bilateral and trilateral interest among these three countries such that they can tap into the consumer and producer market hence generating higher revenue. However, these three financial hotspots have found themselves in the forefront of challenges posed by globalization and this makes it vital for them to revive their cooperation in different areas.

Over the past few decades, Indonesia has made several development landmarks through restructuring its polity and society. The economy and foreign policy goals of this nation have constructively transformed from President Sukarno to Joko. Furthermore, in the 1980’s Indonesia also took a large step in establishing the regional body of ASEAN. Since then for more than a quarter century, ASEAN has been the most important reason for bilateral and multilateral engagements between Indonesia and the two South Asian countries.

Currently, the two-way trade between Indonesia and India stands at about $18.13 billion according to the Indonesia’s Central Statistics Agency (bps).  With this mutually beneficial relationship, in the coming years Indonesia and India are planning to enhance their bilateral trade to $50 billion. There is also said to be an increased strategic, defense and security partnership between the two which got reiterated with the state visit of the Indonesian President Joko Widodo.

Similarly, the trade between Indonesia and Sri Lanka has doubled from $418 million in 2011 to around a billion dollar in the recent past and the ties between the two is set to improve further with the establishment of a future Free Trade Agreement (FTA). The year 2018 has also marked the 66th Anniversary of the diplomatic relationship between Indonesia and Sri Lanka where the visit of the Indonesian President after 40 years saw the signing of a series of agreements between the two island nations.

Since the Bandung Summit of 1955, the Indonesia’s relationship with India and Sri Lanka has been strong. Later ASEAN has played a leading role in making this partnership grow further. However, India’s cooperation with Indonesia and ASEAN serves as a test bed for the new ideas to grow between the two regions.

Indonesia positioned between Southeast Asia and Australasia is a crucial gateway for India and Sri Lanka to further their foreign, economic and security endeavors in these two regions.

*Megha Gupta, a scholar of Masters in Diplomacy, Law, Business at Jindal School of International Affairs, India.

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