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Thai economy needs more than a good image
Publication Date : 04-08-2014
At a recent major business seminar, everyone was speaking about the obvious. Thailand's economic outlook, the participants said, was all right for the short term but highly unpredictable in the long run. Of course, the vicious political cycle was cited and nobody was confident that another loop of uprising, potential bloodbath, an elected government targeted for abusing its mandate, and then a coup wouldn't happen again.
In addition, some expressed concern that potential investors living far away were getting confused or, worse still, being fed wrong information about Thailand, further compounding the business atmosphere.
What wasn't discussed at the "Thailand is Back" international conference, which was organised by the Federation of Thai Industries and The Nation, was that the long-term prospects have a lot to do with two things: Can the national conscience when it comes to corruption change and will businesses, after decades of having to embrace bad traditions, also shape up?
Imaging something is one thing, a genuine foundation is another. Thailand's economy has been on a roller-coaster because it has been largely riding its luck and not depending on true strengths. In today's world, self-advertisement is undeniably necessary, but it has to go with solid and sustainable qualities. One of the essential qualities is, of course, an uncompromising social attitude against corruption.
Thailand has been poor on the issue of transparency, having always got poor world and Asean rankings in this regard. This has deterred many prospective investors.
But corruption has also been the main source of national strife. Businesses have had to "play along" and pay bribes. Tax evasion is so common that when political leaders were involved in malicious schemes, they were largely defended rather than condemned. The country's business outlook, therefore, does not only concern whether the government is investing in mega-projects, how many foreigners are visiting Thailand or whether exports are doing well. Thailand's economic prospects depend very much on whether the country can do away with years and years of tolerating corruption or accepting it outright.
The export performance is seasonal, and so are tourism figures and state spending. What is permanently important to the economy is the trust issue, or the country's integrity.
Some may say "democracy" alone can improve the economy, and when sceptical countries no longer have doubts, trade relationships can be in full bloom again. What Thailand has experienced over the past decade, however, has proved the assumption to be wrong. Corruption can easily destabilise democracy and in an undermined democracy, no legitimate business can truly flourish.
Alleged corruption affected the overthrown government's rice-pledging scheme and played a role in the programme's massive losses. Political turmoil, in which corruption charges were at the centre, killed at least two mega-projects - a water management scheme and a rail transport overhaul.
These are just some examples of how corruption could hamper or blow away business opportunities. To resolve the political crisis for good, a common ground is needed to restore harmony. But "common ground" is a tricky word sometimes, and it may not work as long as corruption is around.
There is no quick fix for Thailand. Participants at the "Thailand is Back" seminar admitted this. Thais, however, must hope for a "real fix" first, because any measure - economic or political - that is superficial will never end the feared cycle. Image building can only protect the economy for so long, and it's time to really concentrate on the foundation.