Stimulus impact muted by lack of knowledge improvements

       Thailand's competitiveness should definitely increase with a boost from the government's Thai Khem Kaeng stimulus programme covering more than 6,000 development projects.
       But the degree of the increase is still debatable, as most of the 1.43 trillion baht in funds over the next three years will go to infrastructure development or construction projects.
       According to Suwit Sappavitthayasiri,senior economist at the Fiscal Policy Research Institute, infrastructure development generally contributes no more than 10% of the factors that will raise competitiveness or/and productivity.
       "Infrastructure investment does not play a critical role in raising competitiveness as we understand it. Human resource development, capital, education, public health, good government policies and political stability instead are what matter," he said.
       "The second economic stimulus package will undeniably stimulate economic growth, but will not raise productivity much, as for productivity or competitiveness alike we need to focus on people's quality and their health."
       Mr Suwit said that while rough amounts of spending and the number of projects are available from promoters of the stimulus programme, in-depth detail is lacking on how each investment project could increase productivity.
       The programme does aim, however,to create 1.1 million jobs in three years and promote growth of about 5% a year.
       The cabinet on Oct 13 is scheduled to reconsider investment projects under the programme, as the government expects to have an extra 150 billion baht available for investment given rising revenues with the economic recovery.
       Arkhom Termpittayapaisith, the National Economic and Social Development Board's deputy secretary-general, said the investments would be separated into three groups.
       They would go mainly to strengthen food and energy security and increase productivity in the agriculture and industrial sectors, upgrade mass transit,restore tourism and promote a creative economy. The programme also covers education quality improvement and a knowledge-based society.
       In an earlier plan, projects for imme-diate implementation were estimated at 1.06 trillion baht in the 2010 fiscal budget, covering water development,logistics, alternative energy, tourism infrastructure and education. The priorities are water management, at 17% of the total value, and transport at 335.9 billion baht (40%), including maintenance of highways, rural roads and mass-transit projects.