The Policies and Politics of Industrial Upgrading in Thailand during the Thaksin Era (2001–2006)

Abstract

What happens when developing countries can no longer grow by simply exploiting their existing comparative advantages in natural resources or cheap labor? When entering the 21st century Thailand was confronted with that question, but in comparison with other East Asian countries it was also a laggard in relation to industrial technology development. Prime Minister Thaksin Shinawatra placed industrial upgrading high on the policy agenda. This article combines a policy cycle analysis with a political analysis. It examines the ability and willingness of the Thaksin government to design and implement an adequate and coherent set of industrial upgrading policies with a particular emphasis on implementation issues. It is argued that although many initiatives were taken during the Thaksin era, they did not add up to an adequate and coherent set of industrial upgrading policies. This was partly due to institutional legacies in the bureaucratic system but mainly a result of the logic of politics, including the nature of political coalition-building.

Dawn of Industrialisation? The Indonesian Automotive Industry

“…Thailand's extensive components industry also has a heavy foreign presence, and in its first tier of suppliers fewer than a quarter of the firms are purely Thai (Natsuda and Thoburn 2013), although there are a few well-known Thai component makers. Influential commentators (Lauridsen 2009;Doner 2009, chapter 7) have argued that there has been little upgrading of indigenous Thai component suppliers, though we have identified some recent evidence to the contrary (Natsuda and Thoburn 2013, 432).…”

“…A particular focus of much GVC analysis is whether domestic firms within a chain can upgrade their products, processes, or functions in order to achieve higher productivity and (sometimes) a larger share of value added (Humphrey and Schmitz 2002). 8 Beyond the GVC literature's usual emphasis on the upgrading of firms' activities, there is also an issue of upgrading the whole industrial structure (Lauridsen 2009)-in this case the whole network of local production.…”

Weber, Marx and Contemporary Thailand

“…chains (see Archanun and Nipon 2011;Lauridsen 2009). Additionally, the expansion of consumer technologies, such as computers, mobile phones, motorcycles and automobiles, has greatly changed economic and social life.…”

Coalition Politics and Reform Dynamics in Thailand

“…The four-year master plan was clear and detailed, and all the objectives, such as producing 1 million cars per year and achieving localization of 60%, were achieved in 2005, one year ahead of schedule (Ohno 2006: 39-40). Another major shift took place in the hard disk drives industry, as the long-standing paucity of university-industry linkages was partially remedied (Lauridsen 2009). The Thai bureaucratic system, notorious for its bloated structure and functional duplication, underwent a radical transformation for the first time since the 1890s.…”

“…The government provided fiscal stimulus through a number of grassroots programs such as a debt moratorium program for farmers and the One-Million-Baht Village Fund. The Thai economy had grown at an average of 5% per annum during his tenure.In terms of policymaking, the Thaksin administration was the first government that systematically formulated selective industrial policies and forcefully placed science, technology, and innovation high on the agenda(Lauridsen 2009;Patarapong 2011). The National Competitiveness Committee chaired by the prime minister was inaugurated, with the overarching concept of "cluster development".…”