Connect with us

Reports

Higher Productivity is Key to Thailand’s Future Economic Growth and Prosperity

Newsroom

Published

on

Thailand’s growth slowed to an estimated 2.5 percent in 2019 from 4.1 percent in 2018, due to external and domestic factors. The economy is projected to pick up moderately to 2.7 percent in 2020 as private consumption recovers and investment picks up due to the implementation of large public infrastructure projects. As Thailand seeks to transition to high-income status by 2037, boosting productivity and reviving private investment will be critical, according to the World Bank’s Thailand Economic Monitor report, released today.

Global economic growth is forecast to edge up to 2.5 percent in 2020 as investment and trade gradually recover from last year’s significant weakness but downward risks persist. These risks include a re-escalation of trade tensions and trade policy uncertainty, a sharper-than expected downturn in major economies, and financial turmoil in emerging market and developing economies.

“A continued deceleration of economic activity in large economies, China, the Euro Area, and the United States, could have adverse repercussions across the East Asia region, through weaker demand for exports and the disruptions of global value chains,” said Birgit Hansl, World Bank Country Manager for Thailand. “Financial investment, commodity, and confidence channels could further weaken the global economy and adversely impact Thailand’s exports.”

In 2019, declining exports and growing weaknesses in domestic demand were the key drivers of the slowdown in growth in Thailand. Agricultural commodity exports declined by 7 percent in the first three quarters of 2019, led by sharp decreases in export volumes for major products such as rice and rubber. Manufacturing exports declined by 6 percent in the same period, with electronics exports hardest hit. Thailand’s strong currency, which has appreciated by 8.9 percent since last year, making the baht the strongest it has been in six years, has also impacted international tourism and merchandise exports.

The government has responded swiftly to the growth slowdown, through accommodative monetary policies and a fiscal stimulus package to boost economic growth. Going forward, the report recommends the governments consider policies to enhance the effectiveness of the stimulus by focusing on implementing major public investment projects, improving the efficiency of public investment management, and providing social protection coverage for vulnerable families.

The recent growth slowdown has highlighted Thailand’s long-run structural constraints, with slowing investments and low productivity growth. In the last decade, Thailand’s productivity growth has fallen to 1.3 percent over 2010-2016 from 3.6 percent over 1999-2007. Private investment has halved from 30 percent of GDP in 1997 to 15 percent in 2018, as foreign direct investments slowed, and progress stalled on projects under the Eastern Economic Corridor.

The report projects that if current trends continue, with no significant pickup in investment and productivity growth, Thailand’s average annual growth rate will remain below 3 percent. To achieve its vision of being a high-income country by 2037, Thailand will need to sustain long-run growth rates of above 5 percent, which would require a productivity growth rate of 3 percent and increase investment to 40 percent of GDP.

“Boosting productivity will be a critical part of Thailand’s long-term structural reform,” said Kiatipong Ariyapruchya, World Bank Senior Economist for Thailand. “Increasing productivity, particularly of manufacturing firms, will depend on increasing competition and openness to foreign direct investments, and improving skills.”

Sustaining higher productivity growth will require removing constraints that prevents new firms, especially foreign firms, and skilled professionals from entering the domestic market. These constraints include lifting restrictive laws, particularly for the services sector, implementing the new Competition Act with clear guidelines related to state-owned enterprises and price controls, and developing policies to build the skills and human capital needed for an innovative knowledge-based economy.

Continue Reading
Comments

Reports

Curbing Corruption in the Midst of a Pandemic is More Important Than Ever

Newsroom

Published

on

Progress against corruption can be made even under the most challenging conditions, a new World Bank report finds. At a time when unprecedented levels of emergency funds have been mobilized to respond to the COVID-19 pandemic, the report offers a fresh look at some of the most effective approaches and tools to enhance government accountability.

Enhancing Government Effectiveness and Transparency: The Fight Against Corruption focuses on ways to enhance the effectiveness of anti-corruption strategies in the sectors most affected. It serves as a reference guide to policy makers and anti-corruption champions as further work is needed to sharpen the application of traditional tools.

“The COVID-19 pandemic has resulted in large scale emergency spending by governments at rapid speed to revive the economy as well as protect the poor and vulnerable who suffer disproportionately. As countries embark on the road to a more resilient and inclusive recovery, prudent use of scarce resources in a transparent manner is critical,” said World Bank Managing Director Mari Pangestu, “Progress is possible in all environments and we are committed to work closely with our partners in government, civil society, and the private sector to address corruption and its corrosive impacts.”

Some of the unprecedented emergency spending against COVID-19 has occurred without adhering to the regular checks and balances. While speed is understandable, without proper controls, it exposes governments to a variety of corruption risks that may undermine the effectiveness of their responses. To foster greater accountability, the report calls on governments to clearly articulate their actions, enforce rules, address violations, and remedy problems as quickly as possible, and in a transparent manner.

The report covers five key thematic areas: public procurement, infrastructure, state-owned enterprises, customs administration, and service delivery, and cross-cutting themes such as open government initiatives and GovTech, with case study examples from around the world. It will help equip public sector officials and civil society with a modular set of approaches and tools that can be drawn upon and adapted to their specific country context. 

The report’s case studies show that measures to curb corruption are often opportunistic, targeting specific areas of vulnerability where and when the political space allows. But even when actions have apparently limited impact, they can provide important foundation for future progress.

In Bangladesh, the implementation of the e-Government Procurement, combined with increased transparency and citizen participation, halved the number of single bidder tenders which improved competition significantly; increased the number of contracts awarded to non-local firms; and led to better prices with successful bidders.

Colombia updated its e-procurement system to publish data in an open way following international standards.  As a result, single bid tenders in the public roads agency, INVIAS, went down from 30% to 22%, while cities like Cali saw competitive processes increase from 31% to 56% in about two years.

In Ukraine, making wealth declaration forms of public officials available online was recognized by citizens and the international community as a key tool in the fight against corruption. The latest data shows that close to 5,3 million documents in the e-declarations system are accessible to the public. As of mid-2020, the High Anti-Corruption Court of Ukraine had 19 cases against officials accused of submitting false information in the Asset and Interest Declaration or intentionally not submitting a declaration.

In Afghanistan, the customs department has been progressively implementing a countrywide computerization of customs clearance operations. Although significant vulnerabilities exist and revenue loss at the borders remains a substantial challenge, revenue collected by customs has increased seven-fold between 2004 and 2019, and clearance time and the transparency of trade transactions has improved significantly.

The land reform program in Rwanda helped manage the conflicts around land and led to increased efficiency, transparency, citizen participation, and development of viable land governance institutions. Automation of land records reduced bribes paid to land registry officials as the information was in public domain.

“Institutions are incredibly important for implementing government policies, engaging civil society, and ensuring greater transparency in government operations,” said Ed Olowo-Okere, World Bank Global Director for Governance, “The global report highlights the importance of complimenting the traditional methods of dealing with corruption with advanced ones like GovTech and e-Procurement to address corruption, even in the most challenging and fragile environments.”

The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. We are supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans.

Continue Reading

Reports

A rapid rise in battery innovation is playing a key role in clean energy transitions

Newsroom

Published

on

Affordable and flexible electricity storage technologies are set to catalyse transitions to clean energy around the world, enabling cleaner electricity to penetrate a burgeoning range of applications. Between 2005 and 2018, patenting activity in batteries and other electricity storage technologies grew at an average annual rate of 14% worldwide, four times faster than the average of all technology fields, according to a new joint study published today by the European Patent Office (EPO) and the International Energy Agency.

The report, Innovation in batteries and electricity storage – a global analysis based on patent data, shows that batteries account for nearly 90% of all patenting activity in the area of electricity storage, and that the rise in innovation is chiefly driven by advances in rechargeable lithium-ion batteries used in consumer electronic devices and electric cars. Electric mobility in particular is fostering the development of new lithium-ion chemistries aimed at improving power output, durability, charge/discharge speed and recyclability. Technological progress is also being fuelled by the need to integrate larger quantities of renewable energy such as wind and solar power into electricity networks.

The joint study shows that Japan and Korea have established a strong lead in battery technology globally, and that technical progress and mass production in an increasingly mature industry have led to a significant drop in battery prices in recent years. Prices have declined by nearly 90% since 2010 in the case of lithium-ion batteries for electric vehicles, and by around two-thirds over the same period for stationary applications, including electricity grid management.

Developing better and cheaper electricity storage is a major challenge for the future. According to the IEA’s Sustainable Development Scenario, for the world to meet climate and sustainable energy goals, close to 10 000 gigawatt-hours of batteries and other forms of energy storage will be required worldwide by 2040 – 50 times the size of the current market.

“IEA projections make it clear that energy storage will need to grow exponentially in the coming decades to enable the world to meet international climate and sustainable energy goals. Accelerated innovation will be essential for achieving that growth,” said IEA Executive Director Fatih Birol. “By combining the complementary strengths of the IEA and the EPO, this report sheds new light on today’s innovation trends to help governments and businesses make smart decisions for our energy future.”

“Electricity storage technology is critical when it comes to meeting the demand for electric mobility and achieving the shift towards renewable energy that is needed if we are to mitigate climate change,” said EPO President António Campinos. “The rapid and sustained rise in electricity storage innovation shows that inventors and businesses are tackling the challenge of the energy transition. The patent data reveals that while Asia has a strong lead in this strategic industry, the US and Europe can count on a rich innovation ecosystem, including a large number of SMEs and research institutions, to help them stay in the race for the next generation of batteries.”

The joint study follows the publication earlier in September of the major IEA report Energy Technology Perspectives 2020, which has deepened the IEA’s technology analysis, setting out the challenges and opportunities associated with rapid clean energy transitions.

As governments and companies seek to make informed investments in clean energy innovation for the future, sector-specific insights like those offered by the joint study will be highly valuable, including for helping bring about a sustainable economic recovery from the Covid-19 crisis. The innovation study provides an authoritative overview of the technologies and applications receiving research attention – and of those that are underserved. It also shows where they stand in the competitive landscape.

Innovation is increasingly recognised as a core part of energy policy, and this year the IEA has been introducing more tools to help decision-makers understand the technology landscape and their role in it – and to track progress in innovation and the deployment of technologies. This includes a comprehensive new interactive guide to the market readiness of more than 400 clean energy technologies.

Continue Reading

Reports

Russia Among Global Top Ten Improvers for Progress Made in Health and Education

Newsroom

Published

on

Russia is among the top ten countries globally for improvements to human capital development over the last decade, according to the latest update of the World Bank’s Human Capital Index (HCI).

The 2020 Human Capital Index includes health and education data for 174 countries covering 98 percent of the world’s population up to March 2020.

Russia’s improvements were largely in health, reflected in better child and adult survival rates and reduced stunting. Across the Europe and Central Asia region, Russia, along with Azerbaijan, Albania, Montenegro, and Poland, also made the largest gains in increasing expected years of schooling – mainly due to improvements in secondary school and pre-primary enrollments. The report also shows that over the last 10 years Russia has seen a reduction in adult mortality rates. However, absolute values of this indicator remain high in the country with this progress now at risk due to the global Covid-19 pandemic.

Human capital contributes greatly to improving of economic growth in every country. Investments in knowledge and health that people accumulate during their lives are of paramount concern to governments around the world. Russia is among the top improvers globally in the Index. However, challenges persist and much needs to be done to improve the absolute values of Index indicators,” said Renaud Seligmann, the World Bank Country Director in Russia.

The HCI, first launched in 2018, looks at a child’s trajectory, from birth to age 18, on such critical metrics as child survival (birth to age 5); expected years of primary and secondary education adjusted for quality; child stunting; and adult survival rates. HCI 2020, based on data up to March of this year, provides a crucial pre-pandemic baseline that can help inform health and education policies and investments for the post-pandemic recovery.

Of the 48 countries in Europe and Central Asia included in the 2020 Human Capital Index (HCI), 33 are among the upper-third in the world, and almost all are in the top half. However, there are significant variations within the region.

In Russia, a child born today can expect to achieve 68 percent of the productivity of a fully educated adult in optimal health. It is at the average level for Europe and Central Asia countries and the third result globally among the countries of the same income group. There is a stark contrast between education and health subscales in Russia. While the education outcomes of the country are high and outperform many high-income peers, its health outcomes are below the global average.

Continue Reading

Publications

Latest

Environment41 mins ago

How environmental policy can drive gender equality

Environmental degradation has gendered impacts which need to be properly assessed and monitored to understand and adopt gender-responsive strategies and...

Economy3 hours ago

Long trends and disruption: the anatomy of the “post world” of the COVID-19 crisis

What will be the economic architecture of the world after the COVID-19 crisis? This question involves understanding the major trends...

Newsdesk5 hours ago

Business World Now Able to ‘Walk the Talk’ on Stakeholder Capitalism

The World Economic Forum today launched a set of metrics to measure stakeholder capitalism at the Sustainable Development Impact Summit....

Newsdesk7 hours ago

Countries urged to act against COVID-19 ‘infodemic’

The UN and partners have urged countries to take urgent action to address what they have described as the “infodemic”...

Economy9 hours ago

Flattening the Eastern Hemisphere through BRI: The Geopolitics of Capitalism

The Pivot of Asia: Conceptualizing the Peaceful Rise The Belt and Road Initiative is a trans-continental multibillion-dollar infrastructural network linking...

Environment11 hours ago

Climate Heat Maps Show How Hot It Could Get for Today’s Tweens

Climate-related impacts such as the wildfires in the western United States will only become more severe if we allow the...

Middle East13 hours ago

Arabs-Israeli Peace must be Well-Anchored, not Neatly Fantasized

Watching a few Emirati and Israeli citizens dance in Chabad House, Dubai to celebrate normalization may give the impression that...

Trending