Thailand: Exports need to be upgraded
Thailand’s national trade strategy for 2022 to 2027 should focus on upgrading existing export products and services in alignment with modern technology.
The government needs to improve the business environment by reducing market dominance and regulations to facilitate ease of doing business for small and new operators, according to the latest study by Thammasat University’s Research and Consultancy Institute, hired by the Trade Policy and Strategy Office under the Commerce Ministry.
Thanawut Limpanitgul, a researcher at the institute, said global trade competition is focusing more on value, technology and innovation, but Thailand’s key export products still rely mostly on the traditional economy.
For instance, Thailand remains an export-orientated production base for hard disk drives, but consumers have switched to USBs and cloud systems.
“Over the past 10 years, Thailand continues to make the same products, concentrating on contract manufacturing, and has yet to develop its own technology,” said Mr Thanawut.
“More importantly, it remains short of R&D and foreign direct investment that will help the country to upgrade technology. Without rapid changes, Thailand may make slow progress in rehabilitating its economy after the virus crisis.”
Based on in-depth interviews and 12 public hearings with all stakeholders including the government, the private sector and civil society, the study found a spate of obstacles remain for the country’s trade development, notably domestic monopolies arising from regulations that do not encourage small and medium-sized enterprises (SMEs) to compete with big operators, resulting in an absence of product variety, he said.
These obstacles also cause difficulties for new players to enter the market and lead to a slow pace in product development as well as a low level of innovation, said Mr Thanawut.
Domestic infrastructure is at an insufficient level, while labour development does not match demand in domestic industries, according to the study.
He said the university drafted a five-year trade strategy focusing on five areas, including upgrading infrastructure and technology to increase opportunities for SMEs through online platforms and trade infrastructure, as well as ecosystem enhancement to align with the future economy and reduce production costs.