Tuesday, September 21, 2010

The middle income trap

The Nation on Sep. 12, published an article announcing ADB's approval of a $300mn loan to Thailand to develop its capital market. The 15 year period loan is to be used in support of the Thai government's Capital Market Development Master Plan for 2009-13 for the development of the equity market, bond market and money market in four areas: regulatory environment; market efficiency, liquidity and transparency; market infrastructure; and new products and investors. 

The government has made substantial headway in developing Thailand's capital market. Recent measures included establishing a timetable for the demutualisation of the Stock Exchange of Thailand, strengthening the surveillance and enforcement capabilities of the Securities and Exchange Commission, moves to develop the domestic bond market, and simplifying taxes on financial transactions. There has also been activities organised to improve public financial literacy.

What caught my interest was the mention of the capital market development plan's goal to help the country "transform from a middle-income to high-income economy through increased contribution of the domestic capital market to financing domestic investment and economic growth".

"The middle income trap" seems to be a recent development agenda that is being 'pushed around' at the moment. I remembered having recently read an article at Time about Malaysia's dilemma with this interesting concept. I had felt then that the writer didn't do much justice for Malaysia. However, it seems that this economic criticism is gaining some weight among policy makers. Here are a couple of related articles:

From an economist's blog, "Getting out of the middle income trap"

Of course, moving towards a higher income economy is a desired goal, but I can't help wondering. Is the simple focus on "income" levels obscuring other desired developmental goals? Like income distribution for one? Does higher income come with skewered income distribution? If it does, well, maybe it's okay to be "stuck" for a while, until those higher income countries can show us that people with lower income in their countries are receiving desired benefits of higher income, let's say... a good welfare service system for one, no?

Some recommendations of how to escape the middle income trap:
  • a managed growth program with higher income, stronger currency, while maintaining a flexible foreign exchange regime and inflation control targets
  • a more efficient capital market, availability of capital for sme and local firms to grow
  • R&D spending
  • tax reform (capital gain tax)
  • investment in human resources
  • developing an ability to produce and contribute to the global economy via home grown innovations
Economics aside, I think there are other socio-political issues that can cause a country to be stuck, my own list:
  • political instability, stunted political development
  • corruption
  • a polarized society
  • debt
  • lack of investment in infrastructure and human capital
  • energy self-sufficiency
To cap off, I found this interesting and useful guide, from You can read the Bangkok Post, by Jon Fernquest, "Avoiding the middle income trap: The challenges ahead for Thailand"

Tuesday, September 7, 2010

Linguistic diversity in Thailand

Recently meeting a linguistic student the other day, I surprised him by declaring that Kmer and Thai did not belong to the same family group. He thought they belonged to the same linguistic family.  I had a vague memory of a classification of the three large linguistic families of Southeast Asian languages I had read in Joachim Schiiesinger's "Ethnic Groups of Thailand: Non-Tai Speaking Peoples of Thailand" (published by White Lotus Press, 2000.)  I looked up this book as soon as I got home, just to make sure I hadn't made a rash declaration. Sure enough, page 8, a diagram, adapted from James A. Matisoff, "Linguistic Diversity and Language Contact", in John MacKinnon and Wanat Bhruksasri, eds, Highlanders of Thailand (Oxford University Press, 1983): The three linguistic superstocks of Southeast Asia:
  1. Austro-Asiatic, to which belongs the languages of Munda (India), Nicobarese, Mon-Kmer (Vietnam, Laos, Cambodia, Burma, Thailand, China, Assam), and Aslian (Malaysia).
  2. Austro-Thai, to which belongs the sub-family languages called Austronesian, Tai-Kadai, and Mioa-Yao.
  3. Sino-Tibetan, subdivided into Chinese and Tibeto-Burman.
Now if you're not a linguist (which I'm not, but I'm an extremely curious person), it's easy and forgivable to make a simple and common conclusion that people of same geographic region will be speaking similar and related languages. However, it turns out that Southeast Asia is one of the most diverse and linguistic regions of the world. My new linguist friend, who specialized in Spanish and is more interested in learning about prehispanic languages, of course, was not expected to know this.

How would you explain to people who don't have a clue, the minefield of linguistics? What exactly do linguists do? Well, my husband's niece who had decided to go into that field of study, is now working on the construction of a dictionary of Spanglish, of all things. I met another, who worked with a computer software company, using her speciality in Latin, putting a natural order to computer programming. Then, there's a blogger I avidly follow who doesn't write so much about linguistics as much as she writes about Thai cooking!

Wikipedia says, "linguistics is the scientific study of natural language". It also goes on to say that there are several sub-fields (ie, grammar and semantics), and sub-disciplines (ie, evolutionary liguistics, historical linguistics, sociolinguistics, neurolinguistics, language acquisition, discourse analysis, and pragmatics), and even relate fields (like phonetics). Interestingly, "outside the field, this term is commonly used to refer to people who speak many languages fluently".

So from the understanding derived from reading the above wiki article, the classification of family languages falls under historical linguistics, branching out from philology, the study of ancient texts.  Well, if you're in interested in what linguistics is all about just keep following those numerous links provided by wikipedia. I hope it will inspire you to develop a keener interest in what linguistics is about, if not to be fascinated enough to become one yourself.  Meanwhile, I'm looking at the topic heading that I put up and sees that it's saying "Linguistic diversity in Thailand"!

What then is the distinction between Austro-Asiatic and Austro-Thai? "Austro" means south, so therefore, Austro-Asiatic is basically South Asia. That is an interesting revelation, because only a small group of people are left that speak Austro-Asiatic (Munda) in India which geographically is considered South Asia. Instead, the language of the Indians are mainly of the Indo-European and Dravidian language groups. Another quirk of linguistics.

The grouping of the language family of Austro-Tai is based on a hypothesis that the Tai-Kadai and Austronesian language families of southern China and the Pacific are genealogically related. There are a number of possible cognates in the core vocabulary.  The word for rice, for example.

While what is seen on the surface is that the Thai language is THE one and only official language of Thailand, in reality a multitude of languages and dialects are spoken in Thailand. I enjoy being able to point out the differences of Isaan dialects spoken in Northeastern Thailand. Sakon Nakhon, where my family is from, has a special kind of sing song lilt (influenced by Puthai) that in my opinion makes it sound softer than for example the dialect of its neighboring province of Kalasin. Nobody will deny that the dialect of the North is different from the dialect of the Northeast, even if we can quite easily understand each other, but have a Southerner speak his dialect to me and I'm lost, but not as lost as having a Karen hilltribe speak to me.

The book, "Linguistic Diversity and National Unity", by William A. Smalley (1994), singularizes the success of Thailand's official language policy. Unlike other multi-ethnic nations, such as Myanmar and India, where official language policy has sparked bloody clashes, Thailand has maintained relative stability despite its eighty languages. 

Another notch on the belt for Thailand, it seems.