For Thailand to remain competitive in the face of increasing globalization and to stimulate continued long-term economic growth, the Kingdom needs to improve regulatory policies sector by sector.
Thailand's dramatic gains prior to the mid-90's benefited a broad cross-section of the population, elevating the overall standard of living. Before the onset of the Asian economic crisis, Thailand enjoyed three decades of annual GDP growth averaging more than six percent. However, for Thailand to remain competitive in the face of increasing globalization and to stimulate continued long-term economic growth, the Kingdom needs to improve regulatory policies sector by sector.
Retail Trade Sector
Liberal sectoral regulations and openness to foreign investment have enabled Thailand to rapidly introduce productive modern retail formats. But traditional formats still dominate the marketplace, dragging down overall productivity in the sector.
Retail Banking Sector
Thailand's productivity in retail banking is about half that of the US, mainly because of poor operations including inefficient branch design, lack of marketing skills, and over-reliance on cash-based transactions.
Productivity gaps in the telecommunications sector persist in the fixed line segment, which is heavily regulated. Increased international competition has driven productivity much higher in the mobile market.
The primary factor constraining productivity in the Thai cement industry is the low level of capacity utilization. Use of higher cost fuels also hurts productivity.
The entry of Carlsberg in 1989 set off significant structural change in the local markets. Lower prices and better choice have benefited consumers but overall sector productivity still stands at one third of US levels.
Chicken Processing Sector
Despite enjoyed growth as a chicken exporter, productivity in the chicken processing sector is low compared to international best practices. Monopolies and regulations barring imparts have kept prices high domestically and limited incentives to improve productivity.
Computer and Electronics Sector
The computer and electronics sector accounts for 4 percent of Thailand's GDP. While "units per employee" productivity is at international levels, Thai companies are stuck at the low end of the value chain.