Study Shows Growth Comes from Removing Regulations in Key Thai Industries.

Aug. 3--Eliminating regulations that impede productivity in key industries is the single most powerful way to improve economic growth in Thailand, according to a study by the consulting firm McKinsey & Co.

Reforms that enhanced productivity could potentially increase economic growth by two to four percentage points, the report said.

Roland Villinger, a partner with McKinsey (Thailand), said the study compared productivity levels in Thai industries against international benchmarks and pinpointed key barriers and areas for improvement.

"Our objective in conducting the study was to combine McKinsey's global and local Thai knowledge to shed light on productivity-related challenges and opportunities in Thailand," he said.

The study focuses on seven sectors: retail banking, telecommunications, retail trade, cement, beer, chicken processing, computers and electronics.

In retail banking, Mckinsey noted that restrictions to competition and a cumbersome regulatory environment were the main factors behind low productivity, roughly 45 percent of the US level.

Local banks have been slow to adopt low-cost channels such as telephone banking and centralised back offices, so Thai staff process fewer than half the number of payments as their US counterparts and less than 15 percent of the number of loan applications, it said.