OECD MULTI-DIMENSIONAL COUNTRY REVIEW - THAILAND INITIAL ASSESSMENT REPORT

Transcription

1 OECD MULTI-DIMENSIONAL COUNTRY REVIEW - THAILAND INITIAL ASSESSMENT REPORT Bangkok, 9 April 2018 OECD Team for MDCR of Thailand

2 Main messages Sustained economic growth has brought about impressive social progress. However, there remain development constraints across each of the 5 pillars of the sustainable development goals (SDGs). Further reform is needed to meet the SDGs and transition to an inclusive, high-income country. 2

3 People: Towards better lives for all 3

4 Regional inequalities have narrowed but remain pronounced 15 Regional GDP per capita gap Thailand s ratio between the richest and poorest region Regional GDP per capita gap Ratio between the richest and poorest region, Korea OECD average China Thailand Malaysia Indonesia Source: Panel A: Thailand National Statistical Office (2014), Economic Indicators; Panel B: calculations based on OECD (2013a), OECD Regional Database, and national statistical office data from Thailand, Malaysia and Indonesia 4

5 Precarious employment remains widespread 60 % of precarious employment in total employment, Singapore South Africa OECD Poland Korea Malaysia Mexico Turkey China Philippines Colombia Thailand Indonesia Vietnam Source: World Bank, World Development Indicators 5

6 1400 The old-age allowance alone cannot guarantee income security for the elderly Monthly universal old-age allowance by age, THB Universal old age allowance National poverty line Source: Schmitt, V., T. Sakunphanit and O. Prasitsiriphon (2013) Note: The national poverty line refers to the minimum monthly cost of basic food. 6

7 Social protection is comparatively well targeted but still disproportionately benefits the non-poor Social Protection Index, 2013 Non Poor Poor 0 Indonesia Philippines Thailand Viet Nam China Singapore Malaysia Korea Source: Asian Development Bank (2013), The Social Protection Index Assessing Results for Asia and the Pacific, Mandaluyong. Note: The Social Protection Index (SPI) is total expenditures on social protection divided by the total number of intended beneficiaries of all social protection programmes, normalised by poverty-line expenditures (which for cross-country comparability purposes is set uniformly at 25% of GDP per capita). A SPI of 0.10 would thus be equivalent to 2.5% of GDP per capita. A higher SPI denotes better social protection. 7

8 The quality of education needs to improve 550 Maths Reading Science PISA scores 550 Maths Reading Science Indonesia Thailand Malaysia OECD average Viet Nam China Source: OECD (2016b), PISA: Programme for International Student Assessment; OECD Education Statistics (database). Note: China refers to the four PISA-participating Chinese entities: Beijing, Shanghai, Jiangsu and Guangdong. Coverage of Malaysian schools in PISA 2015 fell short of the standard PISA response rate so results may not be comparable to those of other countries. 8

9 Too few students graduate in courses meeting industry needs Enrolment ratio in STEM subjects, Latest available year, % Thailand South Africa Indonesia Viet Nam OECD Turkey Poland Colombia Mexico Korea Malaysia Singapore Source: UNESCO-UIS (2017), Education (dataset), UIS Data Centre, Note: STEM courses include natural sciences, mathematics and statistics programmes; information and communication technology programmes; and engineering, manufacturing and construction programmes. 9

10 People - key constraints and selected recommendations Social protection system excludes many informal workers Inadequate pension benefits Encourage formalisation through tax and regulatory measures. Harmonise social protection schemes Index non-contributory allowance for older people to minimum required living costs Poor education outcomes Strengthen teacher capacity, curriculum coherence, student assessment procedures and ICT use in schools Large skills mismatches Expand co-operation between vocational institutions, academia and the private sector in course development 10

11 Prosperity: Boosting productivity 11

12 Faster growth is needed to catch up 100 GDP per capita, % of OECD average, computed at 2016 PPP USD Indonesia Malaysia Philippines Korea Thailand Viet Nam Source: Conference Board (2017), Total Economy Database, Datastream, and OECD calculation Note: In 2016, Thailand s per capital GDP in USD PPP was , versus an OECD average of

13 Labour productivity can be boosted Average labour productivity growth per employee per year % OECD average South Africa Mexico Korea Colombia Malaysia Poland Singapore Turkey Thailand Philippines Indonesia Viet Nam China Source: OECD calculations based on data provided by national statistical office and Datastream; OECD, Productivity Statistics database 13

14 R&D outlays remain below some comparators Gross expenditure on R&D, % of GDP, 2015 % level 2021 target 0.0 Indonesia Philippines Colombia Viet Nam Mexico Thailand South Africa Poland Turkey Malaysia China Singapore OECD Korea Note: The 2% R&D expenditure target included in the STI Plan was subsequently revised down in the 12th Plan to 1.5% for Indonesia, Philippines, Viet Nam, and South Africa, 2014 for Turkey and Singapore. Source: UNESCO-UIS (2017), Science, Technology and Innovation (dataset); UIS data Centre; OECD, Gross domestic spending on R&D 14

15 There are high barriers to services trade Pilot exercise of OECD Services Trade Restrictiveness Index Construction services Regulatory transparency Barriers to competition Other discriminatory measures Restrictions on the movement of people Restrictions on foreign entry Average STRI 2014 CHL KOR JPN DEU LVA IRL CZE NZL GBR LTU AUS NLD FRA ZAF LUX EST DNK SVK ITA SVN POL ESP FIN AUT CAN BRA USA CRI SWE COL PRT HUN MEX TUR BEL CHN CHE GRC NOR RUS IND ISR THA IDN ISL Architecture services Regulatory transparency Barriers to competition Other discriminatory measures Restrictions on the movement of people Restriction on foreign entry Average STRI 2014 LVA CHL DNK JPN AUS NLD KOR USA LTU SWE NZL IRL DEU COL CAN LUX NOR MEX FIN ESP CHN GRC GBR ZAF BRA CRI CZE ITA TUR RUS CHE IDN AUT HUN ISR BEL ISL SVN EST PRT THA POL FRA SVK IND Note: Full openness to trade in services gives a score of zero, while complete closure to foreign services providers gives a score of one. Source: OECD (2017), Services Trade Restrictiveness index database 15

16 Prosperity - key constraints and selected recommendations Slow economic advancement, notably in the agriculture sector Low innovation and commercially viable research SME development is constrained by costly financing High cross-border barriers to services trade and investment Invest in lifelong learning and skills training Upgrade business skills and foster greater ICT use in agriculture Ensure institutional coordination. Boost public R&D spending to no less than 1.5% of GDP by 2021, as planned Create a lower-cost bourse in the stock exchange Improve co-ordination across agencies responsible for SMEs development Review regulations on foreign business operations including restrictions on foreign firms entry and movement of people 16

17 Partnerships: Sustainably financing development 17

18 The population is ageing rapidly Elderly dependency ratio OECD average Regional comparators Thailand Note: The elderly dependency ratio refers to the number persons (aged 65 and above) per working age population (aged 15 to 64). Regional comparators refers to the average elderly dependency ratio for Malaysia, Philippines, Indonesia and Viet Nam. Source: UN Population projections, 2017 revision. 18

19 Fiscal revenue will need to rise % of GDP General government revenue in % of GDP, average over Indonesia Singapore Philippines Thailand Korea Viet Nam Mexico Malaysia Colombia China South Africa Turkey Poland OECD Source: Datastream, OECD Revenue Statistics (2017) 19

20 There is room to improve PPP processes 100 PPP preparation PPP procurement PPP contract management Average Malaysia Turkey Thailand Poland Indonesia China Singapore Viet Nam Colombia Korea Mexico South Africa Philippines Note: The higher the score, the more aligned with international best practice. Scores for unsolicited proposals are not considered in the above analysis as Thailand, Malaysia, Turkey, Poland and Singapore do not have any regulatory procedures. Source: World Bank Group/PPIAF (2017), Benchmarking Public-Private Partnerships Procurement

21 Partnerships - key constraints and selected recommendations Revenue needs to increase to fund future commitments Boost tax efficiency, increase compliance and rely more heavily on less distortive taxes Inefficient and costly infrastructure financing Make greater use of alternative infrastructure financing such as Thai baht infrastructure bonds Align PPP policies with OECD Principles for Public Governance of PPPs Escalating public healthcare and pension burdens Invest in preventative and primary care. Reduce exemptions to healthcare copayments Increase pensionable age 21

22 Planet: Conserving nature 22

23 Droughts and floods affect many areas % 100 A. Share of provinces affected by drought or flooding Drought Flooding % B. Share of agricultural land affected by drought or flooding Drought Flooding Source: NESDB (2017), Social and Quality of Life Database System, OAE (2017), Agricultural Statistics of Thailand

24 Towards better waste management Municipal waste Kilograms per capita Philippines Colombia Poland Mexico Korea Turkey Thailand OECD Singapore Source: OECD countries from OECD (2017); Thailand from PCD (2017b); Philippines and Singapore from 24

25 Coal will form a bigger part of power generation by Natural gas Imported coal Lignite Renewable Imported hydropower Domestic hydropower Nuclear Source: MOE (2016), Thailand Integrated Energy Blueprint. 25

26 Emissions have increased Kg per 2010 USD CO 2 per GDP Colombia Singapore OECD Turkey Indonesia Mexico Philippines Korea Poland Thailand Malaysia China South Africa Viet Nam Source: IEA (2017), CO2 Emissions from Fuel Combustion 2017 Edition. 26

27 Planet - key constraints and selected recommendations Management of water resources is fragmented Floods and droughts often cause economic disruption Pollution and inadequate waste management undermine environmental quality Power sector plans will lead to a more carbon intensive path Environmental issues are not well integrated into public plans and policies Ensure co-ordination across existing agencies, at all levels of governance Improve disaster prevention and response capacity at the local level to effectively provide services Make polluters pay more directly, including wastewater tariffs on water usage Step up investments in renewables and consider increasing environmental taxation Carry out Strategic Environmental Assessments more frequently and effectively 27

28 Peace: Strengthening governance 28

29 Improving reform implementation 4 Capacity for State reform Long-term strategies South Africa Thailand Indonesia Mexico Turkey Singapore OECD Average Korea China Poland Colombia Malaysia Philippines Note: Capacity for State reform measures the authorities ability to decide and actually implement reforms (scores range from 0 for very low capacity to 4 for strong capacity). Long-term strategies indicate whether the public authorities have a long-term strategic vision (scores range from 0 for very weak strategic vision to 4 for strong strategic vision). Source: Centre d Études Prospectives et d Informations Internationales, Institutional Profiles Database

30 Improving government online presence Government's online service Online e-participation Indonesia Thailand South Africa Viet Nam Turkey Philippines Poland Malaysia China Colombia OECD Average Mexico Korea Singapore Note: The higher the score, the closer to world best practice Source: Cornell University et al. (2017), Global Innovation Index 30

31 Local governments rely heavily on revenue from the central government Local government revenue sources, 2016 Locally collected revenue 11% Central government: VAT redistribution 39% 17% Central government: other tax redistribution Central government: grant funding 33% Source: Fiscal Policy Office 31

32 Corruption persists 90 Corruption perception index, Note: Index ranges from 0 (highly corrupt) to 100 (very clean). Source:Transparency International Corruption Perception Index (2017), 32

33 Peace - key constraints and selected recommendations Lacking institutional capacity Imbalance between central and local government Review role of ministries and clarify responsibilities across all levels of government Pursue decentralisation by empowering local administrations Weak enforcement of competition law Strengthen capacity of the Trade Competition Commission Corruption remains problematic Further strengthen existing integrity measures and streamline the anticorruption mandates of various institutions 33

34 For more information, please see Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. 34