 Chapter 4
Thailand Upholding a “Creative Economy”—Concerns that political instability will be aheavy weight
Keiichiro Oizumi
Senior Economist, The Japan Research Institute, Limited
Key Points


Until now, Thailand has maintained stable economic growth among the developing
countries. However, when seen from a long-term perspective, the growth rate
trending slower, and so more time will be required to transition to being ahigh-income country. Compared to South Korea, industrial restructuring is lagging
behind.

In Thailand, the problems related to the middle-income trap have been discussed
since early on. Policies for strengthening international competitiveness, liberalization
trade, developing infrastructure, and the like were created, but many of them could
not be implemented due to political instability. Currently, the shift to being a“creative economy” and a growth strategy in anticipation of becoming the economic
center of ASEAN are being upheld.

In order for these policies to have an effect, political stability is a prerequisite. To
this end, a policy for correcting disparities is necessary, but such policies in recent
years have been the cause of a fiscal deficit, and meanwhile there is the possibility
that they would delay the policies for avoiding the middle-income trap, such as
infrastructure development. Additionally, the Japanese corporations collected in
Thailand play a large role in increasing productivity.
From being “efficiency-/resource-driven” to being “technologicalFigure 3: Thai growth stages
innovation-/creativity-driven”
GrowthGrowthCompetitive
Competitive
advantageadvantage
innovation/creativity-driven

technological innovation/creativity-driven

Comparative
Comparativeadvantageadvantage

efficiency-/productivityefficiency-/productivity
driven-driveninput-/resource-driven
input-/resource-driven
1950 1960
1950
1960

1970
1970

1980
1980

1990
1990

2000
2000

2010
2010

2020
2020

Source: NESDB (2011)
Source: NESDB（2011）

Japan Center for Economic Research, 2013 “Asia Research” Report47

1. The middle-income trap for Thailand

Thailand has maintained an annual average economic growth rate of approximately 6% overthe past half-century.

During this process, the country did experience the currency

crisis/economic crisis, the Lehman shock, and a severe economic contraction resulting frommajor floods, but in every case, the speed of recovery exceeded expectations.
The per capita GDP in 2012 was $4803, and the per capita GNI was $5210.

According to

the World Bank definition, this is classified as an upper-middle-income country. The per capita
GDP in the capital of Bangkok and the surrounding eight provinces already exceeds $10,000,
and the scenery in these areas is rarely different from that in a high income country.
Meanwhile, in the regional areas there are 44 provinces (corresponding to 57.4% of the
population) where the per capita GDP is less than $3000.

In other words, to Thailand,

avoiding the middle-income trap is ultimately equivalent to expanding the prosperity from thevicinity of Bangkok to the regional, rural areas.
Economic issues noted by the World Bank and the Asian Development Bank as the
middle-income trap had already been recognized and discussed in Thailand in the early of the
2000s. In fact, a portion of the policies in response have been implemented and been fruitful.
However, due to the destabilization of the political situation starting in the latter half of the
2000s, the fact of the matter is many policies have been postponed.

As the political situation

has been stabilizing under the Yingluck Administration, comprehensive debates over the
middle-income trap have proceeded, and new visions and policies have come to be proposed.
What economic issues does Thailand have as a middle-income country? What understanding
does the government have about those issues, and how is it attempting to respond? What kindsof tasks are there for these policies to be effective?

The objective of this chapter is toconsider these questions.
The structure of this chapter is as follows:
Section 2 overviews the economic growth of Thailand, and on that basis makes acomparison to South Korea, which is considered to have avoided the middle-income trap, andnotes the characteristics of Thai economic growth. Section 3 compiles the recognition by theThai government regarding the middle-income trap, as well as the policies in response to it.
Section 4 notes the political tasks for the Thai policies to be effective, and finally, the role ofJapanese corporations is discussed.

48

Japan Center for Economic Research “Asia Research” Report2. Thailand as a middle-income country
Figure 1 examines the changes in Thailand’s effective GDP growth rate from 1961 to 2012.
The country did experience a drop resulting from the 1997 currency crisis/economic crisis as
well as the severe economic contraction resulting from the effects of the recent Lehman shock
and flooding.

However, it can be seen that overall, the country has been proceeding withsteady economic growth.

The average annual growth rate from 1961 to 2012 has been 6.3%,

exceeding the average annual growth rate of 4.9% of the middle-income countries.
However, looking at long-term trends, the growth rate has had a tendency to be slow down.
Comparing the 1990s to the 2000s, the average annual growth rate declined slightly from 5.3%
to 4.8%. As seen in figure, the average annual growth rate from the year 2000 onwards drops
below that of the middle income countries. Due to this trend of a slowing economic growthrate, there is the view that Thailand has fallen into the middle-income trap (Somchai, 2012).
Figure 1: The changes in Thailand’s effective GDP growth rate
(%)
15
10
5
0
1960

1965

1970

1975

1980

1985

1990

▲5

1995

2000

2005

2010
(Year)▲ 10

Thailand▲ 15

Middle-income countries
Source: World Bank, World Development Indicators.

Comparing the per capita GDP (nominal, in dollars) against South Korea, in 1965 Thailandstood at $138 and South Korea at $106, both at a low level. However, the per capita GDP in
South Korea rose rapidly from $279 in 1972, to $6153 in 1990, to $20,540 in 2010. Meanwhile,
the per capita GDP in Thailand went from $192, $1508, to $4803 in same period. Although it istrue that this was a rising trend, the 2012 level was only a quarter that of South Korea.

Chapter 4 | Thailand Upholding a “Creative Economy”

49Supposing that the 5% growth rate is maintained in the future, the per capita GDP would
exceed $10,000 in 2025, and $15,000 in 2033.1

The length of time between exceeding a percapita GDP of $3000 in 2006 and exceeding $15,000 would be 27 years, nine years longer than
the 18 years this took South Korea.2

If the growth rate slows, further time would be required

for the transition to being a high-income country.

3. The recognition and response by the Thai government to the middle-income trap

3.1

The “state competitiveness strategy” under the Thaksin administration

Although the middle-income trap is a concept that spread after the World Bank published“An East Asian Renaissance” in 2007, it is interesting that the Thai government had recognized
the problems noted in that paper from an early stage. In particular, the Thaksin administration,
which inaugurated in February 2001, considered the overcoming of the problems experienced
by middle-income countries as contributing to sustained growth in Thailand.

With Thaksinhimself as the “national CEO,” an attempt was made to accelerate an industrial structuretransformation under his powerful leadership.3
The “strategy for Thai competitiveness in a new global economic environment” announced
in June 2002 expressed the problems faced by middle-income countries as follows (NESDB
2002): the Thai economy “is caught between the countries with low labor costs and thecountries with high technological strength, and is a walnut in a nutcracker, so to speak.”other words, Prime Minister Thaksin clearly recognized the middle-income trap.

In

In May2002, the National Competitiveness Committee personally chaired by Thaksin was launched.
The National Competitiveness Plan had the pillars of 1) expanding exports, 2) selecting
strategic industries, and 3) increasing the productivity in the strategic industries.

Fivestrategic industries were designated: 1) automotive, 2) food processing, 3) fashion, 4) tourism,
and 5) software.
Fashion was the field for which the Thaksin administration’s aims were made the most clear.
In addition to textiles/clothing, it includes jewelry/accessories and leather/leather products.
The textile/clothing industry is labor-intensive, and although it was seen by some as adeclining industry, the Thaksin Administration attempted to increase the competitiveness of the1

Using a fixed 2012 exchange rate value. The population increase rate uses the mid-range estimate in the United Nations World
Population Prospects: 2012 Revision.
2
The per capita GDP in Thailand exceeded $3000 in 1996, at $3055. Calculating from this time results in a 37 year period, or
double that of South Korea.
3
See Suehiro (2009) regarding Thaksin’s policies.

50

Japan Center for Economic Research “Asia Research” Reporttextile/clothing industry by leveraging design in the form of “fashion” (and was referred to as“tropical fashion”).

The competitiveness strategy put emphasis on niche markets.

Additionally, the uniqueness of Thaksin’s policies lay in bringing in the concept of“competition” to the previous “development”. Thenceforth, instead of the word “plan,” Thai
policies started to frequently use the word “strategy.”
In addition, an attempt was made to promote growth in the strategic industries through free
trade agreements (FTAs). In addition to the FTA concluded in the ASEAN framework, theThaksin Administration issued bilateral FTAs with Japan, Laos, China, Australia, and New
Zealand.

By combining FTAs and invitations for foreign capital in this way, many

corporations expanded to Thailand, and an attempt was made to cluster the strategic industries
through invoking them as a collection.

3.2

The National Economic and Social Development Plan and the creative economy

After the collapse of the Thaksin government, the Samak, Somchai, and Abhisit
administrations placed importance on increasing national competitiveness, but they struggled
to respond to an uneasy political situation, and so were not able to launch notable policies.
Furthermore, although the necessity for large-scale infrastructure development comparable to a
megaproject was recognized, it was not carried out.

This is a prime example indicating thatpolitical stability is a prerequisite for avoiding the middle-income trap.
The Yingluck Administration was born through the general election in August 2011, and thepolitical situation finally began to stabilize. From around mid-2012, debates on the
middle-income trap gained momentum.

However, it must be noted that their contents were afresh departure from the rapid raising of productivity promoted by the Thaksin Administration.
Below, this will be confirmed through the contents of the Eleventh National Economic andSocial Development Plan (2012-2016).
In Thailand, centered on the National Economic and Social Development Board (NESDB), a
mid-term National Economic and Social Development Plan (hereinafter referred to as“development plan”) was produced approximately every five years since 1961.

Therein,development targets were based on reflections on the 1997 currency crisis and economic crisis,
and following the Eighth Development Plan (1997-2001), underwent a large change indirection.
From the First to Seventh Development Plan, there was a strong awareness that economic
growth itself would make the lives of the people abundant, but from the Eighth Development
Plan onwards, “human-centered development” was emphasized, and in the Ninth Development

Chapter 4 | Thailand Upholding a “Creative Economy”

51

Plan, the King’s philosophy of a “sufficient economy” was added as a slogan.

Rather thaneconomic growth, stability and toughness of the economy and society were emphasized.

This

directionality was further reinforced in the Eleventh Development Plan due to politicalinstability, the global financial crisis following the Lehman shock, and the worsening
environmental problems.
The vision of the Eleventh Development Plan was “to achieve a happy society with equality,
fairness, and resilience.”

Figure 2 indicates the items of the Eleventh Development Plan.

The many uses of the words “equal,” “sustainable,” “safe,” and “stable” can be seen. Although
the fact that a response to economic globalization, environmental problems, and the like wasrequested is discussed, there are no statements regarding whether the transition to ahigh-income country would be difficult or whether there is urgency in the transition. It can besaid that rather than growth in the national economy that merely increases the pie, stable
growth contributing to all the citizens is aimed for. Chapter 6 “Strategy for Restructuring the
Economy toward Quality Growth and Sustainability,” and Chapter 7 “Strategy for Creation ofRegional Connectivity for Social and Economic Stability” correspond to economic strategies
for avoiding the middle-income trap.

Figure 2: Items in the Eleventh National Economic and Social Development Plan
Chapter 1

Current Situation

Chapter 2

Vision and Development Strategies

Chapter 3

Strategy for Promoting a Just Society

Chapter 4

Strategy for Human Development towarda Sustainable Lifelong Learning Society

Chapter 5

Strategy for Strengthening the Agricultural
Sector, Food and Energy Security

Chapter 6

Strategy for Restructuring the Economy
toward Quality Growth and Sustainability

Chapter 7

Strategy for Creation of Regional
Connectivity for Social and Economic Stability

Chapter 8Strategy for Managing Natural Resources
and Environment toward Sustainability

Source: NESDB, The Eleventh National Economic and Social Development Plan (2012-2016)

52

Japan Center for Economic Research “Asia Research” ReportGiven the above, the specific kind of economic growth the Thai government seeks is
considered from the recent NESDB and the Thai Board of Investment (BOI) seminar
documents.
NESDB Secretary General Arkom indicated in a seminar on March 28, 2011 that a “creative
economy” (setthakit saangsan) was the appearance for the Thai economy that should be aimedfor (NESDB 2011).
According to the lecture notes, the growth thus far can be divided into the following two
periods (Figure 3).

Figuregrowthstages
stagesFigure 3:
3: Thai
Thai growth
GrowthGrowthCompetitive
Competitive
advantageadvantage

innovationtechnologicalinnovation/creativity-driven/creativity-driven

Comparative
Comparativeadvantageadvantage

efficiency-/productivity
efficiency-/productivity-driven
driveninput-/resource-driven
input-/resource-driven

1950

1960

1970

1980

1990

2000

2010

2020

Source: NESDB (2011)
Source: NESDB（2011）

The first period was that from 1960 until the currency crisis and economic crises, and in the
figure is considered “input-/resource-driven” growth taking advantage of comparativeadvantages in labor costs, abundant agricultural products, and the like.
periodfrom

thecurrency

crisisandeconomiccrisis

The second was theuntiltoday,

andis“efficiency-/productivity-driven” growth taking advantage of competitive advantages.

Asstated before, the development plan furthered by the Thaksin Administration as anenhancement of international competitiveness corresponds to this.

Finally, there is the“creative economy” as the future appearance that Thailand should aim for, and is“technological innovation-/creativity-driven” growth. The “creative economy” was defined
as follows in a handout from the seminar:

Chapter 4 | Thailand Upholding a “Creative Economy”

53

“Economic development based on taking advantage of creativity and knowledge.
Economic added value is created through taking advantage of intellectual property andcreativity connected to Thai culture, the intellectual accumulation of social technology, andtechnological innovation in production and services.”
What is notable in that is the emphasis of taking advantage of Thailand’s uniqueenvironment and culture. This can be considered to be a development strategy putting anemphasis on “Thainess.”

3.3

A review of developing industries

What kinds of industries does the Thai government have high hopes for?
Let us consider the lecture notes for a talk by NESDB Secretary General Arkom on October
3, 2013 titled “The Next Generation of Thai Industry” (NESDB 2013).

According to this,

there are five highly competitive industries: 1) processed food (including halal food) withguaranteed safety and quality as the kitchen of the world, 2) manufacturing centers forautomotive and parts, 3) an Asian medical center, 4) a supply center of clean energy to the
ASEAN region, and 5) a hub of tourism in ASEAN.

Compared to the strategic industries

designated by the Thaksin Administration, processed food, automobiles, and tourism are in
both, but fashion and software have been replaced by medical and energy.

Specifically, in the

medical field, taking advantage of drugs and cosmetics based on traditional medicine, in theenergy field, clean energy development resulting from cultivating and using energy plants(cassava, sugarcane, palm oil), and the like are within firing range.4 These are all industries
that emphasize “Thainess.”
Regarding the industrial restructuring, it can be thought to reflect the NESDB opinion below.
First, there is no urgency in transforming the occupational structure from agriculture toindustry.

Second, the service industry desires stable growth more than high growth. In theprocess of transitioning from a middle-income country to a high-income country, it isrecognized that a huge expansion in the service industry is indispensable. Nevertheless, it canbe inferred that from the experience of the currency crisis and the global financial crisis, rapid
growth in those industries in a manner so as to lose stability is not desired.
For the purpose of this kind of industrial nurturing, the plan is to continue to take advantage
of invitations for foreign capital.

This was made clear in the “Five Year Investment

Promotion Strategy Draft (2013-2017)” issued by the Thai Board of Investment at the start of4

54

Fashion and software and thought to be contained in creative industry. Here, competitiveness is not an international standard byrather is “Thainess.”

Japan Center for Economic Research “Asia Research” Report2013 (BOI 2013).

Until then, the BOI had the promotion of investment to nearly all businessas subjects, but in this Strategy Draft, a plan was indicated to limit preferential measures toonly investment contributing to industrial restructuring.

The fields of investment promotion

are the four below, divided into ten industries

Figure 4: Fields of investment promotion
1) Fields contributing to basic infrastructure development
1. Transportation infrastructure development
2. Raw material industry (steel, petrochemical, etc.)
3. Medical/precision equipment
4. Alternative energy and environmental services
5. Business support services (R&D, regional operating headquarters)
2) Fields contributing to the elevation of Thai industry
6. Advanced technology (biotechnology, etc.)
3) Fields strengthening Thai resources and Thainess7. Food and agriculture processing
8. Health/medical tourism
4) Fields having an important position in the global supply chain
9. Automotive/transport equipment
10. Electronic and electrical appliances
Source: Five Year Investment Promotion Strategy (Draft)

The first is fields contributing the basic infrastructure development, within which aredesignated: 1) transportation infrastructure development, 2) raw material industry such as steel,
petrochemicals, and the like, 3) medical/precision equipment, 4) alternative energy andenvironmental services, and 5) business support services including R&D and regional
operating headquarters.
The second is fields contributing to the elevation of Thai industry, within which is 6)
advanced technology such as biotechnology and the like.
The third is fields strengthening Thai resources and Thainess, within which are: 7) food andagriculture processing, and 8) health /medical tourism industry (medical tourism).
The fourst is fields having an important position in the global supply chain, within which
are: 9) automotive/transport equipment and 10) electronic and electrical appliances.

This iscurrently the most competitive industry.

Chapter 4 | Thailand Upholding a “Creative Economy”

55Meanwhile, it is predicted that preferential treatment for labor-intensive businesses andenvironmentally-taxing businesses will be abolished.

Additionally, the previous practice ofgranting preferential treatment with respect to taxes and infrastructure usage for investment to
the regional areas which are lagging in development will be abolished. In its place, industrial
clusters are designated in each region (for example, a food processing cluster or a rubber
industrial cluster or the like), and preferential treatment is granted to investments contributing
to the formation of those clusters.
In this, it is possible to glimpse the position of the government, which is attempting to departfrom labor-intensive industries across all of Thailand in order to avoid the middle-income trap.
This is consistent with the fact that the Yingluck Administration raised the national minimum
wage on January 1, 2013 to 300 baht. The Thai government is envisioning that industries thattake advantage of a low-cost labor force will shift to Cambodia, Laos, and Myanmar.

In fact,

Japanese corporations are starting to move towards shifting processes with high labor costs
from the Thai production base to these neighboring countries (Oizumi 2013).

3.4

Transportation infrastructure development

As upheld by the BOI as a promotion field, transportation infrastructure development is an
important field.
In Thailand, 82% of transportation relies on roads, and their inefficiency has been noted fora long time.5

For example, resolving the traffic jams within Bangkok is a constant matter ofconcern, and the need for a large-scale transportation system (railroad) to Bangkok has been
noted for the activation of the regional economy.

Additionally, in recent years, transportation

infrastructure development has been emphasized as one plan for strengthening economic
relations with the neighboring countries.
Chapter 7 of the Eleventh Development Plan indicates a vision for Thailand, particularly thevicinity of Bangkok, being a hub region for ASEAN and the Greater Mekong Sub-region(GMS).

To achieve this, Transport Infrastructure Development Plan produced by the

Ministry of Transport is on the enormous scale of a total of 4.2456 trillion baht.

Here, theYingluck Administration decided by cabinet decision in March 2013 to promote thisinfrastructure development by borrowing 2 trillion baht during 2013-2020.
The Infrastructure Development Plan produced by the Ministry of Transport comprises thefollowing three strategies:

556

The others are rail transport (2%), river transport (9%), sea transport (6%), and air transport (1%).

Japan Center for Economic Research “Asia Research” ReportIn the first, with “modal shift” and “multi-model” as keywords, the intention was to shift
from the previous road-emphasizing transport system to rail and water transport.
Specifically included were the improvement of the existing rail infrastructure, laying double
tracks, developing harbors, and improving levees.

The total investment quantity is 1.765

trillion baht (of which 309.6 billion baht is development resulting from borrowing).
The second has the keyword “connectivity,” and has the objective of connecting theinter-regional transportation networks and to connect with neighboring countries. Specificallycontained are high speed rail development, high speed road development, the new constructionof existing lines, and the like.

The total investment quantity is 1.793 trillion baht (of whichloans are 954.8 billion baht).
The third has “mobility” as a keyword, and has the objective of smooth transportation
system development.

Contained are: metropolitan rail development, converting railroads tooverhead crossings, providing four lanes on the national highways, developing a Thai gulf
tourism road, and the like.

The total investment quantity is 1.376 trillion baht (of which

672.5 billion is borrowed).
These have the objective of reducing transportation costs in the city of Bangkok, between
Bangkok and the surrounding area, and between the surroundings of Bangkok and the threeneighboring countries.
Rail linking with the neighboring countries includes: Ban Phai -> Mukdahan (neighboring
Savannakhet Province in Laos) -> Nakhon Phanom (neighboring Thakhek in Laos), and Den
Chai -> Chiang Khong (neighboring Mae Sai in Laos).
The Yingluck Administration is planning the activation of the border region economy
together with the linking of transportation infrastructure with that of neighboring countries.
Meanwhile, there has also arisen a plan to establish an industrial complex in Thakhek and Mae
Sai.

Also, transportation capacity will be increased by increasing the number of tracks along

existing lines.
Linking production bases at the border with the Thai intensive regions by rail would lead toa decrease in transportation costs.

In conjunction with the Asian Development Bank-led plan

for an East-West Economic Corridor and a Southern Economic Corridor, the plan is to carryout road development between Myawaddy and Dawei in Myanmar and Poipet and Koh Kongin Cambodia.6

6

The Thai government is also active in road development among the neighboring countries. The road leading from Myawaddy in
Myanmar into Thailand is being built with Thai funding.

Chapter 4 | Thailand Upholding a “Creative Economy”

57

4. The issue of the middle-income trap in Thailand

4.1

Effective distribution of financial funds

The Thai government was fully cognizant of the presence of the “middle-income trap” froman early point in time.

Moreover, policies for avoiding the middle-income trap were

implemented, and a subset bore fruit.

On the other hand, the fact of the matter is many

policies and plans were delayed due to subsequent political instability.

This can be noted not

only as being a factor causing growth to slacken, but also to have had a negative effect.
For example, an infrastructure development plan for flood prevention, including levees,
irrigation, and the like, was included among the megaprojects presented to the Thaksin
Administration.

Despite a total review of megaprojects, the Abhisit Administration, which

was anti-Thaksin, planned to inject massive funding into levees and irrigation.

However, therelated infrastructure development was not carried out amidst political instability, and this was
one cause of the massive floods in 2011.

In order to avoid the middle-income trap, politicalstability is a prerequisite, but in November 2013, the lower house of the parliament passed abill recognizing amnesty not only for ordinary citizens, but also political leaders including
former Prime Minister Thaksin, which has been a new spark for political instability.7
Although a variety of factors have been noted behind the political instability in Thailand,
one of them is the extreme income disparity.

As stated at the beginning, the per capita GDP

in Bangkok and the surrounding eight provinces exceeds $10,000 and is at the level of ahigh-income country, this is less than $3000 in another 44 provinces, which are at the level of a
low-income country.

Also, although the Gini index, which indicates the degree of income

disparity, is decreasing, it is still in the vicinity of 0.4, at which there is considered to be a highlikelihood of leading to social instability.
In response, all the administrations engaged in correcting the inter-regional income disparity.
From the Thaksin Administration onwards, a variety of policies were implemented such as
establishing investment funds, expanding microfinancing, implementing an economic
activation plan including promoting a “one village one product (OTOP)” a 30 baht medicalcare system, increasing benefits for the elderly, a rice purchasing institution, increasing theminimum wage, and the like.

Nevertheless, no large effect has resulted.

are factors that put pressure on finances.

Meanwhile, these

Looking at the recent fiscal situation, the fiscal

balance has been in the red every year since 2006.

7

58

Thereafter, the upper house rejected the bill, putting priority on political stability, but there is still no knowing what will happen.

Japan Center for Economic Research “Asia Research” ReportWhat should be noted is the fact that the fiscal balance has been a deficit amidst the
postponing of necessary infrastructure development and the situation that a social welfare
system is also undeveloped.

In other words, if the infrastructure development for correcting

inter-regional disparities and the implementation of a social welfare system as acountermeasure for the aging population are carried out, the fiscal deficit would worsen
Amidst these circumstances, if the Thai government adheres more than necessary to abalanced budget or a small government, the infrastructure may be delayed.
certainly reduce future competitiveness.

This will

It is also an important strategy for avoiding the

middle-income trap to carry out tax reform such as increasing the tax rate and reviewing thetax system to increase tax revenue collection.

However, these debates over fiscal reform

contain the possibility of newly sparking political instability.

4.2

Japanese corporations and the middle-income trap

Thailand is an important overseas production base for Japanese corporations.
According the statistics of the Bank of Japan, the direct investment balance from Japan toThailand at the end of 2012 was 2.4221 trillion yen, and so Japan had the next highest number
in East Asia than China (5.9 trillion yen).

Despite problems including political instability,

flood damage, a labor shortfall, rising wages, and the like, Japanese corporations continue toincrease direct investment in Thailand.
Up to now, there is no mistaking that the entry of Japanese corporations into Thailand has
contributed to the increasing productivity in Thailand through the transfer of technology,
knowhow, and management system.

In the future as well, the integration and enhancement of

production bases of Japanese corporations in Thailand actually is an important key for evading
the middle-income trap.
In other words, there is the win-win relationship such that by means of the productivity
increase plans of Japanese companies operating in Thailand increasing the productivity of thecountry, Thailand gains the momentum to avoid the middle-income trap.
Assistance by the Japanese government is effective on this point.

In fact, through theThailand-Japan Technology Promotion Association, the latest technology and knowledge isbeing transferred and disseminated, and human resources are being nurtured. The Thai-Nichi
Institute of Technology was established in June 2007, nurturing students furnished with bothknowledge and practical technology coupled to Japanese craftsmanship.

These constitutesupport directly linked to the evasion of the middle-income trap, and also support contributing
to increased productivity at Japanese corporations.

Chapter 4 | Thailand Upholding a “Creative Economy”

59

References

BOI (2013) Five-Year Investment Promotion Strategy Draft (2013 - 2017) (Secretary General
Udom, Lecture notes, February 11, 2013)
NESDB (2002) Yutthasat Kankaenkan klong Thai Plui tai Sathankan mai khong Sethakhit lok (Astrategy for enhancing Thai competitiveness in a new global economic environment)――――(2011) Setthakit Saangsan (Creative Economy) (NESDB Secretary General Arkom,
Lecture notes, March 28, 2011).
――――(2013) Utsahagaan yudmai (The Next Generation of Industry) (NESDB Secretary
General Arkom, Lecture notes, October 3, 2013)
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Tsuruyo Funatsu (eds.) Tai Seijigyosei no Henkaku 1991-2006. Institute of Developing
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