Foreign Investors Remain Uncertain About Nominee Status

[wolfmanjack]

When you talk about investment, what exactly are you talking about? Are you talking about bogus real estate trading companies? Are you talking about beer bars and Go Go bars? I think we place too much value on our "HUGE" investments here. Some time back I was involved in a BOI sponsored company. The BOI cut through a LOT of red tape and helped the company whenever they could. My work permit as well as a number of other farang work permits were pushed through by the BOI. Like it or not Thai laws are written so that they can be selectively enforced. Looking at the visa rules should tell you that few things are black and white. I believe that it is planned that way.

Let's take a look at the investments of those of us that invest a little more than the bar beer owners. I have around 50 thais that work either directly or indirectly for my company. They are paid more than the minimum wage plus social insurance and the work is not difficult. As a matter of fact some of the workers quit to go work for 10 baht per day more and they came back after only a month saying the hours were longer and the Thai boss was an ######. One of my per piece workers hired a few workers himself. I paid him 60,000 baht last month and out of that he paid his helpers 20,000 baht leaving him with a net of 40,000 baht. A thai owner would in turn hire the helpers that this guy hired and pocket the extra 40,000. As a falang I would not dare try to do anything like that.

I know Thai owned companies doing the same work and they pay 80 baht per day with no Social insurance and no other benefits required by law. After 1 year they get 90 baht per day and after 2 years they max out at 100 baht per day.

Almost every thai business owner I know pays very little in taxes. They tell me that the revenue department assumes that every body cheats on their taxes and charges you more than you claim. As a result of this they cheat even more than they normally would and then come to an acceptable arrangement with the revenue folks. I on the other hand paid over 80,000 baht in taxes last year not counting Social insurance, work permits, visas and other government fees. This was on a net of 480,000 baht. Most of the money I bring in goes to the workers.

This means if the government forces me to to quit because i do not make enough money to meet their minimums or makes it too dificult in other ways these 50 thais will lose their job and only have the prospect of moving to bangkok or go to work at the companies that only pay 80-100 baht per day. My wife is already complaining that the investment I have made in this company could be better used in some other way and wants me to sell out.

[Gary A]

Let's take a look at the investments of those of us that invest a little more than the bar beer owners. I have around 50 thais that work either directly or indirectly for my company. They are paid more than the minimum wage plus social insurance and the work is not difficult. As a matter of fact some of the workers quit to go work for 10 baht per day more and they came back after only a month saying the hours were longer and the Thai boss was an ######. One of my per piece workers hired a few workers himself. I paid him 60,000 baht last month and out of that he paid his helpers 20,000 baht leaving him with a net of 40,000 baht. A thai owner would in turn hire the helpers that this guy hired and pocket the extra 40,000. As a falang I would not dare try to do anything like that.

I know Thai owned companies doing the same work and they pay 80 baht per day with no Social insurance and no other benefits required by law. After 1 year they get 90 baht per day and after 2 years they max out at 100 baht per day.

Almost every thai business owner I know pays very little in taxes. They tell me that the revenue department assumes that every body cheats on their taxes and charges you more than you claim. As a result of this they cheat even more than they normally would and then come to an acceptable arrangement with the revenue folks. I on the other hand paid over 80,000 baht in taxes last year not counting Social insurance, work permits, visas and other government fees. This was on a net of 480,000 baht. Most of the money I bring in goes to the workers.

This means if the government forces me to to quit because i do not make enough money to meet their minimums or makes it too dificult in other ways these 50 thais will lose their job and only have the prospect of moving to bangkok or go to work at the companies that only pay 80-100 baht per day. My wife is already complaining that the investment I have made in this company could be better used in some other way and wants me to sell out.

Please don't mistake my post as being critical of companies that actually provide a physical product. Real estate companies and bars do not produce anything. If you are employing Thai workers in a manufacturing venture I think your company would be VERY welcome. Did you look at the BOI possibilities? The ideal business here is an industry that creates new or better products for Thailand and trains the workers to learn and then carry on with that business. Better yet is a product that can be exported. Of course you are correct in that it is NOT a level playing field for us. We face many hurdles that the Thai companies do not. I think the BOI levels the playing field.

[teko]

Foreign investors grill Thailand on ownership

BANGKOK: --

"Over 100,000 foreign companies here are being affected by this issue. A lot of them are very, very upset," Richard Watson, a financial adviser based on the Thai tourist island of Phuket, told Reuters.

Thailand's Foreign Business Act is under scrutiny after graft investigators suggested the sale in January of telecoms firm Shin Corp (SHIN.BK: Quote, Profile, Research) by the family of ousted Prime Minister Thaksin Shinawatra to Singapore's Temasek may have broken the law.

...

The Act bars foreigners from owning majority stakes in most Thai businesses, but in practice gray areas have allowed non-Thais to invest with confidence since the 1970s.

...

However, Temasek's $3.8 billion deal for Shin Corp, which fueled street protests against Thaksin that led to the September 19 coup, put the spotlight on the foreign ownership issue.

"Among big companies in Thailand, how many of them have got genuine Thai shareholders? Temasek and Shin have brought this to the surface," Watson said.

....

Thailand was committed to an open economy, but at the same time Thais needed help to compete against foreigners, he said.

A few things, starting with that last comment.

When will Thai's ever learn that their over zealous protectionism and cultural xenophobia is killing their own economy. Thailand could (and ought to) have an economy as strong as Japan or Taiwan but they can never seem to get through a one way street with two cars going in opposite directions. Thai's love to see money coming in, as long as it doesn't come attached to a farrang. Well, guess what folks, money always comes attached, and if it's coming from another country, there is a farrang who's going to maintain control of it, or it ain't gonna happen. You can't have Frank's money without Frank -- get it? If Thai's want's to join the 1st world, and they want have a strong economy that can compete globally, then they have to embrace not only foreign money, but also the foreigners that come with it. Even the King, bless him, has noted, that worldwide, foreigners have a bad impression of Thailand and so Thai's need to make an effort to change this, by accepting foreigners and treating them well. This was a recent royal decree (seriously). The king very rightly recognizes that Thai's have to get over their cultural fear and ignorance of farrang. Variable policies that change year-to-year and vague grey-area loopholes in the law are the current plaster (bandage) "solution" on the wound of Thai racism & xenophobia, which, if they could be overcome, would allow real confidence in foreign investors and probably quadruple the money coming in within 1 year. The current patchwork of loopholes & grey areas are simply not conducive to the serious business investor. Thailand is missing out on 1st world economic status because the government behaves as if it's still operating in 1850 and treats investors like foreign invaders, when, by definition, foreign investment means money coming in to Thailand, boosting jobs, taxes, and development for people in Thailand. Why can't they see, this is a good thing!?

As I recall from reading the Bangkok Post & The Nation, the real reason Thais were upset & protesting in the streets about the Shin corp. deal had nothing to do with nominees -- people were mad because Thaksin (who is incredibly wealthy already) paid NO tax on this 73 Billion Baht deal -- that, I think everyone agrees is not good for Thailand, and that is an issue to do with a specific law relating to stock purchase rules for Thai Public Companies. The nominee issue is abstract and unimportant to most Thai people -- and what is the point of that rule anyway? Through preferred share voting (which is perfectly legal), any group of shareholders can have all the voting power while others have none -- this is common over the entire world over for business. Some wealthy people, as you can see in many places, act in their own self-interest, not the nations interest, whether they are Thai or Farrang. So why is it any better to have Thai's with 51%+ ? If the Thai government thinks Thai's should be majority owners because they will have Thailand's own interest at heart they are sadly mistaken. Thaksin: case and point.

The fact is I know dozens of Farrang who care far more for Thailand and it's culture than many other local Thais do. Quick example: on Koh Samui a group of well-to-do resident farrangs formed a group called Green Cross to clean up public beaches (by themselves, by hand). They're mostly farrang volunteers with awareness advertising & fund raiser's sponsored by farrang controlled Thai corporations. Some Thais do help out spontaneously when they see a cleanup in progress, but the vast majority stare and gawk as they continue to toss their beers and cigarettes into the ocean. Now, I realize that is not business, but it is culture and it says a lot about caring Farrangs who leave their own birth countries to settle in Thailand obviously must love life here so it only makes sense that they are going to want to be good to this country. Sure, there are some bad apples in every bunch, but clearly, farrangs who are living here, by definition , have already made the choice that Thailand is the country they like better than there own. So policies which assume allegiances based solely on race or country of origin are nothing more than racist ignorance, and do not necessary serve the best interests of Thai people, who would otherwise benefit from the increase in jobs, education, infrastructure, and quality of life improvements that comes with what is essentially a direct deposit into Thailand's GNP.

Other issues with Shin Corp involved the sale of government funded assets such as telecom satellites, which virtually everyone, including myself, agrees is a big no-no. But come on, how many farrangs have investment in companies like that? The Thai government, DSI, & thai media have a bad habit of making vast generalizations based on a very small number of specific cases, like Shin Corp & the Peak land deal, when in fact these are rare, isolated cases, not the mainstream. Yet the mainstream companies and potential investors gets scrutinized and threatened with changes in policies, rules, and laws that are not necessary in their cases, and yet seriously impact their ability to attract investment of ANY KIND.

If Thailand wants to attract a serious steady-stream of investors and not loose the ones they already have they had better very quickly enact clear cut laws that make Thailand attractive for foreign investment and give everyone a legitimate sense of confidence (such as through a royal decree confirming it) that such new laws are here to stay. If investors don't have ability to control their investments, they will need to do it via nominees, or trust me, they won't invest AT ALL. Sufficiency economy is a good idea, and it does not have to mean SELF-sufficiency, it just means use only what you need, be efficient, and make use of all that is available. When there are potentially Trillions of Baht available in foreign investment capital to help boost and support Thailand's sufficiency economy, they'd be fools not to do everything they can do attract it, instead of confusing it and scaring it away.

I don't usually have the time to read such long posts, but this was well worth it and I am glad I did.........talk about the nail on the head

[wolfmanjack]

Please don't mistake my post as being critical of companies that actually provide a physical product. Real estate companies and bars do not produce anything. If you are employing Thai workers in a manufacturing venture I think your company would be VERY welcome. Did you look at the BOI possibilities? The ideal business here is an industry that creates new or better products for Thailand and trains the workers to learn and then carry on with that business. Better yet is a product that can be exported. Of course you are correct in that it is NOT a level playing field for us. We face many hurdles that the Thai companies do not. I think the BOI levels the playing field.

My company is not big enough to qualify for BOI. One of the heads of BOI in Bangkok spoke to me when I exhibited at a trade show in Bangkok about applying for BOI. This was a few years ago and I do not remember the specifics but I could not meet the capital requirements since they do not include the cost of the land or buildings. I only have a million baht in machinery and that was not enough. Especially when you take depreciation into account. My business is very labor intensive at this point in time unless I decide to automate. I am now trying to decide among 3 choices. Sell, Automate, or move to another country. I am waiting to see what happens with the new rules.

[wolfmanjack]

Please don't mistake my post as being critical of companies that actually provide a physical product. Real estate companies and bars do not produce anything. If you are employing Thai workers in a manufacturing venture I think your company would be VERY welcome. Did you look at the BOI possibilities? The ideal business here is an industry that creates new or better products for Thailand and trains the workers to learn and then carry on with that business. Better yet is a product that can be exported. Of course you are correct in that it is NOT a level playing field for us. We face many hurdles that the Thai companies do not. I think the BOI levels the playing field.

Unfortunately those of us that have small manufacturing facilities are getting lumped in with the bar owners. I would also like to point out that 99% of what I produce is exported. Many of my customers were introduced to thailand through my company and now buy from other thai companies in addition to what they purchase from mine.

[Gary A]

Unfortunately those of us that have small manufacturing facilities are getting lumped in with the bar owners. I would also like to point out that 99% of what I produce is exported. Many of my customers were introduced to thailand through my company and now buy from other thai companies in addition to what they purchase from mine.

Good luck with your business and I would hope the Thai government will stop generalizing and reclassify businesses into more logical types of operations with different ground rules.

[Nemo.]

Facts are

China: large cheap hardworking population with large numbers of English speaking qual grads and skilled people + cheap low skilled labour

Malaysia: excellent English, relaxed foreigner investment laws (eg anyone can buy property over 250,000 RM), political stability (one party rule means no "Malaysia love Malaysia" party!) and a government that invest massively in IT (MSC has very relaxed laws on foreign investment). Proton though was Dr M.'s baby and they want to get rid of it! Oil industry (Petronas) is virtually run by foreigners as Malaysia knows that locals are not up to the job (not enough dynamic skilled managers to fill all the posts).

Singapore - begs foreigners to come in! 5 year PR is easily available BEFORE getting a job if you have a Masters degree or equiv experience. You can even get a passport after 3 years easily! They know more foreigners = more wealth for Singaporeans. They have their heads screwed on right! And they speak fluent English

Vietnam - waking upto the fact that foreign investment = more wealthy for Vietnam. No "Vietnam loves Vietnam" nonsense their either.....

India: millions of English speaking graduates. IT is flooded with IT grads from India and most are of good enough quality

Thailand: worst almost non-existent English pool of grads/workers. Most grads have Thai only degrees of "dubious quality" even when compared with other SE Asian countries. "Thai loves Thai" party represents feeling that "foreign = evil" among rural population. Anti investment laws and lack of political stability. No government strategic view on economic development holds back capital investment - Thailand seems content to be the low tech manufacturer eg clothes. Anti foreign investment laws - its illegal to do almost any job! WP/visa rules are just plain stupid. Malaysia gives 3 year work permits with Gold ID card that allows fast transit via imi at airports WITH NO STAMPING OR STUPID "RE ENTRY VISA"

Now where would you invest? Thailand at bottom of the list on every count (English/qual grads/capital investment/work permits-visas/...............)

[brahmburgers]

Asian administrations have a long history of closing doors to trade. In the past, the western powers, who were superior miltarily (and still are) would force open markets via 'gunboat doplomacy' as they did in opening up Japan with Admiral Perry's battleship. Thailand's leaders (albeit unelected) are acting from unsuredness. When unsure about unrest in the neighborhood, the average homeowner might batten down his doors and windows.

It's true, Thailand needs its best and brightest thinkers, many of whom were educated in western universities. Rather than being xenophobic and overly protective, Thai leaders should open their eyes to the possibilities of networking on a global level. Thailand has rich soils (for farming), lengthy beaches (for tourism and retirement abodes) and other endowments, though such things need maintenance - and are falling in to disrepair much like the thousands of abandoned concrete structures throughout the kingdom.

Granted, as a farang, my subjective hope perspective is Thailand would become as open to foreigners as the U.S. is - allowing businesses to operate and foreign ownership of property - with some reasonable restrictions. But that will never happen as long as Thais are so extremely aware of who is not Thai (actually, being Thai is a varied mix of many genes, but that's another story). Then there is the fuzzy subject of millions of Chinese (are they now Thai or still Chinese?) who own most large and medium businesses in Thailand. They slipped under the radar because of their Asian appearances and their strong underground community support within Thailand. Perhaps what farang need is some sort of lobbying office - rather than the current scenario where it's 'every-man-for-himself'

[younghusband]

Please don't mistake my post as being critical of companies that actually provide a physical product. Real estate companies and bars do not produce anything. If you are employing Thai workers in a manufacturing venture I think your company would be VERY welcome. Did you look at the BOI possibilities? The ideal business here is an industry that creates new or better products for Thailand and trains the workers to learn and then carry on with that business. Better yet is a product that can be exported. Of course you are correct in that it is NOT a level playing field for us. We face many hurdles that the Thai companies do not. I think the BOI levels the playing field.

Unfortunately those of us that have small manufacturing facilities are getting lumped in with the bar owners. I would also like to point out that 99% of what I produce is exported. Many of my customers were introduced to thailand through my company and now buy from other thai companies in addition to what they purchase from mine.

I think it's just worth noting that the OP's differentiation between companies producing a physical product and those that don't (ie service industries) is economic illiteracy.It would have been forgivable in the 1970's when the distinction was received wisdom.There's no excuse however in peddling this nonsense now.Actually in Thailand the future will see an increase in the importance of service industries and a decline in manafacturing, particularly given China's now unstoppable ability to manafacture more cheaply and more efficiently.

[mouse]

I have three points I wish to share:

1.) Thailand should stop worrying about colonization, as the Thai Chinese are already taking care of that and the Internet is doing the rest. Yes people, in my humble opinion, the Internet is the most advanced form of western (mainly American) colonization.

Kind of like foreign aid. Here is your free television and we will sell you a power plant to make that tv go and even news to show on it.

2.) I strongly advise anyone that is a U.S. citizen to register an Amity company. Nuff said! Ask Sunbelt!!!

3.) We should not demonize being poor. There is nothing wrong with it and people that are, usually are much happier than those worrying of their riches being stolen.

People have to remember that money is nothing more than a mere tool, kind of like a hammer is to the nail and not a religion that many seem to practice.

Edited November 11, 2006 by mouse

[TRD LOVER]

Thailand was good to a degree while it lasted.. but China gets my vote.. Vietnam still too hot same as going even furth south where they all simply hate Americans..

[capt_canada42]

When I came here many years ago Viet Nam was way behind Thailand but now it is passing Thailand. Due to many reasons. One of the main reasons is you can own you own company in Viet Nam with out partners who are locals.

In Thailand things have got worse instead of better I sell land here in Phuket. We used to be able to set up companies to protect falangs when they buy land, the problem is now the Thai government wants to investigate and make sure all the investors have money and they were not given the money by the falangs.

Thus the only land sales happening here in Phuket are to Falangs who trust their Thai wives and register the land in their names. The trouble is that unless you know some one a long time and have a lot of experience with them you risk loosing your hard earned money.

The other way is lease which is not a 100 % satisfactory, as there is nothing better than havings things in your name or the name of a company that you control.

Thus lands sales have fallen here in Phuket and the island has had hardly any sales except to people who want to put land in there wives name.

If Thailand wants foreigners to invest they have to wake up and start giving people rights instead of treating them like suspicious trash.

[capt_canada42]

I have three points I wish to share:

1.) Thailand should stop worrying about colonization, as the Thai Chinese are already taking care of that and the Internet is doing the rest. Yes people, in my humble opinion, the Internet is the most advanced form of western (mainly American) colonization.

Kind of like foreign aid. Here is your free television and we will sell you a power plant to make that tv go and even news to show on it.

2.) I strongly advise anyone that is a U.S. citizen to register an Amity company. Nuff said! Ask Sunbelt!!!

3.) We should not demonize being poor. There is nothing wrong with it and people that are, usually are much happier than those worrying of their riches being stolen.

People have to remember that money is nothing more than a mere tool, kind of like a hammer is to the nail and not a religion that many seem to practice.

Heh Mouse Amity expired long ago 1997 but they kept extending it but is finished again on Dec 11, they still may extend it again but know one is sure. Also why should Yanks get special status I know they fought in the war but so did alot of us guys from other countries volunteer for that mess !

[younghusband]

I have three points I wish to share:

1.) Thailand should stop worrying about colonization, as the Thai Chinese are already taking care of that and the Internet is doing the rest. Yes people, in my humble opinion, the Internet is the most advanced form of western (mainly American) colonization.

Kind of like foreign aid. Here is your free television and we will sell you a power plant to make that tv go and even news to show on it.

2.) I strongly advise anyone that is a U.S. citizen to register an Amity company. Nuff said! Ask Sunbelt!!!

3.) We should not demonize being poor. There is nothing wrong with it and people that are, usually are much happier than those worrying of their riches being stolen.

People have to remember that money is nothing more than a mere tool, kind of like a hammer is to the nail and not a religion that many seem to practice.

Heh Mouse Amity expired long ago 1997 but they kept extending it but is finished again on Dec 11, they still may extend it again but know one is sure. Also why should Yanks get special status I know they fought in the war but so did alot of us guys from other countries volunteer for that mess !

If anybody should get Amity status it should presumably be the Japanese as allies of Thailand in WW2.

[PeaceBlondie]

This reminds me of Thaksin meeting the big MNC investors about the grandiose infrastructure projects, before Thaksie had a great fall like Humpty Dumpty. Investors heard vague platitudes when they wanted facts and details.

I suspect the baht is strong against the dollar recently for the same reason that other currencies are strong against the US$. When those reasons no longer apply to Thailand, the baht may fall, because nobody wants to invest a lot in Thailand.

Of course, I'm often wrong. Maybe Gates and Buffet and Soros and China and India will each invest two trillion euros in Thailand tomorrow.

[Butterfield8]

ps: where the bl__dy heck are the brilliant economists from Thailand, educated on top-universities in the UK/Europe, USA and Australia ?

I think you just already named the countries where they are living & working now. Putting their expertise to good use for the benefit of those countries & not their own.

Does anyone have the time & know how to track down an email address for the appropriate Thai Government dept? I think it would be a very good idea if this thread were forwarded to them, so they can see what intelligent foreigners think about their behind the times thought processes & methods.

Ofcourse realistically it will never happen, but it would be interested to see what would happen to Thailand's prosperity if every single foreign led company pulled out & moved elsewhere overnight.

[Butterfield8]

ps: where the bl__dy heck are the brilliant economists from Thailand, educated on top-universities in the UK/Europe, USA and Australia ?

I think you just already named the countries where they are living & working now. Putting their expertise to good use for the benefit of those countries & not their own.

Does anyone have the time & know how to track down an email address for the appropriate Thai Government dept? I think it would be a very good idea if this thread were forwarded to them, so they can see what intelligent foreigners think about their behind the times thought processes & methods.

Ofcourse realistically it will never happen, but it would be interested to see what would happen to Thailand's prosperity if every single foreign led company pulled out & moved elsewhere overnight.

Of course, our lovely Thai King was mainly educated abroad. It's time he looked at the overall economic situation and give his views on how to improve it so that the cabinet will sit up and actually listen. I would hate for a lovely country AND ITS PEOPLE like Thailand to be left behind while the rest of Asia picks up its economic boom. HK didn't do badly under the Brits - it is an awesome city with a superstructure that is mind bogglingly efficient.

[Martin]

'nemo' said, in post #67,:

"Singapore - begs foreigners to come in! 5 year PR is easily available BEFORE getting a job if you have a Masters degree or equiv experience. You can even get a passport after 3 years easily! They know more foreigners = more wealth for Singaporeans. They have their heads screwed on right! And they speak fluent English"

I think the underlying purpose of that is to get us to think: "Yes, Thailand should follow Singapore and then all will be well". Not so.

I am more inclined to follow up on what the ex-PM, ex Senior Minister, now Minister Mentor of Singapore (Lee Kuan Yew) said, when he revealed that he doubts if Singapore will last out this century.

I did six years in Singapore and it was a great experience to spend part of my career (well, OK, part of my careering around!) working right inside the city that is showing the world how to manage a city.

To have the confidence of several senior officials and one Cabinet minister and be privy to their innermost view of Singapore was most revealing.

Basically, they told me that they saw Singapore as a great place to have a career and stack up enough wealth to then leave it and spend a civilised retirement in a more civilised place.

"Singapore lacks a hinterland" was at the root of their 'world view'.

But Bangkok has a huge hinterland that it is Bangkok's privilege to serve or temptation to exploit, according to its conscience.

If the present administration acts to encourage the goodwill to serve, and discourage the evil will to exploit, it will serve Thailand well.

If it sees forign capital as wanting to come in to exploit, and so decides to keep it out, that will be a first step in the right direction.

Singaporeans have no option but to trade their services for a mess of pottage and, hopefully, a bit to spare on which to retire.

But Thailand is more-fortunately placed. It can produce its pottage and nourish its soul at one and the same time.

[Martin]

We each make up our minds and take our choice.

My late wife and I spent ten days in Hong Kong being shown its way of life by former colleagues from the UK who were working there.

At the end, we decided that Singapore was by far the more civilised of the two artificialities.

Singapore was safer, cleaner and greener and my impression was that, in Singapore, my students would work well, be happy and cheerful, and be mutually-supportive. But, in Hong Kong, my students would work well, be morose, and be downright selfish.

I was proved right as far as my Singapore students were concerned.

[faranginbkk]

3.) We should not demonize being poor. There is nothing wrong with it and people that are, usually are much happier than those worrying of their riches being stolen.

This sounds simplistic and arrogant. Ask the poor what they think! I know an unemployed guy from Isan with no job and no money, and it is a desperate struggle for him to support his family. If you don't own land, and cannot easily get job in manufacturing (e.g. if you are disabled), life is very difficult indeed.

[Steph1012]

The cynical amongst us may take the "sufficiency economy" to be applicable mainly to the poor.

IE you get on with your lot so long as you just have enough to be able to work and produce things and farm the land.

We will protect our riches but not seek to increase them dramatically. At least not as openly as before.

We remain rich and you remain in your place and forget any ideas of becoming a threat to us (rich people) by getting educated and political.

Its face with the rich Thais, they don't care about the economy so long as they are richer than the poor. We've had this before, take your Issan girlfriend round Bangkok to buy a new car and the middle classes hate it, sulk and would rather not sell the car than deal with somebody darker than them.

Obviously you are the cynical one. The king is the one that stressed the "sufficiency economy" and I do believe he was referring mainly to the poor and not the entire kingdom. Fortress Thailand was not what he intended. My wife is from a hilltribe village and here is what happened after the million baht per village fund was started.

1. Many have a new motorbike when an old one or walking was good enough before. This means air and noise pollution where there was little before. Money must be spent on gasoline which would be better off saved for the farm. Riding instead of walking decreases the amount of exercise one gets.

2. The other major purchase was a refrigerator. The electricity shuts off so frequently that the frig is useless and now sits unplugged.

3. Furniture was purchased and not used. I see homes with tables and chairs but every one sits on the floor.

4. Cell phones with no cell service in the village. They have to drive 10 kilo away to the top of the Doi to get service when they have a pay phone in the middle of the village.

These are just a few of the examples where the poor are going into debt to buy things they really don't need or even use. I believe that the self sufficiency was meant to stop the useless spending and the use of imports by people that can not afford it. In the past 90% of what was used by the villagers was also produced in that village.

A good reply here and I have witnessed some of the above myself. My wifes families phones only work when they go into Khon Kean shopping!! They still have to have em.

A few points though. The aspirations of people have been awoken, wants are becoming needs whether practical or not. People are voting with their feet when they buy these things and whilst rampant consumerism as we have in the West is not a good thing, people do aspire to more than having sufficient food and shelter. We would all still be living in caves in Africa without this desire for betterment.

Many Hill Tribe people in particular are leaving that way of life behind, and where they stay, are pursuing the tourist dollar with their fine handicrafts (and they are fine), visitor centres and photo opportunities. Sufficiency for them would be to produce enough to get by in life. What would happen is that other people (the middle classes) would trade these goods as they often do now (bussing tourists in), make massive profits on them and maintain their very comfortable lifestyle.

Sufficiency for them is the status quo and I don't see any of them parting with a single satang in a downward charitable manner or moving towards a state of self sufficiency. For them, this could be achieved more easily than for the poorest people, in fact it could be achieved over night!

I maintain that the ruling and middle classes want to protect their status and the poor must be kept poor in order to do this.

A point I often make is that many poor people have leap frogged the middle class by marrying westerners such as you and me. This really pisses off the Chinese Thais who run virtually everything here as their pool of poor labourers are starting do demand basic rights... geting paid for working for one.

Edited November 11, 2006 by Steph1012

[Gary A]

Everyone is certainly entitled to their own opinion. My opinion is that if you want to try to do business in a country with a communist government, go for. You think it's corrupt here? China is especially a laugh. I know first hand of a company that does business there. At the final negotiations a government official couldn't get to the meeting because his car was old. To get him there they had to buy him a new car.

If you want to do business in a muslim country and take the chance that the morality police will start to check up on you, that's your decision too.

If you want to live in a country where you can't chew gum or spit in the gutter, there again it's up to you.

I won't do business here either but I have tried in the past. I was involved in three Thai companies over the years. Two of them failed and the third, I was cheated by a trusted farang partner who saw fit to steal my product detail drawings, copy and sell the prototypes and to go for it himself. I took my lumps and I HAVE learned from them.

Edited November 11, 2006 by Gary A

[Bruce1]

Yes, they're confusing two issues here:

1. The Shin to Temasek sale and whether tax should have been paid -of course it should have been.

2. Whether foreign investment rules are ridiculously restrictive and should be relaxed - of course they are and should be.

Thaksin's sale of Shin actually demonstrated the truth about foreign invement - that the rules need to be liberalised, not tightened.

Why would any foreigner bring money into Thailand under this silly 49% rule? You'd have to have rocks in your head!

And what's wrong with the baht strengthening - its called the free market, and actually just means the $US is weakening.

Does anyone in politics in Thailand have to guts to make long-term beneficial decisions?

[Martin]

I take issue with the thoughts in:

"Whether foreign investment rules are ridiculously restrictive and should be relaxed - of course they are and should be."

I would contend that there is nothing ridiculous about a country making a decision not to sell its soul for a mess of pottage.

Of course, countries that have done so under the 'leadership' of Thatcher and Reagan will use any power they have to get you to follow suit.

Thomas L. Friedman, in his book 'The Lexus and the olive tree' calls it "putting on the Golden Straitjacket".

Thailand tried it for size, starting around twentyfive years ago and got one of the sleeves inside out. Hence the famous, though necessarily elliptical, speech about being satisfied with sufficiency in late 1997.

The election of 2001 resulted in Thaksin getting the power to try it again, but then it was seen what that would lead to. So various groups (for various different reasons) used whatever came to hand (mainly corruption and the Shin sale) to push Thaksin out of the driving seat.

The bottom line is that outside money (derived by China from selling consumer goods to Americans for money they haven't got but is paid for them by the US Government issuing T-bonds, and by Middle East countries pumping out oil) would like Thailand to put itself into that 'Golden Straitjacket'.

But Thailand, as a country, doesn't need to.

Hopefully, (having got rid of the younger and brasher), wiser and older counsels will now prevail; and outside money will be spurned.

[bkkandrew]

I take issue with the thoughts in:

"Whether foreign investment rules are ridiculously restrictive and should be relaxed - of course they are and should be."

I would contend that there is nothing ridiculous about a country making a decision not to sell its soul for a mess of pottage.

Of course, countries that have done so under the 'leadership' of Thatcher and Reagan will use any power they have to get you to follow suit.

Thomas L. Friedman, in his book 'The Lexus and the olive tree' calls it "putting on the Golden Straitjacket".

Thailand tried it for size, starting around twentyfive years ago and got one of the sleeves inside out. Hence the famous, though necessarily elliptical, speech about being satisfied with sufficiency in late 1997.

The election of 2001 resulted in Thaksin getting the power to try it again, but then it was seen what that would lead to. So various groups (for various different reasons) used whatever came to hand (mainly corruption and the Shin sale) to push Thaksin out of the driving seat.

The bottom line is that outside money (derived by China from selling consumer goods to Americans for money they haven't got but is paid for them by the US Government issuing T-bonds, and by Middle East countries pumping out oil) would like Thailand to put itself into that 'Golden Straitjacket'.

But Thailand, as a country, doesn't need to.

Hopefully, (having got rid of the younger and brasher), wiser and older counsels will now prevail; and outside money will be spurned.

Guess you're going home then...

Edited November 11, 2006 by bkkandrew

[womble]

I take issue with the thoughts in:

"Whether foreign investment rules are ridiculously restrictive and should be relaxed - of course they are and should be."

I would contend that there is nothing ridiculous about a country making a decision not to sell its soul for a mess of pottage.

Of course, countries that have done so under the 'leadership' of Thatcher and Reagan will use any power they have to get you to follow suit.

Thomas L. Friedman, in his book 'The Lexus and the olive tree' calls it "putting on the Golden Straitjacket".

Thailand tried it for size, starting around twentyfive years ago and got one of the sleeves inside out. Hence the famous, though necessarily elliptical, speech about being satisfied with sufficiency in late 1997.

The election of 2001 resulted in Thaksin getting the power to try it again, but then it was seen what that would lead to. So various groups (for various different reasons) used whatever came to hand (mainly corruption and the Shin sale) to push Thaksin out of the driving seat.

The bottom line is that outside money (derived by China from selling consumer goods to Americans for money they haven't got but is paid for them by the US Government issuing T-bonds, and by Middle East countries pumping out oil) would like Thailand to put itself into that 'Golden Straitjacket'.

But Thailand, as a country, doesn't need to.

Hopefully, (having got rid of the younger and brasher), wiser and older counsels will now prevail; and outside money will be spurned.

Guess you're going home then...

Sometimes he sounds like he's a Thai himself.

Allbeit one in the dark ages.

[bkkandrew]

I take issue with the thoughts in:

"Whether foreign investment rules are ridiculously restrictive and should be relaxed - of course they are and should be."

I would contend that there is nothing ridiculous about a country making a decision not to sell its soul for a mess of pottage.

Of course, countries that have done so under the 'leadership' of Thatcher and Reagan will use any power they have to get you to follow suit.

Thomas L. Friedman, in his book 'The Lexus and the olive tree' calls it "putting on the Golden Straitjacket".

Thailand tried it for size, starting around twentyfive years ago and got one of the sleeves inside out. Hence the famous, though necessarily elliptical, speech about being satisfied with sufficiency in late 1997.

The election of 2001 resulted in Thaksin getting the power to try it again, but then it was seen what that would lead to. So various groups (for various different reasons) used whatever came to hand (mainly corruption and the Shin sale) to push Thaksin out of the driving seat.

The bottom line is that outside money (derived by China from selling consumer goods to Americans for money they haven't got but is paid for them by the US Government issuing T-bonds, and by Middle East countries pumping out oil) would like Thailand to put itself into that 'Golden Straitjacket'.

But Thailand, as a country, doesn't need to.

Hopefully, (having got rid of the younger and brasher), wiser and older counsels will now prevail; and outside money will be spurned.

Guess you're going home then...

Sometimes he sounds like he's a Thai himself.

Allbeit one in the dark ages.

Yes, it had crossed my mind. I guess he will be "spurning" other evil foreign invading items, such as oil, cars, computers, phones etc. etc.

Have we found the Thai equivelent of an Amish??

[HenryB]

And add to that the increasing confusion over what exactly "sufficiency economy" means, and military officers sitting now on boards of state enterprises without having any background in business.

Does anybody have any clear idea how the economy is doing now in Thailand?

I do not think anyone knows. The same people stated 2 weeks ago because of the

tremendous increase in foreign investments that is why the Baht is so strong. Now this !!!

Thailand will get further behind because they are scared of anyone investing in their country.

In Vietnam Intel is just a start and one will see them surpass Thailand very soon because of their

open foreign policy and their willingness to expand their infrastructure.

We like the STATUS QUO here.

For sure I am a conservative. I would not like to see Thailand grow into a new Singapore or Hong Kong in my lifetime at least. Selfish yes, but I like Thailand the way it is.

Thailand will never given foreigns investments rights like China or even Viet Nam. Investors in Thailand are dreaming it will never change.

[thaigene2]

This issue of "non-resident" is, I believe, one of their major stumbling blocks - and always has been. Why would you do business in a place or "buy" a private residence in a place where you can't own the land and will only ever be recognised as a visitor - a NON-resident??

The elite Thai hand has become so accustomed to having foreign money simply placed into its palm for the 'right' to do business with these elite thai 'partners' that brought nothing to the table except 'connections', that now this elite groups and their cronies have absolutely no clue about what to do now. A perfect example of being left to clean up one's own mess if ever there was one.

Give us your money and you can run 'our company'. Give us your money and you can buy 'our' house...

It seems they thought they could get away with this forever. If so they thought wrong.

Does anyone know about private residence ownership rights in China (for foreigners of course)?

[JR Texas]

This issue of "non-resident" is, I believe, one of their major stumbling blocks - and always has been. Why would you do business in a place or "buy" a private residence in a place where you can't own the land and will only ever be recognised as a visitor - a NON-resident??

The elite Thai hand has become so accustomed to having foreign money simply placed into its palm for the 'right' to do business with these elite thai 'partners' that brought nothing to the table except 'connections', that now this elite groups and their cronies have absolutely no clue about what to do now. A perfect example of being left to clean up one's own mess if ever there was one.

Give us your money and you can run 'our company'. Give us your money and you can buy 'our' house...

It seems they thought they could get away with this forever. If so they thought wrong.

Does anyone know about private residence ownership rights in China (for foreigners of course)?

JR Texas (51, USA): Reply to Thaigene2: Hi...new to this section. I have spent over 20 years in Asia. I have spent most of those years in Thailand. I have a house in Thailand, a common-law Thai wife, and many Thai friends.

I have two doctorates (I would tell you in what field but I would rather remain anonymous). Some would argue that I am a well-known academic in Asia (very familiar with the Thai academic scene). I am currently living in China.

About Thailand and business. At one time I tried to start a business in Thailand, but the govt. placed so many hurdles in my path that I decided not to do it. I was ready and willing to put up my own capital. All I wanted was the opportunity to be successful. In the end, I guess I lost. But so did Thailand as I was not able to create jobs.

I came away thinking that the govt. was actually not interested in helping foreigners to establish small businesses. I think it is now obvious that they are not at all interested in this. That is unfortunate because, worldwide, small businesses generate the most jobs. And Thailand needs jobs......especially in the countryside.

A few years later a major NGO based in Bangkok wanted to hire me to do some important work. But the Thai govt. would not allow them to issue me a work permit (I think the reason had to do with the 4 Thais to 1 foreigner rule).

Of course, there are positive economic models in Asia, and Thailand is certainly not one of them. The way to generate jobs and economic growth is via an open market system (just look at Singapore and Hong Kong). Personally, I would not invest in Thailand now. I see much better places to risk the loss of my capital (e.g., China, Vietnam, Malaysia, Cambodia).

There are several simple things the govt. could do to bring investment dollars into the Kingdom:

1) remove the 4 to 1 rule (4 Thais to 1 foreigner);

2) eliminate the 51% Thai ownership rule and allow foreigners to legally own and control their business (nobody wants to come up with a good business idea, give it to a Thai, and then give them control of the company);

3) make the business registration/set-up process simple;

And there are many other things that can be done to generate a positive economic climate that are related to the new visa rules and regulations:

4) restore the investment visa and make it applicable to any type of investment (the important thing is the introduction of dollars into Thailand and the flow of those dollars........not the type of investment);

5) make it easy for a foreign expat to live in Thailand and support his Thai wife (the new rules are ripping families apart and do not seem to care about their impact on families....for starters reinstate the 400K in the bank rule...or better......drop it to 200K and drop the new 40K per month rule to 10K).

In my view, Thailand is "cutting its own throat." When I talk to my Chinese friends about Thailand and its business/visa rules and policies they just laugh and wonder why they would do such stupid things. The Chinese are smart people.

And about your question on property ownership in China. As far as I know, it is possible for a foreigner to have 100% ownership of a house or condo in China (this is what my Chinese friends say but I have not heard this from a lawyer).

On another matter, it is incredibly easy to get a work permit (and inexpensive). And you do not have to report to immigration every 90 days or leave the country for a visa stamp, or return to your country to change your visa, etc.

Thailand has a lot to learn. I am afraid they will have to learn the hard way.