This article is a part of Background Paper : A Nation in Decline?, which will be presented in Thailand Future Forum #4  co-organized by Thailand Future Foundation and the Economic Reporters Association on 17 October 2013  at the Royal Meridien Plaza Athenee, Wireless Road

How did we get here?  A 20-year retrospective

Last article, we mentioned about 3 emerging symptoms that clearly indicate that all is not well with the country‘s health.    And today we will review some of the key development across different dimensions of Thailand’s development experiences.      It often helps to take the long perspective.  We can use the benefit of hindsight to distinguish between what were temporary blips and what were long-term underlying secular trends. 

  • The economy: More production but not productivity

    In 1990, Thailand’s 5-year average growth rate was the 6th highest in the world, but twenty plus years later as of 2012, our average growth rate ranks 81st in the world.  The drop in growth is readily explainable.  Because the country is aging rapidly, the growth in the labor force (the population aged 15-60) has dropped off from a compound average growth rate (CAGR) of 1.5% in the 1990s to only an expected 0.2% during the current decade, and is expected to turn negative by as early as 2018.  Fewer workers might not necessarily mean lower growth if those workers were more productive, but Thailand’s labor productivity growth has been lackluster.  There are myriad reasons for the sluggish productivity growth, but one worth highlighting is the sluggish recovery in investment. Without investment—more capital and technology—it is hard for workers to be more productive.  Thailand is the only country in the region where the actual level of investment (in real terms, excluding inflation) is still significantly below the level recorded prior to the 1997 Asian crisis.  Total investment in Thailand in 2012—both public and private—stood at about 80% of what it was in 1996, its pre-crisis peak.  Other Asian crisis countries have managed to get their investment above pre-crisis levels, e.g., Korea (117%), Indonesia (152%),  Malaysia  (111%).

    Neither has the country invested in knowhow.  Central to a country’s ability to “move up the value chain” and escape the middle income trap is improving its technological capability.  But not only is Thailand’s spending on R&D as a share of GDP low for its level of income (0.24%), it has also stagnated and even recently dropped. 

  • Social outcomes: Improved access without the quality

    People have been getting much improved access to education.  The percentage completing tertiary (vocational or university) education has more than doubled, from 14% to 33% over the same period.    The problem now is quality.  Thailand’s students have been scoring progressively worse in all the 3 areas covered by PISA: math, science, and reading.  The problem is mirrored by Thailand’s own O-net educational tests. If we take a look at 4 main subjects (Thai, English, math, and science) for Por. 6, Mor. 3, and Mor. 6 (the equivalents of grades 6, 9, and 12), they show that scores have dropped in almost every subject across almost every age group with few exceptions: Thai for Por. 6 and Mor. 3 and English for Por. 6.  

    But perhaps most worrisome on the social front are the problems associated with our youth.  40% of children are not living with (both) their parents: 17% are in single parent households and 23% are living with other relatives.   The average annual number of criminal cases committed by minors and juveniles has increased by 40% since 1996.  Most of these cases have been drug-related.  It is not just our youth that are having problems, but also the children of our youth.  In just 2011 alone, a staggering 114,000 kids were born to teen moms.   

  • Energy and the environment: from bad to worse

    Thailand is a country that is highly vulnerable to global warming.  Yet it is a substantial emitter of greenhouse gases.  Total annual CO2 emissions have increased nearly three-fold during the past 20 years.  We ranked 22th out of 186 countries globally in terms of greenhouse gas emission.  Underlying much of this is our wasteful use of energy.  As noted above, our energy intensity ranks among the worst in the world, despite being a country that is highly dependent on energy imports.    

    Neither have we been very diligent about curbing other forms of pollution.  Every day, we generate over 41,000 tons of garbage, up over 35% since 1990.  Over the past 10 years, we have generated enough garbage to fill a landfill the size of Koh Samui to a height of 5 meters. 

  • Governance: the critical missing piece

    On corruption,   we rank 88th out of 176 countries in the Corruption Perception Index and in the bottom 44th percentile for control of corruption in the World Bank Governance Indicators.  Despite the huge amount of newspaper column inches devoted to stories about corruption, successful high-level prosecutions are few and far between.  Accountability is limited. 

    On political stability, national politics in Thailand has been in the spotlight for quite some time.  Because we tend to think of political stability in terms of whether the government changes or not, we often do not pay sufficient attention to the lack of stability at the ministerial and civil servant level.  Even without any change in government, we have had 4 ministers of education over the space of just 2 years. The average tenure for a cabinet minister currently stands at only 11 months and governors among our 20 largest provinces only 17 months.      

    And what needs to be done to address these symptoms of decline?
       What we need to do to improve for our health and wellness?      Let’s go and brainstorm together in Thailand Future Forum No.4 :  “A nation in decline?”  co-organized by Thailand Future Foundation and the Economic Reporters Association  on this coming 17 October 2013 at the Royal Meridien Plaza Athenee.