Sluggish start for Thais as regional integration looms

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EDITORIAL
Sluggish start for Thais as regional integration looms
The Nation

The protracted political deadlock is greatly restricting thailand's preparations for an Asean Economic Community

BANGKOK: -- The latest economic research and surveys are competing to deliver warnings and straightforward bad news. Thailand, they say, has been progressively less and less attractive when it comes to foreign investment. This year's economic growth, it is expected, may be the lowest in many years thanks to the prolonged political crisis. And with the beginning of the Asean Economic Community (AEC), the regional free-market, looming around the corner, the timing couldn't be worse.

The poor prospects for foreign investment are nothing new. One doesn't need to be an expert to see why for?eign investors will struggle to find good reasons to bet on Thailand. Corruption is rampant and has become deeply politicised. Mega government spendings, a key factor in every modern economy, has been and will remain tied to political volatility, rightly or wrongly. The country also has a poor ranking in education and our labour attractions are losing ground to neighbouring countries.

Other issues include compatibility for offshore businesses and infrastructure. Both are more or less embroiled in troubled politics or corruption. This is not to say that our neighbours don't have these problems, but it's fair to say that ours are more on show.

How much we need foreign investment is an entirely different subject. One school may argue that a food-producing nation like Thailand has advantages it doesn't really appreciate. In other words, the country may not register a flashy economic growth, but it will survive difficult economic times. "Developed countries" that have to buy foods will suffer more if slammed by drastic winds of economic change.

With Thailand's agricultural sector weakened, however, the other school sees foreign investment as essential. Some view Thailand's deteriorating attractiveness with growing concern. Thailand, this camp insists, must take a great stride into the AEC, not limp into it. But as things stand now, we will have to race against time to really get ready for the regional economic rearrangements.

Thailand's private sector used to be strong, boasting some good resistance against political turmoil. That is no longer the case. Big corporations have been drawn into the political fight. A senior foreign businessman faces deportation. There is a state "blacklist" accusing leading firms of sponsoring anti-government activities. And, as stated, projects that could generate jobs or investment or draw in foreign money have hit political snags, rightly or not.

There is a relatively short period before the AEC begins. Good news, as far as Thailand's bad situation is concerned, is that drastic changes won't happen overnight. Many tax or tariff reduction schemes are a follow-up of what have been tried before. The shift of skilled labour across the borders will still face non-legal problems or restrictions. Singapore may be more attractive, but it has always been more attractive than Thailand, AEC or no AEC.

Bad news is the AEC is not a short-term thing. That means whoever gets a good head-start may hold advantages for years.

For example, countries that manage to draw in foreign investment over the next two years will be able to solidify their positions or competitiveness. With inroads being made in Myanmar, Singapore always more attractive, Malaysia far more politically stable and Vietnam better dressed up, Thailand faces an uphill battle to win over investors.

Each side of the Thai political conflict is blaming the other for the country's dismal prelude to the AEC. Who is right or who is wrong may not matter much when the AEC is concerned. And the longer the blame game drags on, the weaker Thailand will look on the AEC racetrack.


-- The Nation 2014-03-17

[tomyummer]

No big deal. ASEAN integration is a joke anyway and won't be more than additional trade rules opened between countries.

Thailand is no more corrupt than Indonesia or the Philippines let alone the northern neighbors.

Singapore is so much more advanced as an economical power and will never allow itself to be integrated or tied with its undeserving fellow members more than easing trade.

Free flow border crossing between ASEAN countries? No way.

[upena]

Thailand was ill-prepared for AEC way, way before the current political unrest. Next year will be fun here listening to all the complaints of jobs lost to foreigners.

[pitrevie]

I found out how far integration had gone when I tried to transfer money from the Bangkok bank to a bank account in Laos. It appears the only way they have of doing this is to covert it to dollars and send it via New York. Its like being told that if you wanted to transfer money from a German Bank account to a Dutch bank account that first it must be converted to yen then transferred via Tokyo. I agree with a previous poster, there is no way the likes of Singapore are going to be dragged into this Fred Karno outfit other than a couple of symbolic gestures.

[BudRight]

Thailand will implement exactly zero of the AEC stuff, which is how much they have done so far as well.

[belg]

they will just probably exit the ASEAN just before it comes into action, as it will not bring them enough advantages.... fair competition ? just look at the tuk tuk, jet ski, taxi maffia and rip-offs on the islands... and that is just one section

[Dogmatix]

The AEC is a non-event for Thailand. You see articles quoting govt officials saying they need to prepare for AEC but none show any insight into what it actually is or what preparations would be useful. The only areas where they take determined action is to try to find ways to batten down the hatches to prevent ASEAN firms from owning 70% of service sector companies (the necessary amendment to the FBA to facilitate this was not even been discussed in Parliament) and to prevent ASEAN professionals from working freely in Thailand (by requiring Thai language exams), as required by the AEC. They simply talk about the opportunities for Thais to work abroad and for Thai companies to invest in ASEAN, which they can already do because all the other ASEAN members already allow 100% foreign ownership. Thai professionals who are good enough can already work abroad but most are not wanted because their English is so poor.

[leggo]

The subject of Thailand in this or that situation has become outdated until the government is capable of serious management and at the moment it is just not feasible in the short term.

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