The Economic Policies of Visionary Leaders

Our economy is relatively small in global terms. Yet, globalisation compels us to carefully manage our participation in the fluctuating worldwide economy. The process of navigating the policies of trade-partner countries can be especially tricky.

Therefore, clear policies that strengthen our country’s economy are absolutely critical, especially at this time when the global economy – including Thailand’s economy – is staggering from the sub-prime problem.

Because of this, Thai people expect any new government to foster economic stability. Now Thailand needs visionary leaders to help our export sector, which is threatened by non-tariff barriers.

Last November I gave a lecture titled “The Impact of Globalisation on the Thai Economy” at the seminar “Overcoming the Crisis: A Strategy to Deal with Thai exports in 2008.” In my talk, I proposed that Thai leaders take a “quick on the draw” approach, in which they swiftly acknowledge problems and energetically resolve them.

Thai politicians were slow to address the needs of Thai shrimp farmers who were having problems with US government. Apparently, the Shrimp Association of Louisiana had asked the US government to eliminate its Generalized System of Preferences (GSP) for Thai shrimp, arguing that the Thai shrimp industry uses child labour. In this situation, visionary leaders would have negotiated with the US, whilst adhering to global trade regulations.

Visionary leaders would have aimed to both resolve the conflict and, at the same time, improve opportunities for Thai exports. However, Thailand’s leaders tend to passively accept decisions by the economic powerhouse nations. They accept the impact of these debilitating decisions and typically attempt to solve problems only when it is almost too late.

Strong national leaders would negotiate for proper regulatory protocol and prevent our country from being intimidated. They would persuade other nations to accept outcomes that bring benefit to all involved.

Leaders require foresight to anticipate the changes our nation must make to gain economic advantage over other countries. The government must introduce pro-active policies that anticipate global trends.

However, if our leaders raise product standards too quickly, high production costs would hurt the Thai economy. Thus, it is essential to negotiate with other countries so product standards improve at a common rate. All future production of Thai goods could include components produced in other nations, particularly Thailand’s neighbouring countries. Therefore, it will be imperative that Thai businesses exert pressure on such external suppliers to attain acceptable international production standards, ensuring that the quality of resultant Thai goods is not compromised in any way.

Non-tariff barriers that Thai entrepreneurs now face are only one problem. The Government has many more tasks, such as rebuilding the confidence of Thai people and foreign investors in the economy, and increasing productivity in our industrial sector. If a leader has vision and all stake holders work together, I know the Thai economy can resist the daunting competition of an increasingly globalized world.

Dr Kriengsak Chareonwongsak
Senior Fellow, Harvard Kennedy School , Harvard University
kriengsak@kriengsak.com, kriengsak.com, drdancando.com