Thailand should use small investments in developing its digital economy to ensure cost benefits and effective returns, says a 1996 Nobel laureate for economics.
This would result in fewer problems for project financing and enhance the development time, said Prof James Mirrlees in an interview with the Bangkok Post.
Mirrlees: Advises one step at a time
"Attempts to have very large-scale projects have ended up being much more expensive and, in many cases, have had to be abandoned completely. The lesson from that is one should take things in smaller lumps, because they are more efficient," he said.
"The implication of that is how much you spend depends on how much is available."
Developing large-scale digital facilities can be problematic and ineffective, said Prof Mirrlees, citing Britain’s attempt to computerise all medical records of its National Health Service.
He said one should never do something because it is fashionable or modern but should make sure there were grounds for a return on investment and cost benefits.
Prof Mirrlees visited Bangkok last week as part of the 5th Asean "Bridges - Dialogues towards a Culture of Peace" series, organised by the International Peace Foundation.
The idea of developing a digital economy was floated by Deputy Prime Minister MR Pridiyathorn Devakula in a bid to create a pool of information resources across sectors regarding policies that could improve the economy's sustainability.
The overall picture of the digital economy will be seen in a year. Over the next two months, the legal structure will be prepared in the form of the ministries law and organic laws such as those regulating electronic transactions, online privacy and digital signatures.
Prof Mirrlees said the infrastructure projects might not increase Thailand's economic growth substantially next year, as they had not yet been initiated, but the idea of developing infrastructure was good.
Prof Mirrlees agrees with the proposed inheritance and land and buildings taxes that are on the table but said the concept of legacy taxation on inherited assets would have to be spread out over some years for a consensual arrangement.
However, the lowest tax bracket for personal income tax at 5% seems too low due to administration costs.