The proposal by a National Reform Council (NRC) committee to renew the push to force some state enterprises to privatise deserves close attention. NRC member Paiboon Nalinthrangkurn told the media that privatisation is a key part of his committee's focus on reform. Mr Paiboon, whose day job is chairman of the Federation of the Thai Capital Market Organisations, has his finger on the business pulse of such a move. He now seems certain to run up against the political problems of privatisation in short order.
Mr Paiboon heads an NRC committee studying reform of state enterprises, and of governance in general. With his business-finance background, it was inevitable that the topic of privatisation would reach the top of his agenda. He told the media that privatising some of the state enterprises would — his words — "lower the government's financial burden". Therein lays a dangerous road.
State enterprises can be divided into two groups. There are those that make money and those that don't. The ones that show a profit are obviously not a burden on the taxpayer. In principle, and usually in practice, they return a portion of profits to state coffers. They are undoubtedly attractive to the private sector and would, if made available on the market, fetch a high price. The problem here is the following political argument: Divesting profitable state enterprises actually costs the state money, because it no longer receives annual payments.
Those which lose money can certainly be sold. Investors are always willing to take over an existing business. However, these pose even greater political risks for the government trying to dispose of them. Workers will no longer be guaranteed jobs. Many of those workers will have put years or decades into helping the enterprise, which loses money despite the employees, not because of them.
And many state enterprises and state-supported firms lose money very much by design. An example is the State Railway of Thailand. Privatising the SRT might sound attractive. But a private business taking over the SRT would by definition be far more concerned about making profits than serving the public. Fares designed to help citizens travel would be "adjusted" to help the company prosper.
It is said that it is difficult to make a choice between serving the public and making a profit. But it is not. Mr Paiboon's colleagues in the business-banking community see the world through bottom lines and black ink. There are others who always see it through the belief that government should be dedicated to helping citizens, without thought of how to turn enterprises into profitable ventures.
Past governments came into office touting the necessity to privatise to put government on a proper financial footing. Ministers of the first Thaksin Shinawatra government became annoyed when protests broke out against some of the then-premier's plans to sell off state firms.
Mr Paiboon is serious about his privatisation plans. Like any good businessman, he has the facts and figures to back up his arguments. It is certain, however, that he will run into stiff opposition, just like all recent attempts to privatise.
Serious discussion is warranted about specific privatisation steps. Business and government certainly can co-exist and cooperate in moving the country ahead.
The issue of privatisation demands lengthy talks about how to reach a desirable goal while easing the concerns of citizens.