This week, there are coincided incidents in Thailand, Venezuela and Japan regarding the impact from the changes of business laws in these three countries. Please read this story and see what you think.

By Jeerawat Na Thalang

The Nation

If you think that the Thai foreign business law is unfriendly to the foreign investors, try Venezuela or Japan.

This very same week that Thai Cabinet was approving the drafted amendments of foreign business act, Venezuelan President Hugo Chavez was proposing to nationalise the country's energy and telecommunications sectors.

In Japan, Citigroup Inc has moved to sharply downsize its consumer finance operations in Japan in response to stricter laws. The move was announced this week after Japan's parliament passed laws to place limits on rates and cap loans. Foreign companies would have to adjust themselves to comply with the rules.

Amidst the force of globalisation, countries are facing dilemma: how can they open up the market to foreigners without hurting the locals?

While emerging countries such as Vietnam and India are revising their laws to welcome foreign companies, countries such as Venezuela recently decided to walk opposite direction. Chavez vows to nationalise the country's biggest telecommunications and electricity, both controlled by US firms.

Propelled by the nationalistic sentiment, Chavez began his new sixyear term as president by planning to speed up the socialism.

Although his statement received criticism from Washington, whose relations with Chavez have been strained over the past years, Chavez's plan somehow connects with voters. He managed to turn the anticapitalism into political kudos at home.

In Japan, meanwhile, Citigroup, one of the world's largest financial services firms, said it will close all but 50 of its 320 branches, and shut down 100 of its 800 automated loan machines located throughout Japan after a toughening environment for consumer lenders.

Citigroup's announcement came less than a month after Japan's parliament passed new legislation that would slash the maximum loan rate to 20 per cent from 29 per cent and set a limit on loans to individual customers, in a move lawmakers say would protect consumers from borrowing beyond their means.

The legislation directly affects the foreign firms operating consumer finance industry, which grew rapidly during the country's leconomic slump in the 1990s. At that time, Japan's troubled banks scaled back lending. Citigroup however said it was not planning to withdraw completely from the sector.

In spite of the coincided timing, the rationale behind each country's decision is different. Venezuelan motive is purely political aimed to guard the two strategic secetors against foreign domination.

Tokyo does not mean to drive away foreign business but its decision aims to protect local consumers from overexposure to easy foreign money.

In Thailand, Commerce Minister Krirkkrai Jirapaet said the amendments were to promote the good governance in the business in aftermath with the scandalous Shin Corp's takeover by Temasek Holdings of Singapore.

While the details of the law have barely changed from the old one lastly revised in 1999, the government tightens the definitions to address the question of nominee to prevent some investors exploit the legal loopholes in the future.

Despite the Cabinet's we assumed good intention, the timing for amending the law may not be far from perfect.

Chavez managed to score domestic support for his nationalisation plan because of strong votes he just received and the country's oil resources that would enable the government to buy oil companies.

Japan's business sentiment is at their most upbeat in two years, according to the latest consumers' confidence surveyed late last year.

The backdrop of Thai political and economic situation is different. The drafted law was passed when the foreigners started turning back from Thailand after a series of incidents.

The Bank of Thailand's draconian capital control measures introduced since December 19 have raised fears that Thailand is turning its back to globalisation. This has hurt sentiments in the financial markets and potentially might harm foreign direct investment in the long term.

A series of bombings on New Year's Eve have also alarmed investors over political stability.

In fact, the drafted law has barely changed from the old one, revised the last time in 1999. It simply makes the definition clearer and tries to plug the loopholes on nominees used to circumvent the ownership law. Foreign investors are still free to invest in Thailand in most of the business sectors, just like most other countries in this world.

However, no matter how good the intention of the draft law is, if the timing is wrong, then it can create an impression that Thailand again is shooting itself at the foot.