Thailand

This April 2007 issue of the Thailand Economic Monitor provides and overview of economic developments, a section on recovery and outlook, and a section on implementation... Show More + of structural reforms. The paper observes that growth is slower in recent years. GDP grew by 5 percent in 2006, modestly better than 4.5 percent in 2005, but is projected to fall to 4.3 percent in 2007, driven mainly by exports. Average, annual GDP growth rate of 4.6 percent during 2005-07 will be nearly 1.5 percentage points below Thailand's own annual average during 2002-04. This slowdown is in part because the easy gains from increased utilization of excess capacity have been exhausted and in part because new capacity is expanding slowly as confidence of investors are at a low point. Some recent initiatives however give cause for hope that this will turn around starting in 2008. Show Less -

Ratings for the Second Phase of the Strengthening Social Protection for the Working Population, the Poor and the Vulnerable Project for Thailand equity gaps existed... Show More + before the launch of the project in social assistance programs administrated by welfare centers of Ministry of Social Development and Human Security (MSDHS), and in the contribution rating of the Workmen's Compensation Fund (WCF) were satisfactorily narrowed particularly through the development and adoption of key performance indicators for the welfare centers, and the development of new WCF simulation model and computer program of the WCF scheme. Some lessons learned include: the conceptualization of the project and ensuring the linkage between objectives and activities should be carefully managed. The Bank should play more proactive role in terms of objective and activity setting. In the area of standard technical cooperation, where design of policy is clear, efficient investments were made. Outcomes were satisfactory with minimal future risks. Project resource should be concentrated fewer areas depending on counterpart's and Bank's priority in order to have more impact. Show Less -

Upon reviewing the three loans, the audit mostly downgrades the Implementation Completion Report (ICR) ratings, though it concurs with a likely sustainability on the... Show More + three loans. Project outcomes are downgraded to moderately unsatisfactory from a satisfactory rating on the three loans, and, on the institutional development impact rating, it downgrades to modest the Finance Companies Restructuring Loan; from substantial to modest that of the Economic and Financial Adjustment Loan; yet, concurs on a substantial institutional development impacts for the Second Economic and Financial Adjustment Loan. Finally, mixed reviews are also shown on the Bank and Borrower performances. The main findings from the review of these loans suggest: given that the significant cost of cleansing financial crises can offset progress made over the years in poverty alleviation, and other social improvements, the Bank should continue to play a role in both improving financial sector governance, and soundness to reduce the probability of crisis, as well as in post-crisis management and well-structured recovery. Early underestimates of the severity of the crisis, and the impact of the closure of the finance companies (FCs) on the economy, raised concerns about the credibility of the international financial institutions' approach, and, most important to Thailand's future, about the financial reform itself. This suggests that crises in other countries need to be approached more comprehensively, taking into account potential negative impacts of large scale closures. The audit stipulates short-term crisis management policies can compromise essential structural reforms. The failure to factor in the design of the reforms the inadequacies of the Thai legal, and regulatory infrastructure led to approaches that may have increased the cost of cleanup. Further lessons highlight that sequencing and timing of reforms are crucial; and recommend that succeeding loans with increasingly broader goals, and a growing list of conditions, diffused the focus of reform and meaningful monitoring. A better approach might have been a well-designed programmatic loan, as now being used (but not available at that time), which seeks to develop a set of priority reforms, and sequences the steps for supporting those reforms through successive loans. Show Less -

The Thailand Secondary Education Quality Improvement Projectre had a satisfactory outcome, highly likely sustainability, substantial institutional development impact,... Show More + overall unsatisfactory Bank performance, and overall unsatisfactory. Key lessons learned from the project concerned bank supervision, project design and management, staff development, and instructional reform. They are as follows: 1. Project implementation can be negatively affected if Bank supervision is not maintained in a timely and consistent manner. 2. Effective Bank supervision requires coupling experienced task managers with adequate staffing on the ground. 3. To quickly identify and address supervision problems before they affect project implementation, the supervision team should be supported by a well informed, proactive management structure, including a Country Operations Manager with front-line responsibility for service quality. 4. Use regularly scheduled portfolio reviews for increased quality control of Bank supervision activities. 5. Make available an extended team of project implementation specialists (procurement, financial management, ICT development, etc.) to support the task manager in resolving supervision problems. 6. Establish an effective implementation unit with adequate numbers of qualified staff experienced in supervising civil works, equipment procurement, staff training, financial management, and monitoring and evaluation for timely planning, implementation, and monitoring and evaluation of project activities. 7. Maintain the project manager for the duration of the project to ensure management continuity and involve him in project design, staff appointments, and initial training of project staff. 8. Positive and consistent support for the implementation unit from top-level education ministry officials is essential. 9. The training in logical framework strategies enabled the Educational Service Areas, project institution coordinators, and teachers to meaningfully participate in project implementation. Other lessons concerned establishing and operating an effective monitoring and evaluation for accurate progress reporting on quantitative and qualitative achievements at dispersed sites; adapting apt criteria for selecting candidates for overseas fellowships and short-term training, and providing translations at training courses in science research and use of advanced equipment; ensuring that the local provider does not infringe on international copyright laws; involving local university personnel to train staff in integrating ICT with the curriculum and instructional materials preparation; avoiding delays in procurement and disbursement by reducing differences between the Bank's and the Government's regulations; using vertical integration between institutions (e.g. universities, secondary schools) within a single subsector for effective institutional reform; and the need to shift from teacher-centered to student-centered teaching/learning methodology to improve student learning and retention; and improve secondary teachers' ability/opportunity to use ICTs in their classrooms. Show Less -

The outcome for the Distribution Automation and Reliability Improvement Project for Thailand was satisfactory, the sustainability was likely, the institutional development... Show More + impact was high, and the Bank and borrower performance were both satisfactory. Lessons learned: Major restructuring, and privatization of a utility, should provide for flexibility, as such actions are often beyond the utility's control, being subject to mandates which may change with a change of Government. Sudden economic/financial crisis in a country could severely impact power demand and could render major distribution investments planned for high sustained growth levels, totally unviable. Introduction of complex power pool operations in a developing country needs to be thought through with care. Show Less -

The project outcome is rated satisfactory, sustainability likely, and the institutional development impact was substantial. Lessons of experience are expressed as follows.... Show More + Particularly during crisis situations, project design should take into account the speed with which assistance can be delivered, i.e., complex structures and processes that slow activities, and disbursements should be avoided, and agencies should have a clear understanding of the requirements involved with Bank operations. It is reinforced that during project preparation, an up-front assessment of implementing agency capacity is needed. Such an assessment, although time-consuming, would help inform project design, and the development of a realistic timeline, as well as identify necessary technical assistance to ensure a smooth project implementation. Under a crisis situation, or emergency operation, in particular, the Bank must provide substantial on-the-job training and assistance at the beginning of the operation, which would likely require higher than the norm budget allocations. Likewise, the structure of a crisis-response project should allow sufficient flexibility to accommodate changing circumstances, and provide incentives to help mitigate risk. A focus on outcomes, both in design and supervision, is critical in determining whether a project is delivering the intended results, and whether adjustments are required. To this end, indicators should move beyond tracking outputs (i.e. number of trainees, number of roads constructed) to analyzing the quality and impact of such achievements (i.e. employment gained as a result of training, sustainability and benefits of infrastructure created). The challenge of developing measurable indicators for community empowerment, social capital, and capacity building objectives must also be addressed. Show Less -

The ratings for the project were as follows: the outcome was satisfactory, the sustainability was likely, the institutional development impact was Modest, and the Bank... Show More + and borrower performance were both satisfactory. The lessons learned indicate that the use of local processing staff based in the Bank's field office is an advantage for projects which require frequent monitoring and evaluation. A clear orientation to the project objectives and a statement of project responsibilities should be provided to all participants in a project. Project designs should include planned activities to quickly collect and organize good baseline data. When co-financed projects are associated with a Bank project, it is important to have clear understandings and linkages/relationships well documented for both projects. Where faculties have similar or related academic interests, careful attention should be given to options for integration and sharing of equipment and other resources. Future projects should not assume that there is good communication within its stakeholder organizations and should evaluate and work with these organizations to ensure all interested parties can participate in information flows. Where only one language is predominantly spoken in a project area, that language should be the primary language used in the project. Electronic bidding procedures have been proven in this project to have distinct advantages over traditional procurement/bidding procedures. Show Less -

The ratings for the project were as follows: the outcome was satisfactory, the sustainability was likely, the institutional development impact was high, and the Bank... Show More + and borrower performance were both satisfactory. The lessons learned indicate that major restructuring, corporatization and privatization of a utility, should provide for flexibility, as such actions are often beyond the utility's control, being subject to mandates which may change with a change of Government. Likewise, there should be flexibility in the design and implementation of components such as Demand Side Management (DSM), for which the utility has had no past experience and little desire to execute. Sudden economic/financial crisis in a country, could severely impact power demand and could render major distribution investments planned for high sustained growth levels, totally unviable. Under such conditions, utilities need to take timely and drastic measures to restructure their investment plans, exercise great financial discipline, and double efforts towards improving operational efficiency. Under these circumstances, the Bank would do well to take a flexible and sympathetic approach to government actions and desist from demanding rigid compliance with covenants. Introduction of complex power pool operations in a developing country needs to be thought through with care. Active support rather than reluctant acquiescence of the utilities is necessary to push through a complex reform agenda. The Bank could best play the role of advisor and facilitator for countries that have already embarked on the path of power sector reforms and should recognize that restructuring proposals cannot be cast in stone and could change as Government and utility thinking evolves. Show Less -

The development objective of the Highways Management Project forThailand is to enhance the efficiency, productive use, and management of the road network. Specifically,... Show More + it supports the commercialization of the road sector, strengthens the operations of the Department of Highways, helps preserve road assets, and improves competition and transparency in the award of contracts. Furthermore, the project will reduce traffic accidents and fatalities on national highways and
decentralize the implementation of periodic maintenance to the districts. There are four project components. The first, Highway Rehabilitation and Maintenance, comprises: (a) periodic maintenance of about 700 km of priority national highways; (b) three long-term (5 year) pilot contracts for performance-based maintenance of about 900 km of national highways; (c) supervision of periodic maintenance and road safety improvements; and (d) the study, design, and supervision of performance-based maintenance. The second component, Highway Upgrading and Intersection Improvement, comprises: (a) widening of three selected sections (73 km total) of priority national highways from two to four lanes; (b) construction of three overpasses at critical intersections; and (c) supervision of the widening and overpass projects. The third component, Road Safety Improvement, comprises: (a) improvement of 10 hazardous locations; and (b) support for implementation of the road safety action plan in collaboration with the GRSP. Lastly, the fourth component, Institutional Strengthening, consists of: development of a centralized road database, road asset maintenance and management system and a bridge management system; development of a framework for and a case study on public-private partnerships (PPP) in highways; technical assistance (TA) for project coordination; external audit; and introduction of e-procurement. Show Less -

The outcome of the Land Titling III Project for Thailand was satisfactory, the sustainability was likely, the institutional development impact was substantial, and the... Show More + Bank and borrower performance were both satisfactory. The lessons learned indicate that following up sector work, targets and implementation plans are better conceived. However, when components involve coordination between multiple agencies, new technologies or changing roles of public institutions increase the difficulty of well thought-out plans. Demarcation of forest boundaries suffered considerable delays and its achievement was much lower than the planned targets due to lack of working arrangements, policy direction, and coordination between Department of Lands, Land Development Department, and Royal Forestry Department. Introduction of new technologies should be phased and tested at a smaller-scale before expansion. Property valuation development programs should clearly identify the respective roles of the public and private sector in valuation, and the most appropriate institution/agency for support to valuation development. A strong commitment of the borrower/implementing agencies is a prerequisite for successful implementation. Bold initiatives, such as this 20-year program to provide land titles, create spill-over effects and valuable public-sector competency. Show Less -