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Multi-dimensional Review of Thailand (Volume 2)

In-depth Analysis and Recommendations

image of Multi-dimensional Review of Thailand (Volume 2)

Thailand is a fast emerging country that aspires to become a high-income economy by 2037. Still, Thailand’s growth path has created large disparities that risk obstructing the next stage of development. This report lays out three transitions that Thailand needs to master to build capabilities and sustain faster but also more inclusive economic growth. First, the country should move from a growth path dominated by few and geographically concentrated sources of innovation to one that focuses on unlocking the full potential of all regions. Second, to support a new growth agenda, it should organise multi-level governance and the relationship between the many layers of government more effectively, particularly with regards to financial resources. Last but not least, Thailand should focus on water and environment, moving from a resource-intensive growth path with costly natural disasters to one characterised by sustainable development. In the case of water, this means moving from ad-hoc responses to effective management of water security.

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A new growth path: Unlocking the potential of regions

OECD Development Centre

Thailand’s growth path has created large disparities that pose a risk to development. However, a closer look at the country’s peripheral provinces and cities suggests that convergence is underway and that much can be done to boost this trend. Productivity drives economic performance and enables rising incomes. Policy makers therefore need to learn lessons from Thailand’s best-performing provinces and cities. This chapter examines previous policies designed to develop Thailand’s regions and assesses the resulting productivity landscape across regions. Given the limited available resources, past policies have focused on the few areas of the country that showed rapid success. Going forward, more broad-based and innovative regional policies that put local innovation in the driver’s seat, provide flexible support and that learn from best performers will be necessary. An analysis of provinces at the productivity frontier points to superior human capital and public services as the distinguishing attributes of high-performing provinces and cities. Based on these insights, regional policies will need to support cities as the centrepieces of integrated regional development policies and focus on skills development as a tool of regional and urban policy.

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