OSITIONED at the very heart of ASEAN, Thailand nurtures ambitions of being the regional hub for everything from auto manufacture, energy, transportation, and tourism to food, fashion, and healthcare.

Since the late 1990s, Thailand’s story has been one of recovery from the financial crisis that tamed the fast-growing tiger economies of Southeast Asia in 1997 and 1998. Now, a fresh impetus is required to ensure sustainable growth within an increasingly competitive global market.

Prime Minister Thaksin Shinawatra aims to provide the necessary boost by investing billions of dollars in a series of mega-projects designed to accelerate the transformation of the nation into a modern, competitive, knowledge-based economy. And he is looking for help to do it.

Politically, Mr. Thaksin is in a strong position with a strong mandate for change. A year ago, an overwhelming general election victory won him a second term of office and a huge parliamentary majority for his ruling Thai Rak Thai party.

Transformation does not come cheap, however. Mr. Thaksin’s competitiveness-boosting plans are priced at around $50 billion.

THAKSIN SHINAWATRA Prime Minister of Thailand

Money for the projects will come from the accumulated profits of state agencies, the government’s budget, and from borrowing. Nevertheless, Mr. Thaksin has vowed to maintain macro-economic stability and keep the foreign debt ratio below 50 percent of GDP.

The Prime Minister has taken the unusual step of issuing a direct invitation to foreign governments and private investors to participate in the development drive by bidding for projects. Through its Partnership for Development scheme, he says, Thailand is ready to make use of research, talent, knowledge, and technology from all over the world in its move to modernize.

Around a quarter of the total mega-project investment will go toward improving mass transit, including a major expansion of the commuter transport system in the congested capital, Bangkok. A further 20 percent of the investment will go toward advancing Thailand’s objective to become the transportation hub of the region, by developing an integrated system of roads, rail, seaports, and airports.

Water resources, public health, and education, especially in science and technology, are all targeted. Other schemes will focus on raising competitiveness in the agriculture, energy, electricity, information and communication technology (ICT), and tourism sectors.

Meanwhile government policies are focused on liberalization and free trade. Major state enterprises that Mr. Thaksin wants to privatize this year include electricity provider EGAT and, in the telecom sector, the Communications Authority of Thailand (CAT) and the Telephone Organization of Thailand (TOT).

Areepong Bhoocha-Oom, Deputy Director General of the State Enterprise Policy Office (SEPO) says long-term planning is possible because the country is enjoying a new era of political stability. “Things are able to move forward because of the continuity and leadership in the political arena. The private sector is aware of our long-term direction and is able to plan strategically. This is what sets us apart from other countries in the region.”

A recent UN Commission for Trade and Development survey rated Thailand among the top four destinations for foreign direct investment (FDI). The United States, the kingdom’s second biggest source of FDI after Japan, has $21 billion invested.

Prospects for growth are much brighter this year after a slight slowdown last year to around 4.3 percent, from 6.7 percent in 2003 and 6.1 percent in 2004.

PRIDIYATHORN DEVAKULA Governor of the Bank of Thailand

Pridiyathorn Devakula, Governor of the Bank of Thailand, says the economy proved resilient in the face of “a perfect storm” that combined soaring oil prices, a drought, and the aftereffects of the tsunami of December 2004, all of which checked the growth of the tourism industry.

Prommin Lertsuridej, Secretary General to the Prime Minister, draws a similarly positive conclusion. He says, “Since we survived many negative factors in 2005, our performance in this year will definitely be better because things will not be as tough.”

With exports rising and oil prices hopefully less volatile, the economy is expected to follow a trend toward robust growth in South-East Asia this year. GDP is forecast to rise by 5-6 percent. Exports, which account for 40 percent of GDP, are expected to increase by 17.5 percent, industry to grow by 20 percent, and agriculture by around 10 percent.

Thanong Bidaya, Minister of Finance, says, “The country will run with an engine of four cylinders: investment, export and import, government expenditure, and increased domestic consumption.”

The automotive metaphor is well chosen considering the success of Thailand’s vehicle manufacturing and assembling industry, one of its leading export earners. Producing almost one million vehicles a year, the country is well on the way to becoming the “Detroit of Asia” with virtually every brand being manufactured or assembled there.

ASEAN has been the cornerstone of Thailand’s foreign policy for decades. Regional cooperation is progressing in economic, trade, banking, political, and cultural matters. Thailand will lead the ASEAN Secretariat in 2007, after Singapore's current tenure expires.

Thailand has already signed free trade agreements (FTAs) with Australia, China, and New Zealand, and has also been negotiating another with Japan.

Nearing completion are negotiations on a comprehensive FTA with the United States - controversial in Thailand but crucial to Mr. Thaksin’s export drive. The United States is the kingdom’s biggest trading partner. In 2004, trade between the two nations increased by almost 11 percent to almost $24 billion.

Mr. Thanong says, “Free trade with the USA will be the most difficult one to conclude, but it is necessary. The objective is to create a win-win situation for both sides.”