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Several foreign born students living in California have completed a study of their home country governments' economic policies as compared to the MIEPA list of policies as outlined above. The study as written by Duangjai Atipornpanich on Thailand is shown below. The ratings herein are based on the following rating scale:
5.0 Perfect Facilitation of Wealth Creation
4.0 Midway between Perfect and Neutral
3.0 Neutral Effect on Wealth Creation
2.0 Midway between Neutral and Obstructionist
1.0 Perfectly Obstructionist to Wealth Creation
[Rating scale copyright Mike P. McKeever, 2016. Used herein with permission]
To read a disclaimer about the analysis in this file, scroll to the bottom of the file.
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Comparison of Thailand's economic policies to MIEPA criteria as prepared by native student Duangjai Atipornpanich of Thailand studying in the US in the Spring of 2016.
RATING SUMMARY POLICY NUMBER RAW SCORE ADJUSTED SCORE POSSIBLE PERCENTAGE 1 5.0 15.0 15.0 100 2 1.0 3.0 15.0 20 3 2.0 6.0 15.0 40 4 4.0 12.0 15.0 80 5 5.0 15.0 15.0 100 6 5.0 15.0 15.0 100 7 3.5 10.5 15.0 70 8 2.5 7.5 15.0 50 9 2.0 6.0 15.0 40 10 1.0 3.0 15.0 20 11 3.0 9.0 15.0 60 12 5.0 15.0 15.0 100 13 1.0 2.0 10.0 20 14 5.0 10.0 10.0 100 15 5.0 10.0 10.0 100 16 2.0 4.0 10.0 40 17 2.0 4.0 10.0 40 18 2.0 4.0 10.0 40 19 2.5 5.0 10.0 50 20 4.0 8.0 10.0 80 21 1.0 2.0 10.0 20 22 3.0 6.0 10.0 60 23 2.0 4.0 10.0 40 24 2.0 4.0 10.0 40 25 2.5 5.0 10.0 50 26 2.0 4.0 10.0 40 27 1.5 3.0 10.0 30 28 2.5 5.0 10.0 50 29 5.0 5.0 5.0 100 30 4.5 4.5 5.0 90 31 4.0 4.0 5.0 80 32 2.5 2.5 5.0 50 33 4.0 4.0 5.0 80 34 3.5 3.5 5.0 70 TOTAL 102.5 220.5 370.0 59.6% ===== ====== ===== ====
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1. Freedom from internal control 5.0
Thai people have the opportunity to move inside the country freely without any kind of obstacles from the government. The freedom of the individual is protected by the law and anyone can do as they please as long as it is done within legal boundaries. Thai people are free to move within the country as well as in the neighbor countries without any type of interference from the government.
2. Freedom of speech 1.0
Thai people are fear of free speech because of the Thai royal family and the military power. Insulting Thai royal family is a crime. It would be even more sensitive if a foreigner talked about the king of Thailand as Mr. Davies Glyn, the United States ambassador, did. According to the New York Times, although Mr. Davies praised the king in his remarks, Thai police were investigating his case for a possible insulting crime.
3. Effective, fair police force 2.0
Police are one of the most corrupted forces in Thailand. It is not unusual to see Police taking part in scams, especially against foreigners. Even among ThaiŐs often there is a problem related to Police violence. While citizens are protected, it is extremely hard to fight and win a case in court with the involvement of the police force. Often, the richest and the wealthiest people have control over these, while the poor do not receive any service.
4. Private property 4.0
Foreigners prohibit from owning lands in Thailand. However, it is wide-open for any foreigner to buy condominiums. There are no restrictions or visa requirements, but they only can buy within a quota. This law benefits Thai people to keep their lands for their next generations. Otherwise, there would be no land owned by Thai residents later on.
5. Commercial banks 5.0
Many businesses in Thailand use commercial banks' services for their businesses' activities. There are 24 commercial banks and over 7,000 branches. The four largest commercial banks, ranked by their total assets, are Bangkok Bank, Krung Thai Bank, Kasikorntbank, and Siam Commercial Bank. The commercial banks also have many campaigns to support small businesses and startups actively. Moreover, Kasikornbank or KBank joins Workpoint Entertainment to create a popular television program, “SME Tee Tak,” which is also a Thailand's first business reality game show. The candidates from small and medium enterprises (SMEs) come to the show and pitch their businesses in three minutes to win over the judges. Whoever wins the game will get business opportunities and a prize of one million Baht from KBank.
6. Communication systems 5.0
The communication facilities in Thailand are getting better and better. The most common way of communicating for people are cell phones, internet, television, and newspaper, Not only these means of communication benefit individuals, but also the businesses to operate effectively. For individuals, computers and smartphones seem to be the most common and convenient technological devices for their everyday life. For businesses, they use online conferences to help them host a meeting anywhere. There are various internet providers but TOT has the largest coverage in the country. Public WiFi is accessible In the major cities.
Cell phone service providers are also ubiquitous and the coverage is good in the city and is being improved to reach remote areas of the country.Television is still one of the most influential mean of communication. TV shows and movies of various kinds are transmitted every day to the Thai public. While the number of public channels available is not many, cable is an option many adhere to get news and entertainment. Lastly, newspapers are largely read throughout the country.
7. Transportation 3.5
Thailand has many types of transportation such as planes, subways, buses, sky trains, ships, cars, and motorcycle. Either exports or imports, the logistics companies and freight and shipping companies use trucks as their transport network in Thailand. They mostly use trucks to transport their raw materials and finished goods to the main cities and countrysides. Conversely, the cities use trucks to transport products to these companies. Moreover, these trucks often drive on poor roads in order to reach some cities.
8. Education 2.5
While the literacy rate in Thailand is very high, this cannot be associated with a good educational system. In Thailand private education is predominately public. The government provides 12 years of education for free for Thai residents and citizens, with at least a nine years of mandatory attendance. The language spoken in many Thai schools is Thai, but English is also a prevalent language, especially in private school. The school division is similar to the Western countries, ranging from Kindergarten to high school. The number of higher educational institutions is around 150,both private and public. While the private universities are self-sustained, the public ones are financed by the government. These are also considered to be the educational institution in the country. The most prestigious University is Chulalongkorn University.
9. Social Mobility 2.0
Thai society still favors to people who come from wealthy families and some of those families gain trust from their social status in doing businesses. However, their businesses often control the market over small businesses and it makes those small businesses difficult to grow. The poor is still poor and the rich is still rich.
10. Freedom from outside control 1.0
Thai population is not free from outside control. While this does not occur as a result of a direct attack from a foreign country, many internal members of the government, exercise their power from outside the country. The major conflict from outside control is the supporters of the former prime minister Thaksin Shinawatra or Ňred shirtÓ that has been going on since 2008. After he was expatriated from Thailand, he has been ruling from aboard to intervene Thai policies through Ňred shirtÓ movement. Moreover, he also influenced his younger sister Yingluck Shinawatra to be a prime minister in 2011 to 2014, so he can use her power to alter the policies for benefiting his businesses and destroying Thailand. Many violent events occurred because of this conflict such as bombing, protesting, and manipulating Thais against each other.
11. Protection of domestic enterprises 3.0
In the most recent year, the government has new rules of foreign investment to protect domestic enterprises in doing business from foreign enterprises. The new rules focus on industrial businesses, for example, under a preferential program, the used life of an imported secondhand machinery has now been shortened to less than five years instead of ten years. This rule will make it difficult for foreign investors to take advantage of the program.
Several years ago, many businesses in Thailand were in continuous competition against multinationals from the western world which had saturated the market. People were willing to spend money to get products or services that they believed to be a higher quality because of the brand and marketing that these companies had implemented. Thai government did not rule against these corporations and thus did not give an opportunity to smaller and medium size businesses of the country to grow.
12. Foreign currency transactions 5.0
All foreign currencies must be converted to Baht in order to conduct businesses in Thailand. Within the country, people only use Thai currency between businesses. Currencies such as US dollar and Euro are accepted but according to the law, within a year of the time, the money that enters the territory of Thailand needs to be either converted to the local currency or deposited to the Foreign Currency Deposit (FDC).
13. Border control 1.0
Smuggling is a non-stop issue in Thailand such as human trafficking and drugs. I have seen news about drug smugglers on Thai newspaper almost every day. The drug is a big problem that the government has been trying to control. However, the drug smuggling keeps continuing to occur. According to the Office of Narcotics Control Board (ONCB), only 20 percent of the drugs is seized each year. This means that the 80 percent is spreading in the country, which causes other related problems such as drug addicts, unemployment, crimes, and so on.
14. Currency 5.0
The currency of Thailand is Baht which produced by the central bank, Bank of Thailand. We use banknotes and coins. Thai notes are THB 20, THB 50, THB 100, THB 500, and THB 1000. Thai coins are 25 satangs, 50 satangs, THB 1, THB 5, and THB 10. A hundred satang equal one baht. The value of THB 1 equals $0.03. Inversely, the value of $1 equals THB 35.18.
15. Cultural, language homogeneity 5.0
Thailand has various regional dialects, which are central Thai, Isan, Lanna, and southern Thai. The majority of the population speaks central Thai. However, the country has also minority languages such as Chinese, Lao, and Malay. This order also applies the culture in Thailand as well.
16. Political effectiveness 2.0
The government has a difficult time solving and predicting issues such as terrorism or natural disasters. One of the factors that cause terrorism is a political issue, especially the South Thailand insurgency. This ineffectiveness has affected Thailand economically. This national conflict has been an ongoing issue since 1960. Moreover, it had severely become violent in 2001. The government is not capable of fixing this problem because the terrorists have residents, who live in the three southern provinces, as hostages. Mainly, they have been trying to seize the southern area of the country.
From a natural disaster standpoint, the Thai government has always been caught off guard during major natural disasters, such as the Tsunami in 2012, where the government was completely unprepared, causing the death of many and also causing an economic downfall.
Humanitarian Logistics, page 133
17. Institutional stability 2.0
Thailand's major government institution have not been very stable. The education system, for instance, has lacked reforms, that is needed to improve the scholastic career of students. The Thai police are extremely corrupted and is often accused of bribery. The court system is favorable to the richest and often does not take into consideration what is right. However, being a constitutional monarchy, Thai government has always remained pretty stable. Other institutions such as postal service also have not shown instability in the past decade.
18. Honest government 2.0
Although Thailand has the legal system and institutions to counter corruption, Thai people have faced bribery. According to the Transparency International, Thailand has scored 38 and ranked 76 of 168 on the Corruption Perceptions Index 2015. Thailand is going toward the red zone of high corruption.
The most corrupt institution in the country is Thai Police and companies see them as an unreliable source. In August 2015, the terrorist attacked in Bangkok, and the investigation led to a bribe issue in exchange of crossing the border with fake passports.
19. Common laws 2.5
Although there is a legal system in Thailand, it is not always effective. Often the exception applies to rich people or those in high-level government positions. Cases such as APICO have demonstrated that poor often are not able to afford the justice in the country. This case is about the low standard operation that caused water pollution and illness in communities near the sites, but the case was dropped by military government as there was no problem occurred.
20. Central bank 4.0
Bank of Thailand, also referred as BoT, operates as the central bank, and it is the institution that prints the money in the country. The currency of the country is Thai Baht. The central bank has met international Best Practice, with high levels of accountability and transparency until 2008. Bank of Thailand is independent of any governmental influence and it has established various acts to do so. BoT Act is able to authorize the Monetary Policy Committee to manage exchange rate. Moreover, in recent year, BoT has been holding interest rate at a steady pace in the hope to increase government spending to improve the country's economy.
21. Domestic budget management 1.0
The government spends more money than it collects in revenue, which it has created a budget deficit since 2007. The government revenue has decreased close to a low record. This year, the government has planned long-term priority projects, which are crucial investments to help strengthen the domestic economy in the long run such as water-resource management and transportation. However, in the short term, the government is not spending any money towards the country itself. In order to improve the economy, the central bank has even kept the interest rate steady in the hope of increasing government spending, which has not occurred.
22. Government debt 3.0
The government debt has 50.6% of GDP in 2016. However, within this GDP, the government internal debt is about 98% of the total THB 4.4 trillion ($123.8 billion), which means the government will pay 98% of debt within the country. The government plans to overcome the internal debt by increasing job opportunities within the country.
23. Economic statistics 2.0
The census and statistics on the economy of the country are not reliable; however, many businesses have been established without an accurate knowledge of the statistic and of the potential growth or decline of businesses.
The external sector was an issue on growth as weak global demand harmed exports. Moreover, comparing to the unemployment rate to the same period as in 2014 increased from 0.6% to 0.7%. The population census of Thailand is conducted every ten years and the recent one was in 2010. Although National Statistical Office (NSO) has a census quality control for data collections, the post-enumeration survey was organized for only 2% of the total.
24. Protection of public health and safety 2.0
According to WHO Global Tuberculosis Report 2012, Thailand had about 86,000 TB incident cases and 11,000 TB prevalent cases in past year. Case detection rate of TB was 76% and treatment success rate was 85% in 2010. Thai government provides a free TB treatment, but they have only 12 regional offices, where each office covering 4-5 provinces.
For Childhood TB, most of all close family of TB patients below 15 years of age must take the Tuberculin Skin test (TST), but they often fail to do so due to the low number of services offering. Perhaps, it is also not a routinely practiced. Most of TB patients rely on public hospitals because they cannot afford private clinics. Only people, who can afford a private hospital, get diagnosed early. However, there are also people who are not able to access free healthcare services such as non-Thai migrants, homeless, and people who have no birth certificate or national identity number. Overall, the public and healthy safety of the country is low. The infant mortality rate was at 9.86% in 2014, which was a substantial decline from the previous years, yet very high. The average life expectancy of Thailand is 74.19 years.
25. High wage policies 2.5
While the wages of single individuals is not extremely high, the government has ruled to make it as fair as possible for workers to earn a decent amount of money to survive in Thailand. Since 2013, Thailand has introduced minimum wage policy with severe punishments for those who do not obey the law. The initial amount introduced was THB 300 a day, which applied for every kind of worker. This benefits the low-income families, as they were able to have money to sustain a family. The minimum wage is expected to increase in 2016. Even though a wage of THB 9000 is not a compelling amount of money, given the living cost of the country, it is enough for survival purpose. Most average workers earn a mean of 14,000 as of 2014, which allows them to rent, and spend money on everyday expenses.
Employees in Thailand also have the liberty and power to form unions and are protected by the law. These Unions can seek demands and have liberty to strike. On the other hand, laws regarding child labor are not as high. The minimum age to work in Thailand is 15, and often this can result in an abusive workplace, where children are forced to work more than regular hours with an incredibly lean paycheck.
26. Environmental protection 2.0
Poor management of Thai government affects the environment and national resources in the country. Recently, Thailand has a major water issue. The Food and Agriculture Organization (FAO) believes that Thailand might face the water scarcity by 2025 if Thailand does not act now and implement long-term strategies to improve water resource management. In Bangkok, the water in canals has dropped to very low levels that could come to a result of dry canals. These severe water shortages could result in running out of tap water in the capital city. Water shortages are not the only water problem that the country is facing, but also water pollution.
According to World Air Quality Index, the average of air pollution levels in Thailand is moderate. The cities in the southern part have a good standard of air pollution, but some cities in the north have an unhealthy level, especially Phrae. In 2015, the annual burning of land on Sumatra, Indonesia, caused its neighbor countries air pollution increasing over the public safety standard, including some cities in Thailand.
27. Strong army 1.5
In recent years, many devastating situations occurred in Thailand, such as the bombing in the capital Bangkok. While it is not usual for Thailand to face these types of attacks, especially from the foreign countries, they did occur, and the Thai government was almost never ready to defend. The Royal Thai Armed Force is the military in the country, and it is responsible for the protection of the country and of the king. In the most recent years, Thailand has tripled its defense budget going from THB 78.1 billion to THB 207 billion. The constitution of the Kingdom serving the army is a duty of all; however, only males over the age of 21 are drafted randomly and are subject to 24 months of service. Those who volunteer instead have to serve for roughly 18 months, depending on their education. The royal armed forces also include the Royal Thai Navy, Royal Thai Air Force, Royal Thai Police. The current commander in chief is Bhumibol Adulyadej, the King of Thailand.
28. Foreign trade impact 2.5
Thailand is the 23rd largest export-oriented economy in the world and has 65% of GDP from only the exports account, which means the country depends on foreign markets. It is true that the situation creates more job opportunities and businesses to grow internationally. However, Thailand needs to be careful and overlook the economic event of the primary export partners.
According to Bangkok Post, China is the largest export partner of Thailand, especially rubber, and Thailand is the largest rubber exporter to China. Due to China has been reduced the trade since 2014 until this year, 2016, it has impacted on Thailand exports hurtfully.
29. Management of foreign currency budget 5.0
Thailand mainly exports manufactured goods with electronics, machinery and equipment, and food. The major export partners are China, Japan, United States, European Union, and others. The country mainly imports raw materials, intermediate goods, and others. The major import partners are Japan, China, European Union, and others. In January 2016, Thailand exports and imports of goods and services have an almost equal number with $15,710 million and $15,470 million respectively. The balance is about 0.06%, which closed to zero.
30. Layers of collective action 4.5
There are three types of governments in Thailand, which has democratic decentralization, and they can be divided into the following groups: Central, Provincial, and Local government. The central government consists of ministries, bureaus, and departments. The provincial government consists of provinces. Each province is led by a governor (phu wa) and is divided into districts, which are run by a district chief (nay amphoe). Local government are controlled by a subdistrict chief or a village chief (kamnan), and they are elected directly by villagers from among the subdistrict's existing village heads (phu yay ban), who are elected by residents.
Schools in Thailand have decentralized management, which means the government gives authority and management responsibilities to school boards. The government and school boards acquire authority and resources in most areas, but some may be shared responsibilities.
Arghiros Daniel, Democracy, Development and Decentralization in Provincial Thailand Page 26.
31. Pro-business climate 4.0
Thailand has one of the most open market-oriented economies in Asia. Despite the installation of an interim military-led government, the country encourages foreign direct investment as a mean to promote economic development, employment, and technological advancement. In the past decade, Thailand has been competing with its neighbor countries such as China to lead on the foreign investment. As of 2015, hundreds of US companies had successfully invested in Thailand. The government encourages citizens to take initiative and become an entrepreneur. Opening a full-size business in Thailand is not as costly, and the opportunities that come with it are endless. Thailand is at the rank #49 of 189 economies to start a business. As a growing economy, the position of the country is continuously changing. However, investors and company both from inside and outside the countries have found Thailand to be a great place to start a business.
32. Government enterprises 2.5
There are nine industries, which are considered to be government enterprises: Energy, Transportation, Telecom., Infrastructure, Industry, Agriculture, Service, Social&Technology, Financial. The Thai government has 56 enterprises and over 300 subsidies. PTT, which is control of the gas and oil industry in Thailand, is two-thirds owned by the Thai government. In 2013, GDP of the state-owned enterprise was 10.46%. It has been increasing steadily.
While there are positive notes in the governmental enterprises, many companies that used to belong to the government are moving to the private sectors. And even though the remaining sectors are self-sufficient and create job opportunities in the country, they are not organized properly. Thai government does not know the exact number of subsidies, and that is because the government does not have enough capacity to oversee all the subsidies. In 2013, there were 10 SOEs which had a serious financial problem including the Thai Airways and the State Railway of Thailand. Thai people believed that the causes of the problem were the lack of good governance of SOE.
33. International security agreements 4.0
Thailand has been a member of the UN since 1946. The country has a good relationship with the United Nations where it served as the president of the general assembly in 1956. Thailand was also a non-permanent member of the Security Council from 1985 to 1986. The Thai government has always supported UN in activities related to the global peace, as well as the social welfare of the society and the promotion of the human rights. In most recent years, Thailand is seeking a non-permanent position on the UN security counsel for 2017.
At a continental level, Thailand is part of the ASEAN, founded in 1967. It has developed a relationship both from economic and political aspect with other Asian countries such as Indonesia, Vietnam, Singapore, Myanmar, etc. This economical bond has given the country more stability also from a security standpoint.
34. Protection of domestic enterprises from government mandated costs 3.5
Domestic companies in Thailand have a cost advantage in doing business imposed by Thai government setting corporate tax and VAT at 20% and 7% respectively. It can be considerable to start a business in Thailand. It will take both time and cost necessary to launch a commercial or industrial firm with 10-50 employees and start-up capital of 10 time the economy's per-capita gross national income. The procedures take about a month to register a company. Moreover, the associated cost is THB 400 (or $11 in 2016 approximately) to get a corporate seal.
However, there are VAT exemptions for certain activities, such as a company whose has revenues less than THB 1.8 million (or $50,366 in 2016 approximately), professional services (medical and auditing and lawyer in court), Sales and import of unprocessed agricultural products and related goods,... Moreover, the government has the Tax and Duty Compensation of Exported Goods Produced in the Kingdom Act B.E.2524 (1891) to lower the production cost of goods for exportation to support the businesses against foreign products both at international and domestic levels. The eligible applicants for the tax compensation are manufacturers of goods in Thailand or trading agents of exported goods which are produced in Thailand for exporting later.
DISCLAIMERAll the information and conclusions in each country analysis are solely the responsibility of the individual student and have not been verified, corrected, checked for copyright infringement or evaluated in any way by MIEPA or Mike P. McKeever. You are solely responsible for the results of any use you make of the information and conclusions in these studies. Use them at your own risk as interesting supplemental information only instead of seasoned judgements about the policy factors contained herein. Each student has granted permission for his or her work to be displayed here under his or her own name or wishes to remain anonymous and have either created a pen name or used no name at all; if you wish to contact them for any reason, forward your request to MIEPA and the student will be notified of your interest.
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