World Bank report highlights challenges and opportunities facing Thailand
While Thailand has demonstrated strong economic management, it faces obstacles such as inadequate human capital, lagging productivity, infrastructure gaps, environmental degradation, and weak institutions.
The 2024 Systematic Country Diagnostic (SCD) Update for Thailand highlights the challenges and opportunities facing the country.
Key Points
- Thailand’s economy faces challenges from inadequate human capital, lagging productivity, and infrastructure gaps, hindering its growth potential.
- Climate change and environmental degradation pose significant risks to Thailand’s long-term economic and social well-being, requiring sustainable development and protection measures.
- Institutional reform is crucial for Thailand to achieve strong, inclusive, and sustainable growth, with a focus on promoting accountability, transparency, and efficient public services.
While Thailand has demonstrated strong economic management, it faces obstacles such as inadequate human capital, lagging productivity, infrastructure gaps, environmental degradation, and weak institutions.
To revitalize growth and achieve high-income status by 2037, the update outlines five high-level outcomes: strengthening human capital, fostering a competitive and innovative economy, promoting low-carbon urban development and connectivity, advancing sustainable development and climate resilience, and reforming enabling institutions.
Key proposed actions include improving education and labor force participation, enhancing competition and innovation, addressing infrastructure and connectivity challenges, mitigating climate risks, and promoting inclusive and transparent institutions
The Thailand 2024 Systematic Country Diagnostic (SCD) Update provides valuable insights into the country’s reform priorities for social and economic development.
Here are the key challenges outlined in the Thailand 2024 SCD:
- Inadequate Human Capital:
- Learning Outcomes: Thailand faces poor learning outcomes, hindering its progress toward becoming an inclusive, skills-based, and innovation-driven country.
- Ageing Population: The ageing population poses challenges, affecting workforce dynamics and productivity.
- Sub-Optimal Female Labor Force Participation: Ensuring equal participation of women in the labor force remains a priority.
- Exclusion of Vulnerable Groups: Some vulnerable groups lack access to essential resources such as education, healthcare, economic opportunities, and social services.
- Lagging Economy:
- Productivity Challenges: Weak competition and restrictive trade policies in the services sector hinder business innovation and productivity growth.
- Dominance of Large Firms: A few large firms and state-owned enterprises dominate the market, limiting competition and efficient resource allocation.
- Low Entry Rates for SMEs: Small and medium-sized enterprises (SMEs) struggle to enter the market, impacting overall economic progress.
- High Household Debt: Household debt remains a concern.
- Infrastructure and Connectivity Gaps:
- Bangkok-Centric Development: Bangkok drives the economy, leading to uneven development. Secondary cities face infrastructure challenges due to financial constraints and centralized planning.
- Land and Sea Links: Domestic and regional connectivity is hampered by challenges in land and sea transportation.
- Digital Potential: Thailand’s digital potential is hindered by data usage limitations.
- Environmental Degradation and Climate Risks:
- Climate Vulnerability: Thailand’s long coastlines and fragile agriculture system make it susceptible to climate change and extreme weather events.
In summary, addressing these challenges is crucial for Thailand to revitalize growth, achieve high-income status by 2037, promote equity, and build a sustainable, climate-resilient economy
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