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Published on October 12, 2007

"December 23 [the date of the general election] is the last day to see whether my proposal wins the government's backing," said director Panich Laosirirat.

He proposed two types of funding: government funds for the national agenda; and self-generated profits for salaries and operating expenses.

He admitted that while TPI had to struggle to stay afloat financially, it had few resources to focus on its main mission to increase the Kingdom's competitiveness and move towards a high-performance economy. Meanwhile, the government has commissioned a number of productivity-enhancement projects conducted by different agencies. To Panich, these projects should be brought under one roof for a centralised budgeting approach and periodic evaluation.

Established in 1994 as a public organisation under the Industry Ministry, the TPI received government funding in its first five years. For the past eight years, it has provided consulting services to private firms interested in enhancing productivity, with a focus on labour-intensive industries.

Panich realises that although his mission to reaccess government funding has won support from some ministers, it could be derailed following the huge spending among public organisations that convinced the Finance Ministry no new public organisations should be established.

"But if we're looking at the national level, we need a centralised productivity institute to push the economy forward. Anywhere in the world, such an institute is the right hand of all governments in plotting economic strategy," Panich said.

Limited funding has led to a limited workforce. Years ago, the TPI witnessed the en masse resignation of consultants, and it suffered from a tonne of complaints from clients who considered themselves better educated than newly hired consultants. To regain its position, this year all employees, about 170, are being retrained. While the 40 consultants must be updated on the latest academic and technology developments, other staff will be told to minimise rules and regulations to respond better to customer needs.

Panich acknowledged that Thailand still lacked industrial benchmarking that would tell the government in advance which industries were at a critical stage and which should be promoted. Without benchmarking, a company within an industry does not know which areas it needs to improve in order to survive.

The institute was commissioned by the previous government to come up with strategies to improve the sustainability of One Tambon One Product goods. However, the research was shelved after the current government took office.

"If the policy-making level is not committed and shows no continuity, there is no way Thailand's competitiveness will rise," Panich said.

And in those areas that demonstrate higher productivity, the Kingdom's competitiveness could stand still amid an unfair investment environment: poor law enforcement, unstable government regulations and inconvenient investment laws.

Panich said benchmarking by independent agencies was necessary amid news that many industries were falling under. Meanwhile, the government should also set targets for which strategic sectors are to be promoted. The institute's own benchmarking shows the first two industries to be promoted should be auto parts and food products.

Panich concluded that the institute's mission was not yet achieved, due mainly to the lack of both funds and government focus. And it could remain that way if the current government turns down his financing proposal and does not act before the end of its term.

Achara Deboonme

The Nation

Rayong