Regions and Countries

	Table of Contents
p. 15 of 23 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies A. Agriculture B. Infrastructure C. Social Infrastructure and Environment D. Governance Dimensions of ADB Operations E. Gender Dimensions of ADB Operations F. Private Sector Operations 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 : III. Sector Strategies

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D. Governance Dimensions of ADB Operations

99. Recent Developments. Under the Decentralization Act of 1999, the share of local spending (including intergovernmental transfers and relative to total government revenues) will increase to 20 percent in FY2001 from the previous level of approximately 14 percent. By the end of the 9th Plan (2006), local spending is expected to increase to 35 percent of total government revenues.

100. New or restructured institutions called for in the Constitution are scheduled to be established, including the Human Rights Commission, National Audit Commission, National Office of Education Standards and Evaluation, Administrative Court, and Ombudsman. The work of the National Counter Corruption Commission has resulted in some high-profile resignations. A Public Sector Management Reform Plan is being implemented, including downsizing, structural change, decentralization, and provision of more client-oriented services. International competitiveness is being enhanced by the implementation of new laws and institutions to improve the corporate regulatory framework, and consideration of new labor and educational standards.

101. Government Strategy. The Government recognizes the need to build on the considerable institutional innovations of the 1990s to strengthen the accountability, transparency and predictability of government operations through a two pronged approach: (a) internally, with government agencies, to strengthen internal accountability and corporate regulatory frameworks; and (b) externally, with the corporate sector, to improve corporate governance practices, and with the civil sector, to strengthen public support for transparent and accountable government, and to monitor government in the elaboration and implementation of regulatory frameworks. This will aim to strengthen both the "supply" of and "demand” for accountability. This approach is based on the premise that government alone cannot ensure accountability in the absence of public demand for, and increased sophistication in the use of, information. A necessary complement to Government efforts to reform the public sector is the strengthening of information channels to ensure the public is informed and engaged in the reform effort, both in the process of elaborating legal frameworks, and in monitoring their implementation.

102. ADB Support. ADB is initiating an Accountability Cluster I advisory TA in 2001 focussing on four key areas:

• carrying out an agency review of the National Counter Corruption Commission (NCCC), and using this as the basis for a strategic plan to better carry out its constitutional mandate, with particular emphasis on reducing corruption that most directly affects the poor;
• developing criteria for, and making grants to strengthen civil society advocacy for and monitoring of accountability mechanisms;
• developing criteria for and operationalizing Institutional Quality Assurance Group for review of all new ADB projects designed for Thailand with significant institutional development components, and
• providing medium-term capacity building and training to the Central Bankruptcy Court, Business Reorganization office, as well as other agencies involved in the restructuring of NPLs and bankruptcy processes. A small-scale TA to the Central Bankruptcy Court will precede this to meet the Court’s immediate need for short-term training and skills enhancement.

103. In addition, ADB’s operations in Thailand will include support for an Accountability Cluster II TA in 2001. Following the model of its work with the NCCC, the ADB will undertake strategic reviews and planning exercises, focused on the Freedom of Information Office, Audit Commission, and Constitutional and Administrative Courts. These reviews will assist the individual agencies to develop medium-term strategic plans that will feed into an overall strategy for public sector accountability reform. Each agency review will include the examination of the agency vision, organization structure, staffing requirements and policies, internal and external communication flows, need for external expertise (both domestic and foreign), public information and education functions, and available resources. There will be an emphasis on making the work of each organization pro-poor. On the basis of unmet needs identified in this exercise, the ADB will then consider further assistance. In addition, the Office of the Civil Service Commission and the Civil Service Training Institute will be assisted to improve personnel management and ethical practices for pro-poor policy formulation and implementation, and to improve delivery of public services to the poor. Support will also be given to reform insolvency laws, with due consideration of the secured lending system, as both are part of the same system of legal and commercial regulation.

104. The second set of key results will be achieved by support to non-governmental accountability mechanisms. The ADB will provide grants to support civil society engagement on issues emerging in Thailand's ongoing political reform. Proposals will be reviewed by a broadly representative group that will meet periodically to select the most outstanding proposals, and to review progress reports on ongoing work. Key result areas expected will include the following:

• Proactive engagement with accountability agencies to ensure that they effectively carry out mandates provided for in the Constitution and the relevant organic legislation;
• Networking nationwide with academics, NGOs, community-based organizations and interested individuals to develop a powerful constituency for accountability improvement, and to win over or neutralize opponents to such improvement;
• Independent research on specific accountability issues in support of the proactive engagement and constituency building above; and
• Dissemination of research results through press kits and public information media.

105. In addition, the ADB will provide support for publication and dissemination of the Village Governance Manual prepared by the Thailand Development Research Institute (TDRI). This will involve a 3-year effort, including testing and evaluating the newly-developed manual in 30-40 villages; modifying it and producing simple guidelines for local officials and community members; disseminating the outputs of this work; supporting work to develop norms of transparency and accountability at the local level, and developing indicators and procedures to evaluate impacts of the introduction of the TDRI village transparency manual.

106. The ADB will also carry out regulatory reviews in the areas of customs, excise, revenue, procurement, and licensing. Parallel funds will support both private and public reviews. In the private sector, the Federation of Thai Industries, the Thai Chambers of Commerce, and the Internal Auditors Association of Thailand are among those which are seen as possible candidates to undertake such work on behalf of their membership.

107. Finally, there is provision for an Accountability Improvement Project ($50 million) in 2003. The loan will assist the NCCC, the FOI Office, the Audit Commission, and the Constitutional and Administrative Courts to fully implement their strategic plans. It will ensure that appropriate ICT infrastructure is in place for effective financial accountability down to the Tambon level. It will help implement recommendations of regulatory reviews in customs, excise, revenue, procurement, and licensing. It will encourage effective monitoring of this work by government, business, and civil society.

108. Since effective use of ICT is critical for success in this area, the loan will facilitate advise, in partnership with the corporate sector, on removing pricing, financial and administrative controls and bottlenecks in ICT sectors. This will leave the government to act as a facilitator by creating the necessary infrastructural support for more widespread use of ICT, and the growth of knowledge-based industries.

109. Policy Dialogue. Thailand needs to develop new institutional arrangements, both within government and in the larger society, to realize constitutional aspirations and to remove existing bureaucratic and regulatory impediments to addressing current future development challenges. In order for these reform efforts to succeed, Thais themselves must support them. Not enough donor attention, however, has been paid to understanding or developing the Thai constituency for reform. While ADB has emphasized the need to incorporate participation in education and agriculture reforms, the Government largely controls the level and nature of this participation. Part of the ADB's governance strategy will be to place resources directly in the hands of civil society itself to monitor the reform process and implementation of reforms. This will be complemented by clear bureaucratic commitments to transparent reform processes.

110. Improving accountability will involve considerable learning and mutual adjustment. Principles taken from other settings will have to be adapted to particular Thai circumstances. New ideas will need to become locally “owned.” They will need “local champions” and time to take root. This might be facilitated by extensive use of information communication technologies. Electronic discussion networks, websites, community radio, telecenters, and videoconferences will link peer-groups from government, business, and NGOs to share experiences, documents, and smart practices. Thai-language software could also be developed, in partnership with the private sector, to allow local government workers to collect information at the community level on a palm computer as they move from village to village.

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