Title: Based on a G-20 Conceptual Frame a Sustainable Index is Developed for Udon Thani Hub
‘How can we make the world economy stronger, by strengthening corporate governance, avoiding protectionism, boosting development and fostering innovation and competition for sustainable growth. Global economy cleaner tackling corruption and tax abuse better managing environment fragile resources such as water, and confronting climate change. How to make the world economy fairer, by tackling employment issues, education and health. And how to achieved a world balanced economy’(OECD Forum 2009, 2009). The preceding quote was from Angel Gurrier, Secretary General of the OECD. A profound shift in global events brought about by the current global financial crisis. Global information technology drivers increase the speed and reach globally.(Silbergglitt, 2006) (Silbergglitt, 2006). These events has created the opportunity for the citizens of Udon Thani Province to increase local stakeholder ownership in the economic, social, and political spheres. It is urgent because of the speed global external shock factors transverse the globe.. Thailand’s 4th quarter GDP growth 2008 contracted 22% quarter on quarter percent change.(Fund, 2009) (International Monetary Fund, 2009) see . (Figure 1)
Sustainability is a term used to describe humanity’s desire to sustain economic growth and environmental health for the long-term. Sustainable Development are those that manage nature, economics, and social system to meet present needs without compromising the ability of future generations to meet their needs (Nations, 1992). To take what Thailand needs for growth and making sure that future generations does not suffer in other words a Sustainable Index meaning “more for less’. All nations will be going through restructuring of their economic, social, and political spheres as the global financial shocks take hold. The G-20 Group of Nations were chosen because member countries represent around 90 per cent of global gross national product, 80 per cent of world trade (including EU intra-trade) as well as two-thirds of the world’s population (2009, 2009) (The United Kingdom Chair Group of Twenty 2009, 2009). A conceptual framework of the G-20 Nations will identify the “New Balance and New Foundation” of the new world economic order. The ASEAN +3 member nations were chosen because these regional linkages will become more important as the West deleverages and Asian domestic economies rise in importance. The most severe recession since World War II the global economy is projected to shrink by 1.3% in 2009(Fund, 2009) (International Monetary Fund, 2009). Nationally Thailand’s global linkages have been identified and are well documented. The scope of this research paper will answer. What specifically are the global and regional linkages that will affect Udon Thani’s urban and rural economies? Once these linkages are identified. How will these links affect social and political development in Udon Thani? The final question what will be the appropriate strategy to implement given the evidence outcome based on a mixed methodology approach of quantitative and qualitative data to fulfill the goal of sustainable growth. A regional disaggregate economic analysis focused on global linkages will provide a buffer for global external shocks, a more balanced sustainable regional growth pattern that supports decentralization, and identify strategic Hub development for the region. It will also provide a framework for developing other regions in Thailand. To express it more directly The World Bank has stated poverty reduction and sustainable development remain core global priorities.(Bank, 2010) Since the Great Depression brought on by the Financial Crisis sustainable strategy of the G-20 including Thailand has become the preferred strategy. This is the right policy for Thailand to follow because the G-20 conceptual framework is more open to allow Countries their own unique strategy to follow for national development.
Key Words: G-20, Sustainable Development, Sustainable Index, Hub
The World Bank Group defines globalization as “the growing integration of economies and societies around the world.” (Group, 2009)(The World Bank Group, 2009) The Swiss think tank KOF Index of Globalization measures the global connectivity, integration, and interdependence in the economic, social, technological, cultural, political, and ecological spheres. Thailand ranks number 56 out of a total of 144 Countries rankings are based on data from the year 2006 (Dreher, 2006)(Dreher, 2006). Arguments for or against globalization will be left to the conclusion that globalization has been taking place in one form or another since humankind first walked out of Africa. The KOF Index of Globalization ranks Thailand very high among Countries with established and growing global and regional links. Bangkok, Thailand has reached Global City (Sassen, 2001)(Sassen, 2001) status ranked number 22 out of 60 Global Cities Index 2008 (Kearney, 2008)(Foreign Policy, 2008). Udon Thani, Thailand has become a regional Hub for communications and transportation (Tourism Authority of Thailand, 2009). The American led era of the economic engine of the world that celebrated go-go capitalism and resisted regulation of global financial markets has led from the boom cycle of which Thailand has benefited to the now bust cycle as the Global Financial Crisis forces a new era of globalization restructuring among G-20 nations that will affect all nations. This new era is referred as the conceptual phrase of “post-globalization” or “post-liberalism” in the new world economic order or as referred to in the American press as “Obamanomics” in the case of the US response to the Global Financial Crisis (Ignatius, 2009). Obamanomics as defined by David Axelrod, the president’s senior economic advisor, in a conceptual framework of creating “New Balance” and a “New Foundation” for economic growth. New balance as in prosperity that is broadly held instead of benefitting a small group of people while the majority has not benefitted during the past 10 years and moving away from the bubble and burst of an overheated housing market and maxed-out credit cards. New foundation being built on energy, health care, and education (Ignatius, 2009).A profound policy shift that needs to be continually monitored by Udon Thani’s policy makers that will help identify global links and external shock factors to Udon Thani’s economic, social, and political growth. Identifying, restructuring and adapting to these global links will reduce external shock factors and contribute to sustainable growth for Udon Thani and will lead to the most appropriate development strategy for Udon Thani in the new world economic order. Starting broadly with identifying G-20 global links and identifying G-20 policy foundation strategies will provide the starting point in developing appropriate development strategy response for Udon Thani. The Group of 20 Finance Ministers and Central Bank Governors was established in 1999 in response to the Asian Financial Crisis of 1997-1998 that began in Thailand and quickly spread. Membership of the G-20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, and the United States of America. “The European Union, who is represented by the rotating Council presidency and the European Central Bank, is the 20th member of the G-20. (The United Kingdom Chair Group of Twenty 2009, 2009) To ensure global economic fora and institutions work together, the Managing Director of the International Monetary Fund (IMF) and the President of the World Bank, plus the chairs of the International Monetary and Financial Committee and Development Committee of the IMF and World Bank, also participate in G-20 meetings on an ex-officio basis. The G-20 thus brings together important industrial and emerging-market countries from all regions of the world. Together, member countries represent around 90 per cent of global gross national product, 80 per cent of world trade (including EU intra-trade) as well as two-thirds of the world’s population. The G-20′s economic weight and broad membership gives it a high degree of legitimacy and influence over the management of the global economy and financial system.” (The United Kingdom Chair Group of Twenty 2009, 2009). China, India, Indonesia, and Republic of Korea represent developing Asia in the G20 group of nations. Comparative study of the G-20 will produce a broad framework that will provide the basis of a global policy strategy for Udon Thani’s sustainable growth. They also said they would cooperate ahead of summits this year of the Group of 20 — scheduled for Toronto in June and Seoul in November — “to ensure that the G-20 delivers its promise to strengthen the international financial system and lay the foundation for strong, sustainable and balanced growth of the world economy.”(Olsen, 2010) Chapter Three Background and Significance of the Problem Important Regional links include ASEAN members are Brunei Darussalam, Cambodia, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Viet Nam. Another classification is Emerging Asia when identifying different levels of globalization, Members are the People’s Republic of China, India, Indonesia, Malaysia, Philippines, and Thailand. “The Association of Southeast Asian Nations or ASEAN was established on 8 August 1967 in Bangkok by the five original Member Countries, namely, Indonesia, Malaysia, Philippines, Singapore, and Thailand. Brunei Darussalam joined on 8 January 1984, Vietnam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999 (ASEAN, 2009). The ASEAN region has a population of about 560 million, a total area of 4.5 million square kilometers, a combined gross domestic product of almost US$ 1,100 billion, and a total trade of about US$ 1,400 billion.” data from 2006 (ASEAN, 2009). The regional links of ASEAN are very extensive. Udon Thani’s unique geographical location makes a perfect location to develop as a regional Hub. Some of the ASEAN regional links that are and will be of particular importance for Udon Thani are as follows. Stated priority sectors by 2010: air travel, agro-based products, automotives, e-commerce, electronics, fisheries, healthcare, rubber-based products, textiles and apparels, tourism, and wood-based products (ASEAN, 2009). The ASEAN Free Trade Area (AFTA) established in 1992. AFTA is promoted as a single production area. The elimination of tariff and non-tariff barriers among Member Countries is the main priority. According to ASEAN as of 1 January 2005, tariffs on almost 99 percent of the products in the Inclusion List of the ASEAN-6 (Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore, and Thailand) have been reduced to no more than 5 percent. More than 60 percent of these products have zero tariffs. The average tariff for ASEAN-6 has been brought down from more than 12 percent when AFTA started to 2 percent today. For the newer Member Countries, namely, Cambodia, Lao PDR, Myanmar, and Viet Nam (CLMV), tariffs on about 81 percent of their Inclusion List have been brought down to within the 0-5 percent range (ASEAN, 2009). Udon Thani has established communications and transportation Hubs that will benefit from ASEAN agreements. Trans-ASEAN transportation network these consist of major inter-state highway and railway networks, including the Singapore to Kunming Rail-Link, principal ports, and sea lanes for maritime traffic, inland waterway transport, and a roadmap for integration of the air travel sector and major civil aviation links (ASEAN, 2009). Extending and developing Udon Thani’s communication Hub ASEAN has created interoperability and interconnectivity of national telecommunications equipment and services, including the ASEAN Telecommunications Regulators Council Sectoral Mutual Recognition Arrangement (ATRC-MRA) to develop on Conformity Assessment for Telecommunications Equipment (ASEAN, 2009), The Electric Battery of Asia as Lao PDR is known because of the major hydro-electric infrastructure being built sells electricity to Thailand resulting in regional economic links with Udon Thani and trans-ASEAN energy networks, which consist of the ASEAN Power Grid and the Trans-ASEAN Gas Pipeline Projects (ASEAN, 2009) Visit ASEAN Campaign and the private sector-led ASEAN Hip-Hop Pass to promote intra-ASEAN tourism (ASEAN, 2009) is a source of income for Udon Thani’s rural sector to supplement farm income for those working in the seasonal tourist sector. This also provides opportunities for off season migrant workers. The remittance sent back to Udon Thani raises household income and benefits the elderly immobile creating a social safety net. Agreement on the ASEAN Food Security Reserve allows for self sufficiency economic models to exist in Udon Thani’s rural economy. ASEAN Work Program on preparing ASEAN youth for Sustainable Employment and other challenges of Globalization. This long-term investment is also linked to education ASEAN University Network (AUN) promoting collaboration among seventeen member universities ASEAN; Framework for Environmentally Sustainable Cities (ESC) and ASEAN Agreement on Tran boundary Haze Pollution this is just a part of the ASEAN Vision 2020 (ASEAN, 2009). The Southeast and Northeast Asian countries holds an annual summit among the leaders of ASEAN, China, Japan, and the Republic of Korea (ROK) within the ASEAN +3 process. Talks in the areas of security dialogue and cooperation, transnational crime, trade and investment, environment, finance and monetary, agriculture and forestry, energy, tourism, health, labour, culture and the arts, science and technology, information and communication technology, social welfare and development, youth, and rural development and poverty eradication. There are now thirteen ministerial-level meetings under the ASEAN +3 process (ASEAN, 2009). Other areas of regional and global development are Bilateral trading arrangements between ASEAN Member Countries and China, Japan, and the ROK. These arrangements will serve as the building blocks of an East Asian Free Trade Area as a long-term goal. The Chiang Mai Initiative is a collaboration to create a network of bilateral swap arrangements among ASEAN+3 countries. It was agreed upon after the 1997-1998 Asian financial crises to manage short-term liquidity problems. In February 2009, ASEAN +3 agreed to increase the fund to $120 billion from the $80 billion proposed in 2008 (The Nation, 2009). ASEAN’s Dialogue Partners are Australia, Canada, China, the European Union, India, Japan, the ROK, New Zealand, the Russian Federation, the United States of America, and the United Nations Development Program. ASEAN also promotes cooperation with Pakistan in some areas of mutual interest. ASEAN maintains contact with other inter-governmental organizations the Economic Cooperation Organization, the Gulf Cooperation Council, the Rio Group, the South Asian Association for Regional Cooperation, the South Pacific Forum, and through the recently established Asian-African Sub-Regional Organization Conference. Most ASEAN Member Countries also participate actively in the activities of the Asia-Pacific Economic Cooperation (APEC), the Asia-Europe Meeting (ASEM), and the East Asia-Latin America Forum (EALAF) according to (ASEAN, 2009). These ASEAN initiatives will provide diversification options for Udon Thani’s policy makers and private industries as demand from the US, the European Union shrinks, and the coming deleveraging of public debt from the fiscal stimulus packages begin to wind down and shifts more toward China as an economic engine for the region in the future. A bilateral trade analysis will identify current and potential regional links between Thailand and ASEAN member and affiliates. More specifically, a sector analysis of Udon Thani’s economy will also identify current and potential regional links to ASEAN and affiliates. The regional Bank of Thailand’s office in Kohn Kaen should be able to provide data of Udon Thani’s economy necessary to perform a sector analysis. Field surveys will be necessary to provide further data especially in Udon Thani’s rural economy. An example is the newly created Tiger Index. Chapter Four Purpose of the Study During crisis economic theory’s ideology differences seem to be noticed more clearly. Ideology differences shifts to the more immediate solution task needed at the moment. A look at current economic literature debates supports this conclusion. Humankind’s oldest form of exchange barter is related to human behavior (Mill, 1865). Ancient forms of commerce shows up in modern times during crisis. The widely use of barter following the Soviet Union’s collapse in the nineties. Mercantilism Adam Smith coined the term “mercantile system” to describe the system of political economy that sought to enrich the country by restraining imports and encouraging exports. This system dominated Western European economic thought and policies from the sixteenth to the late eighteenth centuries (Smith, 1776). The goal of these policies was to achieve a “favorable” balance of trade that would bring gold and silver into the country and also to maintain domestic employment. Agricultural system of the physiocrats led by Francois Quesnay that believed agricultural was the key to a nations wealth. The term laissez-faire coined by Francois Quesnay of the nineteenth and early twentieth centuries, The mercantile system served the interests of merchants and producers such as the British East India Company, whose activities were protected or encouraged by the state (Allen, 1987). All four of these modern era of economic thought continues to exist today including the ancient system of barter. Modern economists accept Adam Smith’s insight that free trade leads to international specialization of labor and, usually, to greater economic well-being for all nations. But some mercantilist policies continue to exist. The surge of protectionist sentiment that began with the oil crisis in the mid-1970s and expanded with the global recession of the early 1980s has led some economists to label the modern pro-export, anti-import attitude “neomercantilism LaHaye, (2008).” The 1980’s brought “Japan bashing” backlashes from the United States, the world leader in promoting free capitalism, as fear that “Japan Inc” would own everything in America despite Japan being the main source of debt financing for the United States during the 1980’s and 1990”s. The same anti imports fever repeats itself again against China this decade as China becomes the number one source of financing US debt. Obamanomics is filled with programs to protect and create domestic jobs through promoting infrastructure projects using American steel. The world economic policies and ideologies swing back and forth as a pendulum during times of crisis. Institutional examples are according to (LaHaye, 2009). The GATT went into effect in 1948, eight rounds of multilateral trade negotiations have resulted in a significant liberalization of trade in manufactured goods, the signing of the General Agreement on Trade in Services (GATS) in 1994, and the establishment of the World Trade Organization (WTO) to enforce the agreed-on rules of international trade. Specific examples according to (LaHaye, 2009) are numerous giving rise to discriminatory antidumping actions, countervailing duties, and emergency safeguard measures when imports suddenly threaten to disrupt or “unfairly” compete with a domestic industry. Agricultural trade is still heavily protected by quotas, subsidies, and tariffs, and is a key topic on the agenda of the ninth (Doha) round of negotiations. Moreover, cabotage laws, such as the U.S. Jones Act, enacted in 1920 and successfully defended against liberalizing reform in the 1990s, are the modern counterpart of England’s Navigation Laws. The Jones Act requires all ships carrying cargo between U.S. ports to be U.S. built, owned, and documented (LaHaye, 2009). Modern mercantilist practices arise from the same source as the mercantilist policies of the sixteenth through eighteenth centuries. Groups with political power use that power to secure government intervention to protect nations (LaHaye, 2009). One interpretation of these ideological shifts throughout history leads to heated debates over economic policies and which one is the best to implement at the time seems to occur during economic crisis. Fueled by social development theories one of which when humans are threaten security and survival of Maslow’s Hierarchy of needs is a basic human need that is satisfied first. Social development theories and its political influences are recognized throughout the history of economic theory. Adam Smith (5 June 1723 – 17 July 1790) (Smith, 1776) widely cited as the father of modern economics author of An Enquiry into the Nature and Causes of the Wealth of Nations abbreviated as The Wealth of Nations contributed to free markets, division of labor and the invisible hand his work also influenced Karl Marx. Karl Marx was communism’s most zealous intellectual advocate. His comprehensive writings on the subject laid the foundation for later political leaders, notably V. I. Lenin and Mao Tse-tung “Karl Marx.” (The Concise Encyclopedia of Economics, 2009). Mao Zedong was himself influenced by Thomas Robert Malthus (13 February 1766 – 23 December 1834) (The Concise Encyclopedia of Economics, 2009) from his “An Essay on the Principle of Population drawing attention to the dangers of population growth and thus influenced Mao Zedong “one child policy” also argued for longer- term stability over short -term expediency “Thomas Robert Malthus.” (The Concise Encyclopedia of Economics, 2009). The classical economist David Ricardo (18 April 1772 – 11 September 1823 developed the theory of comparative advantage argued for free trade among nations and specialization of individuals other contributions labor theory of value, law of diminishing returns (Buchanan & Yong, 2002). Comparative advantage in international trade is a good argument for a nation to invest in healthcare and education and to rediscover local knowledge as a long-term strategy. Recent literature has shifted from almost entirely based on free trade theories to a more Eclectic Theory approach. Examples of Eclectic Theory approach to the current global financial crisis can be found in recent press releases ADB Asian Development Bank, (Asian Development Bank, 2009) to sustain growth over the long term Asia will need to rebalance growth, placing more emphasis on domestic demand and consumption. and away from exports ADB President Haruhiko Kuroda..A call for greater financial regulations, to avoid systematic risk, greater global coordination fiscal stimulus responses ,and at the same time recognizing there is no one fix policy every nation will be different WEO (International Monetary Fund, 2009) and “The Global Economic Crisis Challenges for Developing Asia And ADB’s Response”, (International Monetary Fund, 2009). This is exact opposite of free trade, easy money lending, and deregulation of the past 10 years since the Asian Financial Crises 1997. “The fundamental problem with the neoclassical model and the corresponding model under market socialism is that they fail to take into account a variety of problems that arise from the absence of perfect information and the costs of acquiring information, as well as the absence or imperfections in certain key risk and capital markets. The absence or imperfection can, in turn, to a large extent be explained by problems of information.” Stiglitz (1996) p.3. “The typical advice of a visiting consultant making a hurried trip to one of the economies making a transition path is to repeatedly emphasize the importance of markets” the invisible hand (Stiglitz, 2005)”There seems to be a certain instant attraction between the old ideologues of the left and the ideologues of the right. Both are driven by a religious fervour, not by rational analysis.” (Stiglitz, 2005). The most important change in economic theory is the recent Great Depression in modern times that gave importance to the G-20 as an institution and a opportunity to Thailand to participate as a non-member is the theory of Sustainable Development. Prime Minister Abhisit Vejjajiva said his trip to the US to attend the UN General Assembly in New York is also aimed at building confidence among foreign countries and investors. He said his agenda for the visit consisted of three main missions–attending the General Assembly, attending the G-20 Summit in Pittsburgh, and building confidence in Thailand through meeting major US investors in the stock exchange, business leaders, importers, members of the U.S.-Thailand Business Council, and the American media. The prime minister will join the G-20 summit in his capacity as chairman of Asean. On Tuesday, the prime minister will participate in a High-Level Meeting on Climate Change and Interactive Roundtable Session: High-Level Meeting on Climate Change (Summit on Climate Change) at the UN Headquarters to exchange views on global warning and related issues and address Thailand’s role in tackling this challenge. Abhisit will take this opportunity to address Thailand’s views regarding the global economic crisis to the international community, Thailand’s role in Asean as well as address the political and economic situation of Thailand. The prime minister will also tell the meeting about the application of His Majesty the King’s sufficiency economy principle in creating balanced growth and sustainable development. At the G-20 on Friday the prime minister will exchange views and experience from an Asean perspective, particularly regarding policy in response to the economic crisis. Regarding global economic revival, Mr Abhisit as representative of Asean will discuss the region’s experience in dealing with the economic crisis. The G-20 Summit will also discuss the necessity of economic stimulus measures, plan how to deal with a new round of economic crisis, possible restructuring of international monetary and financial institutions, as well as other issues of concern such as food security.(Nation, 2009) Available G-20 Indicators Chapter Five Scope of the Study What specifically are the global and regional linkages that will affect Udon Thani’s urban and rural economies? External global factors require an analysis to begin with the G-20 Nations. A conceptual framework of each nation’s stated “New Balance and New Foundation” development strategies. This conceptual framework will be expanded on further during the development of this research paper. The importance of this conceptual framework provides a nation with strategic medium and long-term development strategies. Given the ASEAN 2020 framework, and the global power shift demonstrated at the G-20 London summit 2009 Udon Thani’s ASEAN Regional linkages have come to the forefront for developing a sustainable regional development strategy. ASEAN many initiatives will provide a working framework to identify Udon Thani’s regional linkages to answer the question what are the regional linkages that will affect Udon Thani’s urban and rural economies. An internal analysis must be performed in order to answer the question what is the current state of Udon Thani’s urban and rural economies. First, a regional gross domestic product economic model RGDP must be chosen which economic model will be best to use for Udon Thani. A disaggregate sector analysis will then be performed. Choosing the correct RGDP economic model will allow for different input-output scenarios to be studied. Answering these questions should lead to developing sustainable development strategies recommendations for Udon Thani’s economy. The unknown question is can data be gathered from Udon Thani’s rural economy in such a way as to be meaningful and appropriate to develop a sustainable rural economy. Data points collection strengthening has been a major recommendation from the IMF for Thailand for several years now. Initial investigative survey trips to Udon Thani’s rural area suggest that qualitative studies can be done. There is an enormous amount of local knowledge and experience already available in Udon Thani’s rural areas that can be developed and organized throughout the Mekong Sub Region and beyond. The answers to these questions will provide a “New Balance and New Foundation” regional sustainable growth development strategy for Udon Thani. Scope of the study are divide into four phases as mention in the timeline. Chapter Six Hypotheses Based on a G-20 framework a sustainable index is created for Udon Thani’s Hub in the last phase be confirmed reliable. A third party is the best choice others are available such as compare it to well indications such as The Dow Jones World Sustainable Index or the Ibrahim Index. The third party is the best choice because it meets international standards ISO 9000 and ISO 14000. Chapter Seven Preliminary Literature Review A mixed methodology approach will be used for this research paper. Both Udon Thani’s urban and rural economy will make extensive use of panel data. and whenever possible granular data for stress tests Data sets containing time series, and cross sectional (Arellano, 2003) the analysis of panel data according to (Hsiao, 2003) and on multi-period forecasts (Davies & Lahiri, 2000). Sources that will be used but not limited to Thailand BOI Board of Investment, Thailand BOT Bank of Thailand, Thailand MOF Minister of Finance, Thailand DEP Department of Export Promotion under the Ministry of Commerce, The Customs Department of the Kingdom of Thailand, and 100 Thai Trade Associations chosen based on Udon Thani’s sector analysis. ASEAN statistical panel database for regional analysis and trend forecasting. Individual G-20 countries to identify current and future linkages. Institutional sources for data include ADB Asian Development Bank, The World Bank, IMF International Monetary Fund, UNCTAD United Nations Conference on Trade and Development, and the WTO World Trade Organization. National Economic and Social Development Board to identify current priority developments since Udon Thani’s rural society is based on a large number of small farmers the internationally recognized Tropical Feed Resources Research and Development Centre TROFREC headed by Professor Dr. Metha Wanapat will be an invaluable source to design qualitative research surveys for the Udon Thani rural economy. One representative Teseban in Udon Thani Province will be selected for the qualitative research to narrow down the scope of this paper. Udon Thani City will be chosen for the urban economy model. Based upon a sector analysis one sector will be chosen. Initial preliminary research has identified a Transportation Hub and a Communication Hub if other Hub possibilities are identified one will be chosen for the scope of this paper. Chapter Eight Brief Description of Methodology and Research Design What new knowledge will this concept paper produce? A documented RGDP economic model that can be updated and improved upon. A possible leading indicator tool designed for external global shocks that Udon Thani has no control over in an interconnected world. The path chosen or not is clear as we are all Mutually Assured Dependency MAD. Why is this knowledge worth knowing? By knowing what links our development together we can prepare ourselves and future generations of decision makers and stakeholders a better “New Balance and New Foundation” to build from. This knowledge can also be used not only in the Northeastern Region of Thailand but also in the Northern, Central, and Southern Regions of Thailand. How will the evaluation be done to ensure the validity of the conclusions? By using a mixed methodology approach, gaps in the quantitative primary and secondary panel data can be filled by qualitative data collection. This will provide a more complete picture of global and regional linkages that logical conclusions can be drawn upon. These variables and their relationships will be done through extensive archives searches, interviewing, observing and taking standardized notes, collecting data, and analyzing patterns. Finally, in collecting and analyzing qualitative data cultural differences will be accounted for at each stage of the research to eliminate cultural biases leading to distorted and possibly wrong conclusions. Awareness of different stages of social and economic development of sectors will lead to producing an appropriate strategy and make implementation of recommendations realistic. Knowledge of available regional resources will reduce the need for unrealistic development strategies of importing outside resources that are not native to the region’s comparative advantages. Table 4-Domains of Personal Wellbeing Index regressed with Overall satisfaction with Life Life as A Whole 1 2 3 4 5 6 B B t Constant 1.726 5.93** 1. Standard 0.672 0.103 0.131 3.61** 2. Health 0.331 0.357 0.047 0.066 2.03* 3. Achive 0.419 0.462 0.318 0.128 0.16 4.56** 4. Relations 0.342 0.345 0.242 0.387 0.118 0.135 3.88** 5. Safe 0.261 0.274 0.248 0.268 0.413 0.174 0.19 5.69** 6. Communication 0.232 0.294 0.188 0.158 0.251 0.25 0.039 0.053 1.63 7. Future Security 0.0362 0.427 0.294 0.357 0.327 0.33 0.343 0.065 0.9 2.57* No system of indicators can capture the wealth of all these issues. However through continued discussion and successive iterations, basic indicators could accurately reflect the above trends. Many questions can only be answered with city level data. “Cities in a Globalizing World (2006)” is the latest effort of the World Bank Institute to put together a database that integrates existing data with newly collected data and indicators, covering a total of 412 cities in 134 countries. The source of this data includes the UN Observatory (1998), the enterprise-specific Earth Observing System (EOS) survey database (2003), and the Taylor database. They also include indicators constructed from internet searches. Even though this dataset is a good starting point, it has two crucial limitations: (i) important indictors are still missing and (ii) it is a cross-section of cities that can not be compared over time, limiting how much can be learned about the dynamics of the cities. • The most important set of urban indicators is the UN-HABITAT’s extensive database on Global Urban Indicators which was initiated in 1996. • The World Health Organization, WHO, began a Healthy Cities Project in 1992 and now collects 32 indicators on city healthy from a variety of cities’ • In 2004 UNESCO supported the launch of a ‘Coalition of Cities Against Racism’ and developed a series of ‘Indicators for Evaluation Municipal Policies Aimed at Fighting Racism and Discrimination’ • In 2003 the European Foundation Proposed ‘European Urban Indicators’ under the European Common Indicators Project. • ICLEI12 was tasked at the 1996 Istanbul-Habitat Conference with assisting local authorities to monitor and evaluate their own performance on ‘Agenda 21’. ICLEI also participated in the development of Global Urban Observatories. • ‘City Mayors’ is an extensive independent website of international experts who promote strong cities and good local governments. They survey 40 municipal; indicators in five categories: stability; healthcare; culture and environment; education, and infrastructure. • The International Institute for Sustainable Development, IISD, has been working on indicators related to sustainable development sice1995. Some of their activities include cities. • The International Sustainability Indicators Network is a web-based network that encourages indictors for sustainability. Similarly, ‘Sustainable Measures’ is an American web-based company that develops indicators to measure progress toward a sustainable economy, society, and environment. • The Globalizron and World Cities (GaWC) Study Group and Network used indicators to create an inventory to create an inventory of ‘world cities’. This does not appear to have been update since the first analysis in 1999. • The Mercer Human Resources Consulting Firm annually rates cities through a ‘worldwide quality of living’ survey. Cities are rated by: political and social considerations; schools and education; public services and transportation; recreation; consumer good; housing; and natural environment. The survey is proprietary and city specific ratings need to be purchased. • The Economist Intelligence Unite produce an annual ‘livability ranking’ largely intended to approximate ‘hardship ratings’ for expatriate residents. The survey takes 40 factors into consideration which are weighted across five categories: stability, healthcare, culture and environment, education, and infrastructure. The survey is proprietary and city- specific ratings need to be purchased. • Statistics: Sometimes. Statistics can be used directly as indicators, but in most cased they are just part of the process of indicator construction. For example, statistics such as the mean education level of the unemployed population might give a good sense of the skill level of the individuals who are looking for jobs, and could then be used to guide the policies that may be relevant for this situation. However, when and where the composition of the labor force changes over time, this measure is no longer a good indicators. • Indicators: These are usually, but not necessarily, constructed from statistics. They are simple numbers comparable over time and space that have a clear link with policy implications. • Indexes: These are constructed as weighted combinations of indicators and usually are used to describe an overall performance, For instance, the City Development Index (CDI) was developed as a prototype for Habitat II to rank cities according to their level of development. The CDI id based on five sub-indices (City Product, Infrastructure, Waste Management, Health and Education), the total value of which range from 0 to 100. • Objective: clear, well defined, precise and unambiguous, simply to understand. • Relevant: directly related to the objectives. • Measurable and replicable: easily quantifiable, systematically observable. • Auditable: valid, subject to third-party verification, quality controlled data (legitimacy across users). • Statistically representative at the city level. • Comparable / Standardized longitudinally (over time) and transversally (across cities). • Flexible: can accommodate continuous improvements to what is measured and how. Have a formal mechanism for all cities and interested parties to comment on. • Potentially Predictive: extrapolation over time and to other cities that share common environments. • Effective: tool in decision making as well as in the planning for and management of the local system. • Economical: easy to obtain/inexpensive to collect. Use of existing data. • Interrelated: indicators should be constructed in an interconnected fashion (social environment and economics). • Consistent and sustainable over time: frequently presented and independent of external capacity and funding support. • The policy- based approach: this framework is associated with community concerns and goal based indicators. They are holistic. The objective of these indicators is to measure progress towards goals and therefore they usually involve more than on area of the management structure (e.g. policymakers and stakeholders). • The thematic/index approach: these are usually indexes that focus on broad, multidimensional themes. For example: The City Development Index, or poverty, governance and competitiveness indicators. • The system approach: indicators are developed in a system where operators and causality between sectors are well defined. For example: the state of Environment indicator (OECD). • The needs-based allocation approach: these indicators are used to efficiently allocate or reallocate funds to those areas with particular needs in order to establish targets and priorities. For example: poverty indicators. • The performance approach: indicators are outcome oriented. They include measures of inputs, outputs, outcomes and efficiency and they particularly used by public sector agencies to measure the performance of program and projects. • The benchmarking approach: these indicators measure performance in areas that need improvement. They are used for comparison with other agents that are performing better. The overall objective is to adopt and/or adapt the best practices of those that are performing better. – City Indicators Could Monitor the Following Characteristics – Quality of urban environment – Numbers and condition of the poor – Health care availability and coverage – Treatment of the poor – Education: availability, quality, coverage, knowledge/technology level – Cost of living (including value for money) – Average travel times – Crime rates – Delivery of municipal services: water, wastewater, building permits, land use planning, solid waste, transportation. – Receptivity to guests: hotel, airport quality, taxes – Local media: operatively, professionalism – Credit worthiness (financial strength) – Growth of economic opportunities (new firms, value of business, levels of R&D – Links with the external world An emerging field of research involves ‘subjective well-being’ as a broader measure of ‘happiness’ Initially limited to individual humans, this research is now trying to determine the degree of ‘city well-being’. Table 4-Domains of Personal Wellbeing Index regressed with Overall satisfaction with Life Life as A Whole 1 2 3 4 5 6 B B t Constant 1.726 5.93** 1. Standard 0.672 0.103 0.131 3.61** 2. Health 0.331 0.357 0.047 0.066 2.03* 3. Archive 0.419 0.462 0.318 0.128 0.16 4.56** 4. Relations 0.342 0.345 0.242 0.387 0.118 0.135 3.88** 5. Safe 0.261 0.274 0.248 0.268 0.413 0.174 0.19 5.69** 6.Communication 0.232 0.294 0.188 0.158 0.251 0.25 0.039 0.053 1.63 7. Future Security 0.0362 0.427 0.294 0.357 0.327 0.33 0.343 0.065 0.9 2.57* Reliability Checks Cronbach Alpha: PWI: α =.756 NWI = α.802 These results are consistent with international standards and show a high reliability for both scales. Item total correlations (Pearson Correlations Coefficients) of the single domains and the summated score for PWI and NWI and between. 57 for Security and .76 for Social conditions for NWI, result that are slighter that the result found for Australia. Table 1 – List of Habitat Agenda Indicators Sector Indicator Goal Shelter Durable structures Promote the right to adequate housing Overcrowding Secure tenure Promote security of tenure Housing finances Provide equal access to credit Land prices Provide equal assess to land Access to safe water Promote access to basic services Access to improved sanitation Connecting to services Social Development Under five mortality Provide equal opportunities for a safe and and eradication of Homicides healthy life poverty VIH prevalence Poor households Promote social integration and support disadvantaged groups Literacy rates Promote gender equality in human School enrolment settlements development Women councilors Environmental Urban population growth Promote geographically balanced settlement management Planned settlements structures Price of water Mange supply and demand for water in an Water consumption effective manner Wastewater treated Reduce urban pollution Solid waste disposal Regular solid waste collection House in hazardous locations Prevent disasters and rebuild settlements Travel time Promote effective and environmentally Transport modes sound transportation systems Economic develop- Informal employment Strengthen small and micro enterprises merit particularly those developed by women City product Encourage public-private sector partnership Unemployment and stimulate productive employment Governance Local government revenue Promote decentralization and strengthen local authorities Voters participation Encourage and support participating and civic Civic associations engagement • Scope of the time to study • June, 2010: Presentation of Concept – Concept Paper Rubric Udon Thani. October, 2011: Release of Draft Discussion Document ‘The Current Status Udon Thani City Indicators’. April, 2012: Finalization of ‘The Current Status of Udon Thani City Sustainable Index and placement on an active website, ideally for ongoing updating. Chapter Nine Anticipated Outcome Global shifts of power away from the traditional G-7 Group of Nations to the G-20 Group of Nations represents a stronger and balanced voice platform for Emerging Asia of which Thailand is represented and the subject of this research paper Udon Thani is a part of. The urgency of Udon Thani’s response to this power shift reflects the speed that global external shocks transverses the globe brought about by the Global Financial Crisis of 2008. Initial evidence points to Regional Hubs like Udon Thani will benefit tremendously from this global power shift. Decentralization of global shifts of power means the traditional power base of the Global Cities will require Regional Hubs like Udon Thani to develop their own “New Balance and New Foundation” for sustainable growth benefiting local stakeholders. Udon Thani was chosen because Global Cities like Bangkok is where “re-actions” take place from global external shocks due to their global linkages and Regional Hubs like Udon Thani is where the “actions” needed take place from these global shock factors. Determination of the correct actions to take depends on empirical evidence from the G-20 Group of Nations and more specifically on empirical evidence from ASEAN +3 Nations. A proposed comparative study of these groups of nations will reveal national development strategies as done by Thailand’s National Economic and Social Development Board. Taking these results one step further to develop a “New Balance and New Foundation” for Udon Thani is the goal of this research paper. Steps proposed a Disaggregate Economic Analysis of Udon Thani City and a Disaggregate Economic Analysis of rural Udon Thani. Empirical evidence will lead to conclusion of the title of this dissertation “Udon Thani identifying global G-20 and regional ASEAN +3 economic linkages in developing Udon Thani’s regional Hub status in both its rural and urban economy in a sustainable manner to meet the challenges of the new world economic order.” Based on a G-20 Conceptual Framework a Sustainable Index is created for Udon Thani. This benefits the stakeholders of Udon Thani enriching the lives of its citizens and firmly establishes Udon Thani as a regional hub. Bibliography Allen, W. R. (1987). Mercantilism. In J. Eatwell, M. Milgate, & P. Newman, The New Palgrave: A Dictionary of Economics (pp. Pp. 445-448). London: Macmillan. Arellano, M. (2003). Panel Data Econometrics. Oxford: Oxford University Press. ASEAN. (2009, April 4). About ASEAN. 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