Change essential to resurrect or maintain national competitiveness, Abhisit tells audience
Prime Minister Abhisit Vejjajiva stressed again yesterday that it was impossible for Thailand to detach itself from the turbulence of the global economy, and that the public and private sectors were in need of serious structural reform to revive or maintain the country's competitive edge.
"It's not possible for us to step back from the world economy," he said. "The main concern does not have to do with the government. It has to do with the Thai private sector, which has been heavily involved with the rest of the world when it comes to trade, investment and currency exchange, among other things."
Abhisit told Krungthep Turakij's seminar on "Thailand Tomorrow" that the need to remain compatible and competitive globally did not stem from the government's side, but the private sector.
Thailand's agricultural self-reliance and the capitalistic flaws that have almost brought down the global financial system have added weight to the school of thought that denounces interdependence in a defective, if not corrupted, system.
However, Abhisit and Finance Minister Korn Chatikavanij are considerably positive about a global economic rebound, although they both told the seminar that reforms are required to prepare Thailand for future challenges.
The private sector needs to really realise the tasks at hand, Abhisit said. For example, while Asean leaders have committed themselves to establishing a single market within six years, some other Asian economic powers like Japan and Australia have looked beyond that and set their ambitions on achieving a pan-East Asia market or even bigger, he said.
"How prepared is our private sector?" Abhisit said. "How much do we know about the risks of a more open economy?"
Solid and immediate structural reforms to increase competitiveness are the key to the future, he said.
The government's priorities are promoting a new national savings scheme, switching from populism to an improved and transparent welfare system where government assistance to the people is not for political gain but out of true respect of their fundamental rights, and revamping farm subsidies to make them market friendly and non-destructive.
"Next year we will see big changes where government supervision of crop prices is concerned," he said.
Other key initiatives include formulating economic policies through greater, systematic consideration of the environment, and promoting innovative, value-added economic formulas.
Piyasvasti Amranand, the new president of Thai Airways International, said yesterday that the national carrier has to do more to keep up with global changes.
When airlines from the Middle East went on an expansion spree, THAI stood by and let its market share slide to 5 per cent while those airlines grabbed 19 per cent, he told the "Thailand Tomorrow" seminar.
But now through better products and services and newer planes, the airline would return to a strong position within two years.
THAI's fleet has been ageing against its regional rivals - 11.7 years against seven for Singapore Airlines and Cathay Pacific - which means less comfortable seats and more maintenance required.
Piyasvasti admitted that as a state enterprise, THAI faces pressure from politicians and outside directors. Still, it is the first state enterprise to encounter global challenges, which constrains its freedom to raise prices. And it is also the only state enterprise that cuts costs.
As Europe requires all airlines to reduce carbon emissions by 3 per cent from the 2004-2006 average, THAI may need to buy carbon credits in 2013, potentially from local projects, he said.
"When the strategy is implemented, THAI will be the pride of Thailand around the world. THAI will survive in a sustainable fashion. Yields will rise and we will maximise from the economic recovery," he said.