A new government is expected to be formed following the general election last month, riding the turbulent winds of geopolitical and technological change, which is likely to cause disruption.
Technocrats and economists believe the new government must stick with the current policy promoting the fourth wave of the Industrial Revolution.
Danucha Pichayanan, secretary-general of the National Economic and Social Development Council, said the new government should continue the restructuring of industry and agriculture.
STAYING CURRENT
In recent years, the government attracted foreign investments through various measures and incentives. The new government must work to build confidence in industry and among foreign investors, especially future industries and large trends such as automation, electric vehicles and upstream semiconductors, he said.
Technological change means traditional hard disk drives are being replaced by solid-state drives, which requires chip manufacturing plants, said Mr Danucha.
As the semiconductor industry is vital to Thailand's economic strength and global competitiveness, the government should come up with more attractive policies such as capital subsidies apart from tax incentives like import duty exemptions, he said.
"The world has gone digital, so these chips are important and will be the supply chain of future industry. We have to introduce new measures in order to attract investors," said Mr Danucha.
Regarding the agricultural sector, many farmers have adapted to new technology and now produce quality products. As more farmers get on in years, use of agricultural machinery to reduce labour requirements must be continued, he said.
Mr Danucha said another industry that has been relatively slow to change is education, which the new government should work to restructure.
The public administration sector has gone through comprehensive reforms and this effort should continue, especially when it comes to law, even though it may be time-consuming, he said.
In terms of digital transformation, the government has done a lot by utilising digital technologies to deliver end-to-end services to citizens, helping to facilitate contact with the government, and these efforts should be continued, said Mr Danucha.
FISCAL POLICY
Even as public debt has soared to more than 60% of GDP, government spending can regenerate income for the country if it is used for infrastructure investment, which is the country's economic foundation, he said. Rising public debt is still manageable if GDP continues to expand, said Mr Danucha. If there is an economic crisis and GDP shrinks, then debt could become a problem.
On the other hand, loans to finance economic stimulus schemes should be carefully considered, he said. The State Fiscal and Financial Act mandates the government exercise strict fiscal restraint and establishes fiscal rules and regulations on how the government must manage state income and expenditure.
In addition, he addressed the use of "quasi-fiscal policy", which is synonymous with the future use of money. Once spent, it is necessary to set a budget for repayment, which may restrict budget usage for other expenses such as investment, said Mr Danucha.
Following crises, fiscal and monetary policies in the next period should return to normal to maintain financial and fiscal discipline as well as to boost investor confidence about economic stability.
He said fiscal policy for vulnerable groups such as state welfare cardholders can occur if it is clearly targeted and there is a methodology as well as supportive measures for income generation, to enable them to break free from assistance in the future.
Given the challenges facing the global economy, including a possible US economic recession, unrest in Europe, and NATO talks to open a liaison office in Japan, Thailand needs a strong and resilient fiscal policy to cushion against international shocks, said Mr Danucha.
CARRYING ON
Assoc Prof Somchai Phakaphaswiwat, an independent academic in economics and politics, said the new government must continue four economic policies.
First, Thailand needs to maintain its economic shift as the world progresses from the digital age to artificial intelligence, the Internet of Things, and blockchain. The country is lagging behind in the areas of technology and innovation, human capital, and institutional frameworks such as government policy and support, he said.
Second, the country should continue its efforts to enter the global value chain, said Mr Somchai. Even as geopolitical conflicts may trigger deglobalisation, an interconnected global economy is not disappearing as investors continue to search for new production sources friendly to their interests, also known as friend-shoring, he said.
Third is a focus on mitigation and adaptation to climate change, including the use of renewable energy, while fourth is sustainable economic development, taking into account the impact on the environment, said Mr Somchai.
Regarding the Move Forward Party's pledge to increase the minimum daily wage to 450 baht, he said it would increase operating costs and reduce the country's competitiveness in terms of wages and labour skills compared with Vietnam.
Kanit Sangsubhan, a former special advisor to the Eastern Economic Corridor (EEC) Office, believes the new government should continue to support EEC projects because they play an important part in the 20-year National Strategic Plan on Competitiveness Enhancement. Budget tweaks can be pursued to help vulnerable groups such as low-income earners and small businesses, said Mr Kanit.
He said EEC projects have already helped the agricultural sector to increase productivity and improved education partnerships with companies in the EEC to train students.
Continuing EEC projects include U-tapao airport development, Laem Chabang Port development, and a high-speed railway connecting three airports. In the past four years, public and private investment in EEC projects totalled 1.6 trillion baht, including those focusing on shifting the auto industry to electric vehicles, automation, 5G and data businesses, and port development.
As most EEC projects enter their final phase, investment will increase to 2.2 trillion baht, notably for automation and the development of smart cities, he said.
The economy needs to grow at least 5% per year to generate enough income for development and to help those affected by the pandemic, said Mr Kanit. To expand at that level, Thailand must invest at least 600 billion baht per year, particularly in technology, he said.
