41081 April 2007 Thai Youth Leader Urges Peers "....Investing in young people is one of the key to Speak Up elements of any strategy to reduce poverty. What economists call human capital, which is the skills In our current multi-tasking world of instant of people, is what's really crucial if countries want messaging, phone cameras, and music downloads, to develop into the future and reduce poverty." few youngsters may take interest in the thick volume ofWorldDevelopmentReport2007:Developmentand theNextGeneration. Butif21-year-oldChalongkwan "Being heard", "Getting involved" and "Making a Tavarayuth had her way, this report would top the difference" capture precisely what WDR07 tries to reading list of every young person in convey to youth in developing countries, Thailand. agrees Emmanuel Y. Jimenez, director of the World Bank Human Development "I think it remarkable that the World Sector in East Asia and the Pacific and Bank dedicated its flagship report to the lead author of the report. "While our issue of investing in young people," said primary audience was the policy makers, Chalongkwan, who has represented Thai we also hope that young people like youth in many occasions abroad. The Chalongkwan are able to take away such WDR07, she said, touches many issues that messages from the report," Mr. Jimenez will be critical to the development of her said. generation and to the future of her country. Published annually since 1978, the World "As the World Bank tries to encourage Bank'sWDRhasbecomeavaluableguide governments to address the challenges totheeconomic,socialandenvironmental facing young people today, we should state of the world today. Each year, the also try to make sure that our voices will WDR provides in-depth analysis of a be heard" Chalongkwan said. ChalongkwanTavarayuth continued on page 2 Macroeconomic Fundamentals Remain Strong despite Short- Term Risks The Thai economy is expected to grow at a modest rate of 4.3 percent in 2007 from 5 percent in 2006, resulting from a slowdown in private investment and domesticconsumption.WhileThailand'smedium-term prospects remain strong due to sound macroeconomic fundamentals, quick policy actions are required to improve private investor confidence and address the continuing pressures for baht appreciation, according Thailand's domestic demand grew at only 1 percent in 2006 to the latest issue of "Thailand Economic Monitor," ­ the lowest point in many years the World Bank's semi-annual review of the Thai economy. According to the April 2007 of Thailand Economic Monitor, private investment in Thailand has been Thailand'sgrowthperformanceisalsonotkeepingpace experiencing a much slower growth ­ at 4 percent with its neighbors, said World Bank Lead Economist in 2006 from 11 percent in 2005. It is expected to for Thailand, Kazi M. Matin. For instance, Indonesia, remain at the same level in 2007 as short-term factors Philippines and Malaysia is growing on average by continue to worsen investor confidence, especially around 5.5 percent a year during 2005-07, while China heightened policy uncertainty resulting from recent andVietnamareaveraging10and8percentrespectively. political changes. Domestic demand, meanwhile, Asaresult,regionalcompetitionforforeigninvestment continued on page 3 and exports remains strong, Matin added. Page 1 Thai Youth Leader Urges Peers to Speak Up (continued from page 1) specific aspect of development. Past reports have Butexpandingopportunitiesalonemaynotbeenough, considered such topics as the role of the state, Mr. Jimenez argued. Young people today also need transition economies, labor, infrastructure, health, support as they choose among these opportunities. the environment, and poverty. The reports are the And for those who have to recover from poor Bank's best-known contribution decisions or poor circumstances, to the practice and theory of providingasecondchancetomake development. up for missed opportunities can keep young people from being left This year, the WDR is focused behind. on five crucial stages of any young person's life: transition to "Policy institutions that govern adulthood, progression through how these transitions take place school, entering the labor market, are going to be very important forming families, and exercising for the future," said Mr. Jimenez, citizenship. who has presented the WDR07 to youth and policy makers in According to the WDR07, each 26 countries around the world of these transitions is laden with since its official publication last opportunities and risks ­ not just year. So even though the WDR07 for the individuals, but also for Building human capital requires more than just concerned young people and their their families, their societies, and schooling,the WDR07 says development,themessagehadtobe their economies. The outgrowth of these experiences craftedinthestylethatspeakstotheworld'sfinanceand for today's young people will determine the quality economicministers,thosewiththeauthoritytoallocate of the next generation of workers, parents, and resources to support social objectives, he added. leaders. Chalongkwanwasayouthrepresentativeonthepanel "The opportunities present a chance to benefit wider discussion at the Bangkok launch of WDR07. Asenior society, while the risks, unless properly handled, studentofpoliticalscience,shebelievesthattheWDR's can destroy that potential," noted Ian Porter, World message about opportunities is most relevant to her Bank Country Director for Thailand. "The future of country. today's younger generation and its contribution to the nation will depend heavily on how each of its members manages this transition." "...We have to demand what we think we deserve from our own Government....and I As he presented the WDR07 to a group of Thai think we should start by asking the Government audience on March 12, Mr. Jimenez also addressed to follow theWDR's recommendations," said 21- the question as to why the World Bank, whose year-old Chalongkwan Tavarayuth. primary focus is to help the poorest people and least developed countries, devoted its most important report to the next generation. Even though the Thai Government has expanded compulsory education to nine years from six years "The main reason is that investing in young people previously, inequity in access to secondary education is one of the key elements of any strategy to reduce remains, the World Bank said in its Thailand Social poverty,"heexplained."Whateconomistscallhuman Monitor published in August 2006. "There are capital, which is the skills of people, is what's really large differences in secondary school enrollment crucial if countries want to develop into the future between poorest and richest population groups," the and reduce poverty." Social Monitor reported. "Although these differences have narrowed over time, they Building human capital, however, takes have remained quite substantial." more than just schooling, argues the WDR07.Italsomeansensuringthatyoung This is why the Thai Government should workers can use their skills productively focus on expanding opportunities when as they seek their first job; that their health applying the WDR framework to the is safeguarded as they experiment with national youth agenda, Chalongkwan new life experiences; that they become suggested. "Having a regulation on responsible young parents themselves; compulsory education doesn't necessary and that they become involved in their guarantee that young people will have communities and societies. Youth should equal access to education," she said. "If have opportunities to use their talents the Government is serious about reducing at work and to participate as active poverty, it needs to do better to expand citizens, the WDR07 argues. Government, educational opportunities more equally it says, have a lot to do to expand those Mr. Jimenez during the WDR07 around the nation." opportunities. launch in Bangkok continued on page 3 Page 2 (continued from page 2) NotingthattheWorldBankcanonlysupportdecisions coupled with the recent appreciation of the baht, may that must be made by governments and societies, make it difficult for Thailand to depend largely on Chalongkwan calls on her peers to bring the WDR07 exports to drive economic growth." messages to the country's political leaders and senior policymakers,whomshesaidmaynotfullyunderstand Continuing pressures on the Thai currency could also the needs of the next generation. (For her part, affect export growth. In 2006, the baht appreciated Chalongkwan plans to recommend the WDR07 as a by 8 percent in real terms and is expected to remain requiredreadingnextacademicyearatChulalongkorn, strong throughout 2007. While the baht appreciation Thailand's oldest university). would benefit importers of capital goods, it could hurt vulnerable sectors such as agriculture and labor- "It all comes down to us; we have to demand what we intensive industries. In December 2006, the Bank of thinkwedeservefromourownGovernment,"shesaid. Thailandintroducedcapitalcontrolpoliciestoreduce "AndIthinkweshouldstartbyaskingtheGovernment the pace of the baht appreciation. Although most to follow the WDR's recommendations." of these controls proved temporary, the impact on market confidence lingers, the report said. For more information about the WDR07, please visit http://www.worldbank.org/wdr2007 "SignalsfromtheGovernmentthatthereisacoherent plan to address these pressures at their source would help to reassure the market that a re-imposition of capital controls is unlikely," Matin said. "This also has to be done in a manner that maintains market Thailand Economic Monitor (continued from page1) confidence, raises domestic demand and assists vulnerable exporters will also help to improve grew by only 1 percent in 2006 -- business sentiments." the lowest in many years. Todoso,theGovernmentmaytake "The challenges going forward steps to increase public investment for Thailand is to improve private through the budget and encourage investor confidence through more private investment through quick policy actions," Matin a set of policy actions, including commented. "Measures like the removing the "retrospective" signing of the Japan-Thailand application of voting rights economic partnership agreement, from the Foreign Business Act to modificationoftheForeignBusiness reassure foreign investors. The Act amendment to liberalize some Government may also select -- key service sectors, and actions on the basis of employment-size to reduce investment climate and vulnerability to appreciation constraintscanturnaroundprivate -- export sub-sectors to which it investmentsituation"andimprove will provide time-bound targeted "The challenges going forward for Thailand is to the country's economic outlook, improve private investor confidence through quick financial assistance. This will he added. policy actions" ­ Kazi M. Matin, World Bank's lead allow them to adjust gradually by economist for Thailand funding productivity-enhancing The medium-term prospects for actions, and/or by re-training Thailand's growth and development, however, their employees for employment in other related remain strong, thanks to the sound economic sub-sectors, if productivity-enhancing potential is fundamentals. In the face of many challenges, Thai limited in existing sub-sectors. export volume still grew rapidly in 2006-- at 11.6 percent versus 7.2 percent in 2005. Total exports The report also recommended medium-term agenda topped US$ 130 billion, with exports of agriculture, to move Thailand toward a knowledge economy, as well as of labor-intensive and machinery thus improving the Thai economy's competitiveness. manufacturers growing robustly. Their growth rates "This includes the development of intellectual were either similar to earlier years or significantly and public infrastructure, as well as policies and higher. Exports to China grew just as strongly as incentives for innovation," Bhaopichitr said. The earlier years, the report said. Thai Government may achieve this through a set of actions to improve the policy framework Still, the issue of falling private investment and providing appropriate incentives, improve the consumption needs to be addressed as it left the Thai intellectualinfrastructure,andtoensurethatphysical economy highly dependent on exports, said Kirida infrastructure is supportive of this move. Bhaopichitr, World Bank Country Economist for Thailand,alsoprincipalauthorofThailandEconomic ForfullreportofThailandEconomicMonitor,pleasevisit Monitor. "The economies of Thailand's trading http://www.worldbank.or.th partners are expected to slow down as well, thus reducing demands for Thai exports," she said. "This, Page 3 Upcoming Event: Many young people in the East Asia and Pacific (EAP) region have become interested and actively engaged in the world development process, and An Inter-Regional Knowledge some are continuously making efforts to have their Sharing Series on the 2007 World voicesheardwhenpoliciesareconsideredthataffect Development Report them. The objective of this seminar is to support those efforts. Thisseminarwillbringtogetheryouthleaders,Bank staff, and policy-makers from the region, to discuss development programs initiated by youth. The seminarwillalsoexplorethepotentialforincreasing youth participation in the decision-making process at national levels. The focus of this seminar is in line with the key message of the World Development Report 2007: Development and the Next Generation, which emphasizes youth as partners in the development agenda. By acknowledging the efforts of youth and Supporting Youth Voices their potential as effective partners, this seminar Seminar One of a Two-part Series should serve as first step toward the creation of a morepermanentdialoguebetweenyouth,theBank, A distance learning seminar organized by the and national policy-makers on issues of mutual World Bank, and the Vietnam Development concern relating to international development. Information Center For further information,visit http://www.worldbank.org/wdr2007 or http://www.worldbank.org/eap Contact:Tinnakorn Sareenun 66 (0) 2686-8327 tsareenun@worldbank.org For comments or questions about this newsletter, Tel.: 0-2686-8300 please contact Mr.Tinnakorn Sareenun Fax: 0-2686-8301 The World Bank Office, Bangkok Email: tsareenun@worldbank.org Siam Tower,30th Floor,989 Rama I Road,Pathumwan,Bangkok 10330 Website: http://www.worldbank.or.th Page 4