One should have a read at this excellent Financial Times article (were it to be a little less political). It is very true that we grew very quickly since the 50s till 80s from US patronage, dating from the cold war era and all the way up to the Vietnam War. This legacy still lasts today in the country with strong anti-communist sentiments and pro-West attitude. In the late 80s and early 90s, we saw very heavy investments from overseas. This was coupled with the liberalisation of many sectors and we saw the very rapid urbanisation and growth of the business community.
This all sounded very fairy tale like until the 1997 Asian financial crisis. Many new unstable businesses went out the door just like the dot com bust. Again, the legacy of this in the previous decade still lasts until today: the Hopewell dominoes pillars and skeleton-like buildings still litter the Bangkok skyline. In an attempt to keep this entry non-political (we want reconciliation right?), I won’t blame a former prime minister for taking aggravating the situation.
In the early 1990s, a point many made was you either had to keep up with it or lose out. You could get really rich and ride the near double digit growth, or you could just continue to receive your 7,000 Baht wage as a civil servant back then. The middle class literally splitted into an upper and a middle middle class. The poor of course, were no where to be seen on the radar of all this. But if there was anything to treasure from the crisis, it was that we learnt more about sustainable growth at a rate the whole country could keep up with. Our banks have far been more conservative in lending and big foreign borrowings are thought through properly. This is what’s shielding our banking system from the latest blow from this financial crisis and this is perhaps one of the only strings left that the economy is hanging from.
In an attempt to spring backup from the 1997 crisis, we have resorted to demands outside the country. And in the due process, perhaps have become too export reliant. When the world goes down, we go down, when the world grows, we grow. Now the world is shrinking (not literally), so we are too.
Of course, the recent 1.56 trillion Baht (~US$ 45 billion) stimulus package recently approved for 2009-2012 is very welcoming. But, if we were to look into the longer terms, how would we become less dependent on the situation on the outside world, how do we achieve stability? How should we stand on our own two feet?
Infrastructure and Logistics Hub
There are 4 types of infrastructure in a country that I have massive interests in: roads, mass transit, railways and telecommunications. At the time of economic crisis, there is no better time to invest to stimulate the economy since government spending contributes towards GDP. One would not only create the badly needed jobs, but also pave a way for the long term growth. The US spent much of their money building up the Interstate System, which facilitated long term growth and has rightly served them well in the last half century.
It is good to see the government setting a target of improving logistics, and promoting the country as a logistics hub. Ever wondered why so many Australia bound flights from Europe make a stop over in Bangkok? That’s because the place is located right on the correct route. This has implications not just on passenger traffic but logitics traffic too. If passengers have to make stopovers, why should it differ for goods coming off containers on ships?
On the good side, we’re not doing too badly as a logitics hub at the moment (see here), ranking about the same as China and slightly behind Malaysia. The double tracking of the railway along the Eastern Seaboard is looking quite promising with some work coming along. This would allow faster and more efficient freight movement up from Lam Chabang (largest port of Thailand). Double tracks would mean that trains do not have to wait for each other to pass at the station. The newer tracks will also allow for heavier loading of the train and use of larger locomotives.
A better railway system is no better if the operator is still a ’sleeping tiger’. The State Railway of Thailand is one of the most inefficient organisation in the country. The very long delay of years in opening of the Suvarnabhumi Airport Rail Link (ARL) project should already give enough indication of this. The government should consider privatisation of the railway operations (though I’ve already heard of plans to do this due to debtors’ conditions). A body (call it Thai Rail or something) could be setup to look after the infrastructure and charge the private operators for using the rails. The trains, ticketing and services (the customer facing end) should be privately run. This would encourage the much needed competition, when could we have trains that were no longer running so tempermentally and consistently on time?
Did you know that in Japan, if their trains run more than about ten minutes late, they give you an ‘excuse card’ that you could give to (say) your university for being late in examinations? That’s how much their system is trusted and puntuality is just taken for granted. PTT (despite its not so clean privatisation process) is a good example of the potential that privatisation can seriously bring. Whoever thought the Petrolium Authority of Thailand would be the such a SET index mover right now? Just hearing the name send chills down you like the Communications Authority of Thailand (CAT) or Telephone Organisation of Thailand (TOT) doesn’t it?
I wonder if there’s also any business interest in setting up of mass scale private couriers that run domestically. Sure, FedEx, DHL, UPS and the likes operate in Thailand, but they don’t operate domestic services. For example, I couldn’t use FedEx to send a package to Chiang Mai from Bangkok, just because they don’t operate such thing. The UK has UKMail and TNT Post in addition to Royal Mail. Perhaps, this would make Thailand Post a little more efficient or am I day dreaming?
I’ll leave the thoughts about telecommunications, road and mass transit for some other time. But frankly? We need UMTS (3G), liberalisation of submarine cable landing points and controlled access motorways. And we need those now. The longer we delay them, the more opportunities we will lose. Oh, also please sack the MICT Minister, we cannot rely on someone who doesn’t know what a ‘webcam’ is. Rants about this some other time.
Some More Thoughts..
- Brands, Brands and Brands
- Sustainable Tourism
- A Better Education System
- Health Care Centre
- OPEC Equivalent for Rice
