International Competitiveness

International Competitiveness – Where Thailand Stands?

Introduction:

The idea of competitiveness has been broadly accepted and has turns into a part of debate in international forums. Today world-wide economy cannot be enlightened by using the same approach as it was a few decades before. Progressive competitiveness of economies is a key requirement of the day and capability to contend in the global marketplace is of significant concern.

Primarily the majority of the economists evaluated the idea of international trade on the basis of comparative advantage, and then turns into a new attribute of Trade theory. The study in this paper attempts to evaluate position of Thailand’s economy with the perspective of International Competitiveness. The

He offered an idea that how a country might play a game strategically and could be successful in extracting great levels of revenues from trade, by implementing new trade theories. The comparative advantage theory of Ricardian gained a new aspect as Porter emphasized on development of comparative advantage or innovativeness by improving to sustain greater shares of market. Therefore, the idea of productivity that can be work to attain greater levels of international competitiveness (IC) emerged [Porter (1990)].

Indices based on productivity are extensively used in the measurement of competitiveness. As per Porter point of view productivity is the most valuable thought in international competitiveness. The absolute productivity index that imitates this benefit is the Total Factor Productivity (TFP). A country is called competitive when its industries maintain an average level of Total Factor Productivity TFP higher than the level its trading competitors have. TFP is a determinant of development, growth and efficiency as a

Productivity is a variable that permits a nation to maintain high wages, a strong money, and handsome return to investment and with all of them a high level standard of living. Global economy is not a zero-sum game and various countries can expand their richness if they can start improving productivity [World Economic Forum (2005)].

Competitiveness defined as: A set of factors, institutions and policies which establish the level of productivity of a nation and therefore, manage the level of prosperity that can be assessing by an economy [World Economic Forum (2005)]. Productivity is a main driver of the rates of return on investment, which in turn reflects the level of aggregate growth rate of the economy. So, a more competitive economy is the one that is expected to grow more rapidly over the way to long term.

The two dissimilar concepts of productive efficiency are: relative efficiency in manufacturing exportable goods and absolute point of production costs related to other countries. Relative efficiency doesn’t show competitiveness as a whole of different countries rather it clarify the paths of Global specialization in production whereas absolute production costs defined how successful countries are in global marketplace for individual goods [Irfan ul Haque