Magazine article Business Asia

Thailand's Reform Path Strewn with Potholes

Magazine article Business Asia

Thailand's Reform Path Strewn with Potholes

Article excerpt

The Thai Government has won praise from Western analysts for earnestly tackling its economic problems, but the pace of change is still unsatisfactory.

Thailand's bid for economic recovery has proven a far more wrenching and drawn-out process than many had imagined.

The path to reform and recovery has been strewn with mines, with political rivalries, vested interests, red tape and corruption combining to impede the process, analysts said.

Prime Minister Chuan Leekpai's government has prescribed IMF-recommended remedies to get the economy back on track, but has often found itself straightjacketed when trying to implement them.

"Things are not moving as fast as they should ... not as fast as the government wants them to. It's frustrating," said Ms Arporn Chewakengkrai, one of Mr Chuan's economic advisers.

The latest example of how hard it has been for the government to push its reform agenda is the battle over crucial bankruptcy legislation.

The original bankruptcy bill, one of 11 economic reform bills proposed by the government, was aimed at tightening up the country's bankruptcy and foreclosure process.

The lack of such a legal framework has been blamed for massive non-performing loans, which currently stand at around 50 per cent of total lending, as well as snail-paced debt reform.

Members of the upper house of parliament, or Senate, many of whom hold big debts themselves and stand to lose if the bill goes through, have attempted to delay its passage by proposing sweeping amendments to the government draft.

Senators deny they are acting to defend fat-cat business people, saying the interests of ordinary Thais are at the core of their objections.

"If the government version of the bankruptcy bill is passed, many people, not only businessmen, will suffer. This is not a normal economic situation," said Senator Niramon Suriyasat, chairwoman of Toshiba (Thailand). …

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