Regional development, multi-level governance and water security are the keys to Thailand becoming a high-income economy, says the Organisation for Economic Cooperation and Development.
OECD deputy secretary-general Masamichi Kono said Thailand aims to become a high-income economy enjoying security, prosperity and sustainability by 2037, while he hopes the report will contribute to policy action to achieve the target.
The OECD launched a multi-dimensional review of Thailand on Feb 15. This is the second report building on the results of an initial assessment that identified the main constraints to Thailand's development.
According to Mr Kono, strong growth since the 1970s enabled Thailand to join the group of upper-middle-income economies in the early 2010s.
Economic success has brought remarkable social advancement. Poverty in particular has dropped from 60% in 1990 to 7% in 2019, while education and health services have considerably expanded and improved.
But economic development has taken a toll on the environment, and the benefits of prosperity have not been shared nationwide.
Mr Kono said the report showed that Thailand needs to achieve three transitions that can boost its capabilities to sustain faster and more inclusive economic growth.
The first transition is the shift from a growth dynamic with high structural inequalities and informality to one that focuses on unlocking the full potential of all regions, provinces and municipalities. Innovative regional policies adapted to local contexts can let local stakeholders and entrepreneurs discover potential.
The government should promote technical/vocational schools, universities and local colleges, and encourage investment in intermediate cities, attracting talent and capital outside Bangkok.
For the second transition, the report suggested that Thailand should enhance effective governance to distribute power and resources across government bodies and local administrations. The country needs to enhance its spending and revenue autonomy.
In order to strengthen the local revenue base, Thailand could reform the property tax and transfer system. Local authorities should have at least one important tax base.
On the expenditure side, Thailand could reorganise the current spending assignments between government levels. Local authorities should be allowed to finance infrastructure, as well as to plan and implement strategy development.
Finally, Thailand should improve water management to focus on the security of natural resources from existing management based on natural disasters, especially flooding.
In addition, better governance and coordination between local and national authorities on water management is crucial.