BANGKOK – Thailand’s history of military coups has made policymakers too focused on political stability rather than foreign investment, according to a panel of experts.
At the CNBC 14th Asia Business Leaders Awards in Bangkok on Wednesday, issues like transparency remained major sticking points for investors hesitant to place their bets on Southeast Asia’s second-largest economy.
Foreign direct investment (FDI) in Thailand’s economy remains weak due to structural weaknesses likes high labor costs, availability of labor supply, and a lax regulatory environment.
“Thailand requires an attitude change. It has such great underlying strength, but areas like rule of law and corruption remain major hurdles,” said Curtis Chin, former U.S. ambassador to the Asian Development Bank and Asia Fellow at the Milken Institute.
“All this is very obvious, but the country is so involved in its political situation that they’re not addressing it.”
In May 2014, after more than seven months of political protests against the democratically-elected government, Thailand’s army chief, General Prayuth Chan-ocha, declared the military had seized power and later installed himself as prime minister, marking the 19th coup d’etat since 1932.
The timeline for a return to democratic elections has been pushed back repeatedly. Deputy Prime Minister Wissanu Krea-ngam most recently announced that a general election will be held by May 2017, according to local media.
The World Bank’s latest survey on the ease of doing business, released on Wednesday, reflected Chin’s views. The country, known as the “land of smiles” for its hospitality and friendly citizens, ranked 49th out of the 189 countries covered by the survey, down three spots from last year, and was eclipsed by frontier markets like Macedonia and the Slovak Republic. Continue reading…