THE ROLE of the PRIVATE SECTOR in PROMOTING BALANCED REGIONAL DEVELOPMENT the Thailand Case

The private sector in Outer Thailand should focus realistically on areas of comparative advantage. All public and private sector planning should start from an understanding of comparative advantage in the area in question. In most cases in Outer Thailand, comparative advantage involves: (a) primary agriculture utilizing appropriate farming systems, (b) agriprocessing and other forms of agribusiness, (c) tourism, (d) unlinked high value: weight industry, e.g., electronic components, (e) industries dependent on loyal low-cost labour in small settlements, and (f) producerand knowledge services in selected centres serving wider regional areas, namely, Chiang Mai, Udon Thani, and Hat Yai/Songkhla. In addition, in the southern area of the Northeast Corridor, linked parts-producing industries (particularly auto parts) as well as mass production, and low labour cost industries (e.g., plastic extrusion, garments, or footwear) appear viable. In many cases, medium-sized enterprises will be the most developmentally effective and financially/economically feasible in Outer Thailand, filling the stratum between large multinational manufacturing operations, which tend to locate in the coastal-oriented Industrial Heartland, and small-scale cottage industries, which, unless part of a larger integrated system, offer only limited opportunities for significant upgrading of standards of living in Outer Thailand. It is important that policy makers and leaders in the private sector do not forget the vital importance of the primary sector. Most private businessmen in OuterThailand are farmers. If they produce more their standards of living will rise, they will provide more inputs for agro-industry, and will constitute a viable market for consumer goods and agricultural inputs. The public sector can play a role by focusing and spatially coordinating the delivery of industrial infrastructure to create "clusters of excellence" for manufacturing and by assisting in the provision of credit and technology transfer. Probably most important, the public sector can directly (or indirectly by supervising private or private-public training institutions) provide human resource development programmes in support of local developmental initiatives. Local governments can play an important role by providing good infrastructure for local enterprise and communities to thrive, e.g., roads, markets, slaughterhouses, and tourist complexes. Creating more balanced development in Thailand will not be easy. However, with persistence, realistically coordinated public sector policies to support an economic decision climate which is conducive to private sector development, and with productive private sector investment based on local comparative advantage, progress can be achieved.