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close this bookEmerging World Cities in Pacific Asia (UNU, 1996, 528 pages)
close this folderPart 2. Changing Asia-Pacific world cities
close this folderThe changing urban system in a fast-growing city and economy: The case of Bangkok and Thailand
View the document(introductory text...)
View the documentIntroduction
View the documentGrowth and transformation of the Thai economy
View the documentUrban population, settlement patterns, and employment distribution
View the documentThe international dimension of the changing urban system
View the documentThe internal dimensions of the changing urban system
View the documentThe urbanization of bangkok: its prominence, problems, and prospects
View the documentConclusions: towards a new national urban development policy for Thailand
View the documentAcknowledgements
View the documentNotes
View the documentReferences

Conclusions: towards a new national urban development policy for Thailand

By now, it should be sufficiently clear how Thailand in general has gone through the process of urbanization; what changes in the urban system have taken place as a result of contacts with international economic activities; what kinds of problems its cities are facing during these processes of development and urbanization; and so on. This last section looks at the possibility of a new national urban development policy being adopted in the near future.

Three issues that are believed to have a direct bearing on and relevance for the new national urban development policy in Thailand have been selected for discussion here. These issues are: changes in regional development strategy, changes in the administrative and organizational structures of urban government, and change in the financing of urban activities.

Changes in regional development strategy

The fundamental issue of how best to develop different regions of a developing economy has been debated in urban and regional economics literature for quite some time. The main contending arguments seem to centre on two points; namely, (1) whether such a country should try to slow down the growth or limit the expansion of one or more large cities in the country that have become "over-urbanized," and try to establish growth centres in other lagging regions to balance out the dominance of the existing large city or cities, to keep the rural population within the region by providing them with increased economic opportunities that will eventually "reverse the polarization" of the original large cities, or (2) whether the government should accept as inevitable the rapid urbanization of metropolitan or megalopolitan cities or centres, with all the imbalances and inequities that these cities or centres have generated, and try to spread or diffuse the benefits of such growth to other lagging regions through a series of policies such as stimulating the growth of secondary cities and smaller towns, setting up effective networks with all regions in the country to strengthen the economic relationship between urban and rural areas, and promoting the agricultural exchange and supply functions of market towns. As Rondinelli (1991) concluded in his article on this very issue, the prevailing view nowadays, particularly in Asia, is that policies aimed at creating a "balanced" pattern of urban development, partly by slowing down rural-urban migration and partly by controlling the expansion of metropolitan areas, have failed, and that the diffusion of urban growth, rather than control and suppression, is a preferred policy.

With regard to the case of Thailand, Mike Douglass (1990a,b) also believes in a variation of the diffusion model. In his part of the study on the National Urban Development Policy Framework Project with the TDRI, Douglass argues that the growth pole or growth centre policy, which had been adopted in Thailand since the Fifth Plan, is inferior to what he calls a "regional network" policy. Unlike the growth pole policy, which focuses on urban-based manufacturing as the leading sector for regional development, the regional network policy recognizes the multisectoral nature of local-level development in rural regions and rural or regional resource endowments and already existing activities. Moreover, most growth pole policies adopt an implicit hierarchical central place system based on the importance of the size of the city, whereas the regional network policy finds the city size to be an inadequate indicator of either growth potential or local linkages, and believes that cities of the same size class could have very different functions and development profiles.

According to Douglass, instead of trying to make a single, large city into an omnibus centre for a region, the network concept would rely on the clustering of many settlements, each with its own specializations and localized hinterland relationships. Thus small towns in one area might be made key marketing centres for a certain crop, whereas another town might serve as a cultural centre, and yet another as the administrative centre for the region; and so on. By integrating these centres through transportation linkages and institutional development, the artificiality of central place theory could be overcome.

Along this line of thought, Douglass would argue that the regional inequality brought about by urban-based industrialization could be ameliorated by the regional network approach, which helps to induce urbanization and regional economic expansion through accelerating rural development. Although Thai agriculture has made significant progress in diversification over the past decade, improvements could still be made in the intensification of land use and the production of higher value-added crops for domestic consumption as well as for export. The increase in agricultural productivity would make this rural-led development policy successful, and the development of rural hinterlands would become as important as town-centred or urban investment.

Douglass' ideas seem to have had considerable influence upon the thinking of Thai planners, as the relevant section in the Seventh Plan includes this concept of regional network. However, this regional network concept will supplement rather than supplant the original growth pole concept because, despite the objections propounded in Douglass' study, the growth pole concept was still found to be quite useful, and in its present context was not found to be in conflict with the new regional development concept.

The new regional network strategy entails two important recommendations by Douglass and the research team at TDRI. One is the recognition of the necessity and usefulness of the extended BMR concept; and the other is a new urban hierarchy. The extended BMR concept would recognize that the effect of economic growth has spread beyond the five provinces surrounding Bangkok Proper. To begin with, the growth of Bangkok should be extended to cover other provinces further out, as well as the eastern seaboard areas. Then, through improved communications and transportation networks, the effect of growth would be further spread out horizontally to other areas in a network fashion.

The other auxiliary recommendation is to determine a new urban hierarchy whereby a number of different types of urban centre will be identified for the purpose of linkages between these urban centres and the extended BMR. As part of its analysis of urban spatial development in Thailand, TDRI has analysed the economic potential of each city in the country by applying relevant indicators with different weights to each city. Such socio-economic indicators as average per capita GPP, per capita industrial GPP, per capita deposits in commercial banks, etc. were used. In the end, six levels of cities were identified. Cities at Level 1 are the most developed urban growth centres in the region. A city with a ranking of Level 2 also represents an urban regional growth centre but has high, rather then extraordinary, economic potential. Level 3 and 4 cities are known as community urban growth centres and are typically cities with average (Level 3) or slightly below average (Level 4) economic potential. The classification of Level 5 is limited exclusively to border towns, while Level 6 urban centres are cities with the lowest economic potential in the region.12

In sum, as an example of what could happen under the new urban development scheme, TDRI stated that the regional network strategy would enable the government to target the corridors between major urban centres as sites for industrial parks as well as other higher-order services such as hospitals, universities, or recreational parks in the nearby towns to attract skilled labour from metropolitan areas. The approach was designed to enhance the coordinated expansion of regional clusters of cities and inter-urban corridors rather than simply focusing on a single municipality.

Changes in the administrative and organizational structure

As the new urban development system could not operate effectively in the existing administrative and institutional settings, there must be some changes in the administrative and institutional structures involved in urban management. With regard to the management of the extended BMR, which is a revolutionary urban concept of sorts, TDRI recommended that a new national-level committee be established and charged with the responsibility of setting policy within the extended BMR and managing it. This could be an upgraded Bangkok Metropolitan Region Development Committee (BMRDC), which is already in charge of coordinating the urban policy of the BMR. The Extended BMRDC (or EBMRDC) would be headed by the prime minister, and committee members would consist of high-level officials so that decisions that affect the responsibilities of various government agencies can be effectively implemented.

To be successful, the EBMRDC needs to be assisted by a strong secretariat that has the capability of (a) planning the integrated development of the EBMR; (b) coordinating with various agencies having responsibility for development within the EBMR; and (c) evaluating major infrastructure projects in the EBMR to ensure that they are socio-economically beneficial and are consistent with the desired development directions of the EBMR.

What is equally important, if not more so, is the change in the administrative structure of regional city governments. It is already well known that city governments in Thailand are local governments under the supervision and control of the Ministry of the Interior in Bangkok. Although all regional city governments operate under the administration of municipalities, whose executive officers are directly elected by the local people, these governments still come under the strict control of the Ministry of the Interior as to their fiscal and administrative autonomy. Without effective autonomy in fiscal as well as administrative matters, the city governments cannot perform their duties well. The main obstacle seems to be the entrenched attitude of the Ministry of the Interior in trying to hold on to the power to control local governments. Until there is a genuine change in the autonomy of city governments in Thailand, management of the urban areas will continue to be slow and indecisive.

On a larger scale, there was also a recommendation for change in the administrative and organizational structure at the national level. A new organization, either the Urban Development Bureau or the Ministry of Urban Development, has been proposed to make urban development policy and oversee its implementation. This change might be even more difficult than the decentralization of power to local governments referred to earlier. Therefore, the chance of this change materializing in the near future is quite remote.

Change in the financing of urban activities

Change in the financing of urban activities could be the most important change of all. The successful implementation of the new urban development policy requires adequate and efficient financing. The financial resources needed to fund the infrastructure components of urban development in Thailand in the Seventh Plan are quite large (over 525 billion baht). This ambitious level of infrastructure investment must be funded from a variety of sources, including the central government, local governments, public enterprises, and the private sector. The role of local authorities and the private sector during the next Plan will be much greater than in the previous Plans. As such, the majority of the financial strategies designed to increase the funds available for infrastructure investment rely principally on increasing the resources available to local governments and on increasing and identifying privatization opportunities.

To enable both the central and local (urban) governments to increase their mobilization of resources for future urban development, the following are some of the recommended changes in financing strategies for the new urban development policy.13

(a) improve the efficiency of tax collection and widen the tax base

- Improve the administration and the structure of the Buildings and Land Tax and the Local Development Tax. Administrative modifications could be facilitated by the complete updating of tax maps and rolls. To improve the tax structure, the base of the Buildings and Land Tax will need to be expanded to include owner-occupied houses and public enterprises.

- In the longer term, replace the Buildings and Land Tax and the Local Development Tax with a new Property Tax that is revenue adequate, income elastic, equitable, incentive oriented, and structurally simple.

- Share the revenue generated from the Land Registration (Ownership Transfer) Fee between local and central government. The share of local governments should equal the proportion of their contribution to local infrastructure investment.

(b) Improve service fees

- Establish central government guidelines for fee imposition to be observed by local officials, allowing the exact fee to be levied for any specific service to be at the discretion of the local government.

- Relate fees to the cost of the service, and impose fees when ever beneficiaries can be identified and the benefit is clearly received.

(c) Restructure the present municipal lending organizations

- Create a new organization, perhaps called the Local Government Development Corporation (LGDC), to facilitate funding of local government development and expand local investment opportunities.

- The sources of funding for this organization will be from (i) local governments, (ii) central government, (iii) private financial organizations, and (iv) foreign sources.

(d) Establish a regional development grant

- Establish a regional development grant to be allocated to local governments in high-priority or targeted regions.

- The minimum area for the grants will be the entire province because an urban centre cannot be developed in isolation without concurrent and supportive development occurring in the rural areas surrounding the urban centre.

(e) Modernize the grant allocation mechanism

- Revise the so-called general grant based on per capita allocation to take into account local tax collection efforts. This should provide local governments with incentives to improve their tax collection efficiency.

(f) Other financial strategies

- Impose special assessment levies to mobilize resources from developers for the use of existing and planned infrastructure services. These levies should be imposed whenever conditions, such as the flood protection plan developed for Bangkok, make it possible to do so.

In conclusion, this chapter has demonstrated that the rapid economic development in Thailand brought about in large part by its international contacts and the effects of the globalization of economic growth has caused profound changes in the economy of Thailand and in the way its people live and work. Increased urbanization and the changes in the urban system that accompany urban growth have further created problems never before experienced, problems in the settlement of people and problems with the environment. The contrast between the benefits of economic growth and urbanization and the costs to the quality of life and the environment appears to be very vivid in the case of Thailand. Bangkok has exemplified the benefits and costs better than any other city in the country, and has become the most progressive, most dynamic, richest, and, at the same time, most polluted and congested city in Thailand.

The international implications of this process of urban change are several. Although it is more positive to see the growth of Bangkok as the growth of a "fringe" area in the context of the vast area of the "borderless" Asia-Pacific region, together with the growth of other fringe areas such as Manila, Shanghai, or Jakarta, it could contribute to the dynamic nature of global economic connections. These connections lead to further growth and prosperity, but the growth that Bangkok represents cannot be called sustainable growth in view of still considerable internal or regional inequality. Perhaps a more appropriate policy would be to pay more attention to long-term urban stability so that the growth becomes more equal and more diffused throughout the economy, rather than to be satisfied with the short-term economic prosperity that Bangkok seems to portray.