Countries like Thailand should prepare better to cope with volatile natural and financial risks, World Bank country director Ulrich Zachau said Monday at the official launch of the Bank's World Development Report 2014.
He cited water management, health insurance support to the poor and crop insurance as examples where Thailand is poorly prepared for problems.
The Bangkok-based Mr Zachau said financial and economic turmoil in the West have disrupted the world economy, with loss of income, jobs, and social stability. Meanwhile, intense natural disasters have devastated entire communities from Haiti to Thailand and Japan, causing majuor human and economic losses.
As concerns rise over global warming and the spread of deadly contagious diseases, countries like Thailand need to plan to become more resilient to risk, while still taking advantage of development opportunities, said Mr Zachau.
The World Development Report 2014 report called for individuals and institutions to move from being "crisis fighters" to becoming "proactive and systematic risk managers".
The early morning sun rises over Bangkok. (AP photo)
Thailand is cited in the report for improved management of macroeconomic, financial and corporate risks following the Asian financial crisis of 1998. Lessons learned then have helped Thailand navigate the recent global financial crisis, said Mr Zachau.
But a number of other risks could benefit from systematic management. Water management could help with flood control as well as rising water levels in Bangkok. Planning could alleviate the obvious risk to Thailand's competitiveness from inadequate education. Better planning is needed to plan for high energy costs, he said.
Risk, he said, could never be completely eliminated but people and institutions could build resilience by applying a balanced approach of structural policy measures, community-based prevention, insurance, education, training, and effective regulation.
Dueanden Nikomborirak, Thailand Development Research Institute (TDRI) director of macroeconomic management, said Thailand faces obvious risks from climate change, the global economy, and the speed of information exchange, illustrated like the recent Government Savings Bank run caused by panic on social media.
Norman Loayza, the report's chief author, said effective risk management could minimise or mitigate losses from adverse shocks, and unleash new business opportunities.
"We just need to look into the future and get organised systematically," he said. "If you're better prepared, coping with risk will not be so difficult and cumbersome."
From both domestic and international perspectives, he said, politicians and donors tend to respond to crisis and emergencies, rather than plan ahead.
"We need to mainstream risk management into the [overall] development agenda by considering change and uncertainty as fundamental characteristics in planning, and get policies oriented to integrated risk management," said the World Bank economist.
Mr Loayza also suggested that Thailand and simjilar countries should consider setting up a National Risk Board to get such planning and management under way.
There are many models, depending on national needs, he said. Singapore, for example, integrates risk management into the government planning and budgeting. The Netherlands and the United Kingdom have an independent organisation which alerts and then advises the government on risks.
Somchai Jitsuchon, TDRI director of sustainable development, agreed that preparation was cost-effective but required a holistic approach.
Thailand remains still trapped in the so-called pro-cyclical policy, meaning that when the economy is good, the government spends a lot, but cuts back in dangerous days. The country lacks sufficient flexibility in its production structure.
Apart from poor preparation to cope with natural disaster, Thai society is not fully insured for health packages for the aged and unemployed. It has failed to expand social protection to informal sector-workers.
"We may have to be bold, think more proactive like Malaysia in announcing where we would like to be in the next five to 10 years," said Mr Suchon. "So far, we don’t have leaders to conceptualise and prepare for financing the learning process of the society and business."
He noted that public and private sectors both should consider research and development investment, as well as innovation policies that could "fast forward the economy" and prepare for quick recovery from any future crisis.
"We may need processes similar to those launched by South Korea and Taiwan decades ago," he said.