“The Fu­ture of Com­pe­ti­tion is Col­lab­o­ra­tion” – In­ter­view with Dr. Su­vit Maesincee

In­ter­view with Dr. Su­vit Maesincee

Thai-American Business (T-AB) Magazine - - Content -

Dr. Su­vit Maesincee, Min­is­ter at­tached to the Prime Min­is­ter’s Of­fice and one of the ar­chi­tects of Thai­land 4.0, spoke at AMCHAM’S mem­ber­ship lun­cheon on Jan­uary 26 and pre­sented the main tenets of the Royal Thai Gov­ern­ment’s new strat­egy to raise Thai­land from a vol­ume- based to a value- based econ­omy. Re­cently, he sat down with AMCHAM’S Com­mu­ni­ca­tions Di­rec­tor, Deanna De­spodova Pa­jkovski, to an­swer some fol­low- up ques­tions and go more indepth into the in­tri­ca­cies of Thai­land 4.0 and how it would af­fect the King­dom’s busi­ness en­vi­ron­ment .

Q: When you ad­dressed the Amer­i­can busi­ness com­mu­nity at AMCHAM’S monthly lun­cheon in Jan­uary you talked about ‘ pracharat’ or ‘ State of the Peo­ple’ as a uni­fy­ing el­e­ment of Thai­land 4.0. Can you ex­plain the con­cept of ‘ pracharat’ as it per­tains to Thai­land 4.0 and how it would con­trib­ute to the im­ple­men­ta­tion of the Royal Thai Gov­ern­ment’s strat­egy?

A: The ‘ pracharat’ con­cept works un­der sev­eral as­sump­tions. The first as­sump­tion is that in the last decade we have seen mar­ket failure and Gov­ern­ment failure; when the Gov­ern­ment fails we try to rely on markets and when the markets fail we try to rely on the Gov­ern­ment. But in the 21st cen­tury, we are fac­ing a sys­tems failure where the di­vi­sion of la­bor be­tween mar­ket and Gov­ern­ment doesn’t work any­more. We now need col­lab­o­ra­tion be­tween the Gov­ern­ment and the pri­vate sec­tor to deal with chal­lenges. Ear­lier, the the­ory of eco­nom­ics talked about com­pe­ti­tion and the con­cept of co­op­er­a­tion had a neg­a­tive con­no­ta­tion. Nowa­days, pro­fes­sors teach that the fu­ture of com­pe­ti­tion is col­lab­o­ra­tion, solv­ing the big chal­lenges to­gether, such as cli­mate change, poverty, and dis­eases. So in the con­text of na­tional de­vel­op­ment it means that we have so­cial as well as eco­nomic col­lab­o­ra­tion among these agents that doesn’t only in­volve the public and pri­vate sec­tor, but also the peo­ple sec­tor, or the civil so­ci­ety, by em­pow­er­ing cit­i­zens to solve lo­cal is­sues and con­cerns. This kind of new emerg­ing col­lab­o­ra­tions as pub­licpri­vate part­ner­ships and so­cial en­ter­prises is in line with what we call ‘ pracharat’ in Thai. The Gov­ern­ment has cre­ated 13 com­mit­tees or work­ing groups as part of the ‘ pracharat’ con­cept to work on a va­ri­ety of is­sues, rang­ing from in­no­va­tion and dig­i­ti­za­tion, the new S- curve, and pro­mot­ing in­fra­struc­ture to grass- roots de­vel­op­ment, mod­ern­iz­ing agri­cul­ture, ed­u­ca­tion re­form, as well as how to en­hance the com­pet­i­tive­ness of our la­bor force. These groups will work on a na­tional level, but there is no rea­son why they couldn’t work on international level as well. For ex­am­ple, we have been ap­proached by JETRO ( Ja­pan Ex­ter­nal Trade Or­ga­ni­za­tion) and they are in­ter­ested in es­tab­lish­ing ‘ pracharat’ be­tween Thai­land and Ja­pan be­cause there are a lot of Ja­panese in­vestors in Thai­land and they per­ceive Thai­land as their sec­ond home, so they would like to con­trib­ute to Thai so­ci­ety. We are also in talks with the Thai Euro­pean Busi­ness As­so­ci­a­tion and I don’t see why we can’t also have a Thai- Amer­i­can ‘ pracharat.’

Q: Thai­land 4.0 is a com­pre­hen­sive strat­egy that cov­ers all as­pects of de­vel­op­ment. In your pre­sen­ta­tion at AMCHAM’S lun­cheon you fo­cused on the eco­nomic as­pect, or the de­vel­op­ment of a val­ue­based econ­omy. What are the other de­vel­op­ment as­pects con­tained in Thai­land 4.0? A: In my pre­sen­ta­tion I talked about the com­pet­i­tive growth en­gine, but we also have the in­clu­sive growth en­gine. We have de­vel­oped a new re­gional pol­icy which di-

vides Thai­land into six re­gions and fur­ther into 18 clus­ters of prov­inces. We have al­lo­cated Baht 100 bil­lion to be in­vested into these clus­ters of prov­inces as part of the in­clu­sive growth en­gine in or­der to es­cape the in­equal­ity trap. Another as­pect we are work­ing on is the en­vi­ron­men­tal one, or the green growth en­gine. We are try­ing to bal­ance eco­nomic growth, so­cial well- be­ing, en­vi­ron­men­tal well­ness and hu­man wis­dom. The un­der­ly­ing con­cept of these ef­forts is the Suf­fi­ciency Econ­omy Phi­los­o­phy and our ef­forts are also in line with the Sus­tain­able De­vel­op­ment Goals of the United Na­tions.

The Thai­land 4.0 strat­egy fo­cuses on three things: com­pet­i­tive­ness, which is about peo­ple, ed­u­ca­tion, tech­nol­ogy and in­no­va­tion; co­he­sive­ness, or em­pow­er­ing peo­ple across dif­fer­ent re­gions and try­ing to achieve eco­nomic de­moc­ra­ti­za­tion; and con­nec­tiv­ity, which means con­nect­ing to CLMV ( Cam­bo­dia, Laos, Myan­mar, and Viet­nam), con­nect­ing to ASEAN, and con­nect­ing to Asia and the world. Each of these ar­eas have been as­signed a Min­istry that is ac­count­able for the im­ple­men­ta­tion. The cab­i­nets are al­ready driv­ing the min­is­te­rial agenda. Just this morn­ing, we were talk­ing about Gov­ern­ment 4.0. The bu­reau­cratic sys­tem can be the en­abler or the con­straint to driv­ing Thai­land 4.0, so the pri­mary fo­cus of the pol­icy of Prime Min­is­ter Prayuth Chan- o- cha is rais­ing the qual­ity of the bu­reau­cratic sys­tem, and find­ing ways to change the mind­set, the skillset, and the ecosys­tem. Re­form starts with re­form­ing the Gov­ern­ment.

In this con­text, we are fo­cus­ing on two things: ad­min­is­tra­tive re­form and reg­u­la­tory re­form. At the same time, we are fo­cus­ing on re­lax­ing reg­u­la­tory con­straints on busi­ness and im­prov­ing the ease of do­ing busi­ness by erad­i­cat­ing out­dated reg­u­la­tions. Q: You men­tioned sev­eral times that peo­ple are an essen­tial el­e­ment in im­ple­ment­ing Thai­land 4.0. What is the Royal Thai Gov­ern­ment’s plan on el­e­vat­ing the ca­pac­ity of the cur­rent and fu­ture Thai work­force to make Thai­land 4.0 a re­al­ity? A: What we are try­ing to do is re­lax the con­straints on im­port­ing knowl­edge, such as, for ex­am­ple, the reg­u­la­tion that for­eign aca­demic in­sti­tu­tions need to have a ma­jor­ity Thai own­er­ship. I now su­per­vise the Board of Investment ( BOI) and I have talked to the Min­is­ter of Ed­u­ca­tion and we com­pletely agree that we need to abol­ish this reg­u­la­tion. We need tal­ents in sci­ence and tech­nol­ogy, so why not make the free flow of tal­ent pos­si­ble? In the short term, you need to buy ed­u­ca­tion, so we need to re­lax the con­straints to bring in the best and bright­est. The re­turn on investment in peo­ple is very high. So we are try­ing to bring in investment not only in the busi­ness sec­tor but also in aca­demic in­sti­tu­tions. In the long- term, we should aim to stand on our feet and in­crease our uni­ver­si­ties’ com­pet­i­tive­ness while still be­ing part of the global col­lab­o­ra­tive net­work. In the next five years we should try to bring the best peo­ple from the best global re­search in­sti­tu­tions and uni­ver­si­ties to work hand- in- hand with their Thai coun­ter­parts to make progress in new fields such as biotech, biomed, etc. I be­lieve this is the right model for Thai­land. We are a small and open econ­omy and we should have a strong net­work to en­sure that we have a free flow of goods and ser­vices, cap­i­tal and tal­ent, and knowl­edge.

Re­gard­ing pri­mary and se­condary ed­u­ca­tion, I be­lieve the big­gest prob­lem is in­equal­ity, so the first thing we need to fo­cus on is this struc­tural prob­lem and close the gap in ed­u­ca­tional op­por­tu­nity.

Q: Are there any plans to re­form and in­vest more in vo­ca­tional level ed­u­ca­tion?

A: When it comes to vo­ca­tional ed­u­ca­tion, we have to over­come two bar­ri­ers: the first is the at­ti­tude to­wards vo­ca­tional ed­u­ca­tion which is still per­ceived as in­fe­rior to a univer­sity de­gree even though the de­mand for semi- skilled la­bor is very high. Then, we have to en­sure a tri­par­tite co­op­er­a­tion be­tween the schools, the in­dus­try, and the Gov­ern­ment and that peo­ple trained through the vo­ca­tional in­sti­tu­tions are guar­an­teed a job. We have to cre­ate an en­abling en­vi­ron­ment to make this op­tion at­trac­tive to peo­ple.

Another is­sue we have to work on is how to re­train semi- skilled la­bor to re­spond to the on­go­ing trend of au­to­ma­tion in or­der to avoid so­cial is­sues five or 10 years down the road.

Q: What can the Amer­i­can busi­ness com­mu­nity in Thai­land do to sup­port the im­ple­men­ta­tion of Thai­land 4.0?

A: When I think about Thai- U. S. co­op­er­a­tion, the first thing that comes to mind is knowl­edge trans­fer. Thai­land 4.0 is in line with what Amer­i­can com­pa­nies are al­ready do­ing so we need to look into how we can make this link­age stronger.

Most Amer­i­can com­pa­nies are multi­na­tional and Amer­ica as a whole is fo­cused glob­ally, not re­gion­ally. Ja­pan, for ex­am­ple, is more re­gional- cen­tric. They ap­proach dif­fer­ent re­gions with dif­fer­ent strate­gies, so their pri­or­i­ties in Thai­land are dif­fer­ent from In­done­sia. I think Amer­ica should ap­proach the world in a sim­i­lar man­ner, and not with a one- size- fits- all model. Also, it would be use­ful to con­duct ex­ten­sive re­search be­fore en­ter­ing a mar­ket or ex­pand­ing, or do­ing CSR, or talk­ing to the Gov­ern­ment, like JETRO does. When I talk to JETRO I al­ways have a feel­ing they have done their home­work, they are aware of what the gov­ern­ment needs and they of­fer match­ing as­sis­tance that cre­ates a win- win. So or­ga­ni­za­tions like JETRO and JICA are needed to pro­vide mean­ing­ful as­sis­tance. Also worth not­ing is that this co­op­er­a­tion is not trans­ac­tional; it is re­la­tional.

Q: You very pre­cisely iden­ti­fied that the fu­ture of global eco­nomic ex­change is not in the sphere of heavy in­dus­try, but tech­nol­ogy and knowl­edge trans­fer. Is the Gov­ern­ment plan­ning any changes to the investment pro­mo­tion re­quire­ments to at­tract tech star­tups and R& D- fo­cused SMES?

A: Un­der my lead­er­ship, the work of the BOI will be re- di­rected from vol­ume­based to value- based. Also, BOI’S ap­proach will no longer be sec­toral, but will fo­cus on three do­mains, the first one be­ing tal­ent. One of the con­straints of the BOI in­cen­tives was that it was only of­fer­ing cor­po­rate in­come tax in­cen­tives, but that is not enough. In or­der to at­tract star­tups, which are fre­quently only one or two peo­ple, we will of­fer re­duc­tion in the per­sonal in­come tax as well. Another in­cen­tive we are work­ing on is of­fer­ing the pos­si­bil­ity to get a work visa and work per­mit at the same time. It is cur­rently quite bur­den­some for for­eign tal­ent to ob­tain the nec­es­sary doc­u­men­ta­tion to work in Thai­land as the work visa is is­sued by the Min­istry of For­eign Af­fairs and the work per­mit is is­sued by the Min­istry of La­bor. This doesn’t make any sense. I have asked the Min­istry of La­bor to del­e­gate the is­suance of the work per­mit to the Min­istry of For­eign Af­fairs so any Em­bassy can is­sue the visa and work per­mit at the same time. Also, in the next three months all re­port­ing to the Im­mi­gra­tion Of­fice will be done on­line in­stead of in per­son.

Another re­form we are con­sid­er­ing in the di­rec­tion of in­creas­ing the ease of do­ing busi­ness is to make it pos­si­ble for only one per­son to es­tab­lish a com­pany with­out the need for nom­i­nees in or­der to at­tract star­tups. Last but not least, we are look­ing into chang­ing the reg­u­la­tions for Gov­ern­ment pro­cure­ment bids to make them avail­able in­ter­na­tion­ally, not only lo­cally. It is pos­si­ble to have trans­parency and qual­ity at the same time.

We are also up­grad­ing the BOI pro­mo­tion scheme into BOI Plus. For ex­am­ple, for cer­tain tar­geted sec­tors the tax breaks have been ex­tended from eight to 13 years. We have also es­tab­lished a Com­pet­i­tive­ness Fund worth Baht 10 bil­lion to at­tract and sup­port high- value com­pa­nies that wish to in­vest in Thai­land. Then there is a spe­cial, cus­tom­ized pack­age for the East­ern Eco­nomic Cor­ri­dor ( EEC).

A lot of the re­forms we are try­ing to im­ple­ment are based on com­mon sense with an ad­di­tional con­sid­er­a­tion of how we can dif­fer­en­ti­ate our­selves from neigh­bor­ing coun­tries.

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