Under The Table Payments In Thailand Alleged To Have Grown From 5-10% To A Minimum Of 30%

[george]

Under the table payments in Thailand alleged to have grown from 5-10% to a minimum of 30%

Asian Economic Growth Masks Growing Corruption Problem – VOA, February 19, 2013

BANGKOK — Corruption in Asia continues to be a drag on growing economies, draining billions of dollars from economic development and triggering a public backlash in some places. Calls for reform are coming from the private sector and United Nations even as the region’s economic prospects improve.
newsjs
When protestors took to the streets of Bangkok last year, calls were made for the Thai Government of Prime Minister Yingluck Shinawatra to address signs of growing corruption in Thailand.

A 79-year-old businessman pointed to rising costs of doing business, including bribes for officials.

“I am an industrialist. I cannot stand anymore because we have to pay under the table so much money," he said. "Before, all right you have to accept that before it was about five and ten per cent. But now it’s a minimum 30 per cent - minimum is 30 per cent."

Estimates for how much economic activity is lost to corruption are difficult to judge, but a recent study by the University of the Thai Chamber of Commerce concluded that over two per cent of national output or some $11 billion is likely to be lost to corruption this year.

The university said many from the private sector who were surveyed said they are paying more bribes to government officers and politicians to win government contracts.

Thai political economist, Pasuk Pongpaichit, says although there is evidence that indicates authorities are making progress in curbing lower level corruption, the slowing global economy means growing competition for lucrative government contracts.

"Globalization, the international pressure for Thailand to become more transparent is being felt and various government departments are responding to it. It doesn’t mean that things are going to happen very quickly," she said. "On the other hand, as the world economy is slowing down and the local business is become more competitive, you could see that on specific cases the rate of corruption may have increased because of the higher competition.”

Analysts say the Thai Government is already under scrutiny for spending more than $11 billion on water management infrastructure following the 2011 floods and a further $67 billion on rail and other building projects. Economists have also charged a $33 billion rice price support program for farmers is beset by corruption allegations.

Bandid Nijathaworn, a former central bank deputy governor and now president of the Thai Institute of Directors, says corruption in Thailand appears to be more of a problem now than 10 years ago.

"Corruption is a global problem," he said. "You see corruption appearing as headlines in many countries. So it has become a global issue both in national organization and individual country’s governments trying to tackle it. In the case of Thailand we are having a greater challenge because the problem seems to be worsening than maybe 10 years ago.”

Despite posting robust economic growth during the past decade, many countries in Asia still rank poorly on international anti-corruption indices.

A recent report by the U.S.-based Center for International Policy said that in China alone between 2001 and 2010, $2.74 trillion in illegal funds left the country, through criminal financial schemes, corruption, tax evasion or other illegal activities. For Thailand the figure stood at $64 billion over the same period. In India, the center of major ant-corruption rallies last year, the figure stood at $123 billion.

United Nations Office on Drugs and Crime (UNODC) regional anti-corruption adviser, Shervin Majlessi, says given Asia’s growing influence in the world economy, there is a greater need for oversight.

"Generally, speaking when you have this kind of fast economic growth we are witnessing in this region, it comes with the same challenges and opportunities in terms of corruption," he said. "The challenge is obviously there is more financial flows, there are bigger contracts, procurements, the opportunities for corruption to increase. So you need stronger anti-corruption systems and regimes in place."

In 2003 the U.N. passed a Convention against Corruption. In South East Asia, Burma, ratified the convention in December - the last to do so of the 10 member Association of South East Asian Nations (ASEAN).

UNODC’s Majlessi says for ASEAN governments the key is to implement the reforms set out under the U.N. convention.

"Now the whole of ASEAN is finally covered by this convention. So this is kind of positive news," he said. "There is a key challenge in the implementation of this kind of international norms and standards and that taken time including legal reforms, international reforms and most importantly political will to actually implement this kind of instrument."

The Asian Development Bank is also supporting ASEAN through a Corporate Governance Scoreboard to promote transparency in business.

Thai Institute of Directors' Bandid Nijathaworn, who oversees a new group of companies aimed at fighting corruption, says private sector involvement is also critical for anti-corruption efforts to succeed.

“I think the momentum is building and people and people feel that in order to address the corruption issue you need to look at both the demand side and the supply side of corruption," he said. "Usually companies are being looked at on the supply side of the corruption, so getting the companies together we hope to reduce the supply side of corruption.”

Analysts say the corruption fight needs to go beyond government law enforcement, and include non-government and private sector organizations.

-- VOA 2013-02-21

[hanuman2543]

Is here one member really surprised ?

[GentlemanJim]

In the US there is a law...forget the name of it, where you can whistle blow on any organization if you believe that corruption has led to the awarding of contracts etc. If proved, the whistleblower gets 30-50% of the amount the company is fined. The guy the law is named after was the first to press to test and the company concerned were fined upwards of 150 Mill. Sorry, details are hazy, I will google and check. Anyway, point being IF the Thai Government awarded a similar incentive and companies were fined and those individuals guilty of corruption had their assets confiscated, then corruption would end quickly.............mmmmmm or blackmail would increase significantly.... come to think of it.....forget it !

Edit...out of interest it could be Sarbanes–Oxley Act, enacted on July 30, 2002 (for corporate fraud whistleblowers). Still searching though as that name does not sound correct. I think this was just for protection of whistle blowers rather than reward.

Edited February 23, 2013 by GentlemanJim

[lizardtongue]

Is here one member really surprised ?

Sad to say that I am surprised I really thought it would be higher!

[Pib]

But isn't there a corruption deduction on Thailand income tax returns to offset this cost of doing business in Thailand?

[lizardtongue]

Realistically to be in a position to stop corruption the person at the top must be 'whiter than white' you have to question if such a person exists in Asia let alone Thailand!

The whole of Thailand is corrupt from top to bottom all lining their nests with no regard for the population, if post is correct and companies have to pay 30% they are really taking that money from their fellow countrymen.

Not that I condone it but if they were to pay 10% in bribes, the work force could perhaps receive a 10% increment, with the company being 10% better off so to speak! But as we know it will never happen, as always its the people at the bottom that suffer.

[Kananga]

Remember folks, its not a bribe if its Chinese New Year. It's tradition.

Remember that when they take the rewards of your sweat and toil with their little yellow claws.

[simple1]

In the US there is a law...forget the name of it, where you can whistle blow on any organization if you believe that corruption has led to the awarding of contracts etc. If proved, the whistleblower gets 30-50% of the amount the company is fined. The guy the law is named after was the first to press to test and the company concerned were fined upwards of 150 Mill. Sorry, details are hazy, I will google and check. Anyway, point being IF the Thai Government awarded a similar incentive and companies were fined and those individuals guilty of corruption had their assets confiscated, then corruption would end quickly.............mmmmmm or blackmail would increase significantly.... come to think of it.....forget it !

Edit...out of interest it could be Sarbanes–Oxley Act, enacted on July 30, 2002 (for corporate fraud whistleblowers). Still searching though as that name does not sound correct. I think this was just for protection of whistle blowers rather than reward.

Looks like it's the Federal False Claims Act, refer article below

http://www.telegraph.co.uk/finance/newsbysector/pharmaceuticalsandchemicals/9374104/Glaxo-whistleblowers-to-share-250m-windfall.html

Edited February 23, 2013 by simple1

[ratcatcher]

Could the Thais learn from the Indonesians?

http://www.bbc.co.uk/news/world-asia-20638970

http://www.bbc.co.uk/news/world-asia-21551310

Probably could but won't.

[Bobobirdiebuddy]

What Thai folks fail to realize is that every satang that is paid in bribes is coming out of their pockets - every bridge, every mile of road, every public building, every piece of infrastructure is taking money out of the citizens' pockets and putting into the pockets of crooks. I saw the Bangkok post today talking of the bidding for part of the proposed Red Line was under scrutiny because the two companies bidding for part of it had the same members of their boards.

It will never end.

[surangw]

good to see they finally set a standard, no more guess work.

[Buchholz]

Is here one member really surprised ?

.

Surprised only by the way under-estimated depth of corruption, given their own corruption figure of 30%.

.

some $11 billion is likely to be lost to corruption this year.

.

Not reflective of even the singular total from a number of projects..., eg.

Water management:

Finance Minister affirms govt able to seek 350 billion-baht loan

http://www.thaivisa.com/forum/topic/615323-thai-finance-minister-affirms-govt-able-to-seek-350-billion-baht-loan/

and

High Speed Rail:

Transport Ministry To Proceed With Bangkok-Chiang Mai High-Speed Rail Project

http://www.thaivisa.com/forum/topic/614432-transport-ministry-to-proceed-with-bangkok-chiang-mai-high-speed-rail-project/

OP:

Bangkok to Phitsanulok and will cost 240 billion baht

Phitsanulok and Chiang Mai will take place a year later, 380 billion baht

240,000,000,000

+ 380,000,000,000

620,000,000,000 (total)

x 0.30 (standard corruption cut)

186,000,000,000 Baht (standard corruption cut total)

.

Edited February 23, 2013 by Buchholz

[Skywalker69]

Good Job dear PM. Soon to be declared a total succsess?

Edited February 23, 2013 by Skywalker69

[rubl]

What the real PM Yingluck just said about solving the possible lack of electricity in April also applies here of course :-)

"Please have confidence in the government"

[473geo]

Is here one member really surprised ?

.

Surprised only by the way under-estimated depth of corruption, given their own corruption figure of 30%.

.

>>some $11 billion is likely to be lost to corruption this year.

.

Not reflective of even the singular total from a number of projects..., eg.

Water management:

Finance Minister affirms govt able to seek 350 billion-baht loan

http://www.thaivisa.com/forum/topic/615323-thai-finance-minister-affirms-govt-able-to-seek-350-billion-baht-loan/

and

High Speed Rail:

Transport Ministry To Proceed With Bangkok-Chiang Mai High-Speed Rail Project

http://www.thaivisa.com/forum/topic/614432-transport-ministry-to-proceed-with-bangkok-chiang-mai-high-speed-rail-project/

OP:

Bangkok to Phitsanulok and will cost 240 billion baht

Phitsanulok and Chiang Mai will take place a year later, 380 billion baht

240,000,000,000

+ 380,000,000,000

620,000,000,000 (total)

x 0.30 (standard corruption cut)

186,000,000,000 Baht (standard corruption cut total)

.

$11 billion = 327,760,000,000 Baht

Edited February 23, 2013 by 473geo

[Bellweather]

Is here one member really surprised ?

Sad to say that I am surprised I really thought it would be higher!

Austerity and recession hits everything it seems. Let's not forget in recent ABAC and Dusit polls a majority of Thais saoi corruption was ok if it wasn't too greedy and everybody could get a share ! In other words the only ones who are against corruption are those who are not on the badwagon

[OzMick]

ST3OP CORRUPTION.

It's all in the fine print.

[Buchholz]

Surprised only by the way under-estimated depth of corruption, given their own corruption figure of 30%.

.

>>some $11 billion is likely to be lost to corruption this year.

.

Not reflective of even the singular total from a number of projects..., eg.

Water management:

Finance Minister affirms govt able to seek 350 billion-baht loan

http://www.thaivisa.com/forum/topic/615323-thai-finance-minister-affirms-govt-able-to-seek-350-billion-baht-loan/

and

High Speed Rail:

Transport Ministry To Proceed With Bangkok-Chiang Mai High-Speed Rail Project

http://www.thaivisa.com/forum/topic/614432-transport-ministry-to-proceed-with-bangkok-chiang-mai-high-speed-rail-project/

OP:

Bangkok to Phitsanulok and will cost 240 billion baht

Phitsanulok and Chiang Mai will take place a year later, 380 billion baht

240,000,000,000

+ 380,000,000,000

620,000,000,000 (total)

x 0.30 (standard corruption cut)

186,000,000,000 Baht (standard corruption cut total)

.

$11 billion = 327,760,000,000 Baht

Ahhh... thanks for the catch.

In that case, it takes but two programs to exceed that under-estimated amount of $11 Billion.

Rice pledging:

Bt560 billion spent so far

http://www.thaivisa.com/forum/topic/601138-who-is-really-benefitting-from-rice-subsidies-thai-editorial/#entry5884482

High Speed rail = 6.2 Billion Dollars

Rice Pledging = 5.6 Billion Dollars

That leaves dozens more scheming scams to reap more.

.

[DiNiro]

A friend of mine in the school supply business tells me the bastards steal 35% of the school budget.

Not surprised really.

[Buchholz]

What the real PM Yingluck just said about solving the possible lack of electricity in April also applies here of course :-) "Please have confidence in the government"

.

We have confidence that the previous unprecedented level will be be exceeded.

.

Thailand's Auditor-General Khunying Jaruwan stated that corruption of every sort exists at unprecedented levels under the present administration.

- The Nation / Nov 14, 2004

[seajae]

one of my wifes work colleagues was just shown the door after they found out he had missapropriated several million baht. He was skimming the "governments " money for his own pocket, they found out when they received a complaint they werent paying enough to the right person and that payments the person claimed he had to make were not as high as he had claimed. Even the lower end workers are just as bad, the truck drivers milk the trucks petrol tanks and steal the oil they claim they put in the motor, those that operate the bowsers steal petrol to sell to others, it is a never ending cycle. They have to pay customs officials or their shipments are delayed continually, they have to pay the minister responsible for every shipment as well, surveyors have to be paid a special bonus or they refuse to do the work when it is required, the local govt official has to be paid a bonus or it isnt approved etc, etc. This is Thailand, they live to graft, it is the way they are taught, even the teachers ask for bonus money to actually teach the students their lessons, our daughter tells us that her teachers will only work with certain students(the rich ones) in class, if you want to learn you must pay extra or you simply fail your tests, we send her to an after school learning centre run by the teachers(of course) or else she doesnt get to learn what is needed. They are all thieves.

Edited February 24, 2013 by metisdead
: Bold font removed.

[Pimay1]

one of my wifes work colleagues was just shown the door after they found out he had missapropriated several million baht. He was skimming the "governments " money for his own pocket, they found out when they received a complaint they werent paying enough to the right person and that payments the person claimed he had to make were not as high as he had claimed. Even the lower end workers are just as bad, the truck drivers milk the trucks petrol tanks and steal the oil they claim they put in the motor, those that operate the bowsers steal petrol to sell to others, it is a never ending cycle. They have to pay customs officials or their shipments are delayed continually, they have to pay the minister responsible for every shipment as well, surveyors have to be paid a special bonus or they refuse to do the work when it is required, the local govt official has to be paid a bonus or it isnt approved etc, etc. This is Thailand, they live to graft, it is the way they are taught, even the teachers ask for bonus money to actually teach the students their lessons, our daughter tells us that her teachers will only work with certain students(the rich ones) in class, if you want to learn you must pay extra or you simply fail your tests, we send her to an after school learning centre run by the teachers(of course) or else she doesnt get to learn what is needed. They are all thieves.

Totally believable. Here in our village a yellow government dump truck comes by twice a week. This guy has many 5 gallon cans in the truck full of diesel. He sells if for 25 baht a liter.

[bigbamboo]

I believe 30 per cent is the going rate in Russia too.

I think it's a mafia state thing.

[Locationthailand]

Wow I must have missed the 5-10% part. All my 'dealings' so far including at Govt level has always been 30% (since 2001).

[Pimay1]

Wow I must have missed the 5-10% part. All my 'dealings' so far including at Govt level has always been 30% (since 2001).

Same with me. After I returned from Afghanistan in 2003 I was on a deal with a Thai company to export bottled water to ISAF in Afghanistan. They arranged the monthly supply which was a massive amount, arranged shipping to Karachi, Pakistan and overland transport to Kabul. The deal fell through when the export department demanded 31% of each shipment.

[clockman]

Its inflation,!!!

[tomyummer]

The hard part is how to hide or deal with the taxes on the 30%. The officials don't want to run it under their names unless they have an outside consulting company. And its not a 30% mark-up, it's a flat out commission off the top. And it's always asked for up front. Every government project is 30% inefficient or under built because of this siphoning of money. And it's on the taxpayers' wallet.

[slapout]

When you figure the budget for 2013 has been set at about 90 billion US, and if the experts are correct on their numbers (Min. of 30+% graft), there is a huge amount of money to be hidden from the honest folks of Thailand???

My bad, there does not seem to be any reason to hide ill gotten gains, so that is not a real concern for the corrupt people.

[Carioca]

In the US there is a law...forget the name of it, where you can whistle blow on any organization if you believe that corruption has led to the awarding of contracts etc. If proved, the whistleblower gets 30-50% of the amount the company is fined. The guy the law is named after was the first to press to test and the company concerned were fined upwards of 150 Mill. Sorry, details are hazy, I will google and check. Anyway, point being IF the Thai Government awarded a similar incentive and companies were fined and those individuals guilty of corruption had their assets confiscated, then corruption would end quickly.............mmmmmm or blackmail would increase significantly.... come to think of it.....forget it !

Edit...out of interest it could be Sarbanes–Oxley Act, enacted on July 30, 2002 (for corporate fraud whistleblowers). Still searching though as that name does not sound correct. I think this was just for protection of whistle blowers rather than reward.

It is Qui tam which is Latin for "in the name of the king". And you may google it and get quite the history on it. It is derived from English Common Law. There was an official who had some notoriety back in the 80s for being the first to bring it forward, I don't remember his name either, but I am sure it will surface if you research qui tam. Ernest Fitzgerald was the biggest whistleblower but I am not sure if he collected under qui tam or not.

[Thereisnoif]

What's new here ?

There isn't a single clean millionaire in this country .

All corrupt to the bone.