How bad is corruption in Thailand? A quick perusal of the literature is enough to plunge even the most optimistic person into despair, whether it be about attitudes towards the legal system and police, civil service, tax, land or customs bureaucracies.
Transparency International, in its 2013 Corruption Perceptions Index, ranked Thailand 102nd out of 175 countries, with an equivalent score to Ecuador, Moldova and Panama and just slightly better than Argentina, Bolivia, Gabon, Mexico and Niger. Just 12 years earlier, Thailand ranked 61st out of 91 countries.
But Bandid Nijathaworn, president and chief executive officer of the Thai Institute of Directors (IoD), said he is actually more optimistic than ever that the country could be on a “tipping point” for change.
The generals under the National Council for Peace and Order have made improving public governance and clamping down on corruption a priority, and in recent weeks have reshuffled the boards of state enterprises, transferred dozens of senior technocrats and cracked down on underground businesses.
“Certainly if NCPO is successful, it will benefit the private sector and the country,” Mr Bandid told the Bangkok Post.
Improved public sector governance benefits businesses in three ways: by improving the ease of doing business, encouraging companies to improve their practices and standards, and helping the overall image of the economy and business environment.
Mr Bandid acknowledged successive governments from across the political spectrum have made grandiose statements against corruption.
“But the fact remains the country's rankings have worsened. Now at least I hope we can see some improvement and action,” he said.
Certainly there appears to be greater awareness and commitment today than in past years. Some 323 companies have committed to a framework against bribery and corruption under the Private Sector Collective Action Coalition against Corruption, an initiative launched in 2010 by the IoD and the Thai Chamber of Commerce.
In recent years, the initiative gained widespread support across the business community, including from the Joint Foreign Chambers of Commerce, the Federation of Thai Capital Market Organisations and the Federation of Thai Industries.
Mr Bandid said while business fraud is one aspect of corruption and poor governance, the impact is relatively contained.
“Corruption involving the public sector however is more insidious, as it results in unfair competition, creates disincentives for other businesses and deters innovation,” he said.
Mr Bandid pointed to the recent issue of illegal workers and poor labour practices in the fisheries industry as one example.
“Obviously, businesses employing illegal labour do so to cut costs. But why aren't they instead looking to innovate to remain competitive?” he asked rhetorically.
Thai companies must realise in a globalised economy, commitment to good corporate governance is not an option.
Investors, partners or consumers in other countries are not in a position to observe day-to-day business operations of a Thai company.
Mr Bandid said for their own protection, these stakeholders want to see control mechanisms and standards put in place that affirm a company's commitments to good business practices.
Creating that awareness and a new model of governance will take time, he added.
“But I am more optimistic than before ... the key pieces are in place,” Mr Bandid said.
“What is important to realise is that we are not unique. The theory and process for change is there, as others have also confronted problems with corruption and successfully adapted,” he said, pointing to countries such as Singapore and Hong Kong.
Judging from the experience of anti-corruption efforts elsewhere, the first step is reinforcing the rule of law. Enforcement, Mr Bandid said, is critical to build public trust that authorities are earnest in their commitment to good governance.
A market-based economy and open competition is a second condition, followed by open government procurement practices and good standards for business ethics. Finally, the public must speak and demand good governance from the government.
“Every survey in Thailand shows no one wants corruption, and that everyone wants to change. Everyone feels the problem,” he said.
“We are no different than other countries. I think what will create change is once some 'big fish' are caught, it will serve as an example that change can happen.”