Economic loss could amount to Bt40 bn if siege lasts until end of month
Thailand’s corruption image reached a critical point last year and is expected to continue worsening this year, despite the growth of the anti-graft campaign during the past four years, according to the University of the Thai Chamber of Commerce.
Meanwhile the economy could face a loss of Bt20 billion to Bt40 billion if the chaotic “Bangkok shutdown” movement, whose supporters say they want to uproot graft in government, lasts until the end of this month.
The Thai Industries’ Sentiment Index last month plunged to 88.3 from 90.3 in November, the lowest in the 25 months since December 2011. Businesses believe that the political conflict will not be resolved in a short time and will strangle consumer spending. An index score below 100 indicates weak confidence.
Rising production and energy costs also added pressure on the index in December, Payungsak Chartsutipol, chairman of the Federation of Thai Industries (FTI), said yesterday.
The FTI conducted the survey on 1,025 operators in 42 industries. For confidence in the next three months, the sub-index edged down to 100.9 from 101.4 in November.
The university’s Economic and Business Forecasting Centre’s survey found that the corruption perception index dropped dramatically, from 41 in June to 39 in December.
“People have acknowledged that the corruption situation in the country is getting worse,” said Thanavath Phonvichai, director of the centre. “They still see bribery in business deals between government agencies and companies, while they are worried about the many projects implemented by the government that could lead to corruption such as rice pledging, local development, Bt2 trillion worth of infrastructure development and the Bt350-billion water management programme.
“Corruption can be found particularly among politicians and civil servants,” Thanavath claimed.
The university also reported that according to a global corruption perception survey among 177 countries, Thailand’s ranking plunged from 88 in 2012 to 102 last year. This indicates that the world is concerned about corruption in Thailand, while other countries in Asia boast better rankings.
Corruption in the Kingdom will not improve this year. But the political demonstrations, which have touched on the problem, should help build people’s awareness of and help eliminate graft from the country, he said.
“To get rid of fraud, it could take a long time, 10 or even 30 years. But it’s time that Thailand looks seriously at how to eliminate the problem, as this has damaged the country’s development for too long,” Thanavath said.
Need for bribery
Based on the survey of 2,400 respondents, up to 75 per cent of enterprises that have to do business with government agencies need to bribe politicians or government officials to win contracts. Bribes eat up about 25-35 per cent of the total budget of each project. This could add up to Bt300 billion a year.
Based on the government’s Bt2.4-trillion budget for 2013 and the cost of corruption at 35 per cent, the damage would be 2.63 per cent of gross domestic product. If the cost of corruption were 30 per cent, the damage would be 2.25 per cent.
If the cost of corruption were 25 per cent, then it would be 1.88 per cent. To solve the problem, 31 per cent of respondents said politicians should be targeted for clean-up, 29 per cent said civil servants and 23 per cent said businesspeople. People said Thailand needed to raise awareness of morality, ethics and the need to make each state project transparent, with the government revealing relevant information on such programmes clearly.
Thailand needs to amend some laws and tighten rules and regulations, while strictly enforcing existing laws to punish those who are corrupt, they said.
The university projects GDP expanding only 1-2 per cent this quarter because of the political conflict.
Thanavath said the losses to the consumer and tourism industries could run about Bt5 billion to Bt10 billion a week. If the situation is prolonged, the economy might grow by only 3-4 per cent this year, held down mainly by the slowdown in consumption and tourism.
The FTI’s Payungsak said the Bangkok shutdown had dampened economic activities but not to a serious level. However, customers of manufacturers have delayed their purchase orders to see where the political situation will head.
The private sector wants to see the political situation return to normal as soon as possible, he said.