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Photo caption: From left: Ulrich Zachau of the World Bank, Ian Gisbourne of UBS Investment Bank, Assoc Prof Pavida Pananond and Atikrai Chatikavanij, founder of Hunters Investments.Thailand has been a hub of automotive assembly, and past growth has beenmade possible by the automotive sector. But now some companies are talking about moving out to open plants with our competitorsThe anniversary of the 2014 coup d’etat passed quietly. But even quieter is Thailand’s economy. The Bank of Thailand cut its 2015 growth projection from 3.8% to slightly less than 3% based on weak exports.According to the Ministry of Commerce, exports continued to contract in June, droppingto7.8% year-on-year.Themorepressingquestionisnotwhotoblame but what the national economy will look like in the future and what steps must be taken to prevent stagnation.For Ulrich Zachau, economist at the World Bank, the economic downturn may linger longer than usual. The myth of “Teflon Thailand” – the national economy’s ability to bounce back from political turbulence – may not apply as the present decline is not part of a cyclical trend.Mr Zachau, who previously taught economics at the University of Bonn and worked at McKinsey & Co, was speaking at the panel discussion “Thailand’s economic prospects: good, bad or indifferent?” held recently at the Foreign Correspondents’ Club of Thailand.A lurking threat, he said, is that foreign manufacturers will look to neigh- bouring countries that have more competitive labour costs and a more skilled workforce.“Thailand has been a hub of automotive assembly, and past growth has been made possible by the automotive sector,” he said. “But now some companies are talking about moving out to open plants with our competitors.”The main problem, he thinks, is structural. This includes a shortage of skilled labour, caused by problems in education. It is not that Thailand does not invest enough in education. The percentage of the Thai budget allocated for educationElite+ 31