Thailand’s military regime may not have notched up any awards for furthering human rights or electoral democracy since seizing power in a 2014 coup, but it is winning a few battles on the business front.
In the World Bank’s annual ‘Doing Business’ report covering 190 countries released today, Thailand jumped to #26, up from #46 a year ago. It was one of the highest rises in a country’s ranking since the World Bank started compiling the multi-factor report 15 years ago.
“Thailand has made immense progress in doing business reform this past year, with strong government leadership at the highest levels,” said Ulrich Zachau, World Bank director for Thailand and Malaysia.
Thai Prime Minister Prayuth Chan-ocha, Deputy Prime Minister Somkid Jatusripitak and Finance Minister Apisak Tantivorawong have all been committed to pushing through reforms aimed at improving Thailand’s overall investment climate and will no doubt be pleased with the World Bank’s recognition.
“The government has made reform its top agenda and they have pushed reform into action,” said Thossaporn Srisamphan, secretary general of the Office of the Public Sector Development Commission (OPDC) tasked with studying and tackling obstacles to doing business in Thailand over the past three years.
In the latest Doing Business report, Thailand improved its performance in eight out of the ten areas monitored by the World Bank, which bases its rankings on survey results with the private sector. The eight areas of notable improvement included starting a business, access to electricity, registering property, access to credit, protecting minority shareholders, paying taxes, enforcing contracts and resolving insolvency.
The World Bank, however, noted that there was still plenty of room for improvements. For example, the time required to enforce contracts is 420 days in Thailand, while it is only 164 days in Singapore, the report noted.
Thailand did particularly well this year in terms of easing business startups by abolishing the need for a corporate stamp on all company share certificates, a time-consuming process, and by dropping a requirement that startups submit their employment regulations to the Labor Protection and Welfare Department before they can operate.
Such reforms have been difficult in the past because they required changing laws, usually a major challenge to Thailand’s past elected governments comprised of squabbling and horse-trading coalition partners.
“It would have been difficult under an elected government,” said Thai Deputy Finance Minister Kiatchai Sophastienphong. “To make reforms you need a good civil service but also commitment from the top. Under other governments the commitment might not be there.”
Along with pushing through reforms, another of Prayuth’s priorities has been tackling corruption, a well-entrenched practice in Thailand which is facilitated by myriad regulations and plenty of red tape. While many officials and politicians have been brought to book, critics claim graft-busting has only targeted the military’s political foes, not allies.
Transparency International, a global graft watchdog, notably downgraded Thailand on its global corruption perception ranking earlier this year.
The World Bank is understandably cautious about attributing economic achievements to political systems, a hot topic in Thailand which has been under military rule for more than three years with no date set yet for the next general election and a return to democracy.
“There is no correlation globally between the form of government, on the one hand, and progress of economic development on the other,” Zachau said.
Progress in the Doing Business ranking report boils down to strong leadership and competent administrators, he said.
“What happens is there is a strong commitment to reform from the people who hold the power to make changes, and underneath that power – either in consensual fashion, in open democratic fashion or in autocratic fashion – you need an executive entity that can make those changes happen. That’s what happens in all the countries at the top of the list.”
Thailand’s goal may not be so ambitious. Thossaporn said the country wants to become the second highest ranked country in the Association of Southeast Asian Nations (ASEAN) on the Doing Business list. In the 2018 list, Thailand was behind only Singapore (2) and Malaysia (24).