Thai Exports China or Japan

Thai Exports China or Japan

Posted by Tawan , Reader : 477 , 16:15:50 Print

I prefer to listen to Economist Dr. Supavud Saicheua. I have read the articles and it seems to be more concern with Thailand's future. The long term policies are much better then the current little Dutch Boy running around sticking his finger in every little hole in the dike that lets water flow through which seems to be so popular in Thailand these days.

Case number one China.

Thailand wants to keep its low skill low wage exports alive and hopes to be able to compete with China in this sector. Examine the characteristics of the Chinese businessman and his largest customer the American Businessman. We will refer to the Chinese Businessman as "Mr. Almost" and the American Businessman as "Mr. Walmart".

If ever there was a more perfect couple in this world it would be Mr. Almost and Mr. Walmart. There is no one in this world that can produce products faster and cheaper and cash a LC faster than Mr. Almost and there is no one in this world that can sell products faster and cheaper than Mr. Walmart what a match made in heaven a cheap producer and a cheap customer and a doomed low skill low wage workforce fated to life at the bottom of the social pyramid forever.
Look how this works Mr. Almost's answer to any question is "No problem" Can you roll back the price from last year? Yes, No problem Can you ship on this date? Yes, No problem. The results for Mr. Almost will be a LC cashed in world record time. The results for Mr. Walmart will be a container of poisonous dogfood because of a cheaper ingredient but no problem they are only dogs. Mr. Walmart's goals have been reached to continue to "Roll Back prices". As you can see TQC and zero defects do not enter into this equation.

To be fair to Mr. Walmart he does run a very tight ship by keeping his buyers locked up in the middle of nowhere and not allowed outside to keep them honest but poor. This is how Mr. Walmart got rid of his competition and became a monopoly in the American market Mr. Kmart who made the mistake of letting his buyers roam the world becoming rich. Mr. Walmart by keeping his in-house experts locked up can better compete than any other American company that typically has no in-house experts to form the shell company except a few that they headhunt from competitors because they do not believe in investing in a workforce as workers are treated as a liability instead of an asset all other expertise is subcontracted out to places like India where American trained MBAs will work for $500 a month compared to $80,000 a year in the American market. Meanwhile, Mr. Walmart's customers graduate with MBA degree by the thousands each quarter and find that the $80,000 expected turns into $8 dollars per hour and is very grateful to Mr. Walmart for rolling back prices every month.

Now how can Thailand join this great economic model which has made the US the largest consumer society in the world. Easy listen to the people that wants to keep the Baht at 36 or 37 regardless of market conditions. To be frank with you, I do not believe Thailand can compete in this sector with Mr. Almost at the 36 to 37 range to be able to compete with Mr. Almost Thailand would be better off going to the G7 and asking for a bigger slice of the foreign exchange pie instead of only taking 37 degrees of the pie ask for 360 degrees of the pie. This exchange rate of 360 baht to 1 dollar will make certain Thailand can compete with Mr. Almost. In addition, Thailand will save lots of money by not having to invest in a knowledge based workforce the workforce will be happy making dollar store items for Mr. Walmart forever.

Case number two Japan

Oh, the more difficult road there is a reason they call this road "ganbatte" it is not a easy road to follow. But few could argue that Japan is the absolute leader of Asia and the most admired country in Asia. Imagine a beautiful, clean and safe country with the highest quality of life in the world or walking around the most modern city in the world "Tokyo" that makes New York look like a dirty slum. Where the people are the most polite and honest people anywhere try asking a New Yorker the time of day.

There are many reasons that the Japan model is so successful and many experts that can write volumes on it. I will focus on only one. Japan is successful because of its citizens that the Japanese government and industry has invested trillions of yen to make sure its citizens are knowlede based or even advanced knowledge based. That is why you can find Japanese tradition side by side with modern it does not threaten each other. Japan believes that the most important in a company is not the building or its products but its workforce. People are an asset not a liability without people there is no company no country. Many examples of this, when Mazada had invented a superior technology rotary engine for some reason it did not sell in the marketplace despite the superior technology everyone in the company went door to door selling the car so that the company could survive this is "ganbatte'.

Japan is a small country with no natural resources when the domestic market was full it did not question should it go abroad to diversify risk and find new opportunities for foreign direct investment. Japan has invested in many countries including Thailand led by its well trained cross culturally educated workforce. Japan is much like the US hard to find anything made in that country it is made the world over and Japanese companies have become Global and continue to grow and its citizens continue to benefit from the growth.

Finally, which road will Thailand take? Will Thailand take advantage of its new found wealth of a stonger Baht ? Will Thailand invest billions of baht in a knowledge based workforce? Will Thailand start investing in a cross culturally educated workforce to lead direct foreign investments? What will Thailand invest in ? One thing Thailand is good at is its creative design. Even little Switzerland competes globally with mainly two products watches and banks and smart enough to stay out of world wars. As creative as Thai people are you can not tell me Thailand can not find two products to compete Globally.
Just my humble opinion.