OECD urges Thailand to boost productivity, proposes national productivity council
Productivity is a key indicator of how effectively a country utilises its resources in both economic production and everyday life. A strong upward trend in productivity reflects a nation’s growing competitiveness.
Thailand is facing a persistent slowdown in productivity growth, particularly in the aftermath of the Covid-19 pandemic, which has had a more severe impact on the country than on many of its ASEAN and developing peers.
If left unaddressed, this trend could derail Thailand’s ambition to achieve high-income country status by 2037.
To confront this issue, the National Economic and Social Development Council (NESDC) and the Organisation for Economic Co-operation and Development (OECD) recently co-hosted a forum to launch the report Strengthening Productivity Analysis for Policymaking in Thailand, as part of the second phase of the OECD-Thailand Country Programme.
Deputy Finance Minister Paopoom Rojanasakul presided over the event, which featured insights from Álvaro S. Pereira, OECD Chief Economist.
Pereira highlighted the urgency of reform, noting that Thailand’s productivity slowdown and demographic shifts necessitate immediate action to strengthen long-term productivity.
He emphasised the importance of the OECD’s Boosting Productivity project, which aims to support the development of practical, evidence-based policy recommendations tailored to Thailand’s needs.
The report identifies several structural impediments to productivity growth in Thailand, including:
- High market concentration and limited competition,
- Regulatory barriers to market entry, especially in the service sector,
- Persistent restrictions on trade in services,
- Chronically low levels of private investment,
- Inadequate public investment in infrastructure and human capital.
While the 13th National Economic and Social Development Plan (2023–2027) acknowledges the need to revitalise the industrial sector, it overlooks other critical policy tools — such as targeted support for SMEs and more efficient resource allocation strategies.
The OECD also noted that Thailand lacks a central mechanism for conducting systematic productivity analysis. No dedicated agency currently oversees productivity measurement, resulting in fragmented data, poor integration of knowledge, and insufficient policy attention to productivity-related issues.
Establish a National Productivity Council
To address this institutional gap, the OECD recommends the creation of a National Productivity Council. This body would bring together experts from relevant institutions, including the NESDC, Bank of Thailand, National Statistical Office, and Thailand Productivity Institute.
The proposed council would be supported by a technical secretariat responsible for data management, analytics, and coordination.
Its key functions would include:
- Producing issue-specific bulletins with timely analysis and policy insights,
- Publishing an annual joint productivity report in collaboration with member agencies,
- Recommending actionable policies and identifying responsible agencies.
The report also calls for the development of a National Productivity Framework to guide continuous monitoring, prioritisation of key issues, and data enhancement. This includes improving productivity indicators, strengthening databases, and clarifying policy objectives.
To further improve policymaking, the government is urged to upgrade both macro and micro-level productivity measurement tools, such as the adoption of the Quality-Adjusted Labour Input (QALI) Index to better assess workforce quality.
