Abstract
Energy and energy security have become important to countries aiming to go on the path of sustainable development. In this regard this paper analyses the improvement of energy security which occurs as a result of energy efficiency (EE) improvements in the power sector. In this paper energy security is measured along three main themes which are oil security, gas security and sustainability. The energy systems of the selected countries, namely Sri Lanka, Thailand and Vietnam are modeled using an integer programming based optimization model called Model for Energy Supply Strategy Alternatives and their General Environmental Impacts – MESSAGE. Each country is modeled with two scenarios namely the reference scenario which maintains the status quo at the start year and the EE scenario which models EE options in the demand side as supply side alternatives. The time horizon is 2007-2030, where 2007 is the base year and 2030 is the end year. The results are presented for oil security, gas security, sustainability, and also for co-benefits such as mitigation of CO emissions, reduction in conventional primary energy use and reduction of local air pollutants such as SO and NO . Results show that energy efficiency in Sri Lanka significantly increases the energy security whilst also accruing co-benefits of CO mitigation, mitigation of local air pollution and reducing the conventional primary energy use. In the case of Thailand and Vietnam, energy security is enhanced in the earlier years (2007-2015), but in the longer term of modeling horizon (2020-2030) energy security of both the reference and EE scenarios converge indicating that in terms of long term energy security implementing energy efficiency measures alone would not enhance energy security.
Country or Region: Thailand
Greacen, Chuenchom and Chris Greacen,
Abstract
Over the past five decades Thailand’s electricity arrangements have evolved from largely self-regulated state-owned utilities, to limited private-sector participation (under small power producer and independent power producer programmes), to officially approved plans for retail competition. A recent shift to a “National Champion” self-regulated monopoly model for generation and transmission maintains a focus on privatization but de-emphasizes competition and independent regulation, and raises substantial concerns for small consumers and the environment. This historical narrative traces the governance of the Thai electricity sector, including “electricity reform” in its various manifestations. In the context of Thailand’s ongoing social and economic transformations, we examine the roles of government, utilities, NGOs, multilateral institutions, and the private sector in shaping electricity governance. Key features include politically potent electric utilities that have been able to successfully reject certain aspects of neo-liberal reform (competition, regulatory oversight) while embracing others (stock market capitalization); a significant cadre of well-placed individuals able to benefit from transfers of public assets to the private sphere; and a civil society that has had difficulty in identifying and preventing electricity sector activities that run counter to the public interest.
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Jayanthakumaran, Kankesu and Reetu Verma
Abstract
This paper demonstrates that multilateralism and regionalism are complementary, and that regional income convergence is likely with a like-minded and committed regionalism that often has links culturally and geographically. The association between international trade, income per capita, regional income convergence in ASEAN-5 is explored by applying the Lumsdaine and Papell approach that allows two endogenous structural breaks. The causal relationships between the above variables are also studied using Granger causality tests. The conclusion is that global (non-discriminatory multilateral) reforms have had a large impact on increasing trade. There is also a two-way causal relationship between the flow from trade to regional income convergence, and vice versa.
Severino, Rodolfo
Abstract
When Cambodia, Laos, Myanmar, and Vietnam became members of ASEAN in the late 1990s, concerns were raised about the emergence of a development divide on the basis of a gap in average per capita GDP between the older and the newer members. Such concerns are largely misplaced. There are, however, areas where the divide is real and concerns over it are valid. The Initiative for ASEAN Integration (IAI) has been the principal response of ASEAN and its partners to the development divide. While the four newer ASEAN members have found the IAI projects generally useful, more could be done to make them more coherent, subject their selection and design to greater rigour, strengthen them with provisions for follow-through and assessment, and give the newer members a greater sense of ownership. Aside from the IAI, there are also other programmes for the development of the Mekong Basin, where all the four newer ASEAN members are located. In sum, the development divide in ASEAN is more complex than the difference in economic advancement between the older and the newer members. Programmes to close it should, therefore, be sharply targeted at where the gap precisely lies.
Pananond, Pavida
Abstract
This paper sets out to examine what has happened to the multinational enterprises from Thailand after the crisis. The paper sets the context by discussing the three distinct phases of Thai outward investment: early development (1977-88), rapid rise (1989-97), and post-crisis decline (1998 – present). It then points out the four different trends of Thai multinationals’ post-crisis behaviours: decline, replication of pre-crisis behaviour, reform and refocus, and new emergence. While the first trend involves Thai multinationals that reduced or withdrew from international activities, the second group looks set to repeat its pre-crisis hasty and opportunistic international expansion. The third pattern observed among Thai multinationals shows firms that became more focused in their international expansion strategy, and the fourth trend introduces a new set of Thai multinationals that enjoyed their growth after the crisis. Theoretical explanations of the four trends are then discussed.
Chirathivat, Suthiphand and Sothitorn Mallikamas
Abstract
This paper aims at discussing Thailand’s FTAs initiative and strategy. The recent proliferation of worldwide FTAs in conjunction with the interest of the political leadership have pushed Thailand to become much involved with this new bilateral trade liberalization. The country has made much progress to advance framework agreements with a number of countries, including the significant powers like China, India, Japan, and the United States. The implications of FTAs appear to be tremendous for Thailand in terms of trade increase, GDP and welfare improvement, structural changes related to specific FTAs and sectoral impact. This new dimension of policy framework requires Thailand to explore causes for concern as much as economic opportunities awaiting in front of the long and rocky road that is still to be designed in its roadmap and further implementation.
Athukorala, Prema-chandra and Suphat Suphachalasai
Abstract
This paper examines post-crisis export performance in Thailand against the backdrop of pre-crisis experience and ongoing changes in patterns of international production. Following a stage-setting survey of trends and patterns of export performance over the past four decades, it focuses on two key themes central to the current policy debate, namely the implications of China’s emergence as a key player in world markets in labour-intensive manufactured goods and the link between the crisis-propelled real exchange rate depreciation and export performance. There is strong evidence to suggest that the “China fear” is vastly exaggerated. Real exchange rate depreciation has been a significant determinant of the post-crisis export recovery. However, the growing importance in the export composition of parts and components within vertically integrated cross-border production processes has tended to weaken the nexus of real exchange rate and export growth.
Warr, Peter
Abstract
Sustained reduction of poverty incidence in Thailand has occurred over a period of several decades. This reduction in absolute poverty has occurred in spite of an increase in inequality over the same period. The rate of reduction of poverty has been strongly related to the rate of growth of GDP but the increase in inequality has not. The long-term growth of the Thai economy has been associated with a gradual opening to international trade and investment. The paper also reviews the prospects for reducing poverty by raising minimum wages and argues that poverty cannot be reduced effectively in this way.
Phanishsarn, Aksornsri
Abstract
This research note analyses China’s Great Western Development Strategy, or the so-called “Go-West” policy, launched in 2000, and its implications for Thailand. Under this regional economic development policy, the Chinese Government has intensified its efforts to accelerate the development of its inner western region. Thailand’s geographical proximity to China’s western provinces provides it with a geo-economic advantage. The study suggests that Thailand should place priority on developing economic linkages with the growing southwestern provinces of Sichuan, Chongqing Municipality, Yunnan, and the Guangxi Zhuang Autonomous Region.
Larsson, Christoffer and Sundar Venkatesh
Abstract
Studies on industrial clustering identify factors that nourish the clustering and thus aid in industrial development. We classify these as government incentives and economic fundamentals. Economic fundamentals, which we define as a set of essential factors conducive to the development of an industry cluster, may be the result of chance — for instance, geographical location and climate — or may be a result of long term government policies such as affordable and abundant higher education. We examine the importance of government incentives relative to the economic fundamentals in the development of the software services industry in Thailand. Our survey of investors, both foreign and domestic, in the software services industry in Thailand, found that economic fundamentals were perceived as being more important than government incentives in influencing investment decisions. This raises important questions for government policy. For example, is money used for tax breaks and grants efficiently spent? Or, could the money be better invested in improving the quality of human resources and infrastructure? Based on the findings of this study, recommendations are proposed for government policy and directions for future research.
Kubo, Kōji
Abstract
This paper analyses the influence of the East Asian crisis and the subsequent reforms on the oligopolistic nature of the Thai banking industry. Since the crisis, there have been substantial changes in competitive environment, including a decline in the family ownership of banks as well as the arrival of new entrants. How did these changes affect a banking industry in which the six largest local banks accounted for over 70 per cent of market share? The estimated Lerner index from Bresnahan’s (1989) conjectural variation model indicates the possibility of a decline in the degree of competition.
Nidhiprabha, Bhanupong
Abstract
This paper investigates Thailand’s macroeconomic policy responses to the global financial crisis in 2009. Empirical evidence found in this paper indicates that fiscal policy is relatively less effective than monetary policy. Tax reduction is more powerful in stimulating output than government spending. Maintaining undervalued exchange rates does not create the output expansion effect. Sustained economic recovery requires growth in the world trade volume and enhanced business confidence.
Frankema, Ewout and J. Thomas Lindblad
Abstract
This paper compares long-run economic growth in Indonesia and Thailand as related to technological progress during the second half of the twentieth century. It adopts a two-stage approach. It first provides an estimation of long-run total factor productivity differentials between the two countries then offering an in-depth analysis of this differential and associated trends and policies concerning, amongst others, capital goods imports, foreign direct investment and R&D expenditure. The paper argues that technological progress shaped by official policies and the institutional framework of absorption sufficiently explains why outcomes have differed so substantially in Thailand and Indonesia despite apparently similar initial conditions of long-run economic growth. Macroeconomic policies need to pay explicit attention to the acquisition of modern technologies in order for rapid economic growth to be sustained.
Pholphirul, Piriya
Abstract
This paper uses national income identity to explain the causal relationships among Thailand’s aggregate volatility, deficient financial structure, financial liberalization, and financial crisis in this country. Relatively good macroeconomic policies and diversified structure were able to compensate for financial imperfections and weak corporate governance in the financial sector in the period 1970–90. Under these conditions, real GDP growth was positive, inflation was relatively low, and consumption was relatively less volatile than GDP. The 1997 crisis, however, severely affected the ability of central authorities to smooth fluctuation. Investment and consumption volatility increased substantially. This implies that, when counter-cyclical policies are difficult to implement and incomplete markets exist, it is much more difficult to stabilize consumption.
Wiboonchutikula, Paitoon, Polpat Kotrajaras, and Bundit Chaivichayachat
Abstract
The paper analyses the nature, the determinants, and the impacts of net capital inflows surging in Thailand after the 1997 currency and financial crises. After the crises, the composition of the net capital inflows was changed from the ones dominated by short-term flows to direct foreign investment. However, in recent years, huge net inflows of short-term loans and portfolio investment have returned. While direct foreign investment found mostly in the manufacturing export sector gains from real depreciation of domestic currency, short-term loans and foreign investment in debt and equity were attracted by real exchange rate appreciation together with high returns on investing in Thailand as well as in the emerging Asian region as a whole. As a result of the surge of total net capital inflows, asset prices increased somewhat, foreign reserves grew rapidly as domestic currency appreciated both in nominal and real terms. The study suggests policies which seek to balance the impacts of capital inflows on real exchange rates and the accumulation of foreign reserves. An attempt should also be made to allow for capital to flow out more freely mitigating the adverse effects of the net capital inflow surges.
