Missed the investment article on Thailand in a previous issue of Today’s Manager? Nevermind, here are some wise reasons to be careful investors.
A 26-year-old American paedophile Mr Jackson Matthew Hall was arrested by Koh Samui police at Thon pier. Posing as a school teacher, he entered Thailand under a false passport according to Khaosod Online. Three years ago, Mr Hall was indicted by a Grand Jury in the US for the rape and sodomy of his girlfriend’s five-year old daughter. Thailand is known for its widespread criminal activities. For instance, many innocent white farang tourists are targets of a wide variety of scams in Pattaya and Bangkok. The Royal Thai Tourist Police also arrested 11 Africans and Indians in Bangkok and Samut Prakan for illegal gambling and other vice activities including prostitution involving white Australian male sex tourists.
Greed throughout the rice supply chain was the reason why Thai rice farmers overproduced rice between 2011 and 2013 harvests. To cool the problems faced by greedy farmers, Thai economists and experts suggested a new scheme to resolve the problem. In the Yingluck Shinawatra rice-pledging scheme for the rice farmers of Thailand, the Prime Minister’s Office approved several contracts to buy Thai rice directly from the farmers and sell the harvest on the world market. Experts say that the indicators ought to have shown that the world market prices were significantly lower than what the government desired. To make matters worse, the rice purchase prices to the Thai farmers were 50 per cent higher than the world market price. To complicate matters further, not all Thai farmers qualified to sell their rice stocks to the government and those who qualified also had to sell their stocks through specific rice brokers therefore defeating the purpose of direct buying and selling. No one knows for sure what happened and whether the Yingluck government sold the rice or parts of those stocks to China or other Asian countries. Even the experts are divided on the matter.
Mr Pridiyathorn Devakula (former deputy prime minister); Mr Nipon Poapongsakorn (Thailand Development Research Institute or TDRI); Mr Thirachai Phuvanatnaranubala (former finance minister); Mr Chookiat Ophaswongse (Thai Rice Exporters Association honorary president); and Mr Wichien Phuanglamjiak (the president of the rice farmers’ of Khok Chang, Bang Sai district, Ayutthaya) all provided different interpretations of the problem.
For example, Mr Pridiyathorn calculated financial damages in the rice-pledging scheme between 2011 and 2013 to be about 455 billion baht. Others said it was closer to 500 billion baht on average. So how was the ex-Thai Prime Minister Yingluck involved? Ms Yingluck was the chairman of the committee that approved all the deals in the rice-pledging scheme. The scheme basically involved using government money (that they didn’t have and hence the “pledge to buy”) to purchase Thai rice stocks directly from farmers and to sell it on the world market. When that failed to materialise, rice stocks suddenly disappeared from government warehouses, money from the national budget for the scheme was deposited into unknown foreign accounts, and the farmers were in a far worse position than before the scheme was implemented. Why the Yingluck government approved this scheme for the Northeast provinces is clear: it was because most of her supporters come from those impoverished regions. So she was charged by the Constitutional Court and found guilty of fraud and corruption. Her agriculture minister was sentenced to imprisonment and she faced between 10 years to life imprisonment herself.
While she remained in Thailand for several years (2014-2017) and did not attempt to flee the country, the junta under Chan-o-Cha did not attempt to arrest her. So Ms Yingluck probably used that time wisely to make travel plans. There are several hypotheses that explain her escape. One involves taking a boat from one of the hundreds of Southern islands, making her way to Cambodia and then on to Singapore and Dubai. Another hypothesis involves her being driven to the border with Cambodia at Aranyaprathet where she exited on a fake passport. A third hypothesis involves her travelling overland to Cambodia through the northern border with Laos and then taking a flight to Dubai via Singapore. All the hypotheses involve Cambodia, Singapore, and Dubai. The junta finally confirmed that she fled overland with Royal Thai Police assistance.
Police Colonel Kiattipong Nala a Deputy Commander (Region 5) spearheaded a Police Disciplinary Committee for officers bribed by Ms Yingluck Shinawatra in her escape to Cambodia and then on to Singapore. The three Thai policemen allegedly drove her in an unmarked police car with a license plate number 5393 to the Nakhon Patho (Sew Aw) where she used a fake passport to leave the country. Cambodia authorities deny that she was issued with Cambodian travel documents claiming that none were issued to a person with such a name. Cambodian passports are available on the black market for less than US$250.
Most farang investors are insufficiently knowledgeable of the investment and business climate in Bangkok and are dependent on local interpreters or other “long-stay” farang businessmen. Unless one is more than well-acquainted with the complex business and investment laws of Thailand, it is perhaps better not to invest in a big way. Most of Thailand’s investments come from China and there is a lot of government-to-government business deals and side deals involving locals which fail miserably. You can see one such big failure on the way to Don Meaung Airport. The MRT line was awarded to Chinese and Japanese contractors and stops short of the airport itself. The trucks, vehicles, concrete, pylons, and other construction machinery are lying in the hot sun while rusting in the tropical rain. Corruption, scandals, and greed resulted in turning that MRT line into another investment graveyard.
This paper is based on the author’s recent publication The King and the Making of Modern Thailand (London, Routledge, 2017).
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