Thailand’s long-term competitiveness will be harmed if the draft bill on reforming state-owned enterprises (SOEs) does not receive approval from the National Legislative Assembly, says former Bank of Thailand governor Prasarn Trairatvorakul.
If such a reform fails to materialise, management of SOE assets will become inefficient and corruption, along with political interference in SOEs, will not be eliminated, said Mr Prasarn, who is a committee member of the SOE "superboard".
The superboard has been deliberating the draft bill on reforming and restructuring SOEs for the past two years, and the first reading of the document is currently being conducted by the NLA, he said.
But it remains unknown whether the draft bill will pass all three NLA readings and ultimately be approved as law, Mr Prasarn said.
"If the bill does not receive [the NLA's] approval, then Thailand will lose out on long-term development, since SOEs are the country's major assets," he said. "If reform is not made, this will impede the country's development, result in complicated and unsystematic work [among the SOEs], and increase operation costs, whereby the government has to shoulder the losses incurred by SOEs.
"If the bill receives [the NLA's] approval, this will boost business competitiveness and political interference [in SOEs] will be more difficult, eliminating corruption and lowering the government's operating costs and long-term public debt."
The superboard committee, created in 2014, consists of Prime Minister Prayut Chan-o-cha, serving as chairman, and a few prominent bankers and financiers.
The superboard recommended that a holding company that owns and manages state enterprises be established. For the past three years, a draft law setting up such an entity has been in the making.
The bill was approved by the cabinet in August, and the legislative process is awaiting the NLA's deliberation. Proponents say the law will help steer major reform in the management and governance of SOEs.
Mr Prasarn said the size of state-owned assets has increased from 4.7 trillion baht recorded 10 years ago to 14.7 trillion at present, with SOE spending estimated at 4.8 trillion baht or twice the size of the government's budget.
There is a clear separation of SOEs in Singapore, where profitable enterprises are called Government Link Corporations and SOEs are enterprises established for social and other services, Mr Prasarn said.
Rapee Sucharitakul, a superboard committee member and secretary-general of the Securities and Exchange Commission, said one of the essential SOE reforms is information disclosure of connected transactions, revenue, operating costs and auctions in order to improve transparency among SOEs.
The draft bill is focused on business competitiveness and good governance, as some SOEs are under the supervision of certain ministries, making it hard for checks and balance to occur, Mr Rapee said.
Former superboard committee member Banyong Pongpanich said the planned SOE reform is not intended to list these enterprises on the Stock Exchange of Thailand (SET) index, but enterprises that can compete have the potential to be listed on the bourse.
Some 13 SOEs with combined assets worth 1.8 trillion baht have raised 380 billion on the SET over the past 10 years, a shift that helped lower public debt and government spending, Mr Banyong said.