Thais Learn Not to Keep Business All in the Family

Article excerpt

Thailand is the "good child" of the Asian crisis.

As thousands of angry South Koreans protest rising unemployment and Indonesia's shattered economy slides into oblivion, this easygoing nation of 60 million is setting quietly about reform.

Led by Prime Minister Chuan Leekpai, a soft-spoken lawyer with a reputation for honesty, the Thai government has begun to remodel a political and economic system that, though broadly democratic, had become riddled with corruption. Thailand on May 26 asked the International Monetary Fund to relax the terms for its $17.2 billion rescue package, warning of a more severe recession than expected. But overall progress has been impressive. In less than a year, Thailand has approved a new reform- orientated constitution, instituted a shake-up of its archaic central banking system, and begun drawing up laws that will give enhanced rights to creditors and investors alike. Many of those held responsible for Thailand's economic collapse now face the prospect of trial or dismissal. "They're going to turn the Central Bank upside down," says analyst Martin Clutterbuck, referring to the shake-up in which the central bank head was forced to resign. Moves like that, the promise of a new bankruptcy law, and a ruling that will require listed companies to institute thorough internal auditing are restoring confidence. But it will take more economic hardship to break the habits of decades. "It's certainly difficult to change relationships in a short time," says Richard Bernhard of the Kenan Institute in Bangkok. "You need to get the right mechanisms in place." During the boom, when economic growth seemed like an unshakable certainty, much of Thailand's corporate culture revolved around a relatively small clique of families, politicians, and friends. …