Reforming Thailand: a dual challenge
published : 18 Jan 2023 at 06:08
newspaper section: Oped
Thailand needs to gain competitiveness in the global economy. However, two hindrances come to mind: old leaders and outdated laws.
First, ageing leaders. Let us be clear from the outset. This is not about age discrimination. Older people bring valuable experience from the past. But when there is no room for fresh ideas from young people for the future, the country risks falling behind.
The problem is not really about age. It is about a small group of leaders controlling the decision-making process, and that is not healthy for any country.
The median age of the Thai population is just 38.8. The economy should be vibrant and fast-moving.
But when people making national policies are in their 60s and 70s, it is clear that their past experience might not be enough to tackle the challenges of the future.
According to the IMD World Competitiveness Ranking, Thailand's ranking in 2022 dropped five spots to 33 out of 63 economies. This is lower than its ranking in the pre-pandemic years, which reflects the declining efficiency of both businesses and the government.
Additionally, Thailand performed poorly in the IMD World Digital Competitiveness Ranking for 2022, coming in at 40 out of 63 economies. This is worse than prior to the pandemic, while the digital competitiveness of neighbouring nations is improving rapidly.
Thailand fared the worst in terms of its digital readiness for the future. Unsurprisingly, the kingdom ranks 53 out of 100 countries in the Startup Ecosystem Report, falling behind Singapore, Indonesia and Malaysia, with Vietnam close behind.
Is it possible this economic decline comes from the power monopoly held by old leaders?
Let's take a look at the cabinet, which is predominantly male and has an average age of 65. Compared to Singapore, which is known to have an older demographic than Thailand, the average age of Singapore's cabinet is 59.
Over one-third of our senators are in the 66–69 age group, despite the minimum age requirement being 40. Notably, 40% are military generals, both current and retired. The average age of appointed senators is 68, which is ten years higher than the average age of elected MPs.
While the House of Representatives is still dominated by older people, a growing number of younger MPs are making their mark in national politics. The average age of the MPs in the Move Forward Party is 44, compared to over 57 in other political parties. As a result, their policies are more timely. For example, they have focused on same-sex marriage, a more liberal liquor policy, and people-sponsored laws.
In independent public organisations, the situation is similar. The average age of people on the board of the National Human Rights Commission is 61, compared to 66 for the Election Commission of Thailand, 68 for the Office of the National Anti-Corruption Commission, and 69 for the Constitutional Court.
A recruitment bias towards older people may contribute to this. When positions have significant experience requirements and relatively high minimum ages, the most qualified candidates are often older.
Elections, or their absence, also tend to influence how old candidates are. Over 70% of appointed provincial governors are aged 56–59, at the apex of their bureaucratic power. However, elected members of provincial administrative organisations come from a more diverse age group.
We need to stop the age bias in state policymaking if we want to resolve this issue. Moreover, we need to dismantle political structures -- like the appointed Senate -- that don't listen to the people. Of equal importance, we must ensure the policy-making process is inclusive and takes into account people's various needs and age demographics.
Despite all this, Thailand is still being held back by another huge barrier: outdated laws.
Without a comprehensive reform of the legal system to keep pace with the times and cope with the fast-paced global economy, it will be very difficult for the Thai economy to get out of its rut.
For instance, the anti-gambling law is already 60 years old, meaning it can do little to combat online gambling. The law on the swallow nest business is also obsolete, forcing new operators to raise swallows in buildings.
Yet the business is deemed illegal because it violates old building codes, as well as city planning and public health regulations. As a result, the government loses money from business taxes while the bird nest law and other outdated regulations prevent business growth and remove consumer quality control.
The current tourism law also fails to cover new forms of accommodation, such as tents, rafts, capsule hotels and Airbnb rentals. Many small hotel owners can't live up to the strict legal requirements, especially the health and safety rules designed for large hotels. As a result, they were not eligible for state subsidies during the pandemic.
Meanwhile, as we rush into the digital age, many existing laws do not support modern technologies or the digital economy.
For example, there are still no laws that support the testing of autonomous vehicles on public roads. In contrast, Singapore has started testing such vehicles in these environments while also establishing the necessary standards.
Despite the fact the Securities and Exchange Commission (SEC) has revised several regulations to help SMEs access funds in the capital market, some of the current regulations prevent many startups from receiving funding from public investors.
Thailand must overhaul and modernise its laws to catch up with the times. Remove the obsolete ones, combine the redundant legal services into a one-stop service, revise them, keep what works, and create new ones to support new technologies. This process is known as a "regulatory guillotine".
South Korea was able to reform 11,125 laws and regulations in just 11 months. By reducing the bureaucratic burden on businesses, its economy grew 4.4%, and more than 1 million jobs were created.
Meanwhile, the business sector in Vietnam was able to lower investment costs by $US1.4 billion (46 billion baht) in just two years after overhauling 5,500 laws.
Although Thailand has begun paying attention to regulatory reform, progress is slow due to a lack of political will and bureaucratic inertia.
Another problem is that the 20-year national strategy (2017-2036) limits Thailand's ability to adapt to global change. Since all budgeting, policies, and even national values must conform to its predetermined objectives, Thailand ends up mired in the past.
This overarching strategy was also produced by policymakers at an advanced age (averaging 66.9). The oldest among them is 84.
To regain competitiveness in the fast-paced global economy, Thailand must address the roadblocks caused by elderly political elites and out-of-date laws. If not, it risks falling further behind.
Boonwara Sumano, PhD, is a senior research fellow at the Thailand Development Research Institute (TDRI). Saliltorn Thongmeensuk, PhD, is a research fellow at TDRI. Policy analyses from TDRI appear in the Bangkok Post on alternate Wednesdays. This article is based on the authors' article at the 2022 TDRI annual conference on 'How to Rejuvenate Thailand'.
- old leaders
- outdated laws