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Published on August 25, 2007

Prasert Tapaneeyangkura, a Transport Ministry official and chairman of the master plan's drafting committee, said the plan was aimed at raising industrial productivity so as to create a degree of immunity for industry.

Prasert said that the total industrial sector grew at an average of 8.13 per cent a year from 1982 through 2005. Labour accounted for 2.12 percentage points of that growth and capital 5.45 percentage points, while gains in productivity were responsible for only 0.57 percentage point, considered very low.

In short, the industrial sector grew in terms of quantity instead of quality. Several weak points remain in the structure. Effective and efficient management is absent. Most operations are on a subcontracting basis, where factories depend on cheap labour and have to import raw materials, capital and foreign technology.

The International Institute for Management Development has found that Thailand is losing its competitive edge to other countries in the region.

Prasert said the master plan outlined a five-prong strategic plan:

lenhance labour skills for both new and old workers limprove management capability

lincrease machine efficiency ldevelop the logistics system lcreate business networks and supply chains.

The plan incorporates three elements - knowledge production, focusing on research, development and design work; knowledge diffusion, focusing on human resources development; and knowledge utilisation, focusing on applying knowledge to find solutions for problems that may arise in the industrial process.

Aphiwat Asamaporn, director of the Macro Industrial Policy Bureau under the Industrial Economics Office, said the master plan would be funded from the annual budget. The appropriation of around Bt1 billion from the fiscal 2008 budget would support the first year of the project.

Already 140 businesses have expressed interest in seeking support. The government has selected 37 projects, mostly in the parts, plastics and ceramics industries.

Watcharapong Thongrung

The Nation