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Published on March 6, 2008

Thailand is now facing a serious shortage of engineers and skilled workers. The Automotive Club of the Federation of Thai Industries has raised its concerns over the need to build up a specialised pool of engineers, technicians and skilled workers to meet the future demands of industry. By the year 2015, Thailand aims to increase its vehicle production to 2.5 million units a year. This will fulfil its ambition of becoming the "Detroit of Asia". So between now and then, the automotive industry will require 300,000 skilled workers. And this only addresses the problem of human resources in the automotive industry alone, while the government will also have to invest in the infrastructure to make it possible for investment in the automotive industry to flourish.

Does the Samak government have a strategy to deal with this problem? Apparently it has not yet devised a policy on education and re-training of the work force, which is crucial to raising the competitiveness of Thailand to a higher level.

Investing in education and providing money and equipment to improve human resources takes time and requires patience. We can see that the Samak government, like the Thaksin government, is more interested in implementing populist programmes or stimulus packages that offer results in the short term, rather than undertaking education or human resources programmes that strengthen the knowledge foundation of the country for the longer term.

The latest tax-cut package is a case in point. The Samak government aims to hand out tax benefits to low-income earners and also to the middle class, including property firms, in order to help stimulate consumption and economic growth. This package, which will take effect next year, will result in a loss of tax revenue for the government of around Bt43 billion.

It is true that the government's fiscal position remains strong and that it can absorb this loss of revenue once the tax-cut package is fully implemented. But it is wiser for the Samak government to plan for the longer term or to implement programmes to create jobs.

Wichian Mektrakarn, president of Advanced Info Service , was correct when he said the government should aim to create more jobs via its economic stimulus package.

In fact, the Samak government has set a goal to boost economic growth to 6 per cent this year. This underscores every policy it is implementing now, as evidenced by the tax-cut package and other stimulus programmes for rural people which will be announced next week.

But Dr Surapong Suebwonglee, the finance minister, should not be too concerned with the economic growth rate this year. Already the Thai economy has built up good momentum, with 7.1 per cent quarter-on-quarter growth by the fourth quarter of this year. DBS Research has said that the January data suggests that there is a possibility of the Thai economic growth rate reaching its forecast 5.6 per cent. This figure is not bad at all.

DBS Research also suggests that the Thai government should spend money on education and infrastructure, which will be more beneficial to Thailand in the long term. Korn Chatikavanij of the Democrat Party has echoed a similar thought about the government's spending. He said that if the government is really interested in boosting economic growth, it should instead increase its mid-term budget, which can be disbursed more quickly into the economy.

Indeed, the government should invest in education and infrastructure, which will be of greater benefit to Thailand in the long term.

But the problem is that politicians believe that long-term benefits don't translate into votes or popularity in the short term. They all want to go for a quick fix. The Samak government should rethink its budget spending to really address Thailand's future rather than curing the present pain alone.

The Nation