Thai-German technical cooperation in the field of economic development started late. Today it is a main drive for regional development.

  • In the beginning through vocational education and trade facilitiation in the 1970s, TGTC helped to prepare for the globalized economic development in 1980s and 1990s.
  • A focus has been always placed to build up business and production performances of Thai small- and medium-sized enterprises, in order to improve their competitiveness.
  • Since 2000s environmental and socianl aspects have been integral part of the economic development

In the 1960s, Thailand’s economy depended primarily on the agricultural sector. Therefore, the technical cooperation in economic development started by facilitating trade and investment activities between the two countries. In the 1990s, small and medium enterprise (SME) promotion became an important focus of cooperation, with the aim of reducing economic and social imbalances among dierent regions in the country.

Thailand’s economy in the 1960s predominantly depended on the agricultural sector and the production of a few primary commodities such as rice, rubber, tin and teak. Raising the standard of living by means of greater production, therefore, constituted one of the priority areas of the Thai policy as formulated by the Frist National Economic Development Plan (1961-1966). Apart from fostering industrialization by providing timely vocational training to Thai youth, TGTC directly supported the Thai Government in its endeavor to strengthen and diversify the country’s economic sector. Activities started with the Thai-German Fisheries Project (1962-1975) which promoted the Thai fishing industry by the introduction of the trawling method and its dissemination to local fishermen. Furthermore, the project had multiplier effects on other industrial branches: To make use of the small fish accruing with trawling, duck farms were erected and expanded along the coast of Thailand (using the fish for feeding the ducks). Additionally, small enterprises producing fishing nets were promoted. By promoting the Forest Products Research Division (1966-1976), TGTC managed to establish a viable institute conducting research on the possible utilization of different kinds of wood for the processing industry.

Apart from fostering growth and diversification of the agricultural sector the Thai Government at that time committed itself to a policy of reducing the role of state-owned enterprises and strengthening private sector companies. In 1959 the Board of Investment (BOI) was founded, whose main tasks were to promote investment of both foreign and local capital in the private sector. Within this context TGTC provided Advisory Services to the Industrial Finance Corporation of Thailand (1966-1976), a private development bank established to promote small and medium-sized enterprises by the provision of investment loans and consultancy services.

The promotion of Thai enterprises was also the aim of foundation and subsequent support of the Thai Trade and Investment Center (1971-1979) in Frankfurt am Main. The project aimed to increase the export of Thai goods and to foster foreign investment in Thailand. While the latter objective could only be achieved to a limited extent, because the politically unstable situation in Thailand’s neighboring countries deterred potential investors, the export of several Thai products to Germany – e.g. protective gloves, fashion jewelry, rattan furniture and cotton shirts – increased significantly in the course of the project. To further enhance the export of its products, Thailand participated in numerous fairs held in Germany in the following years, among them the Frankfurt Spring and Autumn Fair, International Furniture Fair (Cologne), INHORGENTA (Munich), International Green Week (Berlin), and the International Leather Goods Fair (Offenbach). By supporting these kinds of activities TGTC tried to counteract the falling demands for Thai export products in the course of the global economic crisis of the 1970s.

In response to the rapid, but uneven development Thailand had experienced during previous decades, SME promotion evolved as a major field of action for TGTC in the economic field since the 1990s. The Promotion of Small and Medium-Scale Industries Project (1994-1997) as well as the Small-Scale Agro-Industrial Development Project (1993-1997) addressed one core problem the Thai economy was facing, i.e. the lack of entrepreneurial potential in the regions outside Bangkok. In line with the Royal Thai Government’s policy to pursue the development of disadvantaged rural regions – in particular by emphasizing the promotion of small and medium-sized enterprises – these two projects were designed to contribute a reduction of regional, economic and social imbalances. In 1997 they were merged into the Small-Scale Industry Promotion Project (1997-2003). Although in the beginning overshadowed by the Asian financial crisis of 1997, in its second phase this project achieved a significant advancement of the entrepreneurial potentials and activities in its pilot regions. Encouraged by the general recovery of the economic situation during the Thaksin Shinawatra era and his government’s policy of decentralized promotion of SMEs, the CEFE training courses conducted by the project have greatly contributed to business foundations, business expansions and the improvement of business performances via access to training and credit facilities for more than ten thousand entrepreneurs.

In order to ensure the sustainability of these engagements TGTC was active also in improving the general service infrastructure for Thai SMEs. Through the promotion of the newly founded Material Properties Analysis and Development Center (1992-2003) a viable institute was established whose laboratories – until today – are offering a wide range of services to the Thai industry. Enhancing the quality and competitiveness of Thai products on both national and international markets constituted the objective of the two projects Amelioration of Legal Metrology (1995-2004) and Promotion of the Thai Calibration Service (1999-2006) implemented by the Physikalisch Technische Bundesanstalt (PTB).

In parallel to these engagements in field of quality infrastructure the project Promoting Business Development Services for SMEs (2001-2005) worked towards the stimulation of a market for business development services as well as for the establishment and facilitation of business networks. Complementing large-scale national support measures for SME development, such as Invigorating Thai Businesses or One Tambon One Product (OTOP), these various projects of TGTC were seen as valuable supplementation and as possibility of introducing modern technology and international know-how to Thailand.

Orienting itself to the Thailand’s national development priorities and following the Ministry for Economic Cooperation and Development’s political goals (poverty reduction, environmental protection) the Thai-German Programme for Enterprise Competitiveness was launched in 2003. Its projects seek to increase the Thai SME's contribution to qualitative, sustainable growth and economic stability, to stable and appropriate employment and to an ecological balance in the context of "Economic Reform and Development of a Market Economy". In this context the programme’s two components “Business & Financial Services” and “Eco-Efficiency & Energy” mutually complement and enrich each other. Bundling efforts and experiences gained during previous projects in the economic field the its main focuses are on quality management, meeting standards, and market development services. Moreover, the programme includes policy advice on legal frameworks, laws and regulations.

More recently, starting in 2000, Thailand and Germany has improved the standing of Thai SMEs through its extensive Programme for Enterprise Competitiveness. This was the first to combine economic, environmental, and social aspects into a single large program to promote Thai production value chains. This important triple-win approach lives on in sustainable consumption and production projects and in the upcoming regional integration of ASEAN. The concept of "balanced development" can be understood best through the concpet of the latest Thai-German sustainable economic development programme.

The Programme for Enterprise Competitiveness (T-G PEC, 2004-2011) emphasised on promoting small- and medium-sized enterprises (SMEs) in the agricultural industry. The targeted sectors are palm oil, shrimp, tapioca, fruit and vegetables and mulberry (saa) paper plus energy as main crosscutting sector. It aims to improve productivity and business performance, facilitate innovations and reduce environmental impacts. Its main focuses are on quality management, meeting standards and promote international recognized certifications for Thai producers and support their access to international markets as well as to develop domestic markets. Moreover, the programme provides policy advice on legal frameworks, laws and regulations to promote enabling environment for competitive SMEs.

PEC

Selected Project of the Programme for Enterprise Competitiveness.

The Programme combines Value Chain and Market Development approaches by focusing but not limited to the two main areas of business and financial services and eco-efficiency services and renewable energy issues. It consists several projects within targeted sectors.

T-G PEC consists of two larger components, "Business & Financial Servcies" and "Eco-Efficinency & Energy", and over ten projects and interventions.

Business & Financial Servcies: This component concentrates on developing the market for sustainable services that are important for enhancing the competitiveness of the SMEs in the selected sectors. These services will be delivered through three sets of actors: private businesses, private sector business organizations such as the Chamber of Commerce or Federation of Thai Industry (FTI), and local or national government institutions.



I think the most important benets were the reduction of waste and loss during production and the consequent increase in production yield. We reduced the amount of our lost in the air because we controlled water usage better. By doing so, we reduced the amount of wastewater owing into the environment, too.

- Mr. Anuwat Ruthaiyanont, Thai-German Programme for Enterprise Competitiveness, Owner of Northeastern Starch (1978) Co., Ltd., and Vice President of Thai Tapioca Starch Association

I think, if the ThaiGAP standard is put into practice as basic standard in agriculture, it will increase the consumers’ trust in products’ safety. This is how the competitiveness of Thai entrepreneurs is enhanced. It underpins that the food products sold and consumed in the market are safe. So in the long run, it will be beneficial to all consumers, in Thailand and internationally.

- Mr. Chusak Chuenprayoth, CEO of KC Fresh Co., Ltd. and Vice Chairman of Thai Fruit & Vegetable Producer Association