On 8th May 2014, the Nordic Chambers of Commerce, in cooperation with the Thai-Canadian Chamber, held the monthly breakfast seminar at the Grand Millennium Sukhumvit Hotel. The key presentation of the seminar – “Current Political and Economic Situation” in Thailand – was delivered by guest speaker Dr. Kongkiti Phusavat, Associate Professor, Faculty of Engineering, Kasetsart University. The seminar was attended by around 30 participants.
The presentation began with a word of caution from the guest speaker that his prepared speech for the seminar had become “out-of-date” already, due to the previous day’s incident – the ruling of the Constitutional Court to oust Prime Minister Yingluck Shinawatra on 7th May. Nevertheless, the presentation went ahead to give the audience a unique insight into Thailand’s politico-economic reality.
Dr. Kongkiti Phusavat talking about the Political and Economic situation in Thailand
at the Grand Millennium
Dr Phusavat mentioned that according to The Revenue Department, out of a population of 65.4 million in Thailand, slightly more than 2 million contribute to and make up Thailand’s tax base of personal income taxes every year, meaning essentially that the government’s policies may not reflect the long-term benefits for those who are contributing financially to the system. He added that this disparity in the number of tax-payers allows the government to make decisions without proper consideration to the ‘minority’ that pay taxes. For instance, productivity and quality in the agriculture sector should have been of utmost importance instead of focusing on the quantity side. He further added that the question of sustainability of the populist initiatives is raised as a result of a failure to expand the tax base of the country.
In this context, Dr. Phusavat expressed his concern about the possibility of Thailand sharing the same fate as the Korean peninsula – the division of the country as a result of the large economic and social divide. He described that according to the UN Human Development Index, which includes social and economic factors, Thailand is divided into two primary areas – the northern and northeastern regions where poverty is high, and the southern and central/eastern regions which have enjoyed more prosperity. Unfortunately, said the guest speaker, the past governments only tried to focus on winning the election by strategically regionalizing the country, which has added to the long-term economic and social divide which hinders the country’s development.
Dr Phusavat then went on to say that the country’s current political impasse highlights the need to reform the public sector, and that it had been weakened by political interferences and reshuffles without due consideration in the last two decades. For instance, the life-span of key provincial governors in their office is little over one year; the continuity in provincial development cannot be sustained. More importantly, the performance assessment in which the public sector tries to emulate the western practices has been linked with the reshuffle. As a result, said the guest speaker, the failures of the public sector can be seen in tackling complex social and economic issues, such as the floods that took place a few years ago when there was a breakdown in the responses by various public agencies.
According to the guest speaker, the emerging problem now for not having the functional governing body is the use of public sector funds to stimulate and sustain the growth in the economy, and that there is no new investment since the country only has an interim government without the Lower House of the parliament.
Another challenge facing Thailand in future is the composition of the population. The size of the ageing population keeps increasing, while the number of people able to work is decreasing. Dr. Phusavat fears that within a period of 20-30 years, the size of the ageing population could surpass the size of the labor force. The presentation also touched upon the infrastructure investment situation in the country, in comparison with Thailand’s Southeast Asian neighbors.
Participants at the breakfast seminar paying close attention to what to the presentation
Towards the end of his presentation, Dr. Phusavat expressed his grave concerns about Thailand’s political and financial future. However, he did present a refreshing aspect of Thailand to the audience – a slide dedicated to Thai food, while he described the traditional Thai diet as one of the healthiest in the world. During the Q&A session when asked about the possibility of a civil war, Dr. Phusavat lightheartedly referred back to his slide on Thai food and remarked, “The Thai people are more into food than into fighting”, and added that a civil war is unlikely in his opinion – “When people’ stomach is full, they don’t fight.”
From the left Jan Eriksson- President of STCC, Mark Spiegel – President of TFCC, Dr. Kongkiti Phusavat, Dr. Supareak Charlie Chomchan – Vice President DTCC, Thomas Nyborg – President DTCC
After a few questions from the engaged audience during the Q&A session, the event ended with the participants thanking Dr. Kongkiti Phusavat for his insightful presentation on the current political and economic situation in Thailand.