Thailand - Social and Structural Review : Beyond the Crisis - Structural Reform for Stable Growth

Abstract

Following the East Asian financial crisis, the Bank's involvement in Thailand intensified, enabling a multifaceted stabilization, and structural reform dialogue, which deepened the economic, financial, and sector knowledge of the country. The study benefits from this analytical work, and provides an overview on the ongoing policy dialogue, regarding short- and medium-term reform, through a number of instruments. To promote longer-term growth, the country embarked on a twin strategy of macroeconomic stabilization, and structural reform. Although its flexible labor market, and support mechanisms diminished the crisis' impact on unemployment, and poverty, compared to other countries in the region, this ability to moderate the impact of the economic crisis, could adversely impact a prolonged crisis. The study examines steps to strengthen public sector social programs, and institutional capacity, envisaging coherent poverty support programs in a timely manner, while speeding fiscal stimulus effects, and, monitoring poverty through reliable information, to ensure cost-effectiveness. The financial sector reform is reviewed, focusing on restructuring financial institutions, while upgrading prudential regulations. Practices to improve private sector development are reviewed, i.e., promote corporate restructuring, and competition, and, improve factors of production, while promising a stable growth.