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Published on July 27, 2007

This turmoil is predictably dampening economic growth in the short term. The economy is, according to the government, only expected to grow 4 per cent this year, after years of growth at 6 per cent or higher.

In the long term, there is reason to be concerned as well, as decisions put in place now could influence the future of Thailand's economy. A good example of this is the government's decision to take a club to American and European companies in the pharmaceutical industry.

The government issued "compulsory licences" on medications used to treat Aids and heart disease, removing patents from Big Pharma and turning over those rights to the Government Pharmaceutical Organisation. Taking on Western drug companies has proven politically popular for a temporary government in dire need of political successes. The decision also led to lower prices for medicine.

But Thailand's government continues to refuse to lower its prices, and in the case of generic versions of efavirenz, has even refused an offer to provide the drugs to patients in Thailand for free! The Global Fund for Aids, Tuberculosis and Malaria has offered to pay for efavirenz copies from India, but the government has refused. Similarly, Thailand has thus far refused the latest offer from Abbott for Kaletra, despite the latest price being lower than any generic in production. Brazil has declared victory in the negotiations and locked up the latest prices for its patients. Thailand's government, on the other hand, seemingly does not want to move on from its one popular policy.

For political reasons, Thailand is more interested in continuing to fight big drug companies (otherwise the government may have to focus on more unpopular policies, such as the draft constitution, the crackdown on free speech and the rapidly expanding military budget). Obviously, playing politics with Aids drugs is dangerous for Aids patients who need medication to survive. But these actions also threaten Thailand's future economy as well.

The use of compulsory licences means Thailand will be reduced to copying existing drugs, since domestic companies will lose incentives to pursue the very costly process of discovering new treatments on their own. This means medicines that could advance public health in Thailand may go undiscovered, but it also jeopardises growth in a sector that offers large numbers of high-wage jobs.

Thus instead of taking a step forward into the knowledge economy, the compulsory licences mean standing still, or moving backward, and keeping Thailand's economy focused on manufacturing, which offers relatively low-wage jobs and stiff competition from other markets, such as China.

Stifling the knowledge economy in Thailand will also have a long-term toxic effect, as it will drive many of our brightest young people to other countries for employment, where there are more opportunities and where intellectual property is protected. This "brain drain" is not something Thailand can afford.

There is going to be a high price to pay for the politics being played with compulsory licences. Medicines are cheaper now but the government insists on continuing the fight. In doing so, they have marked Thailand as an enemy of research and development for medicine.

All of this damage to Thailand's reputation in the global marketplace has delivered some savings. But are the savings worth it? These actions are only projected to save Bt800 million - less than 0.05 per cent of next year's Bt1.66 trillion overall government budget.

Thailand is now seen around the world as a country that is hostile to intellectual-property rights. It is time for Thailand to declare victory in its negotiations and end its fight with drug companies. We cannot continue to publicly punish a key industry for our future innovators and still expect our economy to remain strong over the long term.

Attawut

Bangkok

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Equivalent of FBA would cause an uproar overseas

Re: "Foreign business act on schedule", Business, July 26.

I have just read that the National Legislative Assembly is considering management control, in addition to voting rights, as defining a company as "foreign" under the Foreign Business Act (FBA), according to Skol Harnsuthivarin, a Commerce Ministry official.

According to Skol, the draft is due to be tabled soon for its second and third readings and is likely to be passed by the interim government.

Does that mean that all Thai companies that have foreign managers will have to shut down or appoint unknown and unwanted Thai staff, or will they just find yet more devious means to circumvent this proposed amendment?

It is undeniably backward looking, not to mention the overtly racist overtures from the committee members who have dreamed this one up.

This type of legislation is typical of this government. Imagine the outcry if Western governments imposed this sort of bill on Thai ownership of companies overseas. I wonder if these guys would admit that this legislation is unacceptably xenophobic? They probably wouldn't care. But like the holding page on truethaksin.com, these members should be asking themselves if "The Truth Shall Set You Free".

James Groveway

Bangkok

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Sympathies for Thaksin hard to shake in Isaan

My gratitude to Carolyn for her letter in yesterday's paper ("DAAD's protest Sunday anything but democratic"). She captured my opinion better than anyone else. Just let me allow one comment. Carolyn wrote: "It is also depressing that the international media seem to overwhelmingly confuse a small group of 'paid' rural Thais in a 'rally', with the sentiments of the grassroots majority."

I am very sorry to say that the majority of the grassroots people in Isaan support Thaksin blindly. Their support is such that people with a contrary opinion don't have the courage to air their views.

Egon

Bangkok

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Price-tag on bullet-proof vest purchase seems high

Re: "Bt1 million payout for 46 injured cops", News, July 26.

It is reported that Pichet Jiamburaset, president of the Thai Bus Business Association, recently donated Bt5.8 million to purchase 40 bullet-proof vests for the police working in the three-southernmost provinces. While the Thai Bus Business Association should be commended for this generous and necessary donation, the cost of the contract for the body armour raises questions and directly affects police safety.

I happened to see the press conference and saw the type of body armour being sent to the South as a result of this donation. The reported cost for each unit is Bt145,000. In my experience, including 34 years in law enforcement, even if the bullet-proof vest I saw had a steel or ceramic trauma plate installed, the price should only be about half as much. For Bt145,000 you can purchase high-quality protection called tactical police/military body armour. This type of body armour covers more of one's body and offers much more threat protection against higher calibre weapons.

I hope the government, police or the Thai Bus Business Association reviews the terms and conditions of this contract and makes sure our soldiers and police get the best protection money can buy and that the contract has not been inflated.

David Barkdull

Bangkok

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