Dr Vachara Phanchet, Thailand’s trade representative and an engineer by training, has a wry sense of humour that is rare among his peer group.
But at the Milken Institute’s Global Conference in Los Angeles on Monday, he struck a serious tone when he warned about the challenge posed to Asian countries by their rapidly aging populations. “You’re going to have one person supporting two senior citizens as these populations get older,” he told attendees of a panel devoted to ‘the new dynamics of the Asian economy‘.
Dr Phanchet was more sanguine about the prospects for Thailand’s small and medium-sized enterprises, which he described as “very important” to the growth of the country’s economy, which is the second-largest in south east Asia and which has been hurt by recent political unrest. (A government spokesman estimated Thailand’s economic growth could be cut by 0.6 percentage points if anti-government protests go on for up to three months, according to a Reuters report on Monday)
“The government would like to see SMEs contributing 50 per cent to the Thai GDP, versus about 38 per cent today,” he told FT Alphaville.
Dr Vachara said that while large corporations employed a decent chunk of the Thai population, “these tend to be foreign companies and their policies might not be in the best interest of our people.”
To that end, the government was working to improve the “infrastructure of entrepreneurship” in four major areas, he said:
- Access to the international markets
- Access to financial assistance (For example, the government recently asked the state-owned SME Development Bank of Thailand to offer cheaper loans to ‘prime’ borrowers)
- Improving technical know-how and R&D
- Help adopting of internationally-recognised best practices, including in the area of management
The biggest challenge to entrepreneurship in Thailand, according to Dr Vachara, was a “lack of boldness”:
“People are unwilling to give up the safety and comfort of working for these larger institutions,” he said. In that sense, the financial crisis had been something of a blessing in disguise.
“Some people have realised that now might be a good time to jump ship, and build your own ship,” he said. “Well, realistically it might be a little boat for now – but at least you’ll be your own captain.”
Related links:
Thailand – Lex
A Thai SWF? More if than when. – FT Alphaville
Thai instability remains main threat to recovery – FT
Thais act to offset plunge in exports plunge – FT