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Thai PM: CLMVT must embrace innovation

Image Credits: Bangkok Post, News Report

According to a recent report, the Thai Prime Minister told a sub-regional economic forum that Thailand, Laos, Myanmar, and Vietnam must embrace innovation or else risk losing their competitive edge.

Despite the CLMVT region becoming a main player in the global value chain, the region faces threats from rapid technological development and geopolitics, the Thai PM said at the opening speech of “CLMVT Forum 2019: CLMVT as the New Value Chain Hub of Asia”.

He noted that new technologies will render the countries’ existing production network obsolete. For example, contract manufacturing and production will slowly decline as new production networks in different regions, which embrace the modern value chain, take their place, the PM told the forum attended by industry and trade-related ministers from Cambodia, Lao, Myanmar, Vietnam and Thailand as well as ambassadors, guests from related private sectors and academics.

In terms of geopolitical threats, countries in the bloc must have effective risk management in place to cope with the changes in the global market, he said.

The sectors most vulnerable to disruption are agribusinesses, textiles, automobile, and electronics, all traditional strengths of the CLMVT region.

Businesses need to incorporate various technologies, such as digital transformation, to elevate and enhance the efficiency of their operations from the upstream to the downstream value chain. This can include product design that meets customers’ demands and timely production of quality products.

The service industry within the CLMVT region will also be affected by these trends. Therefore, the service sector must incorporate cutting-edge technologies into their business models. This is especially critical for the main players in the sector such as logistics, retail and wholesale, business services, and financial services.

He urged the governments to work together to support the sub-regional economy.

He noted that the shared prosperity within the CLMVT region must be led by the private sector and academics, and the governments must play the role of facilitators by building the groundwork for development.

So far, the private sector in the region has demonstrated their ingenuity in business expansion and innovation, as well as their key contributions to various successful initiatives. In 2017, CLMVT’s GDP grew by 5.1%. From 2013-2017, external trade grew at an annual average of 4.6%, while intra-CLMVT trade rose by 7.1% and investment went up by 15.7%.

Another article noted that Thailand has moved up five spots to assume the 25th place in this year’s World Competitiveness Rankings, which rated 63 economies for their economic performance, government efficiency, business efficiency and infrastructure development.

According to the latest report by a major Switzerland-based company, Thailand came third in ASEAN, trailing behind Singapore and Malaysia.

Thailand’s ranking is higher than South Korea, which moved down one position to 28th place this year, and Japan, which came in at 30th place, or five notches down from last year.

The better ranking was largely thanks to Thailand’s improved economic performance, government efficiency, and infrastructure.

That said, the country’s business efficiency ranking fell when compared to last year’s ranking, the report noted.

Thus, if the country is to move up the rankings, investing in and adopting technology will be key for its transformation. While the country has recently made several moves in this arena, it will have to ramp up its efforts to keep pace with countries like Singapore and Malaysia if it is to boost its competitiveness.

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