Hong Kong’s new security law means that international business and multi-national corporations are re-locating and reestablishing headquarters in other cities across the region.
Tokyo, Singapore, Taipei all stand to benefit from the usurpation and disruption in the business community.
But Bangkok, rather than being a prime destination for businesses to set up their headquarters, is left out of the conversations altogether.
Much of it has to do with government policy, not just of the current administration, but the protectionism seen in Thailand for the past two decades.
Thailand’s treatment of foreigners, especially during the pandemic, has also become problematic when foreign businesses consider locations for a new base.
On the surface, Thailand seems like a perfect place to conduct the Asian operations of any conglomeration. The country sits at the crossroads of the region in one of the largest transportation hubs in the world. There is little internet censorship when compared with regional rivals, the cost of living is relatively low, and Thailand has the infrastructure necessary to support foreign firms immediately.
Why then were companies, as the The Wall Street Journal reported this month, flocking to rival business hubs such as Singapore and Shanghai, which were seen as a better place to profit from China’s vast economy?
Why was Thailand not even considered?
The answer is twofold. The first, and perhaps biggest consideration, is that companies don’t want to leave a territory with political instability for a country that has been one of the most unstable in South East Asia for the past two decades.
Thailand has seen two coups, numerous protests, an army operation in the streets of Bangkok, and the “Bangkok shutdown” during that time.
The insistence by army generals on their right to rule the country means that there is likely more political instability ahead after the pandemic ends.
The other major reason that companies have shunned Thailand has been the lack of government initiative and policy to liberalize the economy. For all its talk of the Eastern Economic Corridor, that plan has largely fallen on its face with no movement and no biters. Somkid Jatusripitak‘s brainchild was more marketing ploy that concrete policy.
The company also has regressive foreign ownership rules, has protectionist policies meant to protect Thai conglomerates that discourage competition, and has an archaic education system that while protects the status quo prevents the training of a dynamic workforce.
The poor education system also means that Thai graduates lag behind other countries in language application and knowledge of information technology systems.
So while Thailand maybe a dream for foreign executives hoping to resettle in a country known for its hospitality, it will continue to be a dream unless the government encourages an environment for business.