Thailand: the institutional and political underpinnings of growth
It was negative at several points in the s, not only in the crisis years, and zero in and again in , reflecting the effects of the global recession. Subsequently, despite more respectable aggregate GDP growth, the peak rates of employment expansion have been less than 2. Unemployment rates fell somewhat during the s boom but rose again after the crisis and since then have displayed volatility around a higher trend. While these rates may appear low, they are part of an institutional structure that offers no social protection to the unemployed, where the inability to find paid work is therefore reflected in more disguised unemployment in agriculture and petty services.
The pattern is a recognisable one. Many developing countries, including those perceived to be the most successful in terms of output growth rates, exhibit this form of jobless growth. This reflects two general tendencies: a shift in production structure across and within sectors, whereby income expansion is associated with demand for goods and services produced in more capital-intensive conditions without generating demand for labour-intensive goods and services; and the associated technological and organisational changes that improve labour productivity.
This pattern is seen once again in the incidence of jobless growth in the formal sector, described in Chart 3. Both in terms of number of establishments and number of workers, termination of work contracts was relatively low in the economic boom that preceded the crisis.
However, layoffs zoomed up during the Asian crisis of , and have stayed high in the entire subsequent period even though the economy supposedly started booming. In fact, the number of establishments adversely affected has grown faster during the s boom than in the previous crisis. Overall, this means a labour market in which workers are clearly worse off, since both external competitiveness issues and internal dynamics have dictated that demand for labour does not keep up with supply. This reduced bargaining power is indicated by the fact that real wages — which were drastically affected during the crisis of — continued to fall even during the recovery, and then have recovered only slightly.
In , real wages were only 5 per cent higher than their level of , while labour productivity had increased by 22 per cent. Document pdf Urban futures: making cities work for people This day-long event focused on moving towards inclusive, safe, resilient and sustainable cities. This period saw significant progress in access to utilities in these areas, with positive changes recorded in water piped directly to households, and in access to sanitation, as well as the share of slum households with electricity and dwellings made of durable housing materials.
Towards a better life? A cautionary tale of progress in Ahmedabad Ahmedabad, the fifth largest city in India, has achieved significant progress since the s. The city provides a useful lens through which to explore the rural-urban transition and how its challenges can be addressed, particularly terms of improvement in material well-being, environment and political voice. However, those were the glory years of Japan—Thailand economic engagement. Since just before the turn of the millennia, Japan's structural support towards Thailand has been more akin to being handcuffed to a sick patient.
After the Asian financial crisis, it was massive financial assistance to Thailand that helped bring the kingdom back on track. And in more recent years, crises again stalk Thailand that Japan is very minded to deal with. Japanese planners and their Thai counterparts believe that Thailand is currently in this situation.
Thailand is soon to face similar demographic headwinds to those Japan is currently dealing with.
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The kingdom is one of the fastest aging populations in East Asia but is surrounded by youthful populations in the Mekong region, with the UN estimating that Thailand's working age population will peak in Japan peaked in The issue however is that successive Thai governments have failed to change policy in such a way as to make that shift upwards possible, most keenly in the area of upgrading the skills of the country's human capital Warr Coupled with increasing ASEAN integration and Myanmar's recent transitioning, there are now many more options for investors than just Thailand.
Such debts represent a block to Myanmar's desires to further regionally integrate and a problem for Japan to upgrade its provisions from grant aid to loan aid.
Japan took the lead and in March convened major donors to address the issue. Uneven years are due to no loans being approved for that year. All data available are presented here. Data source: JICA loan database. This matters because there is a wide array of economic benefits for Japan in Myanmar that will affect Thailand and likely draw some forms of investment away from the kingdom.
Thailand: the institutional and political underpinnings of growth
Not only are there potentially productive factory workers but also a large consumption market in ways that neighbouring Cambodia and Laos are not. When considered regionally, Myanmar allows for greater production and trade integration through Japan's two large projects—Thilawa SEZ just south of Yangon and the enormous Dawei SEZ further south and located parallel west from Bangkok a Thai project but with large Japanese involvement.
From around to , Japanese investment into China has been slowing down or declining, while for the same period, investment in ASEAN has been increasing. There are clearly various economic factors that explain this, for example, natural economic changes in China resulting from the countries' growth such as rising wages, increasing domestic capacity, etc. However, there are also geopolitical issues surrounding China's more assertive behaviour towards the Senkaku Islands from around This assertive behaviour represents not only a regional issue for many East Asian states but is also a direct bilateral confrontation with Japan.
It is little surprise that Japanese companies in China began to vote with their feet. This means tier 1, tier 2 and tier 3 suppliers moving reconfiguration. With Thailand Plus One, tier 3s and perhaps some tier 2s will be moved into neighbouring Mekong countries.
The process of creating a new constitution involved the NCPO requesting that the NRC forms a Constituent Committee, which then drafted and recommended a constitution for approval by the five rivers, followed by a referendum on 7 August whereby public debate about the constitution was banned and most had not even seen a copy of its articles. What this goal requires is a new executive state institution, what in a previous draft was called a National Strategic Reform and Reconciliation Committee and what in newer drafts has become the National Strategy Committee.
The Thai military seizing power is, in and of itself, not unique. This time however, and the death of King Bhumibol must be remembered here, the Thai junta may be doing something different. However, by stepping out of the shadows so obviously, the Thai military has broken the first rule of the deep state—deep means quiet and invisible.
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Investors are likely flustered by these recent differences in the Thai military's behaviour. From January 1st , out of the seven categories of incentives that Thailand's BoI organises business activity into, around 80 activities within these categories will end—making up close to half of all in incentivised activities Jayasinghe Asia in a Borderless World , 13 March Shangrila Hotel, Bangkok. The junta state of Thailand does not seem worried by the recent drop in foreign investment, and is committed to the previous solution and the problem that it is aimed at resolving.
Nor is Thailand's BoI worried by these figures, the analysis of the problem, nor the solutions. In conversation with senior officials at the BoI, they stated: 6 6 Interview with senior officials at Thailand's Board of Investment, Bangkok, August Thailand has become highly developed over 20 years. Now we want to attract advanced technology industries. We give incentives for the ones who can invest with businesses who have things we need.
But it is time to change our policy. If we give incentives then the country is losing something it could get.
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So we are now thinking we should be more selective about what we give away. Thailand is in a very precarious economic position. It has not only been demonstrated here that conceptualising FDI into Thailand in this way has the potential to generate explanations for the changing trends in foreign investment from Japan into the kingdom but also that key features of the Thai state and its role in the economy of Thailand have become more nascent. That is, not only do existing academic notions of a deep state apply cogently to Thailand, these notions must also be complemented with a globalist explanation of state behaviour.
This aids in understanding not only what the Thai state is but also to understand at what times it is more or less likely to spur to action or inaction. Japan's relationship with Thailand is not particularly attuned to liberal whims and democratic reason.
World Bank trims growth view to 3.5%
These similarities are indeed the grease upon the rails of Japan's highly prized and close economic relationship with Thailand, and both countries share common historical modern developmental features that are well understood by Thai and Japanese power brokers in Thailand today. Nevertheless, changes in Thailand in recent years have been more dramatic than usual and, coupled with wider regional changes, mean the relationship will be tested. It is not predicted that the significance of the Japan—Thailand relationship will diminish anytime soon.
If that happens, then Thailand's currently powerful but possibly future diminished position in the Mekong and within ASEAN may need to become a question for further study.
Thailand: Economic Background to Political Crisis
Volume 4 , Issue 3. The full text of this article hosted at iucr. If you do not receive an email within 10 minutes, your email address may not be registered, and you may need to create a new Wiley Online Library account. If the address matches an existing account you will receive an email with instructions to retrieve your username.
Original Article Open Access. Ryan Hartley Corresponding Author E-mail address: ryanhartley tohoku.