Re: “Ministry to review nod for skilled foreigners”, News, June 2.
You story quotes Thai accountant, architect and engineer societies as opposing liberalisation of the country’s restricted sectors under the so-called Foreign Business Act. This law, which has existed since the 1970s, purports to protect fields in which “Thai business is not yet ready to compete with foreigners”. Fifty years later, there has apparently been no progress.
This is a self-fulfilling prophecy. If you close a sector to competition, it will never become globally competitive. Economics 101 teaches that an externality such as this protectionist law which appeals to nationalism leads to inefficiency. Singapore has per capita income five times that of Thailand and is ranked as the most competitive economy in the world because it draws talent from all over the world. The late prime minister Lee Kuan Yew bragged that Singapore had Russians serving in the army and that the police chief was from Scotland. Can you imagine this ever happening in Thailand? On the contrary, in Thailand the big banks and conglomerates say they employ no foreigners.
If that is an advantage, since presumably they don’t need foreigners, then what is the need for the foreign business law?
The Thai economy has been puttering along at an unimpressive rate for the past 20 years, after having been ranked by the World Bank in 1990 as the fastest-growing economy in the world. In the 1990s Thai people said Thailand was going to be Asia’s “fifth tiger”. Nobody makes these claims today, which now sound grandiose, although Thai tourism is booming precisely because the country is open to foreigners, not closed.
All ships rise with the tide. It is better to have a bigger pie. The foreign business law and more importantly the third world mentality that it comes from needs to be repealed so that Thailand can say to the world, “Anyone can do business here.”
Unfortunately, Cambodia, which started out with the most liberal economy in the world, ranked No 1 most open out of 120 assessed, is now starting to copy Thailand’s beggar-basket labour and visa laws. This is a road to permanent developing country status.