He stood behind Krirk-krai's back to make sure he would be in the photos and on television, too. Suddenly, he raised a sign reading, "Tesco Lotus, Get Out!"

Krirk-krai looked disturbed. "Sorry, could you go elsewhere? I'm here to make peace, not war," he said.

The man looked embarrassed. He put down his sign and agreed to move away before disappearing into the crowd.

This occurred last Saturday morning. Some well-wishers came to the hotel lobby to give bunches of roses to the commerce minister, who had returned to the Northeast four or five times over the past six months. In a few minutes, he would be presiding over the opening of a seminar jointly hosted by the Business Development Department and the Nation Multimedia Group on how to develop the indigenous retail industry.

Amid the onslaught of competition from giant players like Tesco Lotus, Carrefour, Makro, Big C and others, local retailers are facing a do-or-die situation. As commerce minister, Krirk-krai will have to perform a balancing act.

A group opposed to giant foreign superstores was waiting anxiously to listen to Krirk-krai's retail policy. They were up in arms against Tesco Lotus, whose rapid expansion in Nakhon Ratchasima and other northeastern provinces have alarmed them.

One lady from Pak Chong district said, "We've come here to protest against the expansion of Tesco. We just want Tesco to limit doing its business to Muang district alone and not venture into the smaller districts to set up shop. Otherwise, we'll all perish. How can small retailers like us or vendors in fresh markets compete against Tesco?"

Tesco is expanding into Pak Thong Chai, another major district in Nakhon Ratchasima. It already has a foothold in Pak Chong, Non Sung, Sikhiu and other districts. Local retailers regard Tesco as a monster.

Krirk-krai is responsible for two controversial bills. The first one is an amendment of the Foreign Business Act, which has already been approved by the Cabinet. It is awaiting passage by the National Legislative Assembly (NLA). This bill has drawn fierce opposition from foreign businessmen, investors and foreign media, all of whom accuse the government of practising protectionism.

The Bank of Thailand's 30-per-cent reserve requirement and the Commerce Ministry's draft amendment of the Foreign Business Act have been acutely criticised by the business community and are the two major stumbling blocks that have put investor confidence on hold. As a former career commerce official who rose to the top position as permanent secretary, Krirk-krai knew what kind of war he was facing. "Free trade? I have never seen any countries practising real free trade. But in free trade,

we also need to have rules and regulations. Those who have strongly opposed the draft amendment of the Foreign Business Act are those who have relied on nominees to circumvent foreign ownership," he said in his speech. "I shall never pull out the draft law. If I must fight, then it will have to be over my dead body."

Krirk-krai is also going to introduce another controversial bill regarding retail business law. Today, the Cabinet is likely to vet the details of a law designed to create a level playing field in the retail industry. Then the Council of State will scrutinise the legal language of the law before the NLA votes on it by about July.

But already the European Union has expressed concern over the direction of Thailand's attempts to regulate retailing, which is worth Bt1 trillion a year and employs about 15 per cent of the Thai labour force. The size of the Thai economy is about Bt7 trillion.

Krirk-krai knew the pressure was waiting for him in Isaan, the land of contradiction. But he came with a broader message, broader than his immediate agenda to push through the retail business law. He gave a speech on Isaan that was not only touching, but also provocative.

The well-being of Isaan is the well-being of Thailand, too. If you want to form a government, you must win over Isaan.

The vast region accounts for just over one-third, or 22 million, of the Kingdom's entire population of 65 million. But Isaan's per capita income represents only 10 per cent of the total, the lowest level in the country. The region's exports account for only 3 per cent of the total. Thailand's agricultural sector as a whole makes up about 11 to 13 per cent of gross domestic product. But in Isaan, the agricultural sector accounts for 20 per cent of its economy, making the region most vulnerable to economic shocks or fluctuations of crop prices.

Retail business accounts for 22 per cent of Isaan's economy, compared with 50 per cent for processed agricultural goods. The region produces 10 million tonnes of rice a year, or 60 per cent of the country's total production. It turns out 1 million tonnes of tapioca a year. Rubber is also emerging as a backbone of the region's economy.

Over the past 20 years, this structure of inequality has hardly changed, appearing to be a fact of life there. But should Isaan continue to be subject to this eternal damnation of poverty?

"Don't feel belittled," Krirk-krai said. "You have a huge market. You must see the opportunities. We are having two or three bridges linking the region with neighbouring countries. We are having a rice strategy, a tapioca strategy and all other strategies to tackle the problems systematically. We do have income inequality in this region, but the living standard has also improved. We are facing the challenges of globalisation."

Then he touched on the retail industry. "We've never tried to be aware of globalisation. We look at it as if it would not matter at all - mai pen rai. So when it does matter - pen rai - it's already too late. It has an enormous impact. When I arrived here, somebody was trying to put up a protest sign. I told him I was not coming to quarrel with anyone. We do have problems that need to be fixed," he said.

His message was that Isaan folk must wake up and face the challenges. For in the broadest perspective, Thailand aims at becoming a trading nation, an investment country, a service provider and a competitive nation.

Isaan residents must learn to compete, make good investments and expand the market as Thailand integrates with the Asean community. They need to improve the service sector, such as hairdressing, spas and massage, in order to create jobs. They can invest in small and medium-sized enterprises and the retail industry and open up speciality shops.

Thanong Khanthong

The Nation

Nakhon Ratchasima