GungaDin

One misstep was a failure of long-term thinking. During the good years, neither Abhisit’s Democrat Party nor Thaksin’s Thai Rak Thai Party, which first took power in 2001, invested enough in overhauling an archaic education system, which emphasizes basic literacy and rote memorization. Taiwan, Singapore, China, and India invested in university education, English-language instruction, and higher-value skills, and as a result managed to build innovative companies with a global outlook, and sizable English-language outsourcing industries. But Thailand’s government and its major business groups remained wedded to lower-value manufacturing for foreign companies. Unlike China or Singapore, the government failed to create effective incentives to help Thai companies improve their workforces and expand globally. Large Thai conglomerates, historically protected by tight ties to government leaders, moved slowly to embrace real international competition, even as Thailand inked free-trade deals with China and other Southeast Asian states.

The failure was obvious. Thailand’s scores on the TOEFL exam, the test of English skills for students heading to university, now consistently rank among the lowest in Asia. No Thai-owned companies have emerged that compare with the Taiwanese computer giant Acer or the Indian IT giant Infosys. And as China gobbles up more and more low-end manufacturing, high-tech firms ignore Thailand. Intel built a $1 billion chip-assembly plant in Vietnam, a country that in the 1980s and 1990s lagged far behind Thailand. Last year Taiwanese manufacturers pledged to invest billions in Vietnam, compared with just $200 million pledged in Thailand, according to the Associated Press. Because Thailand has been unable to move into higher-value industries, and has been incapable of using government spending to prop up the economy indefinitely in an era of global financial crisis, its growth rates over the past four years have tumbled badly, from 5.2 percent in 2006 to 4.9 percent in 2007 to 2.5 percent in 2008 and minus 2.3 percent last year.