BANGKOK -- Thailand's government, plotting an escape from the middle-income trap, will draw up the country's first long-term strategy for promoting sustained economic growth.
Thailand will aim to double per-capita income to $13,000 in a two-decade plan due out as soon as next year. The effort will see the second largest economy in Southeast Asia run head-on into challenges like moving up the industrial value chain and improving education.
"The five-year plans we've been using are too short," Porametee Vimolsiri, secretary-general of the National Economic and Social Development Board, told The Nikkei in an interview. "There are issues like our aging population and energy security (problem) that we should analyze and tackle from a long-term perspective."
Per-capita gross national income, an indicator that takes into account Thai companies' overseas activity, totaled $5,620 in 2015. Lifting this figure to $13,000 -- in line with countries such as Poland and Hungary -- over 20 years would require annual economic growth of around 5%.
Thailand ranks 86th out of roughly 170 economies by GNI per capita, World Bank data for 2015 shows.
Thailand's graying population is forecast to begin shrinking in the mid-2020s. The nation's demographic bonus will give way to an onus that weighs on growth and makes higher productivity vital to boosting income. "We need to apply more technological innovation, shifting to knowledge-intensive industries and improving research and development capabilities. Thailand is still quite weak in these areas," Porametee said.
Besides seeking advances in such core industries as automobiles, electronics and petrochemicals, Thailand will foster fields including aircraft production, information technology, pharmaceuticals and medical tourism. The government also wants to use biotechnology and other innovations to transform an agricultural sector now focused on low-productivity rice farming.
R&D investment is to rise from less than 1% of gross domestic product now to 1.5% over the first five years, and eventually to 3%. The government will also seek to bring the Gini coefficient -- a measure of income inequality -- to levels seen in developed countries. Targets will also be set for the number of science and engineering researchers in the country and academic proficiency standards for children.
Thailand's ruling junta referenced the strategy in the draft constitution now awaiting promulgation to ensure that the plan remains a priority for future governments.
To some, this hodgepodge of targets may seem a stretch. The government intentionally aimed high for some aspects of the plan, reckons Akio Egawa, an associate professor of economics at St. Andrew's University in Osaka, Japan.
"Whether steady progress can be made in such areas as infrastructure will serve as a test" of prospects for the plan, Egawa said. He sees cultivating talent as the biggest challenge.
Porametee expressed hopes that Japan, Thailand's top foreign investor, will provide advanced technology as well as funding. The Japanese government has started supporting training of Thai engineers.
The Thai government aims to establish National Strategy Act, the legislative foundation for the 20-year effort as early as the first half of 2017. Whether the junta can demonstrate specific policies for achieving it will determine how the public and investors both domestic and international evaluate the long-term commitment.