Development plan targets adding value

Development plan targets adding value

Danucha Pichayanan, secretary-general of the National Economic and Social Development Council (NESDC). (Photo by Chanat Katanyu)
Danucha Pichayanan, secretary-general of the National Economic and Social Development Council (NESDC). (Photo by Chanat Katanyu)

The next national economic and social development plan should focus on narrowing income disparity and reducing poverty through innovation, creating a knowledge-based economy and value-added development, says the state planning unit's chief.

According to Danucha Pichayanan, secretary-general of the National Economic and Social Development Council (NESDC), the country's 13th national economic and social development plan, which spans from 2023 to 2027, aims to transform Thailand in key four areas.

The first goal is to transition the country from natural resource-based industries towards a knowledge-based or high value-added economy that is environmentally friendly.

A high value-added economy focuses on activities that generate a large margin between the final price of a good or service and the cost of the inputs used to produce it, thus creating higher profits for businesses and higher wages for workers.

"Thailand needs to transform the manufacturing sector to higher value-added industries such as the bio-, circular and green economic model, which can increase the value of farm products. An electric vehicle ecosystem creates supporting industries including smart electrical parts and a smart grid, while we should also emphasise the medical industry, tourism, logistics and digital services," he said.

Another focus is providing opportunity and equality for Thais so the poor can enjoy the benefits of economic prosperity, both in terms of income and wealth, said Mr Danucha.

"To build a society of opportunity and equality, the government needs to promote sustainable growth among small and medium-sized enterprises [SMEs] and community businesses; develop well-being and smart cities; reduce the number of people living in poverty, and introduce more appropriate social protection measures," he said.

Production and consumption that affect the environment also need to be considered under the new plan in order to shift to an environmentally friendly way of life and safety, said Mr Danucha.

The fourth priority is developing the workforce and improving government management to facilitate investors and public services.

He said the 13th plan, which was approved for development framework by the NESDC board on Feb 15, is going through public hearings currently among concerned parties.

The government reported for its recent development plan covering 2017-2019, development reduced the number of poor people and narrowed income disparity, according to the NESDC report.

However, the agency estimated for 2020-2022, poverty is likely to worsen because of Covid-19 outbreaks. The pandemic also triggered a big gap in income disparity because poor people are less able to cope with the crisis because of low education levels and lack of access to digital technology, said the NESDC.

Jinanggoon Rojananan, deputy secretary-general of the NESDC, said in the first quarter of 2019, 4.3 million people or 6.24% of the population were living below the poverty line -- defined as an income of 2,763 baht per month per person.

The latest survey by the agency showed Covid-19 outbreaks caused the number of people living below the poverty line to rise from 7.8 million in the first quarter of 2020 to 9.1 million in the second quarter, she said. The tally dropped to 7.2 million in the third quarter, attributed to government subsidies to help low-income earners and efforts from the general public and SMEs.

Ms Jinanggoon said the government's aid measures could temporarily reduce poverty, but noted the number would rise again once the government's relief measures ended.

The survey found Thais, especially low-income earners, have low savings and the government's social welfare programme is far from sufficient. A technology gap has also meant poor people have limited access to government relief measures.

"To tackle poverty and income disparity in the long term and in a more sustainable manner, the government desperately needs to implement tax restructuring to build more fairness, be it corporate income tax or land and building tax. Digital development is also needed to allow poor people to gain better access to digital technology, and skills training to generate more income," she said.

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