Jetro, business groups stress need to fight graft, improve transparency
The Japan External Trade Organisation and two leading Thai private-sector institutions yesterday urged the ruling military junta to focus on reducing corruption and improving transparency to restore investors’ confidence.
Setsuo Iuchi, chief representative for Asean and South Asia of Jetro, told a seminar held by the Board of Investment yesterday that while Japanese investors wanted Thailand to return to democracy, they would also like to see the National Council for Peace and Order reform the economy for medium- and long-term development benefits.
“Of course, we would like Thailand to return to democracy as scheduled. But at the same time, we want to see reforms, not only in politics, but also economic reform.”
Iuchi said the NCPO should take this opportunity to kick-start good governance that includes combating corruption and ensuring transparency in social systems and business rules such as those regarding competition and intellectual-property rights.
“In the ’80s, Thailand made a great effort to develop its infrastructure. In the 2000s it opened up [its] economy to the world. Now I think it’s a good time for Thailand to [bring about] good governance for the new era, in a bid to restore investors’ confidence,” he said.
“I hope Thailand won’t only return to democracy but also make fundamental reforms.”
Iuchi said that despite Thailand’s political problems, Japanese investors remained committed to the country’s development long-term.
“At the same time, they don’t want this kind of situation to repeat again and again in the future. And they want Thailand to compete well with other countries, having a good business environment.”
The NCPO announced on June 28 a three-phase road map towards a nationwide election that would lead to the return of democratic government in October next year.
Jetro has stressed the importance of three issues: transparency of government procedures, respect of the market economy and avoiding intervention in the market mechanism, and opening up the economy to more competition.
Iuchi said this should happen “not only [in] the manufacturing but also the service sectors. Step by step is OK, but you should continue to open up” the sectors.
Echoing Jetro’s view, Kobkarn Wattanavrangkul, vice chairwoman of the Board of Trade of Thailand and chairwoman of Toshiba Thailand, told the seminar that the country should take this opportunity to tackle many critical issues that hindered its national competitiveness. The issues of corruption, education, productivity, and water management needed attention if the Kingdom was to rebuild its foundation to ensure sustainable growth in the future.
“Some say we are stepping backwards because of politics and diversions, but these are just part of [the problem]. Don’t think that after we have an election, everything will shoot up.
“Our problem is competitiveness … to be straight, the quality of Thai people,” she said.
Kobkarn said Toshiba had factories in Thailand, Indonesia and Vietnam that produced the same refrigerator products, but Thai factories used more workers and produced fewer products per minute.
Thai companies and their workforces must not sit idle but strive to strengthen themselves, developing their value-added and innovation capabilities, she said.
Toshiba Thailand, for example, has not just waited for instructions from its parent firm in Japan. The Thai subsidiary has successfully researched and developed its own refrigerator products that cater well to the specific needs of local consumers, thus helping to create new demand in the local market.
Kriengkrai Thiennukul, vice chairman of the Federation of Thai Industries, told the BOI conference that politics was the No 1 factor that eroded investors’ confidence, followed by corruption.
At a recent meeting with Industry Ministry officials, FTI representatives were told that the ministry would not only reform the approval procedures for Ror Ngor 4 factory permits, but also BOI, Thai Industrial Standards Institute, and mineral exploration and production licences, he said.
The BOI yesterday revealed the results of a survey conducted before the May 22 coup showing that 98 per cent of foreign investors who responded to the poll remained confident in maintaining or expanding their investments in Thailand. Dr Rachda Chiasakul, partner and director of Bolliger & Co, who conducted the survey for the BOI, said an in-depth survey conducted via face-to-face and phone interviews with 32 foreign investors after the coup showed that they had positive views over Thailand’s political change over the short term, but for the long term, they still wanted the country to return to a normal situation.
The report on this survey said: “Investors are not confident with the economic policy under the management of the NCPO over the long term because they are still concerned about the situation and acceptance from international [communities], which make it difficult to lay a long-term business plan.
“A majority of investors want to see a return of elected government to bring back investment confidence fast.”
Four of the 32 interviewees said they planned to reduce their investments in Thailand. All four cited politics as the main factor, the report shows.