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close this bookThe Impact of Technology on Human Rights: Global Case-studies (UNU, 1993, 322 pages)
close this folder3. Technology and human rights: critical implications for Thailand
View the document(introductory text...)
View the documentIntroduction
View the documentHuman rights
View the documentTechnology
View the documentImplications
View the documentRural development
View the documentAgriculture
View the documentIndustrialization
View the documentUrbanization
View the documentEnvironmental concerns
View the documentThe socialization process
View the documentAssessment
View the documentAppendix 1
View the documentNotes

Industrialization

Thailand's leap into industrialization has been very much export-oriented and capital-intensive during the past decade. The industries which have contributed to the current 10 per cent GDP growth, particularly in the manufacturing sector, also tend to be concentrated in and around Bangkok. There is evidently a distortion in the spread of industrialization, in that rural areas are on the periphery of the process. This also shapes the human rights perspective and access to technology for industrialization.

The link between large-scale industries, technology, and human rights is opaque, precisely because, for the reasons already noted, it is impossible to quantify how much technology has been developed and transferred to large-scale industries in Thailand.58 First, the number of local patents registered with the Patents Office is small, indicating a paucity of local inventions (or if not a paucity, at least a secrecy which denies knowledge of them to the public). According to a recent World Bank study, although patent applications increased from 500 in 1982 to 1,500 in 1988, the share of Thai applications fell from 22 to 12 per cent as compared with foreign applications.59 Details can be found in table 5. Second, the database for technology transfer from abroad is uncertain owing to lack of a repository for technology contracts at the commercial or governmental level, while there is no law requiring mandatory screening of technology transfer.

Obviously, there have been positive impacts, such as the boom in industrialization itself and the rising GDP, particularly from the industrial sector. However, the negative impacts are also visible. For example, the transfer of many turnkey factories to Thailand from abroad has not been complemented by sufficient training of Thai counterparts to replicate those factories at the local level for production purposes. Moreover, the technology provided is not always suitable and may have serious environmental consequences. For instance, in 1961 there was a transfer technology from Germany in the form of the "otter-board trawl" to improve efficiency in catching fish in the Gulf of Thailand.60 It is mainly through this technique that fishery resources are now depleted, causing a crisis for fishermen and consumers.

At the other end of the scale, in policy-making circles, the problems of over-centralization and the need for decentralization are well known, but it is political and social will which is often lacking for the implementation of change. As was recognized in the Fifth National Economic and Social Development Plan (19821986):

The concentration of industrial activities is due to the availability of basic infrastructural facilities in Bangkok and the surrounding area, which is also the centre for commerce, transportation and communication, financial resources and trained manpower. It is also observed that industries which are located in provincial areas are agro-industries requiring local raw materials and are industries which primarily produce goods for local consumption.61

That Plan also initiated the project known as the Eastern Seaboard (ESB), comprising the industrial development of three provinces adjoining Bangkok as a means of decentralization.62 In practice, however, the area has been an extension of the Bangkok metropolis rather than a genuine decentralization of industries. There is currently concern that the social and environmental consequences of developing the ESB have not been fully appreciated, as it may lead to an outflow of manpower from other rural areas to satisfy ESB industrial needs, on the one hand, and on the other to industrial pollution, especially in nearby coastal areas.

Table 5. Number of patent applications, 1982-1988

Sector

1982

1983

1984

1985

1986

1987

1988

Total

Engineering









Thai

36

35

36

46

44

57

67

321

Foreign

124

191

227

237

205

303

451

1,738

Total

160

226

263

283

249

360

518

2,059

% Thai applications

22.5

15 5

13.7

16.3

17.7

15.8

12.9

15.6

% of sector in total

28.7

27.2

25.2

28.6

24.1

285

33.5

28.3

Chemicals









Thai

4

12

12

9

16

11

11

75

Foreign

207

322

393

415

429

511

590

2,867

Total

211

334

405

424

445

522

601

2,942

% Thai applications

1.9

3.6

3.0

2.1

3.6

2.1

1.8

2.5

% of sector in total

37.8

40.1

38.9

42.9

43.0

41.3

38.8

40.5

Industrial products









Thai

87

141

182

129

182

193

111

1,025

Foreign

100

131

192

153

159

190

318

1,243

Total

187

272

374

282

341

383

429

2,268

% Thai applications

46.5

51.8

48.7

45.7

53.4

50.4

25.9

45.2

% of sector in total

33.5

32.7

35.9

28.5

32.9

30.3

27 7

31.2

Total applications









Thai

127

188

230

184

242

261

189

1,421

Foreign

431

644

812

805

793

1,004

1,359

5,848

Total

558

832

1,042

989

1,035

1,265

1,548

7,269

% {had applications

22.8

22.6

22.1

18.6

23.4

20.6

12.2

19.5

Source Technology Strategy and Policy for Industrial Competitiveness: A Case Study of Thailand (World Bank, 1990), p. 61.

The Fifth Plan also initiated greater interest in small- and medium-scale industries -a sector more likely to benefit rural people and agriculture- by proposing the following measures:63

1. Improve and expand the promotion of small-scale industries in provincial areas.

2. Develop a credit extension system and related institutions for small-scale industries in outlying regions.

3. Improve research work, develop production technology, and improve management techniques. In addition, the Ministry of Commerce, Ministry of Industry, and Ministry of Science and Technology are to cooperate in the expansion of markets for small-scale industries.

4. Promote the production subcontracting system between small-scale and large-scale industries.

5. Speed up the identification of industrial zones according to size and category in various provinces.

The current Sixth Plan continues this call for more small- and medium-scale industrialization and links it with rural industrialization as a whole.64 In this respect, a recent book entitled Rural Industrialisation in Thailand makes this perceptive observation:

Since the majority of Thailand's rural industry comprises small scale industries, the technological requirements of these industries are not high. Unfortunately, there is no information available for rural industry. Nevertheless, the pattern of source of technology in rural areas is expected to be similar to small industry as a whole, i.e. mostly from own design. Direct purchase of foreign technology is found to be low even for large scale industry. Another interesting point is the very small portion in all sizes of industries which benefited from government assistance in terms of technology.65

One successful example of a rural industry which has been promoted recently is the gem-cutting industry, which employs some 400,000 people in the north of Thailand. This exemplifies a link between outlying areas and Bangkok which can lead to exports for the benefit of the country and local people. In reality, however, the development of rural industries along these lines has been constrained by various shortcomings closely linked with technology, i.e.;

- Insufficiency of basic infrastructure, e.g. roads and electricity which are dependent upon technology.

- Lack of certain forms of equipment for small-scale operations, e.g. Iabour-saving devices.

- Not enough knowledge to improve the efficiency of production and maintenance of the equipment used.

- Paucity of credit facilities to help the acquisition of technology at the rural levels.

- Insufficient diffusion of technical know-how, particularly because of a lack of subcontracting.66

As already noted, the Ministry of Technology now has a revolving fund which can benefit rural industries in acquiring and developing technology, but it is nascent in application and limited in scope. To understand the broader perspective of incentives such as credit facilities and access to technology, one should go beyond that ministry to assess the accessibility of other institutions. These include the following:

The Board of Investment

The mandate of the Board of Investment is provided for in the Investment Promotion Act 1977.67 It provides incentives ranging from reduction of tariffs on imported machinery to facilitation of entry of experts to help investment projects from abroad. Its criteria for assisting projects are based upon the following determinants:

- Significantly strengthens position, especially through production for export.
- Supports development of resources within the country.
- Substantially increases employment.
- Locates operations in the provinces.
- Conserves energy.
- Establishes or develops basic industries which form the bases for industrial development.
- Must be considered important and necessary by the government.

In practice, this body has granted incentives mainly to large-scale industries with several million baht capital investment. The beneficiaries would seem to be big business entrepreneurs rather than ordinary people, particularly in rural areas.

Small Industrial Finance Office

This Office is linked with the Ministry of Industry.68 It lends sums of up to 3 million baht to investors, the loan period being seven years. The loan can be used to purchase land and machinery, as well as to construct factories. The loans have had limited impact on rural industrialization owing to the paucity of funds available for loan. The Office is not a juristic person, implying that it has difficulties in borrowing from other institutions; for example, it has no access to the Industrial Finance Corporation of Thailand mentioned below. Those who have borrowed from SIFO tend to be medium-scale industries with expenditure of over 100,000 baht, rather than small-scale industries with expenditure under 100,000 baht.

Industrial Finance Corporation of Thailand

This entity has a revolving fund totalling 200 million baht to promote small-scale industrialization with loans of up to 5 million baht.69 Records show that the majority of those seeking loans ask for more than 500,000 baht. The grants are therefore medium-sized investment and industrialization rather than the small-scale industries that farmers and their families may wish to establish.

The Prime Minister's Office

This has a rural development fund of several hundred million baht, from which rural people may borrow to upgrade their livelihood, including industrialization. However, there is much paperwork, and the administrative process is supervised by the governor of each province. So far, the fund has been ineffective, and few people have resorted to it.

A number of other credit amenities which may facilitate industrialization and technology acquisition are visible, for example, via the Community Development Department, which helps rural women who wish to set up cottage industries. However, the overall picture suggests that despite the rhetoric stressing the need to help rural and small industries, access to credit facilities that may, in turn, permit access to technology has been limited. The funds that are available have been mainly accessible to large- and medium-scale industries. The hopes of small rural communities and farming families in relation to local industrialization that may help to supplement their income are very much dampened by inaccessibility to resources conducive to small-scale operations.