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OECD MULTI-DIMENSIONAL COUNTRY REVIEW - THAILAND
INITIAL ASSESSMENT REPORT
Bangkok, 9 April 2018
OECD Team for MDCR of Thailand
http://www.oecd.org/eco/surveys/multi-dimensional-review-thailand.htm
• Sustained economic growth has brought about impressive social progress.
• However, there remain development constraints across each of the 5 pillars of the sustainable development goals (SDGs).
• Further reform is needed to meet the SDGs and transition to an inclusive, high-income country.
2
Main messages
People: Towards better lives for all
3
4
Regional inequalities have narrowed but remain pronounced
0
5
10
15
1995 2000 2005 2010 2015
Thailand’s ratio between the richest and poorest region Regional GDP per capita gap
0
5
10
15
20
Korea OECD average China Thailand Malaysia Indonesia
Regional GDP per capita gap
Ratio between the richest and poorest region, 2015
Source: Panel A: Thailand National Statistical Office (2014), Economic Indicators; Panel B: calculations based on OECD (2013a), OECD Regional Database, and national statistical office data from Thailand, Malaysia and Indonesia
5
Precarious employment remains widespread
Source: World Bank, World Development Indicators
% of precarious employment in total employment, 2017
0
10
20
30
40
50
60
Sing
apor
e
South
Afric
a
OECD
Polan
d
Kore
a
Malay
sia
Mexic
o
Turke
y
China
Philip
pines
Colom
bia
Thail
and
Indon
esia
Vietn
am
6
The old-age allowance alone cannot guarantee income security for the elderly
0
200
400
600
800
1000
1200
1400
60 65 70 75 80 85 90 95 100+
Universal old age allowance National poverty line
Monthly universal old-age allowance by age, THB
Source: Schmitt, V., T. Sakunphanit and O. Prasitsiriphon (2013) Note: The national poverty line refers to the minimum monthly cost of basic food.
7
Social protection is comparatively well targeted but still disproportionately benefits the non-poor
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
Indonesia Philippines Thailand Viet Nam China Singapore Malaysia Korea
Non Poor Poor
Social Protection Index, 2013
Source: Asian Development Bank (2013), The Social Protection Index Assessing Results for Asia and the Pacific, Mandaluyong. Note: The Social Protection Index (SPI) is total expenditures on social protection divided by the total number of intended beneficiaries of all social protection programmes, normalised by poverty-line expenditures (which for cross-country comparability purposes is set uniformly at 25% of GDP per capita). A SPI of 0.10 would thus be equivalent to 2.5% of GDP per capita. A higher SPI denotes better social protection.
8
The quality of education needs to improve
350
390
430
470
510
550
2003 2006 2009 2012 2015
Maths Reading Science
350
390
430
470
510
550
Indonesia Thailand Malaysia OECDaverage
Viet Nam China
Maths Reading Science
Source: OECD (2016b), PISA: Programme for International Student Assessment; OECD Education Statistics (database). Note: China refers to the four PISA-participating Chinese entities: Beijing, Shanghai, Jiangsu and Guangdong. Coverage of Malaysian schools in PISA 2015 fell short of the standard PISA response rate so results may not be comparable to those of other countries.
PISA scores
9
Too few students graduate in courses meeting industry needs
0
5
10
15
20
25
30
35
40
45
Thail
and
South
Afric
a
Indon
esia
Viet
Nam
OECD
Turke
y
Polan
d
Colom
bia
Mexic
o
Kore
a
Malay
sia
Sing
apor
e
Source: UNESCO-UIS (2017), Education (dataset), UIS Data Centre, http://data.uis.unesco.org/. Note: STEM courses include natural sciences, mathematics and statistics programmes; information and communication technology programmes; and engineering, manufacturing and construction programmes.
Enrolment ratio in STEM subjects, Latest available year, %
• Encourage formalisation through tax and regulatory measures. Harmonise social protection schemes
Social protection system excludes many
informal workers
• Index non-contributory allowance for older people to minimum required living costs
Inadequate pension benefits
• Strengthen teacher capacity, curriculum coherence, student assessment procedures and ICT use in schools
Poor education outcomes
• Expand co-operation between vocational institutions, academia and the private sector in course development
Large skills mismatches
10
People - key constraints and selected recommendations
Prosperity: Boosting productivity
11
12
Faster growth is needed to catch up
0
10
20
30
40
50
60
70
80
90
100
1970 1980 1990 2000 2010 2016
Indonesia Malaysia Philippines Korea Thailand Viet Nam
GDP per capita, % of OECD average, computed at 2016 PPP USD
Source: Conference Board (2017), Total Economy Database, Datastream, and OECD calculation Note: In 2016, Thailand’s per capital GDP in USD PPP was 17 359, versus an OECD average of 41 776
13
Labour productivity can be boosted
-202468
101214
OECD
aver
age
South
Afric
a
Mexic
o
Kore
a
Colom
bia
Malay
sia
Polan
d
Sing
apor
e
Turke
y
Thail
and
Philip
pines
Indon
esia
Viet
Nam
China
%
2001-05 2006-10 2011-16
Average labour productivity growth per employee per year
Source: OECD calculations based on data provided by national statistical office and Datastream; OECD, Productivity Statistics database
14
R&D outlays remain below some comparators
Note: The 2% R&D expenditure target included in the STI Plan was subsequently revised down in the 12th Plan to 1.5%. 2013 for Indonesia, Philippines, Viet Nam, and South Africa, 2014 for Turkey and Singapore. Source: UNESCO-UIS (2017), Science, Technology and Innovation (dataset); UIS data Centre; OECD, Gross domestic spending on R&D
Gross expenditure on R&D, % of GDP, 2015
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Indon
esia
Philip
pines
Colom
bia
Viet
Nam
Mexic
o
Thail
and
South
Afric
a
Polan
d
Turke
y
Malay
sia
China
Sing
apor
e
OECD
Kore
a
%
2011 level 2021 target
15
There are high barriers to services trade Pilot exercise of OECD Services Trade Restrictiveness Index
00.10.20.30.40.50.60.7
CHL
KOR
JPN
DEU
LVA
IRL
CZE
NZL
GBR
LTU
AUS
NLD
FRA
ZAF
LUX
EST
DNK
SVK
ITA
SVN
POL
ESP
FIN
AUT
CAN
BRA
USA
CRI
SWE
COL
PRT
HUN
MEX
TUR
BEL
CHN
CHE
GRC
NOR
RUS
IND
ISR
THA
IDN ISL
Construction services Regulatory transparency Barriers to competition Other discriminatory measuresRestrictions on the movement of people Restrictions on foreign entry AverageSTRI 2014
00.10.20.30.40.50.60.7
LVA
CHL
DNK
JPN
AUS
NLD
KOR
USA
LTU
SWE
NZL
IRL
DEU
COL
CAN
LUX
NOR
MEX
FIN
ESP
CHN
GRC
GBR
ZAF
BRA
CRI
CZE
ITA
TUR
RUS
CHE
IDN
AUT
HUN
ISR
BEL
ISL
SVN
EST
PRT
THA
POL
FRA
SVK
IND
Architecture services
Regulatory transparency Barriers to competition Other discriminatory measuresRestrictions on the movement of people Restriction on foreign entry AverageSTRI 2014
Note: Full openness to trade in services gives a score of zero, while complete closure to foreign services providers gives a score of one. Source: OECD (2017), Services Trade Restrictiveness index database
• Invest in lifelong learning and skills training
• Upgrade business skills and foster greater ICT use in agriculture
Slow economic advancement, notably
in the agriculture sector
• Ensure institutional coordination. • Boost public R&D spending to no less than
1.5% of GDP by 2021, as planned
Low innovation and commercially viable
research
• Create a lower-cost bourse in the stock exchange
• Improve co-ordination across agencies responsible for SMEs development
SME development is constrained by costly
financing
• Review regulations on foreign business operations including restrictions on foreign firms’ entry and movement of people
High cross-border barriers to services
trade and investment
16
Prosperity - key constraints and selected recommendations
Partnerships: Sustainably financing development
17
18
The population is ageing rapidly
0
0.1
0.2
0.3
0.4
0.5
0.6
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050OECD average Regional comparators Thailand
Elderly dependency ratio
Note: The elderly dependency ratio refers to the number persons (aged 65 and above) per working age population (aged 15 to 64). Regional comparators refers to the average elderly dependency ratio for Malaysia, Philippines, Indonesia and Viet Nam. Source: UN Population projections, 2017 revision.
19
Fiscal revenue will need to rise
General government revenue in % of GDP, average over 2011-15
Source: Datastream, OECD Revenue Statistics (2017)
0
5
10
15
20
25
30
35
40
45
Indon
esia
Sing
apor
e
Philip
pines
Thail
and
Kore
a
Viet
Nam
Mexic
o
Malay
sia
Colom
bia
China
South
Afric
a
Turke
y
Polan
d
OECD
% of GDP
20
There is room to improve PPP processes
20
40
60
80
100
Malay
sia
Turke
y
Thail
and
Polan
d
Indon
esia
China
Sing
apor
e
Viet
Nam
Colom
bia
Kore
a
Mexic
o
South
Afric
a
Philip
pines
PPP preparation PPP procurement PPP contract management Average
Note: The higher the score, the more aligned with international best practice. Scores for unsolicited proposals are not considered in the above analysis as Thailand, Malaysia, Turkey, Poland and Singapore do not have any regulatory procedures. Source: World Bank Group/PPIAF (2017), Benchmarking Public-Private Partnerships Procurement 2017.
• Boost tax efficiency, increase compliance and rely more heavily on less distortive taxes
Revenue needs to increase to fund
future commitments
• Make greater use of alternative infrastructure financing such as Thai baht infrastructure bonds
• Align PPP policies with OECD Principles for Public Governance of PPPs
Inefficient and costly infrastructure
financing
• Invest in preventative and primary care. • Reduce exemptions to healthcare co-
payments • Increase pensionable age
Escalating public healthcare and
pension burdens
21
Partnerships - key constraints and selected recommendations
Planet: Conserving nature
22
23
Droughts and floods affect many areas
40
55
70
85
100
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
% A. Share of provinces affected by drought or flooding
Drought Flooding
0
10
20
30
40
50
2009 2010 2011 2012 2013 2014 2015
% B. Share of agricultural land affected by
drought or flooding Drought Flooding
Source: NESDB (2017), Social and Quality of Life Database System, http://social.nesdb.go.th/social/Default.aspx?tabid=40; OAE (2017), Agricultural Statistics of Thailand 2016.
24
Towards better waste management
0
200
400
600
800
1000
1200
1400
1600
Philippines Colombia Poland Mexico Korea Turkey Thailand OECD Singapore
Kilograms per capita
Municipal waste
Source: OECD countries from OECD (2017); Thailand from PCD (2017b); Philippines and Singapore from http://unstats.un.org/unsd/ENVIRONMENT/qindicators.htm
25
Coal will form a bigger part of power generation by 2036
2015
Natural gas
Imported coal
Lignite
Renewable
ImportedhydropowerDomestichydropowerNuclear
2036
Source: MOE (2016), Thailand Integrated Energy Blueprint.
26
Emissions have increased
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Colom
bia
Sing
apor
e
OECD
Turke
y
Indon
esia
Mexic
o
Philip
pines
Kore
a
Polan
d
Thail
and
Malay
sia
China
South
Afric
a
Viet
Nam
CO2 per GDP
2015 1990
Kg per 2010 USD
Source: IEA (2017), CO2 Emissions from Fuel Combustion 2017 Edition.
• Ensure co-ordination across existing agencies, at all levels of governance
Management of water resources is fragmented
• Improve disaster prevention and response capacity at the local level to effectively provide services
Floods and droughts often cause economic disruption
• Make polluters pay more directly, including wastewater tariffs on water usage
Pollution and inadequate waste management undermine
environmental quality
• Step up investments in renewables and consider increasing environmental taxation
Power sector plans will lead to a more carbon intensive path
• Carry out Strategic Environmental Assessments more frequently and effectively
Environmental issues are not well integrated into public
plans and policies
27
Planet - key constraints and selected recommendations
Peace: Strengthening governance
28
29
Improving reform implementation
Note: Capacity for State reform measures the “authorities’ ability to decide and actually implement reforms” (scores range from 0 for very low capacity to 4 for strong capacity). Long-term strategies indicate whether “the public authorities have a long-term strategic vision” (scores range from 0 for very weak strategic vision to 4 for strong strategic vision). Source: Centre d’Études Prospectives et d’Informations Internationales, Institutional Profiles Database 2016
0
1
2
3
4
South
Afric
a
Thail
and
Indon
esia
Mexic
o
Turke
y
Sing
apor
e
OECD
Ave
rage
Kore
a
China
Polan
d
Colom
bia
Malay
sia
Philip
pines
Capacity for State reform Long-term strategies
30
Improving government online presence
0
10
20
30
40
50
60
70
80
90
100
Indon
esia
Thail
and
South
Afric
a
Viet
Nam
Turke
y
Philip
pines
Polan
d
Malay
sia
China
Colom
bia
OECD
Ave
rage
Mexic
o
Kore
a
Sing
apor
e
Government's online service Online e-participation
Note: The higher the score, the closer to world best practice Source: Cornell University et al. (2017), Global Innovation Index
31
Local governments rely heavily on revenue from the central government
11%
17%
33%
39%
Local government revenue sources, 2016
Locally collectedrevenue
Central government:VAT redistribution
Central government:other tax redistribution
Central government:grant funding
Source: Fiscal Policy Office
32
Corruption persists
Corruption perception index, 2017
Note: Index ranges from 0 (highly corrupt) to 100 (very clean). Source:Transparency International Corruption Perception Index (2017), https://www.transparency.org/news/feature/corruption_perceptions_index_2017
0
10
20
30
40
50
60
70
80
90
• Review role of ministries and clarify responsibilities across all levels of government
Lacking institutional capacity
• Pursue decentralisation by empowering local administrations
Imbalance between central and local
government
• Strengthen capacity of the Trade Competition Commission
Weak enforcement of competition law
• Further strengthen existing integrity measures and streamline the anti-corruption mandates of various institutions
Corruption remains problematic
33
Peace - key constraints and selected recommendations
34
For more information, please see
http://www.oecd.org/eco/surveys/multi-dimensional-review-thailand.htm
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