The government has launched policies it believes will move Thailand up a notch in the industrial sector and enable its annual economic growth to surpass an average 4-5% each year, says Deputy Prime Minister M R Pridiyathorn Devakula.
While public attention remains focused on the slow pickup in the economy, M R Pridiyathorn told the Bangkok Post that initiatives are underway to move Thailand to the next level of economic development.
"This is a period of action for the future. It is a period of building a base," he said.
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For decades, economic growth depended on exports and manufacturing. But exports have slowed and in the past four years annual GDP has not exceeded 5%. Many Thai products face competition from neighbouring Asean countries.
"Our first strategy is to develop a new category of products, which will make us competitive," M R Pridiyathorn said.
These are products that competitors in Asean, namely Cambodia, Laos, Myanmar and Vietnam (CLMV countries), cannot produce. The crucial process of manufacturing is to create a supply chain.
Countries such as Thailand have advanced supply chains that can support products that need higher technology.
MR Pridiyathorn: Building a base
The Board of Investment has come up with a list of high-tech product lines which will attract promotional privileges, he said.
For example, Thailand has advanced food supply chain capabilities. Now promotional privileges will be given to the production of medical food with active nutrients.
It's a similar story for the production of eco-friendly polymers and hygienic pulp and paper, the deputy prime minister said.
Thailand should also move from the production of eco-cars to the production of hybrid and electric cars, he said.
Production of normal spare parts will move on to production of high technology, security, and energy-conservation spare parts, which are needed for the production of hybrid and electric cars.
More than 4,000 Thai companies are involved in making plastic products, with Thailand considered one of the centres for plastics manufacture in Asia.
Building on the industry already in place, the government will now move to promote bio-plastic products.
These are more difficult to produce but since Thailand already has a strong production base, the transition is possible.
Malaysia is one of Asean's top manufacturing countries, and 60% of its manufacturing is more advanced than Thailand's. This country remains number one in hard-disc production but is unlikely to catch up on production of other electronic products.
In that case, Thailand needs new product lines to attract foreign investors. The country needs to change and cannot remain idle, he said.
In the past, companies upgraded the quality of their products.
The government has come up with a new list of items to attract promotional privileges, which it hopes will attract more foreign investors here. One day, it could help make the country the industrial centre of Asean.
Foreign investors are interested in research and development, and industry-specific training centres.
There is interest, for example, in Thailand becoming a centre for training airline staff. The country needs to open itself to this type of centre, M R Pridiyathorn said.
The government has held roadshows in Japan to explain its promotional initiatives.
Many firms have shown an interest and started talks on where to head next.
