July 16, 2014 00:00 By Benjarong Suwankiri 2,449 Viewed
Arguably the world of sports always offers one of the best breeding grounds for paragons of dos and don'ts in business world. Although the World Cup is now behind us, the 64 rounds of football, or as some prefer "soccer" (a minority, might I add), are alw
Lesson 1: Teamwork and coordination guarantee results
With Germany taking home the title, no other theme emerged from World Cup 2014 stronger than “teamwork”. It’s hard to over-emphasise teamwork in business, but when it comes to the bigger economic picture, we no longer spend time pondering over what teamwork means. And that’s a problem.
Thai economic stories are well adorned with individual perseverance and personal success stories. In other words, we adore star performers and we play down coordination.
Thailand’s last economic coordination success was arguably the Eastern Seaboard, which paved the way for most of the economic star performances we see today. Yet we hardly celebrate that coordinated development any more, while the next one remains far off in the distance. We need to rebuild the logistics system, fight against corruption, reduce inequality and restructure economic engines. None of these is fit for a one-man show. They need German-quality coordination.
Lesson 2: Mitigate key-man and concentration risk
When it comes to key-man risk in this World Cup, I’m sure three words come up in everyone’s mind: Brazil, Neymar, and Silva.
Given the family nature of most Thai businesses, key-man risk is no laughing matter. In our economic system, key-man risk means many things. It means over-reliance on an economic engine, such as export-orient industries, which share around 55-60 per cent of gross domestic product. It also means our economic concentration in Bangkok and vicinity churns out around half of the country’s GDP. Or, worst, it could mean the lack of a formal and integrated system to fulfil a task successfully, hence the need for personal connections to deliver results.
In either case, we will need to change. We should welcome and promote the trend of regional urbanisation and development. Expanding growth and development to other parts of the country will kill two birds with one stone, increasing the importance of domestic spending as well as reducing reliance on Bangkok and its vicinity.
Lesson 3: Scoring is necessary, but not sufficient for winning
It is plain and simple that you cannot win without scoring at least one goal. But it was also demonstrated over and over again in the World Cup that scoring goals does not ensure victory, others must also do their part as well.
Despite the need to pursue economic growth, as it is so far the only proven way to reduce poverty and spur development, we must work on other ingredients as well. Economic stability must be ensured, while equitable distribution of income must be on the agenda. Not sometimes, but all the time.
Our record for economic stability is so far so good. We don’t have sustained current-account deficits, and have ample international reserves of about nine times monthly imports, and a low inflation rate. In other words, our immunity against the external environment is quite good.
Our immunity against domestic hostility is a different question. Equality, not just of income but also of assets, education, access to basic services, and fair legal processes, is still far from OK.
Lesson 4: Get back up on your feet, while keeping your eyes on the prize
Bastian Schweinsteiger demonstrated this best. Being put down by his opponents and challenges several times during the 120 minutes of the World Cup final, he got back up and resumed his role with his eyes fixed on the title.
For the Thai economy, it has been a tough first half this year. The political crisis that began towards the end of 2013 dampened sentiment in Bangkok, striking the Kingdom’s economic heartland. Tourists stopped flying in, while exports stopped flowing out. Both consumption and investment engines stalled, and government, of course, was in limbo. And we are glad it is now over.
Things have been turning around since May. Private consumption and investment showed the first signs of expansion in April. Manufacturing also registered similar growth. In particular, if the automotive industry is removed to avoid the high base from the first-car programme’s effect last year, manufacturing showed the first positive signs of year-over-year expansion.
While we move into the second half of this year, the Thai economy will recover, starting from exports and consumption, then possibly investment in the fourth quarter. Next year, we edge closer to the advent of the Asean Economic Community, so key focus will be on border trade and logistics investments. In other words, the Thai economy still has a lot to offer, as long as we get back up quickly, and keep our eyes on the grand prize.
Dr Benjarong Suwankiri, head of TMB Analytics, the economic analysis unit at TMB Bank, can be reached at firstname.lastname@example.org. Views expressed in this article are those of the author and not of TMB Bank or its executives.