Regions and Countries

	Table of Contents
p. 9 of 23 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy A. The COS B. Progress Implementation C. Poverty Partnership Agreement III. Sector Strategies IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Thailand : II. Country Operational Strategy

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B. Progress in Implementation

35. The ADB has contributed to Thailand’s economic and social development. Importantly, the ADB helped lay the foundations for Thailand’s extended period of rapid growth in the 1980s by providing technical and financial support for critically needed infrastructure. Investments in the power, transport and telecommunications sectors have contributed to economic growth and development. Further, investments in these sectors, together with water supply, wastewater management, and other urban infrastructure projects, have helped spur modernization and industrialization of the Thai economy. The ADB has also helped balance the growth process by loan and technical assistance for human resource development, and by assistance for environmental protection and institutional building activities. The ADB’s activities in Thailand since 1998 have been consistent with the Interim COS. Both the loan and TA programs have contributed to accomplishment of strategic and specific objectives.

36. Nonetheless, successful investments by the Government and the ADB in physical infrastructure over the years were achieved at the expense of possible investments in the financial, agricultural, and social sectors, reflecting the Government’s earlier requirement that borrowing under OCR terms be restricted to those projects with high economic returns. The Country Programming Mission (CPM) to Thailand in March 2000 observed that a weak and neglected financial sector was the root cause of the financial crisis; stagnant productivity in agriculture has led to the loss of Thailand’s competitive edge in this sector; and low skill levels of the workforce deriving from low education attainment have made it difficult for Thailand to establish a new comparative advantage in skill intensive, high technology industries which would be better suited to its relatively high wage economy.

37. Accordingly, it was agreed with the Government that a restructuring of the ADB’s portfolio was necessary, and that all modalities of ADB assistance such as loan and technical assistance projects, cofinancing, private sector operations and economic and sector work should focus primarily on the agriculture/rural development, social, and financial sectors, in order to maximize the impact of ADB operations. The medium-term program discussed with the Government is based on the Interim COS, which the Government has endorsed. The program attempts to build in special operational concerns such as poverty reduction, environmental and natural resources management, improved accountability mechanisms, and subregional cooperation. In addition, ADB operations in Thailand will rely increasingly on its Private Sector Group (PSG) and cofinancing operations. Descriptions of the ADB’s proposed operations in these sectors are detailed in later sections of this report.

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