Business sector’s inadequate definition of political stability

First of all, they are afraid of reprisals, both from an incumbent government and from its successor. Governments have the power and tools to get back at businesses who oppose their policies. Strong rules of governance cannot guarantee that they will be protected even if their comments are in the national and economic interest.
That’s also the case in the United States, a country that hails its governance practices and acts like a world policeman in tracking malpractice around the globe.
Take Donald Trump’s presidential campaign as an example. US businesses are now fearful of the millionaire being elected president, given the Republican candidate’s threats to launch a trade war against China and increase taxes on the rich. Economists have also voiced their concerns. But when contacted by AFP, most bankers would not speak openly about their disdain for Trump. They are “worried about possible reprisals”, said AFP.
It’s no surprise then that the business sector in Thailand, where governance doesn’t meet US standards, has opted to remain silent no matter who takes office. Ahead of elections, it rarely criticises political parties’ campaigns. The only critics of the Pheu Thai Party’s rice-pledging scheme were rice exporters, while key business associations reserved their opinion. Yet the warning of rice exporters’ went unheard thanks to their vested interests.
It is an open secret that Thai business tycoons throw their financial support behind every major parties’ election campaign, to avoid making a wrong bet. In doing so, they can ensure that whoever takes office will hear their voice on how to maintain a favourable business climate.
Under military rule, they stayed silent during the referendum on the draft constitution, even as anti-draft activists were arrested.
Neither has the business sector commented over repeated calls from the Office of the United Nations High Commissioner for Human Rights for Thailand to quickly resume civilian rule, as since May 2014 over 1,600 civilians have been tried before military courts. When questioned, one executive declined to comment on the arrest of the draft’s critics, simply saying the business sector would welcome any referendum result, as long as political stability was maintained.
Inquiring further, I found that by political stability he meant a continuity of present public investment policies and an absence of violence. Both were expected to support economic wellbeing, with businesses able to operate as normal and Thailand remaining a favourite destination for tourists.
How long this kind of political stability could continue was not part of his equation. Many businesspeople apparently share this view. They are indeed concerned about the political situation, but matters at hand are more urgent and shareholders and employees the priority. As the economy slowly picks up, they want nothing to disrupt the business process.
Unfortunately, they may need to change this attitude, since long-term economic wellbeing is closely linked with genuine political stability. Businesspeople might now be pleased with an improvement in consumer confidence and the economic outlook. But much of that is supported by the government’s Bt1.8-trillion infrastructure investment plans. And with project progress limited to highways and some mass transit lines, they should ask themselves how this will sustain the economy.
The business sector should also accept that it is partly responsible for the malpractice that led to the political chaos. Our latest constitution was drafted to change Thailand’s political structure – to limit the power of big political parties for fear of their corrupt practices, to allow military-appointed Senators to help select the prime minister, and to give the Constitutional Court more power over a government. All this stems from one thing – corruption among politicians. Policy corruption aside, the business sector is to be blamed for malpractice in securing government projects or obtaining “facilitation” from public officials.
It is past time that all businesses in Thailand embraced better governance practices. Thailand’s Private Sector Collective Action Coalition Against Corruption (CAC) is a good start but it should be scaled up. Launched in 2010, it was announced in July that 703 companies have joined the initiative. In total, 353 companies are listed on the Stock Exchange of Thailand. But of those, only 177 have been certified for their anti-corruption practices.
It would be progressive if the business sector allocated a tiny portion of its profits for political awareness campaigns, chiefly to educate the general public on their rights and duties. Only with greater awareness of and support for the national interest will infringements on others’ rights be kept to a minimum.
With no change in the way they do business, non-inclusive economic growth in a corruption-friendly environment will lead to more political disruption.
There have recently been several reports on international business organisations favouring Thailand as their top investment destination. But notably, last week EU and US organisations announced Vietnam was the top of their list.
All must come to their senses and realise that domestic politics can affect the wellbeing of local and foreign entities. As Trump’s popularity rises, the Globe and Mail reported recently that Canada-based retail business Freshco has suspended capital investment in the US. Missing from Thai papers now is any news of big investment projects.
Political stability cannot be achieved without commitments from all parties. And only long-term stability will mean long-term economic prosperity.