Fri, December 03, 2021

business

Experts call for removing outdated laws to boost national competence


Thailand must tackle red tape and get rid of outdated laws that obstruct free competition and increase the cost of doing business, two researchers from the Thailand Development Research Institute (TDRI) said.

In their talk on “Laws as Computer Code”, research fellows Saliltorn Thongmeensuk and Kiratipong Naewmalee argued that laws and regulations are comparable to machine code instruction executed by computers. "If the code is written correctly, the computer can function properly. However, if programers write the code poorly, the computer will not function well or will not function at all."

"To increase our country’s competency, Thailand urgently needs to dispose of these excessively burdensome laws and regulations," they said.

Just as in the case of a computer code, if the law is designed properly and proportionately implemented, citizens can have a better a quality of life.

On the other hand, bad laws can create unnecessary burden and negatively restrict the rights and freedoms of people, they said.

According to a TDRI study, there are approximately 1,000 laws and regulations that require businesses to acquire licences to operate in Thailand, which costs the private sector more than Bt200 billion a year, regardless of additional processing fees. If the government axes these overlapping laws and regulations, the private sector can save costs of up to Bt130 billion a year, or about 0.8 per cent of GDP in 2018.

“Revamping laws and red tape can effectively assist the private sector’s competitiveness and boost the economy without state financial interventions,” said Kiratipong. “This measure is especially urgent while the economy is hit hard by the Covid-19 pandemic.”

Instead of trimming laws and red tape, the government has passed about 70,000 new laws each year. Meanwhile, the country has more than 1,700 types of business licences which require over 10,500 bureaucratic procedures.

Also, the government has set up 345 committees to monitor a variety of laws which more often than not aggravate the red-tape maze rather than provide legal solutions, the duo said.

Some regulatory provisions are vague and up to interpretation, causing confusion and weakening legal enforcement. In addition, some of them are out of touch with changes in society and technology. Some maintain business monopoly which hurts small-scale merchants and is also against our constitutional mandates, the TDRI researchers said.

One case in point is the 2008 Alcoholic Beverage Control Act. It prohibits both direct and indirect promotion of alcohol consumption. As a result, if a logo of an alcoholic beverage appears on a personal post on social media or a restaurant menu, it may be interpreted as marketing of an alcoholic beverage and therefore illegal. Furthermore, there is a maximum fine of Bt500,000 for this offence while there is only a Bt200,000 maximum fine for drunk driving resulting in death.

They said the 1934 Postal Act exemplifies how outmoded laws maintain state monopoly and hurt consumer interest. The Postal Office Department has transformed into Thailand Post, a state enterprise, but its monopoly over postal services is still protected by 86-year-old regulations. As a result, other postal service companies have to pay Thailand Post certain fees.

“Business monopoly violates the right to free and fair competition guaranteed by the constitution,” Saliltorn pointed out.

“Therefore, before passing any law, it is necessary for legislators to make sure that such legislation can truly solve the problem and that creating new laws is the best solution to the problem, which does not exceedingly affect the rights and freedoms of the citizens,” Saliltorn said.

But with political will, there are solutions, said Kiratipong.

Before issuing any new laws and rules, they must go through the Regulatory Impact Assessment (RIA) to estimate their impacts on the public, state mechanisms and businesses.

Existing laws and rules must be re-evaluated for their usefulness. They must be eliminated if no longer useful, or be simplified to fit with the needs of the market economy. This process is called Regulatory Guillotine (RG).

Many countries have experienced similar problems from outdated and redundant laws and rules which hurt citizens, businesses and the economy. But their efforts to eliminate outdated laws and rules have significantly cut business costs and improved competitiveness, he said.

He cited South Korea’s RG efforts, which succeeded in eliminating 48 per cent of its laws, cutting government costs by 4.4 per cent of GDP, and increasing one million job placements.

Although the 2017 Constitution has institutionalised the RIA and RG assessment under Section 77, the government has issued about 70,000 new laws since then. Kiratipong outlined what should be done to free the country from outdated laws and rules:

- Improve the competency of officials involved so they understand their roles in RIA and RG;

- Set up clearer frameworks for the RIA and RG procedures as guidelines for the concerned officials;

- Set up a quality control agency to evaluate RIA and RG reports and improve their assessment standards with internal and external auditing;

- Develop a central database to facilitate people’s participation and public input;

- Seek other options to solve problems outside the legal framework.

The success in eliminating and simplifying outdated laws and rules depend on three main factors, said Dr Kiratipong, mentioning, “political commitment and clear goals; close collaboration between the government, civil society and business sector; and, lastly, a quality control agency for RIA and RG procedures.”

If the government is determined to improve RIA and RG performance, then laws and rules, as the country’s software, would contribute to national competency, he said.

“Equally important, we must look at other options that are more efficient and less costly to tackle the problems,” he said.

“We must look outside the legal framework. We must realise that laws are not necessarily the only solution.”

Published : November 10, 2020

By : The Nation