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2020 OECD Economic Surveys: Thailand 2020

Economic Assessment

image of OECD Economic Surveys: Thailand 2020

Thailand has made impressive economic and social progress over several decades. However, the COVID-19 crisis has interrupted this progress. Thanks to its sound macroeconomic policy framework, Thailand was well placed to respond rapidly to the sharp economic downturn. Nevertheless, achieving high-income country status will require, in addition to a strong recovery programme, a set of policy reforms focused on productivity growth and human capital accumulation. Thailand has made remarkable progress in expanding access to education, and the share of highly educated workers has increased significantly. Nevertheless, because of skills mismatches, substantial labour shortages have prevailed in a range of occupations and industries, which makes it important to improve vocational education and adult training programmes. As the demand for services has become important globally, Thailand has an opportunity to boost its exports of services, diversify its economic activity, and therefore become more resilient in the face of unexpected shocks. This would involve a focus on digital services and business-to-business services, which represent a large share of the value of manufacturing products. Focus on human capital, skills, digital technology, and high-value services would help Thailand resume strong economic growth and social progress after the COVID-19 crisis.

SPECIAL FEATURES: HUMAN CAPITAL; TRADE IN SERVICES

English

Making the most of international trade in services to achieve future economic prosperity

Services are an important part of global economic activity and of international trade. On top of the services supplied directly to consumers, services are also provided indirectly as components of manufactured goods. Digital services are a fast-growing sector and likely to remain so after the COVID-19 crisis and the rising reliance on contactless technologies. By contrast, services involving close proximity, such as tourism and international travel, have been hit drastically. To become a high-income country, Thailand needs to focus on high value-added services with policy support to the development of skills and technology. This chapter discusses how Thailand can seize the opportunity of growing international trade in services.

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