Land lease plan returns

Land lease plan returns

The idea of letting foreign investors lease land in Thailand for up to 99 years for commercial and industrial purposes has been off and on for several years.

It was raised during the tenure of the government of prime minister Thaksin Shinawatra as a means to attract foreign direct investment. But the idea was quickly swept under the carpet due to strong nationalist sentiment, coupled with suspicion against the government at the time.

The same idea resurfaced during the premiership of Yingluck Shinawatra and the Land Department was instructed to amend the Land Lease for Commercial and Industrial Purposes Act to extend the lease period from 30 years up to 50 years to 30 years up to a maximum of 99 years. Again, the attempt failed as the administration was ousted by a military coup in May 2014.

This time around, the idea has been dusted off again and the Treasury Department was assigned by Deputy Prime Minister Somkid Jatusripitak to coordinate with relevant agencies to work out how the land lease law could be amended to extend the lease period up to 99 years in order to attract foreign direct investment.

Mr Somkid wants the law's amendment to be completed this year.

Meanwhile, the Finance Ministry has been negotiating with the State Railway of Thailand to lease the vast land area at Makkasan for 99 years for commercial development. Talk about developing this prime land in the heart of Bangkok into a shopping mall or commercial complex has also been on and off for years with nothing materialising.

One key stumbling block identified is the land lease period which is deemed as being unattractive for the huge investment required to the tune of several billion baht.

Surprisingly this time, opposition to the proposed land lease extension is barely noticeable. Nationalist sentiment against what was considered a "sell-off" of Thai territory to foreigners which emerged during the Thaksin administration is almost non-existent. This appears to bode well for the government to push through the legal amendment to pave the way for the extension.

But why 99 years and why not 90, 80 or 70 years? The mere mention of a 99-year lease period for foreigners is likely to revive the bitter memory of western colonialists when they conquered most of the Asian region or arm-twisted some of the weak nations to let them lease large chunks of land such as Hong Kong for up to 99 years.

Extending the land lease period to 99 years clearly shows a complete lack of sensitivity by the government over the bitter past of colonial rule in Asia.

Proponents of lease extension citing cases of the United States, Canada and Australia with their generous land laws for foreigners is not relevant in the case of Thailand given that those advanced countries have measures that curb social disparities. Landlessness is still a big problem for Thailand and the land lease period extension may widen the socio-economic gap in the country.

If the government is determined to push for the lease period extension, it must also do more to promote fair land distribution in the country.

At the same time, it must put into place a proper land zoning system. Otherwise instances where farmland has been turned into industrial estates such as in Ayutthaya which is part of the country's rice bowl will be repeated.

In fact, land lease extension is just one factor that can boost foreign investment. The government cannot achieve that if it fails to tackle the issues of a shortage of skilled labour, language barriers, bureaucratic red tape and corruption.

These are the problems which require rectification to improve Thailand's competitiveness as a regional hub for foreign investment.


Bangkok Post editorial column

These editorials represent Bangkok Post thoughts about current issues and situations.

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