MANILA, PHILIPPINES - ADB and Thailand have entered into a five-year Country Partnership Strategy, the first ever of its type forged by ADB and a middle-income country.
"This important new partnership aims to fortify our relationship with Thailand to jointly work towards achieving sustainable economic growth, both at the national level and within the region," said Arjun Thapan, Director General of ADB's Southeast Asia Department.
"From the start, this strategy has recognized that Thailand's emergence as a middle-income country has led to development challenges that are quite different from those faced by many of ADB's developing member countries, especially in the context of Thailand as a key regional player."
A Country Partnership Strategy is ADB's primary planning instrument for member countries that also serves to monitor and evaluate the country's development performance during the timeframe of the strategy, which is usually five years. The strategy is developed in consultation with the government, development partners and other stakeholders.
The Country Partnership Strategy at the national level supports Thailand's efforts to enhance its competitiveness in the global economy and promote higher levels of private investment. Core strategic areas of partnership include development of infrastructure, capital markets, and environmental sustainability. At the regional level, the partnership focuses on increasing Thailand's role and capacity as a regional development partner through co-financing projects in neighboring countries, promoting subregional trade and investment, and further developing Asian bond markets.
Since the Asian financial crisis of 1997-1998, Thailand has achieved robust economic growth, macroeconomic stability and significant gains in reducing poverty. Thailand has not assumed new loans from international financial institutions since 2000, but has maintained a strong knowledge-based partnership with ADB. Under the strategy, ADB will continue to focus on knowledge sharing, capacity building and technical assistance. The resumption of lending operations in Thailand will be explored, recognizing the need for ADB financing to be competitive with other sources of funds while catalyzing private sector participation and investment.
"Although the strategy was prepared during a period of uncertainty and transition in Thailand, the Government has welcomed ADB's efforts to forge a deeper and more strategic partnership with Thailand over the coming five years," said Jean-Pierre Verbiest, ADB's Country Director for Thailand.
ADB's 2007 Asian Development Outlook forecasts Thailand's economy to expand 4% this year and 5% in 2008. The projections assume that national elections will take place no later than the fourth quarter of this year. With an elected government in place, and if it quickly adopts a credible economic program, business and consumer confidence should start to pick up, which would revive domestic demand in 2008.
As one of ADB's 31 founding members, Thailand's relationship with ADB dates back to 1966. It is currently ADB's 17th largest shareholder, out of 67 members. Cumulative ADB lending to Thailand as of December 2006 amounted to $5.4 billion, with the energy sector as the biggest beneficiary, followed by transport and communications, and finance.