Somchai Jitsuchon Thailand Development Research Institute NESDB-WB 29 January 200 7 Bangkok

1. A Commentary on Human Resources Development System, Policy and the Contributions of HRD to Economic Growth in South Koreaby ChangWon Jang With Remarks on Thailand Somchai JitsuchonThailand Development Research InstituteNESDB-WB29January 2007Bangkok

2. General Comments • This is a good paper, • Covers past, present, and future of Korea HR development. • Informative on Korea HR adjustment to changing global environments. • Touches on some important issues, potentially worthy lessons to other countries.

3. Important Lessons • Demand-driven HR policy more appropriate than supply-centered policy. • Information-age knowledge is key to future success. • Higher education is increasingly important. Vocational elements added to regular curriculums. • Private sector can play a very crucial role in HR development.

4. Some Specific Lessons for Thailand • International quality of primary and secondary education promoted rich HR base for subsequent high economic growth, through industrial exports. • High tertiary enrollment rate helped deepening industrialization. • Workers need global views as well. • New paradigm is needed, especially to move away from mass production system. High-tech workers must be expanded. This is utmost necessary given China/India factors.

5. Thailand’s HR Situation

6. Overall Picture • Used to be trapped in low HR development path, relied mainly on depletion of natural resources (deforestation for agric.) and cheap labor (for manufacturing). • Low TFP, low contribution from education. • Technological advancement has been through business managements (+ imported techno), not much value-added in scientific/engineer. • Reallocation of labor from low-productivity agr to higher-productivity non-agr also contributed. This channel is not likely to be reliable in the future, as most young adults in rural areas have already permanently migrated to urban.

7. Overall Picture • Forced with less abundant natural resources and cheap labors, Thailand started to import foreign workers in the past 10-15 years. • This adjustment might prolonged the need to upgrade the country’s true technological advancement. Large influx of foreign workers might continue, esp. from Myanmar. • However, significant improvement in secondary education since around 1990 has potential to change the country’s HR structure and might induces industrial technological change as well. • At this juncture, hence, lessons from countries like South Korea will prove to be utmost useful.

8. IMD’s HR Rankings of Thailand vs. Some Competitors Source: IMD World Competitiveness Yearbook 2006 (cited in Ahuya et.al, 2006)

9. Recent Improvement in Education (mostly secondary, some tertiary) Source: Ahuya et.al, 2006

10. Roles of Public Policy on Education • Concentrated mainly on supply-side education. Demand-side nearly absent. • Pay too little attention on vocational education. This is true with the latest ‘education reform’ too. • Fiscal decentralization might profoundly change the primary/secondary education system. Not much progress so far.

11. Comparison of Government Spending on Education

12. Quality Problems!......both present and future? Thai Labor’s Skill • Expected Actual Gap • -Analytical thinking 3.89 2.30 1.59(41%) • - IT 3.57 2.02 1.55(43%) • - Language 3.38 1.93 1.45(43%) • - Communication 3.74 2.42 1.32(35%) Thai Students’ Test Scores Source: Yongyuth Chalamwong, 2006 Source: Ahuya et.al, 2006

13. Roles of Private Sector • Only few big businesses invest in HR. • Medium-size firms have no incentive to invest, fearing losing trained employees to other firms. This ‘public good’ problem likely to last, perhaps until a critical mass of HR investment is reached. • No tight linkage to the public sector.