Download Punjab Development Report: Can Punjab Preserve the Prosperity

Record, Need for Change,
Constraints, and Strategies
26 October 2006
Bangkok
NESDB and World Bank
1. Record: Stellar Growth
GDP Composition, 1970-2004
US$16 Billion Economy
With
22 Million People
Achieving
Strong Growth over last
Four Decades…
100%
90%
80%
70%
60%
50%
1,000
20,000
900
Per
Capita GDP, 1970-2004
18,000
800
16,000
700
14,000
600
12,000
500
10,000
400
8,000
300
6,000
200
4,000
100
2,000
0
30%
20%
10%
0%
Baht (1988 Prices)
US Dollar (Current Prices)
40%
0
1970
1975
1980
1985
1990
GNI Per Capita at Current Prices, Atlas Method (LHS)
1995
2000
2004
GRP Per Capita at 1988 Prices
1970
1975
Agriculture
1980
1985
Industry
1990
1995
2000
Services
…Due to Structural Change from
Agriculture
to Services and Industry
2004
2. Record: Rapid Poverty Reduction
Persons
Growth Came with
Lower Poverty…
50
9,000,000
45
8,000,000
40
7,000,000
35
6,000,000
30
Electricity and HH Durables, 1988-2002
100
Percent
Poverty, 1988-2002
10,000,000
90
80
25
4,000,000
20
3,000,000
15
1988
1990
1992
1994
1996
1998
Number (LHS)
2000
2002
70
Percent
5,000,000
60
50
40
30
Incidence
20
10
School Participation, 1988-2002
100
0
1988
1990
Electricity
1992
1994
Refrigerator
1996
1998
TV
2000
2002
Motorcycle
90
80
…More Household Durables…
Percent
70
60
50
40
… And Higher School Enrollment
30
20
10
0
1988
Age 6 to11
1990
1992
Age 12 to 14
1994
1996
1998
Age 15 to 17
2000
2002
Age 18 or older
3. Record: Vibrant Communities
25
1,000
20
800
15
600
10
400
…And Households Provide
Social Services and Participate
in Local Groups
Number per 100,000
Household Participation in
Social Services and Local Groups, 2001
5
200
100
95
95
80
90
65
85
50
80
35
0
East
West
North
Drug-related Crimes (LHS)
South Northeast
Violent Crimes
Crime Rates Low…
Bangkok Bangkok Central
Metropolis Vicinity
East
Social Services (LHS)
West
North
South Northeast
Local Groups
Percent
Bangkok Bangkok Central
Metropolis Vicinity
Percent
Number per 100,000
Drug-related and Violent Crimes, 2000
1,200
1. Need for Change: Slower Growth in
Productivity and GDP than Other Regions
130
Labor Productivity, 1991-2004
120
Index (Bangkok 1991=100)
110
100
90
80
…So that
Provincial Level
Per Capita GDP
Remains Low
70
60
Per Capita GDP
Map
2002
Lower Growth in
Labor Productivity…
50
40
30
20
10
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Bangkok
Vicinity
East
Central
West
North
South
Northeast
Regional GDP Shares, 1970-2004
…Leads to Lower
GDP Share…
2. Need for Change:
Higher Concentration of Thailand’s Poor
15
Lower Rate of
Growth
Led to
Lower
Poverty
Reduction…
Rate of Decline in Poverty Headcount
Bangkok
Center
12
South
9
North
Northeast
6
2.5
3.0
3.5
4.0
4.5
5.0
Real Growth Per Capita in GDP
…Poverty More
Concentrated
In the Northeast
Today Than in the Past
5.5
3. Need for Change: Strain on Communities
Poverty and Remittances
20
Villages with Many Problems due to Migration for Work
35
15
5
|
th
So
u
st
or
th
ea
N
er
en
t
N
or
th
ity
C
k
kg
ko
Ba
n
1996
Vi
ci
n
th
So
u
st
or
th
N
er
ea
en
t
or
th
N
C
Ba
n
Vi
ci
n
kg
ko
k
ity
0
2002
Without Remittance
With Remittance
While Remittances from Migrants
Have Helped to Reduce Poverty…
NRD2C Survey, MOI
30
25
Percent
10
…They Also
Lead
to more
Migration
Resulting in
“many
problems”
in Villages…
20
15
10
5
0
Center
South
2001
Age Pyramid, Bangkok 2002
40 50 60 70 80 90
…Including
Missing
Young Adult
Population
Group
0
0
10 20 30
Five year age group
40 50 60 70 80 90
North
1996
Age Pyramid, NE Region 2002
10 20 30
Northeast
7.5
5
2.5
0
2.5
Female Male
Percent of Population
5
7.5
7.5
5
2.5
0
2.5
Female Male
Percent of Population
5
7.5
1. Constraint: Primate City
Urbanization Rate
100
90
80
Lowest Urbanization…
70
60
50
40
30
Primacy Indices by Country
20
20
10
0
Ba ngkok
1990
1992
N o rth
1994
N o rth e a s t
1996
1998
S o u th
2000
2002
15
10
…Due to Thailand’s Exceptional
Degree of Primacy…
5
K
U
t
yp
nc
e
Fr
a
Eg
in
a
M
ex
ic
o
il
nt
az
ge
Ar
Br
In
di
a
na
hi
C
PR
na
m
a
et
Vi
ay
si
M
al
si
a
a
ne
re
do
In
Ko
h
ut
Th
a
City Rank by Population Size
ila
nd
0
So
1988
C e n tr a l
Largest City to 2nd Largest City
Largest City to 2nd to 4th Largest City
…Which Inhibits the
Development of
Secondary Cities in
Outlaying Regions
2. Constraint: Inability to Attract Manufacturing
Primacy Leads to Clustering of
Manufacturing Sector around Bangkok…
Manufacturing GDP by Region, 1991-2004
…So the
Contribution
of Outlaying
Regions to
Manuf. GDP
Remains
Low…
Manufacturing Employment by Type, 2001/2
100%
Spatial Distribution
of Manufacturing
Employment
2001/2
…As Skilland CapitalIntensive
Industries
Fail to
Take off
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
North
Resource-intensive
Central
BKKVIC
Labor-intensive
East
Scale-intensive
Northeast
South
Differentiated
Thailand
Science-based
3. Constraint: Ineffective Investment Incentives
BOI Investment Certificates, 2001-Apr 2005
100%
BOI
Investment
Promotion not
Benefiting
Outlaying
Areas…
80%
60%
40%
20%
0%
2001
Zone 1
2002
Zone 2
2003
Zone 3 Other
2004
Apr 2005
Zone 3 Northeast North South
…And Concentration of
Industrial Estates in
the Extended Bangkok
Area
…Due to BOI Zones Borders…
4. Constraint: Lack of Wage Jobs
…Wage Jobs are
Harder to Come by…
…And Monthly Wage Jobs
Are Few-in-Between…
80
40
60
Monthl y Waged Employment (%)
60
40
0
20
0
0
5
10
Waged Employment (%)
15
Unemployment Rate Feb 04
15
20
25
Ce nter
30
35
40
Yea rs o f Ag e
No rth ea st
45
No rth
50
Sou th
55
60
15
20
Ba ng kok
25
Center
30
35
40
Years of Age
Northeast
North
45
South
50
55
15
60
20
Bangkok
…Especially within Manuf. & Agric. …
25
Center
30
35
40
Years of Age
Northeast
North
45
South
50
55
Bangkok
…And Require Good Skills
100%
100%
Employment
By Sector
Feb 91/96/04
90%
80%
70%
90%
80%
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
10%
0%
Monthly Wage Empt Feb 04
Wage Empt Feb 04
20
20
80
While Unemployment is
Problem only for the Young…
E
F91
E F96 E F04
W
F91
W
F96
W
F04
M
F91
M
F96
M
F04
<< NORTHEAST
Agriculture
Manufacturing
E
F91
|
E F96 E F04
W
F91
W
F96
W
F04
M
F91
<< NORTH >>
Other Industry
Commerce
M
F96
M
F04
E
F91
E F96 E F04
W
F91
W
F96
W
F04
M
F91
M
F96
M
F04
Employment
By Education
Feb 91/96/04
20%
10%
0%
E
E
E
F91 F96 F04
W
W
W
F91 F96 F04
<< Northeast
| SOUTH >>
Transport & Comm'tn
M
M
M
F91 F96 F04
Other Services
None
Upper Secondary
Less than Primary
Vocational
E
E
E
F91 F96 F04
|
W
W
W
F91 F96 F04
M
M
M
F91 F96 F04
Rest of Thailand >>
Primary
University
Lower Secondary
60
5. Constraint: Lack of Well-Paid Jobs
18000
16000
Monthly Wages by Education Feb 91/96/04
14000
Skills also Increase Wages
Among Monthly Wage
Workers…
12000
10000
8000
6000
4000
2000
0
F91 F96 F04
<< NORTHEAST |
F91 F96 F04
<< NORTH >>
Primary or Less
F91 F96 F04
|
<< SOUTH >>
Lower Secondary
|
F91 F96 F04
F91 F96 F04
<< CENTRAL >>
| BANGKOK >>
Upper Secondary
Vocational
University
Returns to Education, Monthly Wages, Feb 91 to Feb 04
600
550
…And
Vocational
Education
Fetches High
Wage Premium
While
Upper Secondary
Doesn’t
500
450
400
350
300
250
200
150
100
50
0
F91 A91 F92 A92 F93 A93 F94 A94 F95 A95 F96 A96 F97 A97 F98 A98 F99 A99 F00 A00 F01 A01 F02 A02 F03 A03 F04 A04
Primary
Lower Secondary
Upper Secondary
Vocational
University
6. Constraint: Poor Cross-Border Infrastructure
Northeast Transport Map
Transport
Infrastructure
Adequate…
Rural Fixed Phone Lines (Per 1,000 Rural Pop.)
90
80
70
60
50
…As is Infrastructure
Across the Border
40
30
20
10
0
1977
1978
1979
1980
Center
1981
1982
1983
1984
1985
1986
North
1987
1988
1989
1990
1991
1992
Northeast
1993
1994
1995
1996
1997
1998
South
1999
2000
…While Communication
Infrastructure is Lagging…
7. Constraint: Little Cross-Border Trade
GNI Per Capita GDP, 1995 to 2003, US Dollar
1,000
As GMS
Countries
Have Grown
Faster
than the
Northeast
over the
Last
Decade…
800
600
400
200
0
1995
1996
Cambodia
1997
1998
Vietnam
1999
Lao PDR
2000
Myanmar
2001
2002
2003
Yunnan Province
Northeast
GMS GDP Shares, 1995 to 2003
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1995
1996
Vietnam
Northeast
1997
1998
Yunnan Province
1999
Myanmar
2000
Cambodia
2001
Lao PDR
2002
2003
Other Thailand
…Their Economies have Become Larger…
…And Thailand’s Exports to GMS
Have Increased…
Export Companies by Regions 2004
100
4%
Thailand Exports by Country, 1980-2004
90
3%
2%
1%
0%
1980
1981
1982
Cambodia
1983
1984
1985
1986
1987
Lao PDR
1988
1989
1990
1991
Myanmar
1992
1993
1994
1995
1996
Vietnam
1997
1998
1999
2000
2001
2002
2003
2004
…But
Exports
Continue to
Be via
Sea Rather
Than Land
80
70
60
50
40
30
20
10
Other Destinations
0
1
Bangkok, Vicinity and Central
North
East
South
Northeast
8. Constraint: Low Agricultural Productivity
Agricultural GDP by Region, 1970 to 2004
100%
90%
…And
Has Lowest
Labor
Productivity
Among All
Regions…
80%
70%
60%
50%
40%
30%
20%
10%
0%
Center
North
Bangkok
0.12
0.10
0.08
0.06
0.04
0.02
19
70
19
71
19
72
19
73
19
74
19
75
19
76
19
77
19
78
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
Northeast
Agricultural Labor Productivity, 1991 to 2004
South
0.00
1991
1992
Vicinity
Northeast Contributes Less than South and Center…
1993
1994
East
1995
1996
Central
1997
1998
West
1999
2000
North
2001
2002
Northeast
2003
2004
South
…Is Subsistence Production of Poor Households
Farm Households by Type 2002
100%
Farming Households and Number of Poor 2002
90%
…As Rice
Farming,
Which
Dominates
In the
Northeast,…
80%
70%
60%
50%
40%
30%
20%
10%
0%
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
Central
Rice farming
Northeast
North
Other crops, fruits, and vegetables
South
Livestock
Rice farming
Fishery
Northeast
Other crops,
fruits, and
vegetables
North
Livestock
Manufacturing
enterprise
South
Without
enterprise
Central
9. Constraint: Low Yield Varieties
Production Volume 2002
Rural Households Production 2002 (%)
5,000,000
100
…As Well As
Hom Mali (Jasmine)
Non-Glutinous Rice –
Sold Also
Internationally
4,500,000
90
80
4,000,000
70
3,500,000
60
3,000,000
50
2,500,000
40
30
2,000,000
20
1,500,000
10
1,000,000
0
Any Rice
Non-Glutinous
Glutinous
Non-Glutinous
and Glutinous
500,000
0
North
Northeast
North
South
Central
BKK and Vic.
Northeast
Jasmine
Central
Other Non-Glutinous
South
Glutinous
Northeast Specialized in Low-Yield Rice Varieties:
Glutinous Rice – Consumed Little Outside the Northeast…
Silk Farmer by Type 2002 (%)
Silk Farmer by Region 2002 (%)
100%
100%
90%
90%
80%
80%
70%
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
0%
Polyvoltine
Poly-bivoltine
Poly-biv./bivoltine
Most of Thailand’s Silk Farmers
Use Native Varieties…
Index (>1 Domestic Production Inefficient)
Domestic Resource Costs of Rice and Silk Yarn Production
1.8
1.4
1.0
0.6
0.2
Hom Mali vs. 5
Percent
Central
Northeast
North
…And Most of Them Live in
the Northeast…
Thai Glutinous
vs. Viet.
Glutinous
Thai Polyvoltine
vs. Chinese
Yarn
Thai PolyBivoltine vs.
Chinese Yarn
…And Production of
Local Rice and Silk Varieties
More Costly Than Major
Competitors
10. Constraint: Lack of Water
Villages with Many Problems in
Dry-Season Farming (%)
90
…As Large-Scale Irrigation
Not Suitable…
Yields Kept
Low By
Lack of
Dry-Season
Farming…
80
70
60
50
40
30
20
10
0
Central
Northeast
1996
North
2001
…And Droughts
Frequent
South
11. Constraint: Low Public Spending
Central Government Spending by Region, FY99 to FY03
11,000
10,000
9,000
Northeast
Receives Less
Public Resources
Than Other
Regions…
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
FY99
FY00
Northeast
FY01
FY02
Central
North
FY03
South
…And Very Low in
Agriculture
…Due to Lower
Capital Spending…
Northeast Spending by Type, FY99 to FY03
Northeast Public Spending by Sector FY03
100
100
3,000
90
2,500
80
2,000
70
1,500
60
1,000
50
500
90
80
70
60
50
40
30
20
10
0
40
FY99
Salary
FY00
FY01
Non-Salary
FY02
FY03
Capital
Education Economic
Affairs
Public
Service
Other
Health
Public
Order
% Non-BKK Average
Welfare
Housing
Transport Agriculture
Baht Per Capita (RHS)
Defense
12. Constraint: Low Capacity
Civil Servants Per Capita (Per 100) and Monthly Wages 2001
10
16,000
9
15,000
8
14,000
7
13,000
6
12,000
5
11,000
4
10,000
3
Even Though
Fewer Civil Servants
And
Lower Wages…
9,000
Bangkok
Central
North
Employees Per Capita (LHS)
Northeast
South
Wages (Bt/Month)
Monthly Income by Position 2001
50,000
45,000
40,000
…As Civil Servants
Less Qualified than
Elsewhere…
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Bangkok and
Vicinity
Level 1-2
Center
North
Northeast
Level 3-5
South
Level 6-8
Northeast Spending By Type (%) FY99 to FY03
100%
90%
80%
… Almost Half of
Public Spending
For Wages, more than
Other Regions
70%
60%
50%
40%
30%
20%
10%
0%
FY99
Salary
FY00
FY01
Non-Salary Recurrent
FY02
FY03
Capital
Agenda: Three Principles
I
What is Good for the Poor…
II
What is Good for Thailand…
…Is Good
for the
Northeast
III
What is Good for the
Greater Mekong Subregion…
Agenda: Principles and Policies
I. What is Good for Thailand
is Good for the Northeast
Northeast Growth Dependent on Thailand Growth
Northeast tracks growth in Thailand closely
Northeast largest sector is services – sustained by migrant
remittances
Policies to Support Thailand Growth
Improving the business environment for manufacturing in
Central and East: addressing deficits in infrastructure and
business services, such as improvements in the logistics
system and the provision of one-stop government centers
Sustaining high quality business and producer services in
Bangkok: focus on urban mass transit infrastructure and
communication
Agenda: Principles and Policies
II. What is Good for the Poor
is Good for the Northeast
Economic Convergence Dependent on Meeting Three
Challenges
Skills
Service delivery to rural areas
Local governance
Policies to Support the Poor
Access to vocational education; Improved teaching standards
Geographic targeting; Community poverty programs; Off-farm
diversification; Higher value-added of agricultural products;
Small-scale irrigation; Weather risk insurance
Strengthening and empowering public administrations from
villages to province; Mandate and funds to improve the local
business climate to attract investment; Power for
municipalities to support the development of secondary cities
Agenda: Principles and Policies
III. What is Good for the Greater Mekong Subregion is
Good for the Northeast
Promoting and Integrating with a prosperous GMS to
turn Northeast from land-locked to being land-linked
Reducing structural and institutional impediments to the
movements of goods, people, and capital
Example ASEAN
Policies to Support GMS
Overcoming inadequate transport and communication linkages
and promoting common networks in transport, power
distribution, trade and commerce
Complement physical investments by investments in easing
processes and building capacity: harmonization of legal and
regulatory frameworks and the facilitation of cross-border
flows
THANK YOU!