In this webinar, Dr Patcharawan shared her research on the effectiveness of five-year development plan formulation and implementation in Thailand and Malaysia using insights from organization theory.
REGIONAL ECONOMIC STUDIES PROGRAMME WEBINAR
Friday, 5 November 2021 – ISEAS – Yusof Ishak Institute hosted a webinar on “Medium-Term Economic Planning in Thailand and Malaysia – A Comparative Analysis” presented by Dr Patcharawan Ubonloet, policy and plan analysis at the Office of the National Economic and Social Development Council (NESDC) — Thailand’s national planning agency.
The webinar commenced with Dr Ubonloet explaining the goal of her presentation which is aimed at understanding differences in the development planning and their outcomes in Malaysia and Thailand.
Dr Ubonloet outlined the two stages of development planning. The first stage, which includes the macro-plan, provides the vision, thrust, objectives and target set by the planning agencies. The second stage involves filling up the plan with project proposals developed based on the guidelines of the agencies.
The implementation effectiveness of these plans could be affected by several factors such as the dispersion of resources, lack of discipline, failure to relate formulation to implementation, and a poorly defined relationship between the planning agency and the rest of the government. Having good organisational arrangements at the beginning of the planning cycle is important for fulfilling the decisions and coordinating activities. However, implementation evaluation has been criticised for its lack of progress in the use of quantitative and qualitative methods, agreed techniques, dimensional indicators and data collection methods, little understanding of the relationship between activities that shape planning, and characteristics of multicausality.
Dr Ubonloet also touched upon the performance-based approach and conformance-based approach, in which the former considers whether a plan involved consultation during the decision-making process, while the latter concentrates on qualitative or quantitative outcome measurements.
Dr Ubonloet then introduced three levels of capacity which comprised of the individual, organisation and the environment. Individual capacity referred to the skills and knowledge of the planning officials, while organisation capacity referred to the capacity to manage resources and adjust for self-renewal. Institutional capacity involves managing interrelations with implementing organisations. The level of individual capacity, in particular, was important, as planning has shifted from a comprehensive approach to a participatory-oriented one. Dr Ubonloet also outlined the measurement of implementation effectiveness in terms of GDP (PPP) per capita, GINI index, IMD’s Competitiveness Index and the UNDP Human Development Index.
The effect of political stability on implementation effectiveness in both Thailand and Malaysia was also explored in the webinar. The capacity of Malaysia’s Economic Planning Unit (EPU) is shaped by institutional arrangements, stakeholder management, and institutional linkages. The clarity of the EPU’s policy, procedure, and process of planning also determined a clear role and relationships between different organisations while decision on development expenditures kept projects aligned with the plan’s direction. However, Dr Ubonloet found that individual capacity could be improved.
Exploring the context of Malaysia, which employed short-term, medium-term and long-term planning, Malaysia’s plan focused on the operationalisation of the long-term plan with the EPU at the heart of Malaysia’s planning machinery and system. The EPU has strong law and regulations that determine the role, responsibility and relationship with various organisations. Budgetary preparation is mainly driven by the Development Budget Section in EPU and Ministry of Finance (MOF). EPU provides inputs to the annual budget process, led by MOF. The Implementation Coordination Unit forms part of the implementation machinery where it identifies problems, gives feedback to top management for corrective action together with the Project Management System which provides the status of the project implementation. The monitoring and evaluation of such plans are then supported by the State Action Council (SAC) and State Action Working Committee (SAWC) in addition to ICU’s monthly meetings with line ministries. Overall, the main driver of the budgeting system is the National Budget Office (NBO) which exercises its power in budgeting and financial management through Financial Procedures Act (1957). In terms of stakeholder management, the Inter-Agency Planning Groups (IAPG), Technical Working Groups (TWG) serve as a coordination mechanism and consultative process.
In the case of Thailand, the NESDB’s capacity is concentrated at the organizational level; namely, knowledge management, strategic planning, and research design. However, there has been a decline in institutional and individual capacities. Knowledge management is not yet an instrument for organizational transformation and does not strategically link with organization mission while knowledge transmissions rely on a mechanistic approach. In terms of skillset, there were some limitations in the writing skills of the individual planners and more improvements could be made to improve research design. As such, EPU appeared to be able to better address the gap between budgeting and planning compared to the NESDB. Thailand has also adopted a two-tier planning horizon of medium- and short-term planning. However, there was neither a fixed machinery nor formulation process where thematic research was conducted by NESDB. Additionally, matters concerning budgeting preparation are done by the Bureau of Budget (BoB). Monitoring and evaluation is conducted by several agencies such as the NESDB, BoB, OPDC, Comptroller General’s Department and the State Audit Office. Moreover, the NESDB and BoB both have laws and regulations that determine the roles of organisations such as the National Economic and Social Development Act and the Annual Budget Act, respectively.
Aside from the performance-based approach of evaluating effectiveness, Dr Ubonloet also discussed the conformance-based approach by looking focusing on GDP (PPP) per capita, GINI index, IMD’s Competitiveness Index and the UNDP Human Development Index. Malaysia has experienced an increase in GDP per capita, the Gini Index, and improvements in HDI rank. The trend in the country’s GDP per capita stems from government interventions to promote economic opportunity as well as macro and microeconomic management. In addition, targeted economic sector strategies and the promotion of foreign investment supported by continued public sector improvement driven by various national programs have enhanced productivity, innovation, and national competitiveness. The successful transformation of the economy has resulted in a widening gap between Thailand and Malaysia since 2011, all of which could be attributed to more robust national transformation programs and initiations.
Dr Ubonloet also discussed the role played by PEMANDU in coordination and implementation acceleration in Malaysia. From 1997 to 2015, Malaysia made good progress in life expectancy and infant mortality rate. From 2008 to 2017, Malaysia’s HDI points increased from 0.761 to 0.802. Expenditure, especially on education and health infrastructure development, resulted in achievements in school enrolment and literacy. Moreover, while both Thailand and Malaysia shared a similar growing trend of competitiveness in the late 1990s, Malaysia’s competitiveness index increased in 2004, reaching its peak in 2010. On the other hand, the Thai government were engaged in political turmoil in the late 2000s with Thailand declining to its lowest standing at 33rd in 2007. In 2010, Thailand ranked 26th and continued on a downward trend to 30th in 2015.
Dr Ubonloet further explored the recent developments in Malaysia and Thailand in the form of the 12th Malaysia Plan and the 13th National Economic and Social Development Plan, respectively. In the 12th Malaysia Plan, a new transformative approach was introduced based on three themes, four catalytic policy enablers and 14 game-changers. This new approach is aimed at restoring economic growth, addressing socioeconomic challenges, balancing regional development and enhancing the nation’s competitiveness. It also considers multidimensional goals such labour productivity and reduction in greenhouse gases.
Similarly, Thailand’s 20-Year National Strategy is a 20-year vision aimed at transforming Thailand into a developed country with security, prosperity and sustainability. Additional steps were taken to ensure that political changes and developments would not hinder the progress of the National Strategy. There were also three levels of plans with the first being the 20-Year National Strategy which is followed by the Master Plans and lastly, the Ministerial 5-year operational plan and annual action plan. The Electronic Monitoring and Evaluation System of National Strategy and Country Reform (eMENSCR) was also developed by NESDB to monitor and use data from line ministries for feedback to the cabinet. Apart from the external changes, NESDB has also undergone transformation with the enactment of the National Economic and Social Development Council Act in 2018. Under this institutional arrangement, NESDB was to be the secretariat to the 20-Year National Strategy Committee and other committees to map out six national strategies.
While the previous development plans may have been too comprehensive in its aim to cover all development issues, the 13th National Economic and Social Development Plan is more indicative and covers key prioritised development areas. Five goals and indicators were also holistically set that encompasses economic and human aspect, income inequality reduction, environmental sustainability and the capacity to cope with changes. This is addition to the 13 milestones are designated for country transformation. Dr Ubonloet described some details of one of the milestones which she was involved in, namely, the goal to develop a high-performance workforce, capable of continuous learning and responding to future development context. Specifically, strategies to achieve such a milestone included developing Thai people of all age groups in all dimensions, building a high-performance workforce and promoting lifelong learning.
Comparing the development plans of both countries, overlaps between their aims appear, as sustainability, inclusivity, science, technology, innovation, and sectoral focus. However, Malaysia’s development plan seems to be more inclusive and aspirational as compared to Thailand’s, where the plans are more operationalised and transformational. In addition, multidimensional targets are set in Malaysia’s development plans in contrast to five goals and indicators in Thailand’s plans. Despite the differences, both plans give recognition to sustainable development goals and cross-sectoral thinking. As such, a more systematic approach to building capacity inside and outside of the economic planning ministries is needed. Moreover, mainstream participatory planning in a humanistic manner, the mindset of officials when planning, an ecosystem of public service human resource management, and performance management and evaluation must all be systematically developed.
The webinar concluded with Dr Ubonloet answering questions posed by the audience, such as the balance between budgeting and planning, the emphasis and notion of “community” in the NESDB’s plans, and the effect of political instability on planning and bureaucracy.