VIETNAM ACADEMY OF SOCIAL SCIENCES
GRADUATE ACEDEMY OF SOCIAL SCIENCES

DANG THANH CHUNG

TRANSFORMATION OF ECONOMIC GROWTH MODEL OF
THAILAND AND MALAYSIA AFTER THE GLOBAL ECONOMIC
CRISIS AND IMPLICATIONS FOR VIETNAM

Major: International Economics
Code: 9.31.01.06

ABSTRACT
Ph.D THESIS OF INTERNATIONAL ECONOMICS

HANOI - 2020


Thesis is completed at
Vietnam Academy of Social Sciences

Science supervisors: 1. Assoc. Prof. Dr. Dinh Cong Tuan
2. Dr. Duong Trung Kien

Examiner 1: Prof. Dr. Do Duc Binh

Examiner 2: Assoc. Prof. Dr. Pham Quy Long

Examiner 3: Assoc. Prof. Dr. Nguyen Van Dan

Thesis is to be defended at academy-level thesis appraisal council

country. Practice of economic growth model in both Malaysia and Thailand
has gained certain achivements in terms of speed and quality of economic
growth. However, practice of transforming economic growth model of
Malaysia and Thailand is said to contain certain failures, in which the most
important is the transform process from width economic growth model to
depth model in these countries executed to achieve rapid growth by all
means bringing about social, environmental consequences and even
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macroeconomic instability. At the same time, behind the differences, the
peculiarities of each national program on the transformation of economic
growth models of the two countries, there are very basic similarities
showing the trend of renewing economic growth models, common practice
of the world and the region. Therefore, lessons learned from the
transformation of economic growth models after their global economic
crisis, both successful and unsuccessful lessons, are very useful for
Vietnam. Although Vietnam is not in the "storm heart" of the global
economic crisis, it also affects every aspect of the socio-economic life of
the country and in recent years, the economy has revealed a number of
failures, suggesting a need for a change in economic growth model.
In that transition, the study, learning of successful experiences and the
lessons of failure of other countries - especially those sharing more or less
the common characteristics of culture, geography, Ethnic groups in
Southeast Asia such as Thailand and Malaysia are extremely necessary for
Vietnam. In order to better solve the problems posed in transforming the
economic growth model such as: Why must the economic growth model be
transformed? What model of economic growth are we pursuing? Is the
model really suitable and can be developed sustainably? How to transform
the economic growth model successfully? The research and learning

3.2. Scope of the thesis research
- In terms of content: The thesis limits the content of research on
transformation of economic growth model. Objects of research focus on the
effects of the global economic crisis on the economic growth models of
countries including conditions, motivating factors, transformation measures
and the results of the transformation of their economic growth models after
the global economic crisis.
- In terms of space: The thesis focuses on researching and changing
economic growth model in two selected countries, Thailand, Malaysia and
Vietnam.
- In terms of time: The dissertation studied in the scope of time before,
during and after the global economic crisis in 2008-2009 to identify the

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causes, purposes, conditions and measures to change the economic growth
model in Thailand, Malaysia and Vietnam.
4. Methodology and research methods of the thesis
4.1. Methodology and research methods of the thesis
The thesis applies dialectical materialism and historical materialism of
Marxism-Leninism in the study of socio-economic issues. The research
approach of the thesis is a qualitative research approach.
4.2. Specific research methods
- The method of data collection: Data used in the thesis are mainly
exploited from secondary sources, such as published figures such as
Statistical Yearbook, reports of competent agencies, books, journals. learn
... and other references.
- Methods of data collection and processing: These methods include
descriptive statistics, comparisons, forecasts, and expert consultations.

The results of the thesis will be of reference for theoretical and practical
basis for researchers who are interested in economic growth models and
transformation of economic growth models in general and in other
countries: Thailand, Malaysia and Vietnam in particular.
At the same time, contributing to perfecting institutions and policies to
transform the model of economic growth in Vietnam, serving the country's
development needs in the context of integration.
In addition, the thesis is an essential document for researching and
teaching issues related to economic growth models, economic growth
model transformation in Thailand, Malaysia and Vietnam.
7. The structure of the thesis
In addition to the Introduction, Conclusion, the thesis is structured as
follows:
Chapter 1: Overview of research works related to the topic of the thesis
Chapter 2: Theoretical and practical basis for economic growth model
and transformation of economic growth model
Chapter 3: Changing economic growth models in Malaysia and Thailand
after the global economic crisis

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Chapter 4: Lessons learned from the practice of changing the model of
economic growth in Malaysia and Thailand after the global economic crisis
and implications for Vietnam
Chapter 1
OVERVIEW OF RESEARCH WORKS
RELATED TO THE TOPIC OF THE THESIS
1.1. Literature review of economic growth model and transformation of
economic growth model

research works, they are of reference value and selected by the PhD
candidate in the course of their research.
1.3.2. The gap and research direction of the thesis
Firstly, there are very few studies on transforming the economic growth
model after the global economic crisis in Thailand and Malaysia. Most
studies mention these two countries only as part of the study on economic
growth model transformation in Southeast Asia. Domestic and foreign
studies on this topic mainly focus on countries in East Asia such as Japan,
Korea, and China as examples of successful economic growth model
transformation after crisis. Global economic crisis. However, the PhD
student said that it is necessary to focus on a deep research on the
transformation of economic growth model of Thailand and Malaysia
because these countries share many common cultural and geographical
features. Ethnicity in Southeast Asia with Vietnam; At the same time,
although their economic growth model conversion has not been successful,
it will be valuable lessons for Vietnam in the economic growth model
transformation.
Secondly, in Vietnam, although the transformation of economic growth
model after the global economic crisis is still underway, looking at the
statistics of Vietnam's economic growth rate, The growth rate is still on a
downward trend, the most worrying thing is that the labor productivity gap
between Vietnam and other countries continues to increase. Each
Vietnamese employee has a productivity of only 42.3% of Indonesia;
56.7% of the Philippines and especially 87.4% of labor productivity in Laos
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[13]. Obviously, Vietnam's economic growth model is still not suitable for
economic change. Therefore, changing the economic growth model is still
an indispensable requirement of Vietnam. And the study of changing the

problem, interlinked. Economic growth in terms of quantity usually takes
place first and is a prerequisite for promoting and improving the quality of
economic growth. Improving the quality of economic growth, sustainable
and efficient growth, in turn, contributes to the creation of wealth and
income ... facilitating additional resources for the post-production cycle and
promoting push growth in quantity. In each development stage is different
and depending on the choice of different development models, the position
of the quantity or quality face is set differently.
2.1.4. Elements of economic growth model
From the perspective of the concept and based on the summary of
economic growth theories, it is possible to identify the factors that affect
growth in different ways. Opinions on the determinants and origins of
economic concentration also change over time, with more and more
complete and clear trends about the forces driving growth:
- Can be divided into groups of economic and non-economic factors.
- It is also possible to generalize the factors affecting growth in the four
dimensions of an imagery. These are: (i) The dimension of the inputs, (ii)
the dimensions of output, (iii) the dimension of the economy's structure and
(iv) the dimension of institutions.
- There is also a general view of the components of MTCT including
three factors: growth motivation; inputs of economic concentration;
management mechanism.
2.1.5. Some theories and models of economic growth
- Classical growth theory:
- The theory of economic growth by Karl Marx:
- Keynesian school growth model
- Neoclassical growth model
- Endogenous growth model
- Growth models considering non-economic factors
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Thailand; clarifying the reasons for these countries' transformation of
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economic growth models after the global economic crisis, the basic
orientations for transforming economic growth models and generalizing the
actual transition process. out in these countries; From there, draw some
lessons for Vietnam.
3.1. Transforming the model of economic growth in Malaysia after the
global economic crisis
3.1.1. Issues raised with Malaysia's economic growth model since the
global economic crisis
Firstly, Malaysia, despite being an advanced developing country with
impressive economic growth, at the beginning of the 21st century, is also
stuck in the general difficult situation of the global economy and is seeking
how to get out of the middle income trap.
Secondly, even before the onset of the global economic crisis, Malaysia
tried to diversify its export markets to help reduce the country's economic
vulnerability to external impacts. , and recently there have been policies to
fully exploit the domestic market, but due to the relatively small size of the
domestic market, the future of Malaysia's economy will continue to depend
on the success or failure of the economy. However, some of Malaysia's
main partners (such as the US, Japan, China, EU and ASEAN) have so far
consumed a significant portion of Malaysia's exports.
Third, with the long-term efforts of the government of former Prime
Minister Mahathir Mohammed, Malaysia is considered to be the most
advanced developing country in ASEAN, with the most developed
infrastructure and caring human resources in all three areas of education, health
and social security. However, compared with the set goals as well as the
development requirements to become "Tigers in Asia", these areas in Malaysia

3.1.4. Assessment of economic growth model transformation in Malaysia
Major achievements
- GDP per capita growth rate shows that Malaysia's economy is in the
process of strong growth;
- Agricultural, industrial and service sectors have achieved significant
achievements;
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- Infrastructure construction and transportation
- Investment and trade field.
Outstanding issues: The Economic Transition Program (ETP) in 2009,
aimed at attracting large investment in Malaysia with the aim of promoting
GDP growth to over 6% per year, aims to increase the country's per capita
income to the level of USD 15,000 / year since 2019, aiming to put
Malaysia on the list of high-income countries in 2020. But in fact, after 5
years of implementing the conversion policy, this target only reaches about
5%, making the above goal impossible to achieve.
One of the reasons why Malaysia fell into the middle-income trap is that
the country has not changed development policies since the period of
getting out of poverty.
Income inequality in Malaysia is also an issue.
Malaysia's education system is also thought to be problematic,
particularly failing to meet the labor market's needs and with many
limitations.
3.2. Transforming the economic growth model in Thailand after the
global economic crisis
3.2.1. Issues raised with Thailand's economic growth model since the
global economic crisis
Firstly, for a long time, Thailand achieved rapid growth but mainly

First Plan to the end of the Seventh Plan (from 1961-1996) with the main
strategy of exploiting resources and labor.
- Second stage: Towards a full economy. This period extends from the 8th
Plan to the 10th Plan (from 1997-2011). This period particularly focused on
social development through human capital development, along with
economic stability.
- The third phase: Towards a full economy and sustainable development.
This period begins with the 11th Plan (from 2012-2016), based on a
harmonious combination of human capital, technology and innovation.
The directions for transforming Thailand's economic growth model after the
global economic crisis are integrated into Thailand's 5-year economic and
social development plans, focusing on Plans 10 and 11. Plans follow the
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King's Philosophy of "a sufficient economy", to enhance the "resilience" of
the economy in addition to the conventional growth model.
3.2.3. Policies implemented
- In order to improve the competitiveness from which to increase
exports, Thailand has pursued a liberalization policy based on the
implementation of a range of appropriate market access strategies, but
focusing on only a few sectors and a number of products in each industry
the country having strength.
- The Thai government has consistently carried out flexible monetary and
fiscal policy reforms, helping the country to overcome economic shocks.
- To improve low labor productivity, the Thai Government has introduced
human resource development policies, science and technology and is
integrated into the country's five-year plans.
- In addition, economic restructuring along the line of sustainable
development has been included in Thailand's 5-year plans.

evaluated by international financial institutions, but due to the internal
political situation, there are still many risk factors, so it is difficult to
forecast growth in the coming time; Thailand's economic growth rate in
2018 does not exceed 3.9% and forecasts for 2019 are about 3.7%. Some
economic sectors which Thailand has identified as the key include:
Tourism, agriculture and fishery (rice ranked first in the world, seafood
export ranked third in the world), automation and auto parts, electronics,
food and agribusiness.
Existing issues: Research on the practice of exchanging economic
growth models shows that Thailand only achieved the target of rapid
growth in a certain period and the growth rate tended to decrease, this
demonstrating the unsustainability of growth.
Despite these adjustments and efforts to transform the economic growth
model, those adjustments have not yet adapted to the changes in the internal
and external environment. The fact shows that Thailand still maintains the
signs of growth model in the phase out of poverty, that is, it still uses
development policies based on cheap labor and low innovation capacity.

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3.3. Similarities in the transformation of Malaysia and Thailand's
economic growth models
Malaysia and Thailand pursue different economic reform and
transformation programs. Each transition program has specific goals,
orientations or content depending on the shortcomings of the model itself,
on specific (economic, political, and social) conditions of each nation.
However, also from the above analysis, we also see that behind the
differences, the characteristics of each of these national programs, there are
very basic similarities showing the trend of renewing the economic growth

attention.
4.2.2. Practical transformation of economic growth model in Vietnam
from 2011 to the present
- Objectives, missions of economic growth model transformation
+ Period from 2011 to 2015
+ Period from 2016 to 2020
- Achievements in economic growth model transformation from 2011
until now
+ From economic growth aspect
+ From social aspect
- Challenges to economic growth model transformation nowadays in
Vietnam
+ From economic aspect
+ From economic growth connected with social development
+From economic growth connected with environmental protection
4.2.3. Suggested experience for Vietnam on innovation of growth model
- Perspective on growth model: Innovating growth model must grasp a
thorough view, that is, economic growth must ensure sustainable and
effective requirements in the long term.
The above general view is concretized as follows: (i) Growth in a
concentrated direction (not spread, dispersed); (ii) making the private sector
a real driver of economic growth; (iii) vigorously renovate economic
management institutions towards greater accountability and transparency;
(iv) build industrial production capacity to become the foundation of
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economic growth; (v) economic growth is closely linked to social progress
and justice, focusing primarily on improving the well-being of the
population; (vi) closely associate economic growth with ensuring


Secondly, perfecting and exploiting the competitive advantages that have
been created, continuing to restructure the economic sector in the direction
of increasingly effective.
Thirdly, perfect and exploit the advantages thanks to the scale and the
network of the growth motivation regions.
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Fourthly, smoothly operate the market mechanism
Fifth, growth coincides with income improvement for the
underdeveloped regions through the income redistribution policy.
Sixth, growth places emphasis on environmental friendliness and climate
change adaptation.
- Some conditions to transform economic growth model
Firstly, the most important factor in renewing the economic growth model
is the qualified and highly productive labor force.
Secondly, saving capital and improving the efficiency of capital use are one
of the important conditions to transform the economic growth model.
Thirdly, the government needs to implement flexible and transparent
macroeconomic policies to share growth results fairly.
Fourth, there must be a strong State apparatus.
4.2.4. Some key solutions to continue to transform the economic growth
model in Vietnam in the coming time
- Solutions to continue performing economic restructuring
+ Firstly, restructuring the economy by industries and trades: (i)
Selecting and forming a list of spearhead product industries; (ii) Developing
auxiliary industries to shorten the processing period, gradually increasing
high value-added deep-processing products in processing industries. (iii)
Restructuring and improving the efficiency of exports. (iv) improve the

Fourthly, increase investment in science and technology.
- Solutions to Accelerating Institutional Reform.
Firstly, continue to review to eliminate, amend or supplement backward and
inadequate institutions, and at the same time establish missing institutions to
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adjust newly arising economic and social relations, development process of the
market economy and the process of international economic integration.
Secondly, to accelerate the renovation of the work of planning in order
to clearly identify the socio-economic contents that each level of
government needs to plan; at the same time calculate the balance of
resources corresponding to the identified goals to guide the development of
the market.
Thirdly, it is necessary to be persistent in the perspective of sustainable
development, paying more attention to social and environmental factors in
institutional building and implementation.
Fourthly, continue to promote administrative reform.
Fifthly, perfect policies and laws for market types in line with the goal
of restructuring the economy.
Sixthly, changing the way of regulation and intervention of the State in
the economy through the macroeconomic policies and economic
organizations of the State.
Seventh, continue to renew the decentralization of the Government to
local governments.
CONCLUSION
Researches on economic growth models agree that: Each country
depends on specific historical conditions to select, build and develop its
economy according to its own models. all similar to any country; At the
same time, over each stage of development, the economic model that has

At the same time, it also systematized theoretical and practical issues on
economic growth model transformation in order to build an analytical
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