41083 June 2007 World Bank's East Asian Renaissance Report Offers Insight into Thailand's Biggest Challenges "An East Asian Renaissance: Ideas for Economic Growth" is the World Bank's 4th comprehensive report on the region's economic and social performance. According to prominent Thai businessman, Jingjai Hanchanlash (above), the report also offers an insight into Thailand's development priorities The World Bank's recent report (TDRI) and the World Bank. The discussion "An East Asian Renaissance: Ideas kicked off the World Bank's seven-country for Economic Growth" which focuses tour to highlight the findings of the study. on economic and social forces that have Co-authors Dr. Homi Kharas, a transformed the region since the 1997- visiting fellow at the Brookings Institute in 98 financial crisis, offers an insight into Washington DC (and formerly the Bank's Thailand's biggest development priorities, ChiefEconomistforEastAsia&Pacific),and said leading members of the Thai private Dr. Indermit Gill, the World Bank's Acting sector and academia say. Chief Economist for East Asia & Pacific, "It mirrors back to us the issues were at the event to present the findings surrounding our own competitiveness and discuss what they mean for Thailand. vis-ā-vis other East Asian countries," say An East Asian Renaissance: Jingjai Hanchanlash, chairman of the Ideas for Economic Growth is the fourth ACMECSBusinessCouncil,aregionaltrade comprehensive report on the region's and investment promoting body based in economic and social performance by the Bangkok. World Bank since 1993. It finds that, ten "This report helps us to recognize years after the 1997 financial crisis, East that, if we don'tadjustourpolicies,wecould Asia has transformed itself by creating more fall behind others in the region," he adds. competitive and innovative economies. Mr. Jingjai joined more than 100 However, the region must now representatives of the private sector, the turn to the urgent domestic challenges of Royal Thai Government, the academia, and urbanization, inequality, and corruption the press at the East Asian Renaissance arising from its success, the report says. seminar on May 28, co-organized by Thailand Development Research Institute continued on page 2 Page 1 continued from page 1 has absorbed millions of migrants from within Thailand and around the world. For Thailand, the biggest challenges are how to strengthen innovation and make urbanization more balanced, Dr. Gill notes. Without new ideas and innovation, the Kingdom will find it difficult to move up the value-added chain. Meanwhile, Thailand's reliance on Bangkok to generate much of the country's annual output, if continued, could widen inequality and increase urban-rural tensions, he adds. Research and development (R & D) spending in East Asia has almost doubled Bangkok has served Thailand well in the past. But a more balanced urbanization policy is needed to over the last decade, and most of the R&D help Thailand sustain growth was carried out within the business sector (60 per cent), the report finds. While But Bangkok cannot be realistically Thailand has been able to boost productivity expected to absorb the many new migrants by plugging into regional trade and finance that are expected to move to cities in the networks, its R&D spending remains low ­ next 25 years. As a result, Thailand needs a at 0.2 per cent of gross domestic product. more balanced urbanization going forward In addition, research collaboration to sustain growth. It also has to manage between universities and private firms in large rural-urban inequalities. Thailand is relatively weak. This, the report "Thailand has integrated globally says, has translated into low patenting and and gained market access. It has integrated poor knowledge assimilation by businesses. regionally and become more competitive. It "Thailand has increased investment now needs a third wave of integration, this in higher education since 1990s; now it time domestic, to keep the economy strong should pay attention to R&D in firms and and inclusive," says Dr. Kharas. universities" in order to improve the value of its output, Dr. Gill says. To download a copy of "An East Asian Commenting on the report, Dr. Renaissance: Ideas for Economic Growth," please visit www.worldbank.org/eap Somkiat Tangkitvanij, TDRI's Research Director, suggests that the level of For more information about the World Bank patenting may not paint a realistic picture of in Thailand, please visit www.worldbank.or.th innovation in the country. "Most of the Thai companies granted U.S. patents were not wholly owned by Thai people, but were multinational companies,"saidDr.Somkiat,wholeadsthe information economy research team at Thailand's most reputable think-tank. "This suggested to me that the innovation reality in Thailand may be even bleaker than presented by Renaissance," he adds. As in many East Asian countries, Bangkok is where most economic activity in Thailand takes place. Itsgoodinfrastructure­ports,roads, logistics and aviation systems are among them­hasconnectedThailandtotheoutside world,andBangkokitselftootherThaicities. It accounts for 40 per cent of the GDP and Page 2 Time to Refocus On "Core Mission" ­ World Bank's Vice President for East Asia and Pacific With resolution of the questions work on the ground with Governments and surrounding the World Bank's leadership, other development partners. the Vice President for the Bank's East Asia and Pacific Region, Jim Adams, has called for renewed focus on the organization's core mission. "With this issue resolved and behind us, we can now focus all our efforts on the considerable development challenges in East Asia and the Pacific," Mr. Adams said. "That includes providing people with accesstobasicservices,helpinggovernments deal with a return to civil conflict, filling the infrastructure gap or providing advice on how to deal with income inequality. The list of challenges is long, even in a region that In Thailand, the World Bank has developed a has grown so quickly. We continue to have knowledge-sharing partnership program with the a major role to play, and we can now put Thai Government to support Thailand's economic and social development agenda all our effort and time into it." This year, the Bank expects to commit over US$4 billion in low-interest loans and grants to the East Asia and Pacific region. Among other things, Bank funding over the past year has translated into: new houses for thousands of people in Yogyakarta made homeless by the 2006 earthquake, improved livelihoods for rural people in six Mongolian provinces, and better sanitation in urban areas of China, Vietnam and the Philippines. In the Pacific country of Kiribati, the Bank also supported infrastructure and World Bank funding helped build new houses for other investments in partnership with other people in Yogyakarta made homeless by the 2006 earthquake donors that help to address the risks and impactsofclimatechange,aswellasclimate "However difficult the process has variability. been to resolve this crisis, we are determined For more information about the World to confront governance matters front-on Bank in East Asia and the Pacific, contact within our institution, in the same way that Elisabeth Jane Mealey at we encourage our client countries to do," Mr emealey@worldbank.org, or visit Adams said. "We look forward to supporting www.worldbank.org/eap countries of the East Asia and Pacific region to tackle the challenges they face." The World Bank supports more than20countriesintheEastAsiaandPacific region through grants and low-interest loans for activities aimed at boosting economic growth, reducing inequality and improving people's living conditions. To support this work, the Bank provides technical and policy experts to Page 3 Don't Miss Our Upcoming Events! June 14: Launch of the World Bank's Thailand Environment Monitor 2006 Siam City Hotel, Phayathai Road, Bangkok 8:30 am-12:30 pm Contact: Tanyathon Phetmanee Tel. (0) 2686-8300 ext 8363 E-mail: tphetmanee@worldbank.org June 29: Supporting Youth Voices: Inter-regional seminar on the World Development Report 2007: Development and the Next Generation Thailand Global Development Learning Network (GDLN) Center Chulalongkorn University, Bangkok 8:30 am ­ noon Contact: Tinnakorn Sareenun Tel. (0) 2686-8300 ext 8327 E-mail: tsareenun@worldbank.org If you are of the ages between 12-24 and live in Thailand, we would like to invite you to an E-discussion forum ahead of the Supporting Youth Voices seminar (see above for detail, or visit www.worldbank.or.th). Many young people in Thailand are concerned about getting jobs after graduating from college. They also need the education that prepares them for the changing needs of the job market. To engage Thai youth and policy makers and encourage a meaningful exchange ahead of the Supporting Youth Voices seminar, the World Bank Office Bangkok is sponsoring an E-discussion forum called Youth Voices. This forum is active now until June 30. Young people and policy makers will be able to use this forum to share concerns and exchange ideas on how to address youth employment in Thailand. If you would like to be part of this discussion, please log on to www.dgroups.org/groups/worldbank/YouthVoices.index.cfm and register. For more information about Youth Voices, contact our External Affairs team at (0) 2686-8300. Do you want to switch to E-news? If you wish to receive by e-mail the World Bank's monthly newsletter and information about upcoming seminar, workshop and other World Bank events, please fill in the enclosed form and mail it back to us. We thank you in advance for participating in this survey. For comments or questions about this newsletter, Tel.: 0-2686-8300 please contact Mr.Tinnakorn Sareenun Fax: 0-2686-8301 The World Bank Office,Bangkok Email: tsareenun@worldbank.org Siam Tower,30th Floor,989 Rama I Road,Pathumwan,Bangkok 10330 Website: http://www.worldbank.or.th Page 4