Private sector needs to lead economic recovery, says global financial institute executive
Emphasising how the private sector is the one that needs to lead the country into recovery, Alfonso Garcia Mora, Vice President for Asia Pacific at the International Finance Corporation, (IFC), a sister organization of the World Bank, pointed to how Thai businesses can capitalise on electronic vehicle production, rethink their tourism strategies and embrace digitalisation going forward, in an exclusive interview with Thai PBS World last week when he visited the Bangkok office.
“The recovery from COVID-19 needs to come from the private sector. We need to do the necessary reforms, structural reforms that are pending in the economies, to allow the private sector to come in and to actually play a much more significant role in terms of job creation, in terms of employment, in terms of value add,” said Mr. Mora.
Apart from the mass vaccination drive, three key sectors play an important role in sustainable global economic recovery, the IFC executive said. These are climate change, digitalisation, and the health system.
“We need more health support. We need more healthcare. We need to be better prepared for situations like this one and, actually, the demand for a stronger health system has increased worldwide. And this could be particularly relevant in a country like Thailand,” he said.
According to Mr. Mora, Thailand is transitioning into an aging society, with 11% of the current population older than 65 years old, which will increase to 23% in 2035.
Acting like a bridge between governments and the private sector, having provided consultancies to both sectors and lot of investments in and issued loans to the latter, IFC’s work in Thailand is focused on expanding job opportunities and targeting micro, small, and medium enterprises (MSMEs), in the light of continued expansions of corporates in Thailand.
“We try to support the country’s, say, recovery in this case by investing directly in those companies, in those sectors that can have a bigger impact and are more relevant for the country,” he said.
This focus on the MSMEs is particularly important now as several Thai conglomerates are expanding rapidly through mergers and acquisitions (M&As), prompting concerns over a move towards monopoly in which consumers are at a disadvantage.
“We believe competition is very critical. For the market to be efficient, the benefits must be correctly allocated. That’s why we work to promote SMEs in every single sector to make sure that there is enough supply, that there is enough on offer and, therefore, the price really reflects what market competition creates,” Mr. Mora said.
With “sustainability” being the key word, the IFC vice president acknowledged that Thailand is one of the leading countries in the world in the tourism sector, with Thailand’s gigantic sector contributed up t0 20% of the country’s GDP pre-COVID times. He however noted that the pandemic can provide an opportunity to “rethink” tourism strategies to ensure sustainability, while stressing the need to delve into digitalisation and electronic vehicle productions.
“Both because of the supply and demand, we believe that Thailand will be a key country in the ASEAN for electronic vehicles. This can really transform that industry, and this can be one of the key flagships for the country going forward,” Mr. Mora said.
“I think that creating the conditions to see a significant increase in digital businesses and being applied to different services and products will probably be also a key thing that this country can do and many others will not be able to do,” he added.
Reported by Hathai Techakitteranun