The Brief, Issue 1/2012

Magazine of the British Chamber of Commerce Thailand Issue 1/2012

www.bccthai.com

Blair backs Thailand The Brief

Issue 1/2012

1

think, therefore IB

KIS International School is an IB world school through and through. The school is authorized for all three International Baccalaureate programmes for students from 3-18 years (Primary Years, Middle Years and IB Diploma). KIS lives and breathes the IB philosophy, offering a high-quality, balanced education, encouraging international-mindedness, and instilling a positive attitude to learning.

As a mid-sized school, KIS enables children to learn in a caring, community environment while having access to top facilities.

KIS is a leading light in IB education.

Come and see for yourself; visit our spacious, green campus, located near Rama 9 and Asoke-Ratchadapisek.

World School

Accredited

www.kis.ac.th

Tel +66 (0) 2274 3444

CONTENTS Issue 1/2012

BCCT

Board of Directors 2012 Chairman Simon Landy Colliers International Thailand T: 02 656 7000 simon.landy@colliers.com Vice Chairman & Treasurer John Sim KPMG Phoomchai Holdings T: 02 677 2288 jsim@kpmg.co.th

10

26

Vice Chairmen Matthew Lobner HSBC T: 02 614 4040 matthew.k.lobner@hsbc.com Simon Matthews Manpower Thailand T: 02 634 7273 matthews@manpower.th.com Dean Thompson Boots Retail (Thailand) Ltd T: 02 694 5900 dean.thompson@bootsrt.com Directors Jane Bailey Equitech (Thailand) Ltd T: 02 259 6255 jane.bailey@pattfoundation.org

28

41

Gary Biesty South Asia Law Co., Ltd T: 02 636 0585 garyb@southasia-law.com David Cumming Amari Orchid Pattaya T: 038 418 418 david.cumming@orchid.amari.com Richard Greaves Grand Hyatt Erawan Bangkok T: 02 254 6239 richard.greaves@hyatt.com Colin Hastings The Big Chilli Co., Ltd T: 02 235 0170 colin1066@hotmail.com Andrew McBean Grant Thornton T: 02 205 8222 Email: andrew.mcbean@th.gt.com Sriram Narayan British Airways PLC T: 02 627 1723 sriram.narayan@ba.com

47

This Edition

Chris Thatcher Individual T: 085 064 8884 christhatcher1@gmail.com

10

Toni Weber TNT Express Worldwide (Thailand) T : 02 257 6502 toni.weber@tnt.com

18

Tony Blair gives upbeat message to Board of Investment’s CEO Forum ASEAN energy agreements need private sector backing

24

Flood problems remain for many businesses Front cover: Tony Blair meets PM Yingluck Shinawatra during his recent visit to Thailand.

26

Virachai shares vision for education in talk at Cambridge University

28

Harvard law professor tackles thorny issue of corruption at Bangkok conference

41

Harrow Head speaks out on need for better English skills

44

Profiles of BCCT Board Directors

47

Annual Report 2011 as presented to members at the Annual General Meeting

The Brief

Issue 1/2012

3

IPSEF launches in Asia The Intercontinental Hotel, Kuala Lumpur 6-7th March 2012

international and private schools education forum

As a new BCCT member IPSEF is delighted to provide its friends in Thailand with a special delegate rate for IPSEF Asia, and two nights’ accommodation at the Intercontinental KL. Following three highly successful editions of IPSEF in London this important conference, which addresses the business issues of international and private education, will now run in Kuala Lumpur on 6-7th March 2012

IPS

offers BC EF Asia CT mem bers: 2 full co nference days 2 days o f option With Asia continuing to see significant growth in demand for paid for educational al school v isits places IPSEF plays a unique role in drawing together school owners, Heads, finance 2 nigh ts’ a at the In ccommodation officers and business development managers, to discuss and debate issues of terco strategic importance with governments and educational service providers Kuala Lu ntinental, mpur ranging from architects to inspection bodies IPSEF Asia Conference themes include: • • • • • •

the private schools market – growth, trends and opportunities school design and managing a new school building programme how the private sector can work successfully with governments investing in education, raising capital, buying and selling schools curriculum choices, standards and inspection developing a school brand overseas, and maintaining standards

Speakers include Dr Mark Hensman, COO, Harrow International Management Services, Thailand Ir. Khairil Anwar Ahmad, Chief Executive Officer, Education@Iskandar

Nicholas Brummitt, ISC Research

Christopher Bogden, Jeju Global Education City, South Korea Karan Khemka, The Parthenon Group

Nick Brummitt, MD, ISC Research Stefan Jakobek, Head of Schools Architecture, HOK Azlan Sharom, Chief Executive Officer Yayasan AMIR. Khazanah Nicola Sum, Head of Education, Aga Khan Education Services Malaysian School groups REAL Education and Sayfol

Suzan Trpčič , CfBT Brunei

FREE school visits th on 5th and 8 March!

Mark Hensman, Harrow Int. Management Services

Andrew Dalton, The International School @ ParkCity

IB, UK and US curriculum schools including North London Collegiate, Raffles American School, Marlborough College, and The International School Park City KL The conference will feature numerous Case Histories from international and private schools of different styles from Thailand, South Korea, Hong Kong and Malaysia.

IPSEF Asia is the ideal environment in which to meet your perfect strategic partners.

SAVE £5

0

EXCLUSIV E DE OFFER T LEGATE O BCCT MEMBER S* quote B CC bookingT on the form

*Book today at the special BCCT rate of £425 Price includes 2 days of conference and options school visits on 5th and 8th March We look forward to seeing to seeing you at ISPEF Asia.

Full information and a booking form can be found at www.ipsef.net or contact: mark@methodinternational.com

CONTENTS Issue 1/2012

British Chamber of Commerce Thailand 7th Floor, 208 Wireless Road Bangkok 10330, Thailand Tel: 02-651 5350/3 Fax: 02-651 5354 Website: www.bccthai.com Email: greg@bccthai.com Greg Watkins, Executive Director

37

56

56

61

The Brief is published by: British Chamber of Commerce Thailand For advertising and editorial enquiries, please contact Greg Watkins Executive Director - BCCT Production: Scand-Media Corp., Ltd Bangkok

Every Edition

7

New Chairman Simon Landy outlines his hopes for the Chamber in 2012

9

The views expressed by individual authors are not necessarily those of the British Chamber of Commerce Thailand or of the publisher.

Reproduction in whole or in part without written permission from the British Chamber of Commerce Thailand is strictly prohibited.

64

54

By the Numbers.

56

Round-up of Chamber events

62

Executive Director Greg Watkins in positive mood

Comings and Goings

37

64

European investors eye new opportunities in Myanmar

Tourism leaders hope for troublefree year

The Brief

Issue 1/2012

5

TRAILL INTERNATIONAL SCHOOL

Traill Students have consistently enjoyed outstanding results over the last 45 years. This is only possible with confident and independent students in conjunction with experienced and fully-qualified teachers, for which Traill is renowned.

OUTSTANDING EXAM RESULTS- CAMBRIDGE UNIVERSITY

Last 3 Years IGCSE/A-LEVEL Results:

Year 2009

Best in Thailand IGCSE Physics Best in Thailand IGCSE Biology 2nd place for 5 subjects overall

Year 2010

Best in Thailand AS-level Art and Design Best in Thailand AS-level Business Studies

Year 2011

Best in Thailand AS-level Business Studies Best in Thailand A-level Business Studies Best in Thailand across 4 A-level subjects 2nd place for 7 IGCSE subjects overall (all A* grades) High Achievement award Chemistry A-level High Achievement award Biology A-level

Traill International School

43, Soi 16 Ramkhamhaeng Road, Huamark, Bangkok, Thailand Tel: +66 (0) 2718-8779, E-mail Enquiries@TraillSchool.ac.th

www.TraillSchool.ac.th

New Chairman outlines vision

I

write this first message as your new Chairman with a great sense of history pressing down on my head and shoulders. The role of Chairman is a huge honour and responsibility and I’d like to thank all who have given me support and encouragement.

SIMON LANDY

Corporate Partners

Despite having lived and worked in Thailand for 30 years I am a relative newcomer to the BCCT Board. It was only when I heard Greg Watkins complaining that the Board was predominantly “white, male, 50-something and balding” that I realised how well qualified I was! And it is only after a year on the board that I can appreciate what an amazing job the Chamber staff do to maintain a strong presence and voice for the British business community. Greg is indefatigable in his espousal of the Chamber cause and he has the unwavering support of the dedicated team of Sarinthorn (Jyoti) as his deputy, Rungjit (RJ) on events and Kingkaew (Kaew) minding the books.

With over 500 members BCCT is one of the largest chambers in the country. Last year the staff arranged over 80 events for members, ranging from educational workshops through briefings by business leaders to those ever-popular networking events. Last year’s Board was piloted masterfully by Graham Macdonald and it is with deep respect and gratitude that I salute his achievement in steering the Chamber out of its financial difficulties and back to an operating surplus for the first time in three years.

Other Major Partners

As Graham has acknowledged, this would not have been possible without the dedication and sacrifices of others - particularly Greg and our Treasurer John Sim of KPMG who I’m delighted to report will continue in that role and who is also now a Vice Chairman. After 14 years of unstinting service Graham decided to step down this year. A great loss but I’m pleased to say he continues to tolerate my regular appeals for guidance and will still help the Chamber in its dealings with the Board of Trade.

This year we have increased to four the number of Vice Chairmen to ensure strong leadership for each of our key tasks. In addition to John Sim they are Matt Lobner of HSBC, Simon Matthews of Manpower and Dean Thompson of Boots Retail. With nine of the 14 Directors in their first or second year we want to tap into the new perspectives they bring with a view to adapting the chamber to the fast-changing business realities we face in Thailand. Each Director has an active portfolio to administer.

I would like this year is to see real progress in three key areas:

Supporting Partners

Annual Airline Partners

1. Advocacy: What are today’s key issues for our diverse membership? How should we align ourselves with other chambers and advocacy groups in the community?

2. Events: Which events best serve members’ needs? What is the optimum balance between informational/educational and fun events, between incomegenerating and free or subsidised events, between Bangkok and upcountry and ultimately between quantity and quality?

3. Structure: What structure best serves the needs of members? Should we amend our Constitution to encourage more participation and more diversification?

Should board terms be longer and/or limited? What KPIs should be used to evaluate both staff and directors?

The BCCT exists because of its members. I encourage you to give some thought to these issues – and others you would like to see raised – and contribute to the debate, preferably by emailing me or another director or by other means if you prefer – including ‘collaring’ us at one of our events. Greg promised me, in true Sir Humphrey fashion, to let me know if I was doing something ‘brave’ (read: foolishly asking for trouble). I don’t think it’s brave to open up an existential debate but it would be brave if, having opened the gate of debate, we ignore those that fly through it. I look forward to listening to your views.

The Brief

Issue 1/2012

7

St. Andrews International School Developing independent, confident, lifelong learners

British International Education With over 40 nationalities St. Andrews’ philosophy encompasses the whole child and each campus is small and exclusive by design. www.standrews-schools.com

Sathorn Central Bangkok Location Primary Specialist 2 to 11 years

T: +66 (0) 2632 1995 E: admissions@standrews-schools.com

Sukhumvit 107 Foot of Bearing BTS Primary & Secondary School 2 to 18 years

T: +66 (0) 2393 3883 E: admissions@standrews-schools.com

Green Valley Outskirts of Pattaya Primary & Secondary School 2 to 18 years

T: +66 (0) 3803 0701 E: admissions@standrews-schools.com

Executive Director’s Message

B

CCT begins the new year in good shape financially with a new and enthusiastic board that includes six new directors. In welcoming Toni Weber, Jane Bailey, Andrew McBean, Gary Biesty, Sriram Narayan and David Cumming we must also thank directors Graham Macdonald, Stephen Frost, James Pitchon and Nigel Oakins from the 2011 board for their invaluable work on behalf of our members.

GREG WATKINS

The BCCT office team has also undergone much change in the last 12 months.

However, we remain dedicated to helping members develop their businesses.

Crucial to achieving this objective is that members derive as much value as possible from their membership. As we start this new year I would like to share with you some ways in which members may generate more benefit from their membership: • Business introductions/referrals: on request we are able to put members in contact with potential customers. The BCCT office may also provide assistance and advice in addressing difficulties members have with bureaucracy • Articles or news items in The Brief magazine: members are invited to contribute feature articles, news items and photographs • Events: members are invited to suggest specific topics of interest or speakers from the private or public sectors. Please also pass details of forthcoming events to others in your company • Participate in groups/committees: BCCT has many active groups such as ICT, Communications & PR, Management Development, Property & Infrastructure, Manufacturing, Eastern Seaboard, Professional Women, SME, UK, Safety & Security and Travel & Tourism. Members are welcome to join any of these groups or, indeed, help to establish a new group • Use of BCCT office: Our meeting room is equipped with WiFi, laptop, multimedia projector, screen and whiteboard. In recent months a company badly affected by the foods and a company needing a facility for a board meeting used the BCCT office facilities Please contact me at greg@bccthai.com for information on any of the above.

The European ASEAN Business Centre (EABC) is now officially launched.

EABC is a project funded by the EU for the first four years. Its primary role embraces trade advocacy on behalf of European companies in Thailand. There are currently eight active trade advocacy groups – Automotive, Food & Beverages, Healthcare & Pharmaceutical, Information & Communication Technology (ICT), Insurance, Intellectual Property Rights (IPR), Transport & Logistics and a horizontal group looking at a wide range of general ‘doing business’ issues, such as the Foreign Business Act. BCCT members representing European companies are welcome to participate in these advocacy groups.

BCCT’s initiative on child protection with the UK police’s Child Exploitation and On-line Protection Centre (CEOP) received a boost with the completion of new animated film ‘Mai and Tam’ highlighting the dangers of child trafficking and inappropriate attention from someone close to the family. This film was completed with sponsorship support from the British Council, Shrewsbury International School, Property Care Services and Spirit of Soccer. BCCT’s role on child protection is to promote awareness through our corporate network and to help member companies educate the communities in which they operate.

The challenge in 2012 is to achieve effective distribution of ‘Mai and Tam’ in Thailand. Member companies interested in supporting this important initiative are welcome to contact me for further information.

Finally, we say goodbye to Khun Wannipa in the Events team as she leaves us to explore new opportunities. We wish her much success in the future.

The Brief

Issue 1/2012

9

Cover Story

Prime mover T

hailand has great potential for business and growth in the face of a fast-changing global environment. That’s the upbeat view of former British prime minister Tony Blair.

Addressing the Board of Investment’s CEO Forum in Bangkok, Tony Blair told Thai and foreign business executives that he was confident about the future of Thailand because there were many positive factors bolstering its growth. “Thailand has better investment potential than other countries in Asia and it’s ready for the future despite its current difficulties,” he said.

In a speech entitled ‘The challenges and opportunities in a globalised world’ he added, “If there’s a message I would like to give out it is Thailand is open for business. We can be confident of its future and the world should be confident of the future of Thailand.”

But the former prime minister also expressed concern that Thailand’s economy will be affected by the ongoing European debt crisis. He outlined some of the country’s key advantages, including culture, people and geographical location, but said that Thailand’s role as an exporting nation was being ‘troubled by the crisis in Europe’.

“To resolve this crisis, all that will work is for the European Union and the European Central Bank to stand behind the single currency with 100 per-cent commitment,” he said. He added that the European financial crunch was a good lesson for the rest of the world. “The world is changing fast, and the challenge is not just for a company but also for governments and countries.”

He outlined four key strategies that countries need to adopt if they are to keep pace with change and technological developments. He stressed the 10

The Brief

Issue 1/2012

need for clear regulations and legislation to benefit business and commerce, stating that governments need to create an environment in which business leaders are confident.

Mr.Blair said that the government and service enterprises should grow together and change to support the private sector. He said that the public service can only work effectively if it is

flexible and adopts new technology.

He also stressed the need for both the government and private sector to develop human capital – highlighting people as ‘the key to a bright future’.

He added that a competent set of human resources needs not just a good education but also room for creativity, respect of intellectual property and the development of job skills.

He said if governments encourage and teach their people to be more open-minded, especially in terms of trade and investment, this will help to promote stronger global economic growth.

“Societies can succeed if they combine economic enterprises and social justice, set within the context of fairness such as minimum wages, the welfare system and the relationship between public and private sectors. Other key lessons about what works and doesn’t in the government include the need to reshape and reform welfare and public service systems,” he added.

Mr Blair said countries need to work together if they are to play a greater role in the world. Britain, for example, must maintain and keep strong her alliances with both Europe and the United States, and Thailand should continue to play an influential role in ASEAN. The world should break down trade barriers and instill in people a sense of how their country should succeed in the future. “Change moves fast but governments move slow,” he said.

Former UK prime minister Tony Blair (left) on stage at the CEO Forum in Bangkok.

“Other key lessons about what works and doesn’t in the government include the need to reshape and reform welfare and public service systems.”

He said there was no welfare system could work if there was a lack of balance between the contribution of the state and the individuals involved.

Mr Blair added that societies can succeed if they combine economic

enterprises and social justice, set within the context of fairness such as minimum wages, the welfare system and the relationship between public and private sectors.

Our thanks to The Nation newspaper for kindly permitting us to use extracts from their coverage of the CEO Forum.

The Brief

Issue 1/2012

11

Cover Story

Former PM backs English as ASEAN language T he Thailand government’s push for better standards of English has received a timely boost with the visit of former prime minister Tony Blair. The Education Ministry is pushing students at schools nationwide to speak English at least one day a week under its 2012 English Speaking Year programme.

Mr. Blair shed his political overcoat to adopt the role of an English teacher during his recent visit to Thailand.

About 80 students from eight schools in Bangkok listened intently as Mr. Blair encouraged them to repeat after him some important words in English. He expressed delight that the Thai government was encouraging students across Thailand to study English.

“It makes sense as the world today is more and more one community and English is a universal language. It is a brave decision for Thailand’s education system to do this. It is also a very sensible decision. Thailand is a wonderful nation. It’s got huge potential and a great future. Speaking English is going to be a help to people in Thailand. We are very proud that you are learning to speak our language,” he said.

Students were encouraged to put questions to the former prime minister in a session that Mr. Blair undoubtedly found less stressful than the weekly PMQs (questions to the prime minister) in the House of Commons.

He told one six year old girl that he liked the country and had actually spent his honeymoon with wife Cherie in Thailand. Asked about English as the main language for ASEAN nations he replied that ‘it made sense as the world today is more and more one

Top: Tony Blair takes on new role as an Enlish teacher. Above left: All smiles as the former PM chats with students. Above right: Tony Blair in the House of Commons.

community’. He stressed the importance of learning other languages.

Arisa Sittichokkananon, a fourth grade student at Bangkok Bilingual School, was impressed with Mr. Blair’s English language teaching. “I like the way he taught us to greet in English.

He was friendly,” she said. Arisa was the only student brave enough to ask for and receive Mr. Blair’s autograph.

Thailand’s Education Minister Woravat Auapinyakul announced that The Tony Blair Faith Foundation had agreed to help with education development and English language teaching.

“This was a good opportunity for Thai students to meet Tony Blair. His visit will encourage them to learn English after we set the English Speaking Year 2012 mission,” said Khun Woravat.

Tony Blair served as PM for 10 years, taking office after the General Election of 1997. He stepped down in June 2007 and also resigned his seat in the Commons. He had represented the constituency of Sedgefield since 1983.

More details about Mr. Blair’s charitable foundation at: www. tonyblairfaithfoundation.org The Brief

Issue 1/2012

13

Caption text; ajsdf; asjdf; asj;adsljkfa;s dfjad;skjfa;sldkfj a;skdljfa;skl jfa;slkfj;dlsk f Lord Powell (centre left) briefs Prime Minister Yingluck Shinawatra during his recent visit to Thailand.

Pivotal year ahead for UK-Thai relations

By Bradley Jones

I

have recently returned from a visit to the UK where I spoke at a series of events on the theme of ‘Doing Business in Asia’. I was joined at the Thailand sessions by Greg Watkins, the BCCT’s Executive Director, so that attendees (mostly UK SMEs curious about the business opportunities in Thailand) could get a rounded and frank assessment of the commercial landscape in Thailand.

The Chamber plays an important role in events such as these, offering an independent view to supplement my own analysis.

14

The Brief

Issue 1/2012

The Asia Task Force, which organises these events through UK Trade and Investment, is chaired by Lord Powell, former Private Secretary and foreign policy advisor to Margaret Thatcher and John Major. Lord Powell visited Thailand himself at the end of 2011 where he met PM Yingluck Shinawatra and three former prime ministers of Thailand as well as several members of the Cabinet.

He used the visit to lobby on a range of commercial issues including the

need to begin negotiations for an ambitious EU-Thailand Free Trade Agreement; reform of the Foreign Business Act; ending discriminatory tariffs in sectors such as alcohol; financial sector reform, and the modernisation of customs valuation procedures. He also spoke to Chamber members about developments in the eurozone economies.

There was consensus amongst everyone he met that the recent flooding had had a significant impact on the Thai economy, knocking at

least two percent off of GDP growth projections. But there was also confidence that the Thai economy would bounce back during the second half of 2012 as companies restock, factories are rebuilt and the government implements its postflood expenditure plans.

Lord Powell’s visit also coincided with the launch of the UK ASEAN Business Council, whose objective is to raise awareness amongst UK companies of the wider commercial opportunities across the ASEAN region as a whole. As ASEAN economic integration gathers pace over the next three years, UK companies that think in terms of the region as well as the individual markets will be in a stronger position to take advantage of the easing of trade barriers that currently exist between these markets.

Lord Powell’s trip also marked the beginning of a season of high-level visits from the UK. In January we welcomed former Prime Minister Tony Blair in Bangkok where he delivered a keynote speech at the BOI’s CEO Forum.

February sees the return to Thailand of HRH The Duke of York and in May the Lord Mayor of London will be visiting Thailand to promote the City of London and to showcase UK expertise in areas such as PPP, banking and insurance. These visits, reciprocated by high-level visits from Thailand to the UK to celebrate the Queen’s Diamond Jubilee and the Olympics, will help to make 2012 a pivotal year for UK-Thailand relations.

Lord Powell in discussion with deputy prime minister Kittiratt Na-Ranong.

Our own objectives for the year ahead are to encourage a higher number of innovative UK SMEs to do business in Thailand, to support British companies seeking opportunities in the high-value infrastructure development opportunities that are likely to emerge here over the course of the next few years, and to encourage more Thai companies to invest in the UK. The Chamber, as the independent voice of British business in

Baron (Charles) Powell of Bayswater KCMG, OBE, served as a key foreign policy advisor to British Prime Minister Margaret Thatcher during the 1980s. He joined Her Majesty’s Diplomatic Service in 1963 and his first posting was to Helsinki. He later moved to Washington DC as First Secretary before further postings in Bonn and Brussels.

He was seconded to 10 Downing Street and served as Private Secretary to Margaret Thatcher (1983 to 1990) and then as Private Secretary to John Major (1990 to 1991). His brother, Jonathan Powell, was chief of staff to Tony Blair throughout his period as Prime Minister from 1997 to 2007.

Thailand, will be an important partner for the British Embassy as we endeavour to achieve these objectives, and we look forward to working with the new Board and the membership over what promises to be a busy and challenging year.

Bradley Jones is Director – UK Trade & Investment in Thailand, based at the British Embassy, 14 Wireless Road, Bangkok 10330. Tel: 02 305 8256 Fax: 02 255 8619 Email: bradley.jones@fco.gov.uk www.ukinthailand.fco.gov.uk

The Brief

Issue 1/2012

15

Thai students must improve English language skills

By Linda Belonje

I

n 2015, when the ASEAN Economic Community should become an established element of ASEAN, Thailand will have to be prepared to maximise on the opportunities offered by the AEC or face difficulties being competitive in the region.

As part of ASEAN, and with better cooperation economically, Thailand should be able to become more visible and competitive, but this can only happen with the right foundations in place.

One of the core elements is the people.

Thailand and the Thai people have a lot going for them and visitors to Thailand are often impressed with the kindness and generous spirit of the Thai. However with the regional economic integration other characteristics will gain priority, such as language skills, education level and international-mindedness.

Take for example recruitment. A company will more easily be able to hire staff from other countries within the region. There will likely be a rise in companies operating internationally who will be looking for staff who can speak English well. They will be looking for employees who are well-educated, work independently and who are not afraid to deal with different cultures. The best person will get the job and at the moment it won’t necessarily be a Thai.

The Thai education system prepares Thai students well for employment in Thai organisations. Potential employers understand the system and know roughly what to expect from students based on the university they attended.

This works well in isolation from the

rest of the world. However with the changes to ASEAN, Thailand will have to compete internationally for business, creating a need for employees with good English skills and levels of education that are competitive with the likes of Singapore and Malaysia.

The government acknowledges this, and plans are in place to improve English language learning.

At the moment there are several educational routes available to Thai students, starting from high school. Thai students can choose to go to Thai high school, a bilingual school or an international school. The next step can be a Thai university or an international programme in a Thai or overseas university.

Different combinations are possible and each international option adds value to language learning and international-mindedness, if not necessarily quality of education. It is important to realise that the extent to which these choices affect the student’s chances in the international-oriented work place vary greatly.

Let’s look at some different scenarios.

The first is when a student graduates from a Thai high school and completes four years of Thai university.

While the education the student receives may be solid, the student’s level of English is not likely to be of a sufficient level to successfully compete internationally for jobs against other more proficient students. They will also have had little or no international experience. Even if the language instruction improves, as per the government’s plan, it would be unreasonable to expect Business English fluency for students who have taken this route.

The second scenario is completing a Thai high school and going to a university overseas, say the UK, and following a mainstream university programme there. This option provides an excellent opportunity for students, but it is not easy to achieve. The student will have to compete against UK students for a place at the university. The good thing is that this guarantees the academic level at the university and (for employers) it is a sure sign that the graduate has strong academic skills, international mindedness and English fluency. English levels have to be strong to be accepted in the first place and fluency will further improve dramatically through following the programme in English, as well as through immersion, being part of the mainstream programme.

Another option is for students to go into an international university programme overseas, such as in the US, the UK, Australia or Canada. Many universities have special courses for international students. For these to be accessible to students whose native language is not English, the level of the course is usually less intense so that the programme remains accessible to all. In addition, international students

1 Ministry of Education, Office of the Private Education Commission.

2 The GED, General Educational Development is an American high-school equivalency certificate that caters to people who have been unable to complete their regular high school through personal circumstances, such as immigration, serving in the army, illness, incarceration etc.

16

The Brief

Issue 1/2012

following an international course may not mingle as much with native English speakers, so while they are gaining valuable international experience, their level of education and language learning may not be as competitive as the Thai students who are studying in the mainstream overseas course.

Students may also choose to attend Thai university and do a Master’s degree overseas. While this sounds like a good option, it must be remembered that there are many courses available for Masters’ degrees, and that the standards vary greatly. The courses may be short and not require the student to immerse in the host culture or even to achieve much academically.

Again, the option that offers the best combination of high academic level and top English is a Master’s degree in a mainstream course at a university in an English-speaking country.

There are over 31,000 students enrolled at international schools in Thailand, with ISAT (International Schools Association Thailand) estimating that 50 percent of the students are Thai1. These students are a step ahead of their peers in Thai schools when it comes to preparedness for ASEAN and readiness to enter a mainstream university programme overseas. While each varies in standard, an IB Diploma, A-levels, or a high school diploma from an international school all offer students the opportunity to apply to university overseas or in Thailand. International Schools generally instil an open-mindedness and acceptance of other cultures and usually the educational systems teach concepts and skills as well as content, all traits that employers will be looking for to help businesses compete regionally and globally.

For various reasons, not all students who go to an international school will go to an international university. Some go to a Thai university and follow the mainstream courses. Others choose an international programme in a Thai university. While this seems like a good option, the academic standards of most international programmes in Thailand are below par. The reason for this is that international programmes of Thai universities each set their own

admissions policies and many will accept international school high school dropouts into their programme. Overseas universities will generally accept students only if they have completed four years of high school and have a high school diploma, an IB Diploma, A levels or an equivalent qualification.

The mainstream Thai programme also expects a complete high school education of its applicants, but international courses at Thai universities will accept students who have completed just two years of high school.

These students apply after having completed Year 11 (Grade 10) with IGCSE results, or even students who have not completed any school exams, but simply sit the GED2.

Taking in students as young as 16 years of age means that what is taught in the classroom needs to be simplified, practically reducing the level of the first year of university to that of the third year of high school. It is obvious that this affects the quality of the graduates and the employability of Thais in the ASEAN workforce.

Thailand is making an important step in recognising that the level of English of most Thais puts them at a disadvantage to compete in an international environment. It is commendable that efforts are being made to improve language learning in the classroom. In addition, the education reform and the new 2551 (2008) curriculum aim to be student centred, creating critical thinkers and developing the whole child as well. Education reform also directs the Thai curriculum away from rote learning and the learning of content, but the system is still in transition and has a way to go before this development will become evident in young employees.

Recruiters are looking for employees who are critical thinkers, contributors, have complementary skills to benefit the company and can be held accountable for their work. If the company operates in an international setting, then language skills and internationalmindedness are also needed.

The Ministry of Education is taking action to meet the demands of the changing marketplace. One of the ways this may be done includes the Thai government entering dialogue

with the International Baccalaureate (IB). Sally Holloway, Head of KIS International School, a full IB school in Bangkok, and Board Member of the International Baccalaureate, explains one way the IB does research to determine the direction education needs to take to meet the needs of the country.

“Every other year the IB organises a summit where representatives of education, industry and government meet to discuss and evaluate what the future needs of industry are with respect to the skill set of employees.

We look at what the purpose is of tomorrow’s education, how we can prepare students for the changing global economy and how culture shapes educational systems and understandings. We find out what the desired outcomes are of education and which demands for a better world we can anticipate. We want to work with the government and help make the necessary changes happen.”

Sally confirmed that the IB would be inviting representatives from the Thai Ministry of Education to participate in the conference this year.

It is the responsibility of the government to equip the people with the tools needed to be successful. In light of AEC 2015, this means preparing graduates for open borders. Implementing effective English language learning, changing admissions policies to boost the level of international university courses in the country, setting consistent high standards and reviewing the curriculum and teaching methods will all help provide the opportunity to the Thai to be sought after by employers come 2015.

Linda Belonje (BA Eng, MA Comms) is Director of Marketing and Development at KIS International School, Bangkok. Linda@kis.ac.th

The Brief

Issue 1/2012

17

ASEAN energy agreements need private sector backing

By Christopher Osborne

S

ince the Association of Southeast Asian Nations (ASEAN) was established in 1967 as a foundation for common action to promote regional cooperation in South East Asia, various treaties and declarations by the ten ASEAN member states1 have facilitated cross border cooperation between members.

Many will be familiar with the Common Effective Preferential Tariff (CEPT) scheme for the ASEAN Free Trade Area (AFTA) which has reduced tariffs for goods imported into one ASEAN member country from another. ASEAN also provides a framework for energy security.

Manufacturers have traditionally viewed Asia’s working age demographic as valuable for sourcing workers for manufacturing roles but, as Asia’s working population becomes more prosperous, the global community is increasingly viewing Asia as a new and important market for consumption of products and services.

Energy demand in Asia will increase, not only as a function of population but also as a result of the growth of a new middle class with increasing disposable income. In its Energy Outlook 20302, BP notes that there has been a strong correlation between income and electricity demand and also predicted high percentage increases in energy demand for nonOECD Asia. Energy demand is slowing in Europe while the expectation is that the greatest increase in energy demand will be found in Asia.

Securing increased supplies of energy will be vital to supporting increased growth in manufacturing, trade and 1 2 18

consumption in South East Asia. As early as 1986, ASEAN acknowledged energy security as a contributing factor to the economic resilience and solidarity of ASEAN. There are three key ASEAN agreements relating to energy security, covering petroleum, gas and electricity, namely ASEAN Petroleum Security Agreement; Memorandum of Understanding on the ASEAN Power Grid and ASEAN Memorandum of Understanding on the Trans-ASEAN Pipeline.

The ASEAN Petroleum Security Agreement was signed in 1986 and establishes a petroleum sharing scheme for crude oil and petroleum products in times of shortage or oversupply. If there is critical shortage or an ASEAN member is in distress, the Security Agreement requires the oil exporting members of ASEAN to commit to supply towards meeting the shortage. If there is an oversupply, importing ASEAN members should so far as practicable purchase exports of ASEAN members in distress.

The ASEAN Memorandum of Understanding on the Trans-ASEAN pipeline was signed in 2002, identifying natural gas an abundant, clean, safe and environmentally friendly alternative source of energy. It considered that the implementation of a regional plan for the transportation of natural gas through interconnection via the Trans-ASEAN gas pipeline (TAGP) project would spur economic development and enhance energy security in the region.

The Memorandum of Understanding requires ASEAN members to conduct studies on financing, technical, access, security, health, transit, tax, abandonment and jurisdic-

tional issues relating to the TAGP. Interconnections have already been established between members to commence the TAGP. A cross border natural gas pipeline has been constructed from Myanmar to Thailand and offshore pipelines have also been laid to connect with Thailand, Malaysia and Singapore.

The Memorandum of Understanding on the ASEAN Power Grid, signed in 2007, requires ASEAN members to cooperate on a bilateral or multilateral basis to develop policy on interconnection, trade and the establishment of electricity interconnection arrangements. Members are also required to conduct studies on technical, financing, tax, regulatory and legal, power trade and third party access aspects of the ASEAN Power Grid.

The MoU does not prevent members from entering into similar agreements with non-ASEAN countries and, as such, the MoU would not prevent an ASEAN member from interconnecting with the electricity network of countries such as the PRC. Bilateral interconnections have already been established between ASEAN members to commence the ASEAN Power Grid. Laos provides to Thailand a large amount of hydroelectric-generated electricity; Thailand’s network is connected with Malaysia’s network which is also connected to the network in Singapore.

In 2007, ASEAN members adopted the ASEAN Economic Community Blueprint with a view to establishing the ASEAN Economic Community (AEC) by 2015, intended to transform ASEAN into a single market and production base.

Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei Darussalam, Viet Nam, Lao PDR, Myanmar and Cambodia.

BP plc January 2011 The Brief

Issue 1/2012

The Nam Theun 2 hydropower project in Laos.

The Blueprint states that a secure and reliable supply of energy is crucial to support and sustain economic and industrial activities, and targets the development of the ASEAN Power Grid and the TAGP. Actions set out in the Blueprint include the accelerated implementation of the ASEAN Power Grid and the TAGP; promotion of greater private sector involvement in the ASEAN Power Grid and the TAGP, and finalisation of the ASEAN Petroleum Security Agreement.

Although the blueprint refers to 14 electricity interconnection projects being involved in the ASEAN Power Grid and seven gas connection projects being involved in the TAGP, no deadlines are specified in the blueprint for the expansion of either.

Nevertheless, from a policy perspective, the promotion of private sector involvement is likely to increase the number of interconnection projects and the existing ASEAN energy security agreements provide a framework to enable projects to proceed under the ASEAN Power Grid and the TAGP. ASEAN cooperation with PRC, Japan and the Republic of Korea under the ‘ASEAN plus three’ (APT) programme includes energy security. In September 2011, finance ministers discussed ways to enhance energy security, oil stockpiling, natural gas, renewable energy, energy efficiency and conservation. In October 2011 the ministers welcomed the development of the APT Cooperation Strategy (APTCS) framework consisting of six strategic areas, one of which was biomass energy development.

APT has not yet formalised any treaty level agreements relating to energy security but the level of ongoing dialogue is encouraging and

takes ASEAN closer to a cross border supply of energy with the PRC. Cross border pipelines in other parts of the world have been targets of politically motivated physical attacks and there is no reason to believe ASEAN will be immune from such threats to energy infrastructure. The physical risks could be reduced by installing electricity interconnections in areas of political unrest and limiting pipelines to areas with lower political unrest, such as offshore, which seems to be the approach adopted so far.

The impact of physical attacks on a decentralised energy distribution system is likely to be lower than an attack on a centralised system. Thailand’s VSPP (Very small power producer) and IPP (Independent power producer) regime encourages the establishment of small scale power generation systems (less than 10MW in the case of VSPPs) for interconnection with local electricity grids.

Not only does this decentralised structure have reduced exposure to physical threats of interruption but it also encourages the use of renewable energy sources such as solar, wind and biomass, thereby reducing reliance on depletable fuel sources such as oil, coal and gas, in turn enhancing security of access to a long term supply of electricity.

The ASEAN comprehensive investment agreement (ACIA) provides protection to investments made by an investor of an ASEAN member state in another ASEAN member state. The ACIA addresses expropriation and compensation and also sets out a dispute settlement mechanism.

Unlike dispute settlement mechanisms available under World Trade Organisation multilateral agree-

ments such as GATT, TRIPS and GATS, which permit only a member state to commence proceedings, the ACIA enables an aggrieved investor to commence proceedings directly on its own behalf without requiring state intervention.

The ACIA was signed in 2009 and ratified in January 2012 but, as one ratification was subject to a reservation, the agreement is not yet in force. The transitional arrangements relating to investment protection are less than straightforward and investors should carefully consider alternative mechanisms to protect investments made before the ACIA comes into force.

Although many commentators regard 2015 as the year in which the AEC will commence operation from an energy perspective it is unlikely that ASEAN will represent a single interconnected energy market by 2015. A more likely scenario is that additional gas and electricity interconnections will continue to be made on a project by project basis, although the acceleration of the underlying ASEAN energy security agreements can be expected to encourage private sector involvement. This, in turn, will drive the infrastructure needed to bolster ASEAN’s energy security.

Christopher Osborne is a Senior Associate at law firm Watson, Farley & Williams (Thailand) Ltd. cosborne@wfw.com www.wfw.com

The Brief

Issue 1/2012

19

New opportunities for foreign banks

By Stephen Frost

F

oreign participation in the banking industry in Thailand is regulated partly by industryspecific legislation and partly by the Foreign Business Act. In December 2011 the Bank of Thailand announced new policy guidelines, approved by the Ministry of Finance, that will enable existing foreign bank branches to establish a subsidiary. In this article, we discuss the new rules and the effect on foreign banking activities in Thailand.

There are currently 15 registered foreign bank branches and one foreign bank subsidiary operating in Thailand. With effect from 15 December 2011, these branches may form a sub-

sidiary that will in turn be permitted to open up to 20 branches and have 20 ATM machines. The existing subsidiary will have the same rights.

Criteria Branches that are interested must have strong financial standing in Thailand with good operating performance and expertise in international financial transactions. The parent bank must be licensed in a country that already has, or possesses the potential to have, good relations with Thailand in the fields of finance, trade and investment. The parent must be supervised by a regulatory authority

HSBC set to close Bangkok branches

H

SBC Group is to sell its Retail Banking and Wealth Management business in Thailand to Krungsri Group (Bank of Ayudhya Public Company Limited and its affiliates). The move to reshape business operations in Thailand to focus upon corporate banking follows a strategic business review.

A statement posted on the HSBC website adds: ‘As part of the sale we will transfer our personal loans, mortgages and other retail banking portfolios (including retail credit cards and deposits) to Krungsri Group. It is anticipated that the sale and transfer will take place on 31st March 2012. In addition, in order to ensure a smooth transition of our retail credit card portfolio, we expect to complete the transfer of this portfolio by the end of 2012. If you hold deposit accounts or bills of exchange, we will seek your consent before the transfer of these products and

20

The Brief

Issue 1/2012

we will be in touch shortly to discuss the procedure.

‘We will also separately contact you to discuss the transfer of any other products you have with us. This business decision aligns our local strategy with the HSBC Group’s strategic direction.

HSBC has maintained a strong financial position with a higher capital ratio than international standards. Our credit ratings remain unchanged. In Thailand, we have received satisfactory ratings from all relevant authorities including the Bank of Thailand and the Securities and Exchange Commission.

You can rest assured that your money and personal data are totally safe with HSBC’. The main branch of HSBC on Rama IV road in Bangkok is set to close its door on 30th June 2012 with Thonglor branch closing on 31st March.

More details at: www.hsbc.co.th/1/2/ personal-en/Announcement

that has good relations with BOT. The Thailand branch must a capital adequacy ratio of not less than 12 percent, a NPL ratio not exceeding 3.5 percent and it must have a good rating with BOT. The subsidiary, when set up, must have paid up capital of not less than 12 million Baht. Applications may be submitted within 2012.

Establishing a new branch The rights granted to existing foreign branches above may well be attractive and merit careful investigation – but what about foreign banks that do not currently have a registered branch?

Will they be permitted to register a branch and then apply to set up a subsidiary, as outlined above? Our enquiries with BOT indicate that there is no current policy of BOT to allow foreign banks without a current branch to register one. However, it is possible that this policy will change in 2014.

ASEAN aspect The ASEAN free trade area that is due to come into effect in 2015 may also confer greater rights of investment upon ASEAN-based banks that may wish to establish a foreign banking presence in Thailand. But this may depend upon Thailand accepting such rights under the relevant ASEAN protocol. In an article of this nature, a detailed review of the relevant provisions of ASEAN is not possible.

The rights granted to existing foreign bank branches to set up a subsidiary with 20 branches are interesting and should be investigated further. In the long term, it is clear that the banking industry in Thailand will be open to greater foreign participation and competition and this is to be welcomed in the interests of both commercial and domestic consumers.

Thailand set to amend employment laws T

he Labour Protection Act (1998) in Thailand is the principal law governing employment and deals with such matters as working hours, overtime, holidays, leave, deductions from wages, dismissal and severance pay.

Foreign employees are subject to additional requirements under the Foreign Employment Act (2008) which (in most cases) prohibits foreigners from working in Thailand unless they hold a valid work permit and also prohibits foreigners from working in 39 specific occupations.

The Social Security Act (1990) imposes obligations upon all employers to deduct and remit monthly contributions to the Social Security Fund due from employers and employees, which give rights to claim certain benefits after injuries at work, retirement and upon the occurrence of certain other events. The Labour Relations Act (1975) deals largely with procedures for registration of trade unions and employers associations.

Act (2000) will be changed to allow ASEAN employees to have additional rights, including the right to form their own trades unions.

The Social Security Act will be expanded to deal with social security entitlements for ASEAN employees This article is based upon press reports of the Ministerial announcement and we will have to wait until the Cabinet approves the detailed changes that are envisaged to the legislation referred to above. The removal of restrictions upon ASEAN nationals undertaking certain occupations in Thailand is to be welcomed. One can only hope that as time passes, such liberalising measures will be extended to all foreigners working in Thailand.

As many have commented, foreigners bring skills, expertise and experi-

ence to the companies that employ them, and those skills are transferred to the Thai staff with whom they work, which is in the interests of the their employers and Thailand’s future development as a whole.

Bangkok International Associates is a general corporate and commercial law firm.

For further information, please contact Stephen Frost by email at: sfrost@bia.co.th or Tel: (66) 2 231 6201-6455

On 20 January 2012 the Ministry of Labour announced that certain changes would be made to the legislation referred to above in anticipation of the liberalisation of the employment of ASEAN nationals under the ASEAN Economic Community rules - due to come into force in 2015.

The Foreign Employment Act will be changed to enable ASEAN citizens to work as doctors, nurses, engineers and in other occupations that were hitherto limited to Thai nationals.

The Labour Relations Act and the State Enterprise Labour Relations

UK’s Ambassador Asif Ahmad (second from left) performs the opening ceremony of ‘Everything Forever Now, Designs for a Sustainable Future’, accompanied by Pramote Wittayasuk, Director of OKMD ( far right) as host of the exhibition at TCDC; Charkrit Direkwattanachai, Senior Corporate Affairs Manager - Tesco Lotus (left) as the main sponsor and Deputy Prime Minister Kittiratt Na-Ranong.

The Brief

Issue 1/2012

21

BOI supports business recovery with new investment incentives T

hailand’s Board of Investment (BOI) has approved new measures to encourage investment for business recovery among projects affected by the massive flood crisis. More incentives are being given to industrial estates for additional investment to prevent flooding.

ger than 7-8 years, the 50 percent reduction on corporate income tax will be extended for another five years. * Investors entitled to incentives under 1.2 may also choose to receive the incentives under 1.1, instead 2. Measures for industrial estates and industrial zones both directly affected and not affected directly by the flood, to encourage industrial estates and zones to invest in basic infrastructure improvement and flood prevention systems both on the same premises and expanded facilities operating in the same area.

Industry Minister Khun Wannarat Channukul said that the Board has approved measures to expedite investment for the rehabilitation of businesses following the flood. The measures apply to both small and large scale investors and to both Thai and foreign businesses.

1. General Measure for entrepreneurs directly affected by the flood: eligible investors shall be existing promoted investors whose machines and/or factory buildings were damaged by the flood. The eligible projects shall also be in a promoted category.

Incentives are offered in two cases: 1.1 In the case of a currently-promoted project that already receives corporate income tax exemption with a tax exemption limit, the entire project shall be considered as if it were a new project. Corporate income tax exemption for eight years is granted.

In cases where a project owner continues to invest in the same floodaffected province, the project will be given an exemption of 150 percent of the total remaining tax cap, which is considered an appropriate compensation for damages. If the investors decide to move to other provinces, they will receive an additional 100 percent of the total investment.

22

The Brief

Issue 1/2012

A flood-hit industrial estate in Ayutthaya.

1.2 In cases of a currently-promoted project with an unlimited tax exemption limit, the project shall receive incentives and corporate income tax exemption for another three years beyond the current incentive granted.

However the total tax exemption period, including the current one, shall not exceed eight years in total.

Projects with more than five years of remaining incentives and tax exemption shall receive additional incentives. In cases where the remaining tax exemption period is more than 5-6 years, the project will receive a 50 percent corporate tax reduction for another two years. In cases where the remaining tax exemption period is longer than 6-7 years, the project shall receive a 50 percent reduction on corporate income tax for another four years. If the remaining corporate income tax exemption period is lon-

These projects shall receive an eightyear corporate income tax exemption, and their investment cap shall be extended from no more than 100 percent to 200 percent of the total investment value, not including land and revolving capital. Applicants shall begin construction of basic infrastructure to prevent flooding and set a fair service fee collected from business operators within their industrial zones or estates. The BOI will later announce the relevant conditions in detail.

Interested businesses must apply for such incentives before the end of 2012.

More details from: Investment Services Centre, Board Of Investment, Ministry Of Industry, 555 VipavadeeRangsit Road, Chatuchak 10900 Tel. 0 2553- 8111 Fax : 0 2553-8222

Industry chiefs back BOI T

hailand’s Board of Investment has held the first Honorary Investment Advisors (HIA) meeting. Some 16 CEOs appointed as BOI Honorary Investment Advisors met during the recent BOI Fair to discuss the Board’s promotion strategies over the next five years – designed to secure Thailand’s position as the investment destination of choice.

The meeting was chaired by Dr. Supachai Panitchpakdi, Secretary General of UNCTAD and attended by Dr. Atchaka Sibunruang, Secretary-General of Thailand Board of Investment.

CEOs attending the meeting were John Coyne (Western Digital), Yoshihisa Kainuma (Minebea), Ronald Gentsch (BMW), Osamu Masuko (Mitsubishi Motors), Gunilla Nordstrom (AB Electrolux), Jens

BOI Secretary-General Atchaka Sibunruang (Front row fifth from right) together with Wannarat Channukul, Minister of Industry, Supachai Panitchpakdi, Secretary-General of UNCTAD and Akapol Sorasuchart, President of Thailand Convention and Exhibition Bureau welcome Honorary Investment Advisors.

Werner (Georg Jensen) Shen ShyhYong (Cal-Comp Electronics), Doug DeHaan (Seagate), Aloke Lohia (Indorama), Kazushi Nomura (NAMBU), Fabrizio Rampinelli (PURAC),

Richard Sutton (Weston EU), Michael Koenig (Bayer Material Science AG), Kunitaka Fujita (Sony), Morio Owaki (Toyota Motors) and Giacomo Sozzi (Canadoil).

Battery firm sees red with Liverpool deal O

now a commercial ambassador for the club, was in Thailand to launch the deal with 3K Battery. Rush scored 190 goals in 340 appearances during two spells at Anfield, separated by a season playing for Juventus in Italy.

ne of Thailand’s leading car battery manufacturers has signed a three-year partnership deal with Premier League team Liverpool F.C. to boost the company’s major goal of 10 percent growth in 2012.

Veerawat Korphaibool, Director of Thai Storage Battery Plc and Senior Vice President of 3K Products, explained that the partnership with Liverpool Football Club reflects the company’s determination to tap into the club’s fan base in Thailand which he estimated was more than 14 million. The deal also marks the company’s 25th anniversary.

“Liverpool isn’t only a football team but also part of the legend in the

Veerawat Korphaiboon (left) seals the deal with former Liverpool striker Ian Rush.

world of football. Becoming an official partner is a great honour for 3K Battery and the Thai people,” he said.

Former Liverpool striker Ian Rush,

“Achieving a partnership deal with Liverpool FC has undoubtedly made 3K Battery an international brand.

The slogan ‘3K New Reds Power - the International Power’ featured during a recent match between Liverpool and Manchester United at Anfield,” added Khun Veerawat.

The company is also launching the ‘3K Reds Street Football’ community project in Thailand to find young talent that will attend Liverpool’s academy in England.

The Brief

Issue 1/2012

23

Flood problems remain for many businesses

By Andrew McBean

S

ince the worst of the floods receded it has been replaced by a sense of foreboding about its long-term consequences on Thailand and on our businesses. It has been exacerbated by a seemingly haphazard approach from the central government with a lack of clear, specific information and guidance on how businesses can get back on their feet as fast as possible.

whilst you might say that 38 years in Thailand is like dog years elsewhere, it does give us pause for some wellneeded positive thought.

Companies have had to find critical business survival information at Chamber meetings and random workshops. Indeed, we have just received a request from a Thai company that needs professional assistance with an insurance claim in excess of US$500m. This company has, hitherto, been unable to get the right advice.

Post-disaster studies from around the world lend eerie support to this gloomy picture showing that not only does it take considerable time for people and businesses to recover but also that pre-disaster status is rarely ever attained again. For example, Hurricane Katrina hit the south east coast of Louisiana on the 23rd August 2005. Today the population of New Orleans is 343,839 from an estimated 455,000 pre-Katrina.

In a study, the US Federal Emergency Management Agency (FEMA) reported small business failures at over 90 percent two years after a disaster even though the US has more organised NGOs and is armed with federal assistance - such as the Small Business Assistance programme (SBA) from FEMA. In the study it indicates that businesses wait to recover under a misguided notion that the government and insurance are going to make a significant difference to their recovery.

24

The Brief

Issue 1/2012

Depressing us further, the floods arrived during a ‘perfect storm’ of an anaemic recovery in the US, a bleak prognosis for Europe, dragons running lower on puff in both China and India, the impending competition from liberalised trade brought by the ASEAN Economic Community and the continuing vagaries of Thailand’s political landscape.

However, rather puzzling but hopefully correct are reports running contrary to this which show Thailand’s business prognosis as nothing short of stellar. For example, in a recent report

by HBSC called ‘The World in 2050’, Thailand is predicted to become the world’s 23rd largest economy in 2050, being one of several emerging economies that will break into the top 30 in that time scale.

The Kingdom’s gross domestic product is expected to more than quadruple from US$187 billion (about Bt6 trillion) in 2010 to US$856 billion four decades from now. Now,

A shorter term positive outlook was shared recently by Mark Mobius, executive chairman of Templeton Emerging Markets Group. He is, reportedly, one of the world’s most successful fund managers investing in emerging markets. In an interview with The Nation newspaper in Thailand he was asked if last year’s severe flooding would have an impact on corporate earnings this year. He replied that there would be ‘in a positive way because with the reconstruction work there will be more spending and the government is doing a lot of spending. The minimum wage is also being increased. All these factors will have a positive effect. Of course, it depends on the company, but generally speaking, it will be positive’.

How can we explain this dichotomy?

The catch is at the end of Mark Mobius’ statement when he says ‘it depends on the company’. In fact we could expand this to ‘it depends on the preparedness of the company’.

It is human nature when a disaster occurs, man-made or otherwise, that we yearn for a return to normalcy – the secure cocoon of our daily routines.

But, very occasionally, something so dramatic occurs that one implicitly knows it will have such a severe effect that it cannot be undone or reversed –in essence it creates a ‘new normal’.

Fortunately there are not many of these events but, when they happen, it is important to know they have occurred and to adapt to them.

As the floods were receding we gave post-disaster business stabilisation

in Bangkok. Is the ‘new normal’ a worse one the before or a better one?

The answer to that depends on you and your company’s acceptance that there is a ‘new normal’ and your active plan to embrace it. So how can we embrace our ‘new normal’?

Many entrepreneurial business owners have already instinctively tried to make their ‘new normal’ benefit from the floods by, for example, introducing new products or services that are in demand during this reconstruction phase which will last the best part of 2012. But the longer term characteristics of the ‘new normal’ are around optimisation, efficiency and productivity. Downsized businesses must become leaner and more effective with the same or higher quality; doing more with less domestically whilst preparing for opportunity from a resurgent Myanmar and the impending ASEAN Economic Community. workshops to over 50 companies directly affected. These workshops were interactive, giving companies a chance to speak about their experiences and air their questions about the future.

There were a few common themes in every session.

At the very end of the flood they were stabilising, almost like a patient who has just had a heart-attack being in the ER ward at hospital. After stabilisation, they normalise. They are moved from ER to a recovery room where they attempt to get back to as normal as possible. However that is rarely ever their old normal. It is a ‘new normal’. Their realisation and desire to change to embrace that ‘new normal’ determines their success in moving to the next step which is transformation where they go back home, change their lifestyle and hit the treadmill (vertically one hopes).

At this moment we are collectively at normalisation now – finding our ‘new normal’.

In 2005, at the time of Hurricane Katrina, the whole of Louisiana contributed just 1.2 percent of the USA’s GDP. In comparison, Bangkok contributes 40 percent of Thailand’s GDP. Given its dominant contribution to GDP it is likely there will be less population

shrinkage and great determination to fix it. For the participants of our workshop it was clear that they foresaw significant long-term implications to their businesses. Importantly this was also associated with the fact that it was impossible to say that it could not happen again, with the resultant impact on confidence and rebuilding – both business and personal.

A striking result from a survey conducted after the floods in Queensland, Australia at the beginning of 2011 should also be borne in mind. A flood is such a cataclysmic event that the entire eco-system has to recover for individual businesses to then recover.

The survey showed it did not matter if a business was directly or indirectly affected; the time taken to attain optimal recovery was very similar in both cases. The longer an ecosystem recovery is left to chance the longer it takes, meaning that businesses continue to go out of business long after the initial event; ripples or aftershocks, causing more shocks and so on it goes for months and years.

Related to that, in every one of our workshops, one of the most asked questions was how to lay off workers after the flood. There is no question that the workforce will be downsized

For businesses directly affected by floods, insurance payments are designed to replace what has been lost.

Companies do not typically make money from a claim. The floods have, ironically, produced an opportunity for many clients to revisit operations and, in some cases, put them together from scratch in a more optimised way.

Others have needed help to prioritise what needs to be, and can be, recovered in order to start at least something moving in to production. By taking maximum advantage of this potential for optimisation, companies can try to profit from their insurance or investments to make their ‘new normal’ a better normal.

Andrew McBean is a partner at Grant Thornton 18th Floor, Capital Tower, All Seasons Place, 87/1 Wireless Road, Bangkok 10330 Thailand.

Email: andrew.mcbean@th.gt.com Tel: 02 205 8222.

The Brief

Issue 1/2012

25

Thai academic shares vision for education

By Andrew Watson

S

peaking with charm, eloquence and customary intellectual clarity before a distinguished audience of academics and students at Cambridge University, Dr. Virachai Techavijit outlined an inspiring new vision of education for the 21st century. If his beloved Thailand is where his pioneering ideas were born then, typically, his vision is also global.

Dr. Virachai referred to a postelection July ABAC Poll which suggested that 64.5 percent of Thai people support corruption as long as they benefit from it. He pointed to three self-perpetuating consequences of corruption where giver, taker and observer are all victims in a spiral of interdependency.

Dr. Virachai offered his Cambridge audience a new interpretation of ‘collective corruption’ and, in so doing, raised awareness across the world of the urgency of a situation brought on by advanced states of corruption. He described how increasing collective corruption and the associated wider acceptance of it in a country sucks its people into a social black hole. This phenomenon, he said, is an epidemic which spreads among the youth of a country.

“What does this mean for Thailand?” he asked, relating his concern to the way in which teaching and learning, the core business of education, happens in Thailand. With a powerful sense of moral purpose he claimed that responsibility for attending to decaying values in society rests with educationalists. His lecture then laid out what education can do to cure the country of collective corruption Dr. Virachai’s passionate belief in

26

The Brief

Issue 1/2012

Dr. Virachai Techavijit outlines his vision for education at Cambridge University.

education was clear as he travelled to the heart of what it means to be educated and what it means to be human for students, for schools, for a community and for a nation in the context of a seemingly intractable real world issue – the phenomenon of collective corruption. If we are truly going to create a better, more peaceful world through intercultural understanding and respect then ‘let’s lead by example and address core issues at home’. Acting locally whilst thinking globally, the wider application of his vision became apparent.

Having identified the problem Dr. Virachai provided a solution which like all great ideas is beautiful in its simplicity in the form of a blueprint for how a nation can be given hope for the future through education.

At the heart of the vision is moral

value-rich education, epitomised by the curricula of the International Baccalaureate and the six pillars of Round Square Schools. His own Regents schools are among the most passionate Round Square members.

From as young as Year 2 their school activities and curricula are designed to encourage students to exhibit six pillars which underpin social skills and the development of moral values, namely internationalism, democracy, environmental awareness, adventure, leadership and, above all, service.

The six pillars are known collectively as ‘ideals’. Such blueprints, he explained, must be created and prepared by Thai visionaries and independent educationalists so that they will be readily available when Thailand is blessed with a government of strength driven by moral purpose

which demonstrates the commitment and genuine desire to bring collective corruption to an end. Such a vision must be shared by a new kind of citizen who also rejects corruption in all its forms. Critical to the success of this vision is the idea that education reform is removed from politics and designed and implemented for the students and by the teachers, something which logically Dr. Virachai argued should be enshrined in the constitution.

The duty of the government, he explained, is to implement those blue prints required by the constitution. If politicians lead educational reform, he said, then there is a good chance that their adversaries in the next government will scrap them, however coherent they might be. Indeed, the better the blue prints the quicker they would be scrapped.

Dr. Virachai Techavijit (centre) pictured with fellow academics.

As for the current situation in Thailand, Dr. Virachai pointed to the limited life expectancy of the current government (seven months and counting) and the day when 111 discredited high profile veterans will be free from a five-year political ban.

He expressed with urgent concern the possibility that some, if not all cabinet members and their loyal civil servants might very well be capitalising on collective corruption in order to raise funds with a view to securing their positions in the next cabinet reshuffle or national ballot.

Dr. Virachai described how at disconcertingly regular intervals during the last 79 years of Thailand’s democracy, military coups have been justified on the grounds of public protests about corruption. However all the subsequent temporary governments were given just one mandate – to prepare for new elections.

There has never been an imperative to acknowledge the problem corruption, let alone any attempt to cleanse the country of corruption permanently. Neither has there been any discussion of the means which might be employed to achieve this. Dr. Virachai did not hold back in explaining how western powers who seem to think their kind of democracy is ‘the medicine for all cures’ have done themselves little service in exerting spurious influence which has led to the return of the same corrupt politicians, apparently reinvented and sometimes marching under a new party banner.

He described how this phenomenon has led to a vicious circle of corruption which has been exacerbated by a fundamental lack of self-confidence in governments staying in power for a full term. Thus, with enduring uncertainty, corruption has intensified, manifested in greater levels of misap-

propriation of funds over a shorter space of time as the ruling party prepares for the next election which requires increasing capital in order to secure a return to power.

Dr. Virachai concluded by emphasising that for real and significant long term change to happen through educational reform, the next temporary government appointed by either military coup or by national suffrage must quickly adopt readily available blue prints and embed them in the constitution. The new government will then be required by the constitution to implement those blue prints.

Only then do we stand a chance, he said.

As the situation continues to deteriorate perhaps another corruptioncleaning coup might be around the next corner? “So let’s start producing the blue prints now,” he urged to a chorus of approval from the audience, “because when it comes to doing good, we shouldn’t leave it too late.” It was difficult to disagree.

Dr Virachai was speaking at the Education Faculty – Cambridge University. His slide presentation may be found at www.regents. ac.th/cambridgetalk_slides/ Andrew Watson is Consultant to the International Baccalaureate (IB) and a Director at Plommer Watson Associates.

The Brief

Issue 1/2012

27

NACC conference spotlights evils of corruption

By Professor Matthew Stephenson

The 2nd Conference on Evidence-Based Anti-Corruption Policies (CEBAP II) was held in Bangkok on 1112 January. The conference, organised by Thailand’s National Anti-Corruption Commission (NACC) in collaboration with the World Bank and Transparency Internationals Thailand Chapter, attracted speakers of the highest calibre including Professor Matthew Stephenson from Harvard Law School. Our thanks to Professor Stephenson for kindly permitting The Brief to reprint excerpts from his speech.

L

et me start with the bad news.

Corruption, as I’m sure you know, remains a huge problem throughout the world. Just how much of a problem is quite difficult to say, in part because a consistent definition of corruption is elusive, in part because measuring the amount of corruption (however it is defined) is extremely difficult, and in part because measuring the adverse effects of corruption is more difficult still.

But it is clear that in many countries – including some of the poorest countries, where effective government is most essential – official corruption is deeply embedded in the fabric of national life, to the point where it is widely accepted, though perhaps not condoned. This sort of pervasive corruption has proven incredibly difficult to root out, or even to contain.

Part of the problem is that corruption can generate a number of related vicious circles, in which pervasive corruption becomes a self-perpetuating phenomenon that is deeply resistant to change. In other words, societies can find themselves stuck in corruption traps that are difficult to escape.

28

The Brief

Issue 1/2012

Professor Matthew Stephenson

One type of corruption trap has to do with the type of person who chooses to pursue a career in government service. Public corruption tends to thrive when dishonest people enter public life and to recede when honest men and women are present in greater numbers. But honest people are attracted to other honest people and to work perceived as honest. If a public agency is perceived as a bastion of corruption, honest people will avoid it, while dishonest people – who view public office as a means of accruing personal wealth – will seek it out.

This, of course, means that the agency becomes even more corrupt.

Perhaps, even more importantly, the pervasiveness of corruption also affects the strength of the social norms against corruption. My description of honest and dishonest individuals was an obvious oversimplification. Most people are neither completely honest nor completely dishonest. Most people are somewhere in between and their perception of right and wrong will be influenced by what other people do.

If very few people in a society are corrupt, then corruption will be perceived as deviant behaviour and most normal people will avoid it the same way most normal people don’t shoplift. If corruption is widespread the norms against corruption weaken because of the perception that ‘everybody does it’. This leads to further erosion of the norm and more corruption. The result is a self-perpetuating cycle.

Yet another way in which corruption can feed upon itself has to do with the probability of detection and punishment. When corruption levels are relatively low and the government devotes a modest amount of resources to corruption investigation and prosecution, the odds that any individual engaging in corruption will get caught and punished are fairly high. This will tend to deter corruption. When corruption is pervasive even if the government devotes substantial resources to anti-corruption, the probability that any one individual will be punished for corruption may remain relatively low because there are simply too many potential targets. This means that deterrence is not very effective and corruption levels can remain quite high.

These self-reinforcing dynamics mean that pervasive corruption can be extraordinarily hard to root out. That’s the pessimistic version of the story.

But there’s a more optimistic perspective one might take. The mirror image of the sort of vicious circle I just described is a virtuous circle in which relatively low levels of corruption can be maintained. If a country can find a way to get pervasive, endemic corruption under control then, in the long term, keeping corruption at a manageable level may be easier than getting to that level in the first place.

Once we can get past the tipping point and once corruption becomes deviant rather than pervasive then more honest people will be attracted to public service careers. Norms against corruption become stronger and deterrence will be more effective.

The problem will never go away. There is no country in the world – not the United States, not Sweden, not Singapore – that does not have some problem with corruption. But there is also reason to believe that, no matter how intractable the problem appears, it’s possible to contain it. And here’s more good news. Despite all the problems and challenges facing anti-corruption efforts, there’s strong evidence that straightforward anti-corruption enforcement – audits, investigations and credible sanctions – can be effective in reducing corruption. Sometimes relatively simple and straightforward approaches, if backed by resources and

political commitment, can be quite effective - at least in dealing with certain kinds of corruption.

Researchers working with the Indonesian government’s development agency conducted an experiment in which a number of rural villages were given development funds for building roads. Some villages, randomly selected, were alerted in advance that their road projects would be audited; others were not. The researchers then investigated the extent of corruption in the projects and found that the villages that knew they would face an audit had dramatically lower corruption levels.

In another study, a widely publicised crackdown on corruption in Argentina dramatically reduced the inflated prices that public hospitals had been paying for basic supplies. The artificially high prices that they had been paying before the crackdown were likely due to kickback payments from the suppliers and the anti-corruption crackdown substantially curtailed this behaviour.

A recent study of anti-corruption in the United States found that simply increasing the number of federal prosecutors in a given jurisdiction significantly reduced public corruption levels.

Sometimes the most straightforward forms of anti-corruption measures – investigations, audits, and imposition of sanctions – can have a real ef-

Distinguish guests attending the conference on Evidence-Based Anti-Corruption Policies

The Brief

Issue 1/2012

29

fect. An additional lesson that seems to be emerging from research not only on anti-corruption but on criminal law enforcement more generally is that although it’s important to have meaningful penalties it’s much more important to have regular, consistent, timely and predictable enforcement of anti-corruption rules.

corruption policy amounts to the law enforcement equivalent of a balanced diet and lots of exercise: regular, steady, consistent enforcement of predictable and legitimate rules, with sustained political and financial support. There’s nothing magical about it but it’s hard to sustain.

This observation, if accurate, is important for anti-corruption efforts because one might have thought that so long as the penalties for corruption were sufficiently draconian then it wouldn’t matter if the probability of detecting corruption were relatively low.

Some countries have indeed employed quite severe punishments for corruption. The People’s Republic of China has even imposed the death penalty in extreme cases. But while sufficiently severe punishments might work if everyone behaved like the simple rational agents of classical economic theory the available evidence from several areas of criminal law enforcement seems to indicate that, although the severity of the punishment does matter, it doesn’t matter nearly as much as the probability that a punishment will actually be imposed in a timely fashion. If that is correct, then unfortunately one cannot make up for scanty enforcement with severe sanctions.

Part of the reason that the probability of timely detection and punishment seems to matter so much more than the severity of the punishment is that people tend to ignore entirely events that have an extremely low probability or that are unlikely to occur until the distant future.

A second and related reason that consistent and predictable enforcement may be more important than the magnitude of the penalty is that corruption punishments work not only through their deterrent effect but also by reinforcing social norms against corruption. When corrupt actions are punished only rarely – no matter how severely – the punishments seem more like random bad luck for the targets rather than the legitimate consequence of violating a social and legal norm.

30

The Brief

Issue 1/2012

Deputy prime minister and minister of interior Yongyuth Wichaidit

A closely related point is that the evidence suggests that to be effective, anti-corruption efforts need to be sustained steadily over time. Highprofile anti-corruption crackdowns can sometimes be effective but in many different countries and contexts there is evidence that the effect of such crackdowns is fleeting.

Even worse a cycle of temporary crackdowns, followed by a return to business as usual, can breed cynicism and further erode or impede norms of anti-corruption. Taken together, what I want to suggest is that the most effective anti-corruption enforcement efforts are not necessarily those that make the splashiest headlines, either in the form of major crackdowns or occasional high-profile prosecutions.

Rather, the most effective anticorruption campaigns are likely to be those that are broad and sustained and which achieve the greatest degree of consistency across time and across targets.

It’s a little bit like losing weight.

There are all sorts of fad diets that will help you lose weight in the short term but you gain it all back within a few months. Ultimately, to lose weight, there’s no substitute for a healthy balanced diet and lots of exercise. A great deal of effective anti-

Another lesson that has emerged from the study and practice of anti-corruption is that some of the most important features of anti-corruption strategies are not directly about corruption at all, but rather about other features of the legal or political system that affect the prevalence or severity of official corruption. One obvious example, the subject of much attention from scholars and policymakers, concerns the role of the media and civil society in combating corruption.

The importance of the media in investigating and disclosing corrupt activities has been well-documented. At the highest level of generality, crosscountry comparisons reveal a strong negative relationship between measures of press freedom and measures of corruption. Societies that are rated as having a relatively free press tend to have lower levels of perceived corruption while countries with less press freedom seem to have a bigger corruption problem.

That correlation by itself may not be all that meaningful as evidence that a free press causes reductions in corruption: It is possible that highly corrupt societies tend to restrict the press or that some third factor, such as poverty or authoritarianism, explains both corruption and restraints on the press. But there’s considerably more micro-level evidence that aggressive media watchdogs can make a big difference.

For example, a study in Uganda focused upon theft of central government grants intended for local schools. Theft rates in this grant programme were depressingly high.

In some areas as much as 85 percent of the funds intended for local schools were stolen outright by the local officials responsible for administering the programme. Newspapers began publicising information about aid

provided to local schools, including information about how much money the central government had provided to each village. Corruption overall declined markedly which, by itself, is evidence that media coverage and provision of information can have significant effects.

Those villagers with greater access to newspaper reporting on corruption in the school funding programme saw much lower levels of corruption.

Studies in other countries have found similar effects of transparency and media coverage.

Indeed, corrupt officials themselves seem to view a vigorous free press as a serious threat to their enterprises.

Some of the best evidence for this comes from the Fujimori regime in Peru. Fujimori’s secret police chief was a man named Montesinos who was in charge of maintaining Fujimori’s control through an extensive network of bribery and other forms of corruption.

Remarkably, Montesinos kept meticulous records of the bribes that he paid, even going so far as to have signed contracts in many cases, and sometimes even to videotape the bribe transactions. As a result, Montesinos’ records provide some of the most detailed evidence available of the economics of corruption.

Montesinos bribed all sorts of people, including legislators and judges, but his highest priority, as reflected in the exorbitant bribes he paid, was to buy off the media - particularly the big TV stations. Montesinos’s view, which he expressed to associates, was that the media was the most important potential threat to the Fujimori administration’s subversion of Peruvian democracy.

The coda to the story suggests that he was right: The downfall of the Fujimori regime came after Montesinos jilted one of his mistresses. The spurned woman sent videotapes of Montesinos bribing politicians, judges and others to the one TV station in Peru that he had failed to buy off – a cable station in Lima that Montesinos had thought was politically irrelevant. That station broadcast the tapes repeatedly - and

the government, despite its bribes, could not maintain its hold on power.

So a free press, as well as civil society NGOs that perform similar watchdog functions, can be powerful and perhaps indispensable forces in the fight against corruption. That, in turn, means that laws that affect press freedom and freedom of information, such as defamation laws and government secrecy laws, can be quite important to the struggle against corruption, even if these legal issues are not about corruption per se.

There seems to be a rough negative correlation between the degree to which countries are democratic and the level of perceived corruption. The idea that political democracy might be an effective constraint on official corruption has a long history and is animated by a simple logic: As Lord Acton famously remarked, ‘power tends to corrupt and absolute power corrupts absolutely’.

Political democracy is a check on the power of government officials. If voters dislike corruption, or if corruption tends to lead to bad outcomes for most people, they can express their displeasure at the ballot box. For this reason many theorists have argued that democratisation, in addition to its other effects, may be a potent anticorruption mechanism.

The Chinese protesters who occupied Tiananmen Square in 1989 certainly thought so. Those protests are remembered, particularly in the West, as pro-democracy protests – which they were. But what is sometimes forgotten is that they started out as anticorruption protests. They evolved into pro-democracy protests due to the belief that some form of democratisation was the best way, or perhaps the only way, to combat the rampant official corruption that accompanied China’s economic reforms.

The tragic outcome of the Tiananmen protests means that most Chinese citizens don’t make this argument publicly any more but I know that many of them still believe it to be true. More recently, many of the pro-democracy protests that emerged over the last

year in the Middle East – the so-called Arab Spring – emerged in large part from disgust with the rampant corruption of the incumbent governments. These pro-democracy protests, like the Tiananmen demonstrations, were also anti-corruption protests. So the idea that democracy is a potential antidote to corruption has widespread appeal and potentially enormous consequences.

But the relationship between democracy and corruption is more complicated. The evidence is also more mixed. While there is indeed a negative correlation between democracy and corruption, with more democratic countries tending to be less corrupt, it’s not at all hard to think of countries that don’t fit this general pattern. India is the world’s largest democracy and it also suffers from a severe corruption epidemic.

Singapore, which has been a de facto one-party state for most of its history, is one of the big anti-corruption success stories. And in countries such as like Russia and Indonesia there is evidence that the corruption problem worsened after, and arguably because of, democratisation.

That last observation highlights a feature of the cross-country data that can get lost if one looks only at the overall correlation between democracy and corruption. Although the overall correlation is negative, the data actually reveals a kind of inverted-U shape. As one moves from undemocratic countries to more democratic countries, the level of corruption first rises and then falls.

Corruption tends to be higher in newer or less consolidated democracies or in countries that are partly but not fully democratic, but corruption is lower in more established, consolidated democracies. Moreover, the crosscountry comparisons do not really tell us all that much about whether or how political democracy affects the level of corruption There is some micro-level evidence that democratic accountability, when coupled with sufficient transparency, does seem to constrain otherwise corThe Brief

Issue 1/2012

31

rupt officials. A range of studies within individual countries seem to show that corruption levels go down when officials are more concerned about reelection and that elected officials are less likely to be re-elected when they are perceived as more corrupt. This seems to corroborate the traditional story.

But there is a dark side to democracy.

In new democracies, or democracies without stable political competition between established parties, political time horizons can be relatively short.

That means there’s an incentive for officials and politicians to take advantage of a temporary position of power as much as they can, while they can.

This tends to encourage greater corruption and it may provide an explanation for the inverted-U shape of the cross-country data. It also suggests the importance of developing strong, stable political parties, built around policy platforms rather than individual personalities. Furthermore elections, particularly modern elections, can be incredibly expensive and the need for political parties to raise the cash to win elections can become a major motivation for corrupt activity. In the United States many critics have argued that what has emerged in the U.S. is a form of legalised corruption in the form of the exchange of campaign donations for political favours.

Another significant form of corruption associated with democratic elections is vote-buying, in which it is the politician doing the bribing, rather than receiving the bribe. Vote buying in many countries is a rampant problem that is not only itself a form of corruption but one that makes democracy less effective in constraining other forms of corruption.

So political democracy, and the pressures of electoral competition, can be both a cause of and a cure for official corruption, depending on how the democratic system is structured.

Overall, the evidence does suggest that democratisation seems to be an important feature of a long-term anticorruption strategy. At the same time, the relationship is complicated and 32

The Brief

Issue 1/2012

The conference in Bangkok attracted many high-profile business and political leaders.

features of the democratic system, such as the electoral system, the party system, and the rules on campaign finance, may themselves have important implications for anti-corruption - even if these legal and institutional features are not usually conceived as having to do with corruption specifically.

One unfortunate fact is that although aggressive anti-corruption enforcement can be quite effective, it can also become quite politicised - particularly in countries with deep political divisions where corruption is pervasive, corruption investigations and prosecutions can become a tool whereby one party or faction harasses its opponents. Sometimes this happens on a large scale. There are numerous cases in which a victorious political party, having wrestled power from its opponents, initiates an anti-corruption crackdown that quickly becomes a political purge of the opposition.

This can degenerate into a destructive cycle, particularly if the former opposition party eventually manages to take control and then unleashes its own wave of politically-motivated anti-corruption prosecutions in retaliation.

There is evidence that anti-corruption efforts can become politicised, both in the sense that law enforcers may go easy on the party currently in power and in the sense that anti-corruption enforcers may be more aggressive against opponents of the ruling party.

This can occur even in mature democracies. Recent evidence from the United States indicates that the federal government tends to more aggressively investigate and prosecute corruption allegations against members of the opposition party.

The real or perceived politicisation of anti-corruption efforts has a number of undesirable consequences. The first and most obvious is the simple unfairness of selecting targets on the basis of factors other than the seriousness of the corruption involved. Politicisation of anti-corruption efforts can also have far-reaching deleterious effects on anti-corruption norms more generally.

Effective anti-corruption efforts depend not only on a direct deterrent effect but also on the cultivation of strong social norms against corruption – a sense that corruption is wrong and that punishments for corrupt activity are fair and legitimate. Real or perceived politicisation of anticorruption enforcement undermines those perceptions.

One natural way to address concerns about excessive politicisation of anticorruption enforcement is to insulate the main anti-corruption agencies from direct control by the government. This is what many countries have tried to do. There are, however, some difficulties with creating independent anti-corruption agencies.

It’s not entirely clear how to make such agencies truly independent. Legal or official independence is not the same as true independence. For an anticorruption agency to have true independence and real authority, powerful political factions – including those that might benefit from corruption or from using anti-corruption as a tool to harass their opponents – must be willing to commit to the independence of the anti-corruption agency. It’s not clear how to achieve this, however.

There may be a trade-off between an anti-corruption agency’s independence and the amount of financial and political support for that agency.

One of the biggest challenges facing anti-corruption agencies around the world is a lack of resources. Another challenge is a lack of cooperation from other divisions in the government. An independent and insulated anti-corruption agency may find these challenges even more daunting. Politicians tend to spend money when they can also exercise influence.

Perhaps most importantly, making anti-corruption agencies independent of elected government officials has costs as well as benefits. Decisions about anti-corruption policy are often themselves political decisions. Not political in a crude partisan sense, but political in the sense that they involve basic strategic and value choices about which reasonable people might disagree.

In a democracy it’s dangerous, both in principle and in practice, to try to remove fundamentally political decisions entirely from the political process. I want to emphasise this because there’s a common idea, particularly among experts in some field, that if only we could take this issue away from the politicians we’d be able to solve the problem. But that’s often an illusion.

There are technical aspects of anticorruption policy that are best left to the experts and excessive politicisation of anti-corruption can have devastating effects, rendering anticorruption efforts ineffective or even counterproductive.

Yet we value political accountability

and political sustainability. Our frustration with the political process and our legitimate concerns about the politicisation of anti-corruption enforcement sometimes leads us to try to place anti-corruption policy outside of politics or above politics. But anti-corruption efforts must work through the political process and with the political process. They cannot be entirely above or outside it.

Some degree of insulation for anticorruption enforcers is likely necessary. One of the big challenges in designing effective anti-corruption agencies is striking the right balance between political independence and political accountability. There’s no simple formula or easy answer but this is one area that needs more attention than it has received.

It is also worth keeping in mind that, in some circumstances, pervasive corruption is the consequence of laws and rules that are themselves inefficient or else of sufficiently low value that the government would not really be willing to bear the costs of enforcing them consistently. In these cases the inefficiency of the rules creates an overwhelming pressure to find ways around them.

Informal normative constraints on violating such rules are relatively weak because the rules themselves may be perceived as arbitrary and illegitimate. The result is that an informal system of corruption develops in which parties bargain around the rules, essentially substituting a shadow market system for the inefficient non-market system established by the official rules. So although in some circumstances corruption is itself the main problem it is more like a symptom of a different problem. The corruption is the fever but the bad rules are the underlying infection.

It was this possibility that led some prominent scholars in the 1960s and 1970s to conclude that corruption was not only not bad but was affirmatively good, at least for economic development. As political scientist Samuel Huntington once stated ‘in terms of economic growth the only thing worse than a society with a rigid, over-cen-

tralised, dishonest bureaucracy is one with a rigid, over-centralised, honest bureaucracy’. It’s a clever quip but the evidence is overwhelming that Huntington was wrong about corruption being a good thing.

His argument only holds up if the government rules in question are in fact inefficient to the point that an illicit market allocation system would be superior. Huntington’s perception that this was generally the case may have been influenced by prominent examples such as the Soviet Union and 1950s India, where one could plausibly argue that some forms of corruption were indeed socially and economically beneficial ways of evading heavy-handed government regulation. But it’s not generally true. To the contrary, government rules circumvented by corruption are often incredibly valuable.

Another flaw in Huntington’s argument is that the dynamic Huntington describes – in which people will pay bribes to get around inefficient rules – creates perverse incentives for public officials to create and maintain those inefficient rules, precisely so they can extract the bribe revenue.

The flaws in Huntington’s analysis should not blind us to the kernel of truth at the heart of the argument that, sometimes, the underlying source of corruption is the substance of the rule itself. As a result, sometimes the best way to deal with the problem – both the corruption problem and the underlying inefficiency – is to change the law. Doing so may have costs, particularly if there are some benefits associated with the law, but those costs would have to be weighed against the costs of corruption.

Hemming in government decisionmakers with clear rules may help rein in corruption, in that it is easier to monitor whether these officials are in fact following the rules. But rigid rules can sometimes contribute to corruption as well First, recall Huntington’s observation that rigid rules can be inefficient, and can create pressures for circumvention.

If the application of a rule would reThe Brief

Issue 1/2012

33

quire a government official to do something that the official herself views as silly or misguided, she may be more susceptible to persuasion to do something else if she can get away with it.

derpaid and underappreciated, they are more likely to view illicit income as a kind of compensatory entitlement.

Third, the degree of corruption in an organisation may be related to how much the members of the organisation identify with its mission and how much the organisation itself seems to be organised along professional lines.

Again, this suggests that a comprehensive anti-corruption strategy may involve measures that are not necessarily about corruption as such.

Rigid rules may also alter the kind of person who becomes a government official, attracting people who are less invested in the mission of the organisation. After all, it’s not all that satisfying or interesting to be a functionary. It’s more rewarding to have some say in how things get done. Overly rigid rules can contribute to public servants’ frustration and alienation with the job, which in turn can foster an attitude conducive to corruption.

That last observation relates to one other suggestion I want to make. I think we need to pay relatively more attention to the psychology of corruption. Let me say a bit more about what I mean. There are two main ways that most academic and popular discourse depicts the corrupt official. First, there’s the language of traditional moralism, in which corrupt individuals are immoral individuals – dishonest, scheming, and greedy. Corruption, on this account, is a moral failing.

Then there’s the language of classical economics in which corrupt individuals are rational actors responding to tangible material incentives, primarily the size of a bribe, the risk of getting caught, and the expected penalty.

Neither of these accounts is wrong.

Indeed, both are clearly correct, as far as they go. Corruption is both a moral failure and a rational response to a particular set of incentive but neither of these perspectives, at least in their traditional form, is sufficiently attentive to what we might think of as the psychology of corruption.

Most people don’t think of themselves as bad or corrupt people. Most people don’t like to think of themselves as bad or corrupt people. There are exceptions, of course. Some people steal brazenly and without conscience but most people aren’t like that. For corruption to reach epidemic proportions, as it has in many parts of the world, it must be the case that large numbers of people who think of

34

The Brief

Issue 1/2012

Former prime minister Abhisit Vejjajiva

themselves as basically decent, honest people – and who probably are, in most other areas of their life, decent, honest people – are engaging in fundamentally dishonest conduct. How does that happen? How do people rationalise, or justify to themselves, this sort of behaviour? How are people’s natural inhibitions against dishonest behaviour eroded?

I think that understanding how that psychological process occurs may be quite important in developing long-term anti-corruption strategies.

There’s surprisingly little research on this topic but let me hazard a few conjectures about how basically good people can become corrupt.

Social norms against corruption may be profoundly affected by perceptions of what is normal or accepted. When we see rules flagrantly violated all the time, we learn to accept certain violations as tolerated and to view enforcement of the rule as bizarre, unexpected, and illegitimate.

Second, people may rationalise corrupt behaviour by noting how they’re being unfairly treated in some other respect. When civil servants feel that they don’t get respect, that their superiors don’t care much about the quality of their work, when they are frustrated in their ability to make a positive contribution to society, when they feel un-

War used to be considered a natural, inevitable, even glorious part of life. States made war – that’s what they did and they killed thousands upon thousands of people while doing it. A century or two ago anyone who suggested that war might become a rare event, viewed as illegitimate except in extreme circumstances, would probably have been ridiculed as a starry-eyed optimist.

But as Steven Pinker has documented in his recent book this has occurred.

Do we still have wars? Yes, of course we do, and they are still horrible. But their frequency and cumulative impact have declined dramatically in a relatively short time. No one today describes war as normal or acceptable, let alone glorious or desirable. War is a problem to be contained, not a normal and accepted fact of everyday life.

Perhaps as with war, so too with corruption. Perhaps over a similar time frame – say, 50 to 100 years – we can make corruption a rare and illegitimate deviation from a norm of integrity, much as offensive war has become a rare and illegitimate deviation from a norm of peace.

Matthew Stephenson is a Professor of Law at Harvard Law School. He may be reached at: mstephen@law.harvard.edu

Big bell to ring in London Olympics T

his year’s in London spectacular inspired by a play speare.

Olympic Games will begin with a opening ceremony

by William Shake-

The show’s artistic director, Danny Boyle, told media that the ‘Isles of Wonder’ ceremony was inspired by ‘The Tempest’. He said that the ceremony would be about ‘a land recovering from its industrial legacy’. At least one billion people are expected to watch the televised opening ceremony on 27th July.

London 2012’s executive director Steven Daldry said that the task of putting on the greatest shows on earth, backed by a budget of £81m, was like producing 165 West End musicals at the same time.

“The Olympic and Paralympic opening and closing ceremonies will represent one journey, looking at who we are, who we were and who we would wish to be,” he said.

Danny Boyle, perhaps best known for directing the Oscar-winning film Slumdog Millionaire, said the ‘Isles of Wonder’ theme captured the essence of Britain. Europe’s largest bell will ring to start the opening ceremony. The 27-tonne bell has been cast at London’s Whitechapel Foundry (where Big Ben was cast in 1856) and will be inscribed with a quote from The Tempest’s Caliban: ‘Be not afeard, the isle is full of noises’.

The bell is to hang at one end of the Olympic stadium, with Danny Boyle stating that he wants it to be heard ‘for hundreds of years’.

With £27m to spend on the opening ceremony - far less than the £65m

Former Olympic athletes Seb Coe and Frankie Fredericks lay the final piece of turf at the stadium in east London.

given to Chinese film director Zhang Yimou for the Beijing 2008 spectacular – Boyle said he would be taking his lead from previous Olympics. “You’re standing on shoulders of giants – you cannot but live in the shadow of your predecessors,” he told media representatives.

Boyle described Beijing’s opening ceremony as ‘extraordinarily, eye-wateringly spectacular’ and that of Athens 2004 as ‘incredibly beautiful’ but added that he would be most honoured if his spectacle was compared to the opening of Sydney 2000 – ‘a wonderful people’s Games’.

A full dress rehearsal will be held for a capacity crowd of 80,000 in the Olympic Stadium, which will be fitted with a million-watt sound system.

Before the 20,000-cast event kicks off on 27 July at 21:00 BST, with the tolling of the bell, an Olympic Stadium packed with 80,000 spectators will be entertained by a pre-show that will start at 12 minutes past eight - 20:12 BST. Some 900 youngsters from the six

Olympic host boroughs will be given roles in the opening and closing ceremonies. Children from 18 primary and seven secondary schools in east London have been auditioning for the roles.

Boyle also revealed that nurses would have a starring role in the ceremony sequence because, he said, the NHS is one of things that is ‘unique about us... along with our sense of humour’.

Around 15,000 performers using 25,000 costumes will take part in the opening and closing ceremonies of both the Olympic and Paralympic Games. They will be drawn from members of the public and more than 10,000 have already been auditioned.

Both Olympic and Paralympic closing ceremonies will be directed by Kim Gavin, the brains behind Take That’s theatrical stadium shows, while artistic directors Bradley Hemmings and Jenny Sealey will be behind the opening of the Paralympics. The ceremonies are expected to be watched together by up to four billion people and advertising experts estimate that’s worth up to £5bn in airtime exposure.

The Brief

Issue 1/2012

35

H.M. The Queen to address Parliament as nation prepares for Golden Jubilee T he Queen will make a personal address to MPs and peers as part of her Diamond Jubilee celebrations.

attendance of the two Houses on Her Majesty in Westminster Hall for the presentation of humble addresses on the morning of Tuesday March 20.”

Leader of the House of Commons Sir George Young has confirmed that the Queen will address a joint session of Parliament in Westminster Hall on 20th March.

Other tour plans confirmed include a visit by Prince Harry to Brazil in March after a jubilee trip to Jamaica, Belize and The Bahamas. It will be his first official tour on behalf of the Queen. The visit to Brazil is in support of his charities and the UK government.

Her Majesty made similar addresses to mark her Silver Jubilee in 1977 and her Golden Jubilee in 2002.

Sir George said that politicians from both Houses of Parliament would mark the Queen’s 60-year reign. He told MPs, “An early celebration of this magnificent anniversary will be the

Foreign Secretary William Hague said Harry would attend the Rio de Janeiro launch of the ‘Great campaign’, which promotes the UK abroad on the back of the London 2012 Olympic Games and the Diamond Jubilee.

Today, as I mark 60 years as your Queen, I am writing to thank you for the wonderful support and encouragement that you have given to me and Prince Philip over these years and to tell you how deeply moved we have been to receive so many kind messages about the Diamond Jubilee.

In this special year, as I dedicate myself anew to your service, I hope we will all be reminded of the power of togetherness and the convening strength of family, friendship and good neighbourliness, examples of which I have been fortunate to see throughout my reign and which my family and I look forward to seeing in many forms as we travel throughout the United Kingdom and the wider Commonwealth.

I hope also that this Jubilee year will be a time to give thanks for the great advances that have been made since 1952 and to look forward to the future with clear head and warm heart as we join together in our celebrations.

I send my sincere good wishes to you all.

ELIZABETH R.

36

The Brief

Issue 1/2012

Buckingham Palace has already laid out plans for the Diamond Jubilee with the Queen and the Duke of Edinburgh intending to travel as widely as possible across the UK. Other members of the Royal Family will visit the 15 other countries where the Queen is head of state, as well as some other Commonwealth nations.

The Duke and Duchess of Cambridge will visit Malaysia, Singapore, the Solomon Islands and Tuvalu.

The Prince of Wales and Duchess of Cornwall will visit Australia, Canada, New Zealand and Papua New Guinea.

The Duke of York will travel to India and the Princess Royal is set to visit Mozambique and Zambia. The Earl and Countess of Wessex will tour a number of Caribbean islands with an extra visit to Gibraltar.

Other travelling royals include the Duke of Gloucester and the Duke of Kent. The former will head to the British Virgin Islands and Malta. And the latter is set to go to the Falkland Islands and Uganda.

European investors eye new opportunities in Myanmar

By Nareerat Wiriyapong

E

uropean companies are keen to use Thailand as a gateway to Myanmar as the latter opens up to the international community and becomes more attractive to foreign investors, writes Nareerat Wiriyapong – Business reporter at the Bangkok Post.

A group of European investors visited Myanmar last month and observed positive developments taking place that favoured foreign investors, said Rolf-Dieter Daniel, president of the recently opened European-Asean Business Centre (EABC).

“It is very likely that the process of opening up Myanmar will be very successful and continuing. Myanmar people are very keen to have European investors there, not only big businesses but small ones,” said Mr Daniel, also president of the German-Thai Chamber of Commerce.

“The more Myanmar opens up, the more Thailand will benefit as your country will be used as a gateway.

Thanks to the natural border and close connections with Myanmar people, European investors will develop business there through Thailand.”

Thailand is the second largest investor in Myanmar after China. European businesses are interested in all kinds of natural resources and infrastructure projects. Myanmar in 2013 will chair the Association of Southeast Asian Nations (ASEAN) and this is expected to further speed up the pace of political and economic reforms there, said Mr Daniel.

He believes that Myanmar needs to open up sectors such as the internet, telecommunications and health care to support the arrival of companies including those from Thailand to invest

rently represented by either embassies or chambers of commerce in Thailand.

Leading western politicians such as Hillary Clinton (top centre) and William Hague (above right) have been keen to engage with Aung San Suu Kyi.

and upgrade the country’s systems.

The presence of higher-standard communications and health care will facilitate and draw more investments from abroad.

The EABC supports European business interest in Asean by providing basic information, identifying obstacles to investments and pursuing dialogue with government agencies. Working groups have been established under the centre to deal with food and beverages, healthcare and pharmaceuticals, ICT, intellectual property rights, insurance, automotive, transport and logistics sectors.

Mr Daniel said the centre aimed to have 600 members in its first year of operation. They would include the 13 existing European chambers of commerce, which in turn have 2,500 corporate members, as well as companies not cur-

European investors are also encouraging the Thai government to enter negotiations for a bilateral free trade agreement (FTA) with the European Union. At present, the EU has FTAs with Malaysia, Singapore and Vietnam but years of political drift in Thailand have stalled efforts to seriously pursue an FTA with the 27-country European bloc. This is despite the fact that Europe is the second largest export market for Thai products after ASEAN, while European investors rank second in terms of foreign investors in Thailand.

“Thailand will be left behind the neighbouring countries if they don’t have an FTA with us. Meanwhile, the Generalised System of Preferences granted to Thai products will expire next year, so your products will lose advantages in the European market,” said Mr Daniel.

“We want to bring a European voice to your government so that European companies can be at least on the same level playing field in Thailand.”

With thanks to the Bangkok Post for kindly permitting us to reprint this news story. Nareerat Wiriyapong is a Business reporter at the Bangkok Post.

The Brief

Issue 1/2012

37

HELPING THE NEEDY

Fresh hope for stateless children

T

wo stateless children released from the Immigration Detention Centre (IDC) in Bangkok after intervention from the National Human Rights Commission of Thailand (NHRC) and the Thai Committee for Refugees Foundation (TRC) have been granted scholarships worth one million Baht to attend St. Andrews International School.

The children arrived in Thailand with family members to seek asylum in June 2008. They were arrested in May 2010 and detained at the Bangkok IDC until 27 January this year.

A press release issued jointly by the NHRC and TRC stated: ‘the conditions in the detention centre have been variously reported as extremely inhumane.

Cells are overcrowded with no proper sanitation and not enough space.

Among the detained are also young children, women and unaccompanied minors. Many of the detained are refugees who have been officially recognised

by the UNHCR, the United Nations Refugee Agency. Refugees, asylum seekers and stateless persons are governed by the same Immigration Act and as such considered to be illegal aliens. It is often a situation of despair as the only way out of it is resettlement to a third country or return back to their country of origin’.

The statement added that ‘the release was a great achievement by the NHRC’s initiative in launching a national campaign against the detention of children and the cooperation with the Immigration Department and TCR (Thai Committee for Refugees Foundation). The bailout of the refugees and stateless people was possible through the help of TCR’s Refugee and Stateless Persons Freedom Fund’.

The fund was established in May 2011 in order to bail vulnerable refugees, in particular children, women and sick persons, from the Immigration Detention Centre in Bangkok. Acting on a

request from the NHRC, the TCR expanded the fund to cover stateless children and their families.

‘Last June saw 94 refugees and two asylum seekers released on bail after cooperation between Thai government agencies and Thai civil society. It was for the first time that such a large group of refugees and asylum seekers could live lawfully in Thailand while waiting for resettlement to third countries.

Their lawful bail is administered under the Article 54 of the Immigration Act B.E.2522 in Thailand’, according to the press statement.

TCR is seeking amendment of the Immigration Act – in particular the sections regarding arrest and detention of asylum-seekers, refugees and stateless children and their families. TCR is also campaigning for new legislation that would create a national legal framework to protect refugees in Thailand. At least 10,000 signatures are needed before the draft bill can be tabled in parliament.

Britain in South East Asia (BiSEA) CAMBODIA British Business Association of Cambodia c/o Top Recruitment Cambodia 592, Building F, Phnom Penh Centre Corner Sothearos & Sihanouk Boulevards, Phnom Penh, Cambodia Tel: 855-23-997-492 Fax: 855-23-997-493 Email: secretary@bbacambodia.com Website: www.bbacambodia.com Chairman: Tom Sterling Committee Secretary: Kevin Britten INDONESIA British Chamber of Commerce in Indonesia Wisma Metropolitan 1, 15th Floor, Jl. Jend, Sudirman Kav 29-31 Jakarta, Indonesia 12920 Tel: 62-21-522-9453 Fax: 62-21-527-9135 Email: bisnis@britcham.or.id Website: www.britcham.or.id Chairman: Haslam Preeston Executive Director: Chris Wren MALAYSIA British Malaysian Chamber of Commerce E04C1, 4th Floor East Block Wisma Selangor Dredging, 142-B Jalan Ampang 50450 Kuala Lumpur, Malaysia

38

The Brief

Issue 1/2012

Tel: 603-2163-1784 /1786 Fax: 603-2163-1781 Email: britcham@bmcc.org.my Website: www.bmcc.org.my Chairman: Dato Larry Gan Director, Business Development: Molly Jagpal PHILIPPINES British Chamber of Commerce of the Philippines c/o The British Embassy Manila 120 Upper McKinley Road McKinley Hill, Taguig City 1634 Metro Manila, Philippines Tel: 632-858-2255/858-2372/858-2373 Fax: 632-858-2390 Email: secretariat@bccphil.com Website: www.bccphil.com Chairman: Keith Perrin Executive Director: Alison Doig Henderson SINGAPORE British Chamber of Commerce in Singapore 138 Cecil Street, #11-01 Cecil Court Singapore 069538 Tel: 65-6222-3552 Fax: 65-6222-3556 Email: info@britcham.org.sg Website: www.britcham.org.sg President: Mr. Steve Puckett Executive Director: Brigitte Holtschneider

THAILAND British Chamber of Commerce Thailand (BCCT) 7th Floor, 208 Wireless Road, Lumpini Pathumwan, Bangkok 10330 Tel: 66-2651-5350-3 Fax: 66-2651-5354 Email: greg@bccthai.com Website: www.bccthai.com Chairman: Simon Landy Executive Director: Greg Watkins VIETNAM British Business Group Vietnam Ho Chi Minh City G/F 25 Le Duan Blvd, District 1 Ho Chi Minh City, Vietnam Tel: 84-8-3829-8430 Fax: 84-8-3822-5172 Email: execdirector@bbgv.org Website: www.bbgv.org Hanoi 67 Le Van Huu, Hai Ba Trung, Hanoi, Vietnam Tel: 84 4 6674 0945 Chairman: Patrick Regis Executive Director: Jakki Lydall

Graham signs off as Chamber Chairman BCCT Chairman Graham Macdonald made a passionate farewell speech at the BCCT annual General meeting in January. Here is a summary of his comments.

Over the last 14 years I have seen the Chamber go from strength to strength.

When I joined the board in 1998 there were well less than 400 members and more than a few were not fee paying.

We now have a healthy increase on this and, if you are all good people, the membership should be paid up by the end of the quarter!

The Chamber has had its ups and downs during my time on the board.

Fortunately, most of them have been ‘ups’. When there have been ‘downs’, for instance loss-making years, they have been rectified as quickly as possible. It is with this in mind that I ask you to remember that board directors donate their time freely and try to serve the membership as best they can.

Have there been mistakes over the last 14 years? Using 20:20 hindsight of course there have been. However, these were made using the information available at the time and were made in good faith. As we announced earlier, the Chamber is now in a very healthy state. I would urge those that continue to delve into the past to forget and forgive. There are some who are no longer around to defend themselves.

The world and Thailand are going through troubled times. We need to unite, put the past behind us and, together, help shape the future to the benefit of all – especially those in whose country we are guests in.

The Thai people have suffered more than most over the last decade. They have proved themselves time and time again. No people in the world are more resilient or bounce back so well and so quickly – and all with a smile on their

Daniel Pruce presents Graham Macdonald (right) with his lifetime membership award.

face. Let us buckle down, work with them and help make this country the best place for business in Asia.

As President Truman once said, ‘Anything can be achieved providing no-one minds who gets the credit’.

My thanks go to all of them.

One company that is often forgotten is my own – MBMG.

Firstly my thanks to John Sim who brought in and oversaw a systematic change in the way the Chamber does its accounting. It is now so good that even I know what is happening.

When I took over in 2010, the chamber was taking up to three days a week of my time. It is purely down my business partner Paul Gambles and our CEO Jan Sumanus that I was able to dedicate this time to the Chamber.

Without them covering for me this would have been impossible and their hard work should be recognised. I must also thank my wife Jay for all the support she has given me and allowing me to spend so much time in Bangkok.

John has worked tirelessly for BCCT and deserves all our thanks. Thanks must also go to all the Vice Chairmen who have supported me – their support and counsel have been invaluable. I would also like to thank the rest of the board for all the hard work they have done. The board of 2012 has a tough act to follow.

Finally, the biggest thank you of them all must go to Greg Watkins and his staff who work tirelessly for the BCCT so that you can get the benefit. They have sacrificed a lot over the last 12 months and have done so purely to help the Chamber and its members.

We should not forget this. That the Chamber is a success is down to them

The last few years have also seen a lot closer links with the Embassy. We now have an excellent working relationship and complement each other superbly.

Lastly, it has been an honour and a privilege to serve you over the last 14 years and I thank you for allowing me to do so.

Much has been done over the last 12 months to get the Chamber to where it is now.

The Brief

Issue 1/2012

39

MEMBER NEWS

UK Group seeks stronger ties T

he BBCT UK Group’s second annual meeting heard an upbeat assessment on business prospects for British companies in Thailand.

Bangkok-based Director of Trade and Investment Bradley Jones stated many of the trade missions postponed due to the recent floods in Thailand were now being reinstated with others now at the planning stage. Visits to Thailand by HRH The Duke of York and Lord Green are also in the pipeline, he told the meeting.

Bradley Jones added that British exports to Thailand continued to move in an upward direction and the latest arrivals included the University of Central Lancashire – now in the process of establishing the first British University campus in Thailand.

BCCT Executive Director Greg Watkins reported that 2011 had been a good year for the Chamber with finances back on a sound footing and membership levels increasing – helped by the recent introduction of a THB10,000 overseas subscription.

Tim Standbrook, Executive Director of the newly-formed United Kingdom Asean Business Council, said that this new body is to be chaired by the Labour peer Lord Davies of Abersoch, a former chairman of Standard Chartered Bank, who will work with a dozen-strong advisory panel and a small executive team.

It will be initially government funded but the aim is to transfer responsibility for this body to the private sector within four years. He said that the UKABC ‘will focus upon on SMEs,

40

The Brief

Issue 1/2012

Lord Davies of Abersoch

which should be good news for the BCCT membership as over 85 percent fall into this category’.

Stephen Willis (Asia House) gave a brief account of forthcoming activities and made it clear that the organisation would like to play a leading role in both the UKABC and any future Thailand-related activities.

Steve Buckley, formerly the Director of Trade and Investment at the British Embassy in Bangkok, outlined the various UK Group activities in 2011 which comprised mainly briefing sessions with chambers, trade associations, companies and government ministers. He reminded those attending the meeting that 2012 marks the fiftieth anniversary of the Anglo Thai Society and that a number of high-profile events, including a dinner at the House of Lords, will mark the occasion.

Steve welcomes more contact from BCCT members. “This is the only regional Chamber to have a UK Group and it would be a pity for this to be lost by a lack of interest on the membership’s behalf,” he said. The meeting was sponsored by the OCS Group.

Science Fair set for St Andrews

A

Science Fair at St Andrews International School at Green Valley Rayong Campus could become an annual interschool event in Thailand.

The Fair, on 22-23 March, has attracted interest from several international schools on the Eastern Seaboard. Individual students, or students working in groups, will undertake an investigation or study related to science. It is not intended to be a research project but should involve the scientific method. Prizes funded by corporate sponsorship will be offered.

“Science and technology is something that everyone uses whether they realise it or not. It is something that our youth take for granted and use with ease. It is something that is always changing when individuals see a need, or a way, to improve what is already in place. The aim of our fair is to celebrate the field of science, to get all students to think it, to investigate it, to test old ideas and to think of new ones,” says St Andrews’ Annie Hansen.

Harrow head urges more thought on school selection

F

ast food outlets and sales of high tech social mobile devices are not the fastest growing markets in the world. This position is occupied by international schools. That’s the view of Wilf Stout, Headmaster of Harrow International School in Thailand.

“In our rapidly shrinking cling-filmed world, parental desire for an outstanding English medium education for children is highly desirable. Three new international schools are opening worldwide daily, the bulk of them being on the continent of Asia,” he says.

Mr Stout wants parents to think very carefully about the curriculum best suited for their children. “Too many parents still choose proximity of school to the home irrespective of curriculum. It would be safe to state that US parents choose to follow a US curriculum; British parents the UK curriculum; Australian parents the IB and other nationalities according to the likely country in which their children will study at higher education.

“There are three major English medium educational programmes from which to choose - the UK, US or the International Baccalaureate. All three are available at international schools in Thailand and all three offer different learning experiences to children ranging from semi-prescriptive syllabusbased curricula to more open-ended, free-range experiences,” he says.

Traditionally the UK curriculum, based on the National Curriculum of England and Wales, offers a continuous programme of study from age five to age 18. It is subject based, subdivided into five key stages with formal assessment available at the end of each stage. At 16 years the International General Certificate of Secondary Education (IGCSE) is available and two years later students may sit what is ar-

guably the ‘gold standard’ in international assessment - Advanced Level.

“The system in one form or another has been around since 1830 and has been adapted as the national system of education in over 50 countries in the world from Singapore and Zimbabwe to the nations in the Caribbean,” adds Mr Stout.

The US system is less formal in both prescription and practice. Each state in the USA has its own system of education and assessment many of which are available internationally. The International Baccalaureate Organisation offers three programmes across age range five to 18 years.

All have international credibility as entrance qualifications to university and higher education courses. An international education is seen to be very important for those Thai families who are available to afford private education. Thai students are found in schools offering the three curriculums and they achieve success in all.

If there is a problem in international education in Thailand it arises from the fact that given any opportunity our Thai students resort to speaking in Thai to the detriment of acquiring absolute fluency in English – despite the fact that we do our best to encourage an English-speaking environment,” says Mr Stout.

Phuket work wins design award for dwp

W

ork undertaken at the Mai Khao Dream Villa Resort & Spa in Phuket by the dwp design consultancy has been recognised at an awards ceremony in Paris. The event was organised by the International Interior Design Association.

“We are proud and honoured that our designs are being singled out among our peers and the industry,” says dwp group CEO Brenton Mauriello.

The words Mai Khao in Thai mean white wood – the defining accent for the design concept of the Mai Khao Dream Villa Resort.

The Brief

Issue 1/2012

41

MEMBER NEWS Pupils from Bangkok Patana School have enjoyed a successful weekend in Jakarta competing in rugby, touch rugby, tennis and basketball team events as part of the South East Asia Student Activity Conference.

Pictured is the school’s victorious girls tennis team.

Upbeat forecast for hotel investment

G

lobal hotel investment volumes surged in the first half of 2011 before economic uncertainty returned in the second half of the year caused this momentum to falter in the second half of the year. That’s according to the latest Hotel Investment Outlook published by Jones Lang LaSalle Hotels.

The company is forecasting that global hotel transaction volume will hold steady in 2012 to reach upwards of US$31 billion in deals. In the Asia Pacific region hotel transaction volume is projected to reach US$5 billion in 2012, a similar level to 2011. Of this, Asia is projected to reach US$3.5 billion as long term owners continue to make strategic dispositions in southeast Asia.

According to Mike Batchelor, the company’s Managing Director - Investment Sales Asia, “Following a ‘V-shaped recovery’ in 2010, growth in Asia Pacific economies moderated through 2011 and is projected to continue to do so in 2012. Strong domestic economies are also resulting in emerging sources of capital with offshore hotel investments made by players from China, Hong Kong, India, Indonesia, Japan, Malay-

42

The Brief

Issue 1/2012

sia, Pakistan, Singapore, South Korea and Thailand”.

He added, “Asian investors have invested a total of USD7.5 billion in global hotel real estate since 2009, accounting for 26 percent of total cross border investments and the highest proportion for any source region. This trend is likely to gain pace in 2012 as more groups look to deploy capital offshore to take advantage of displaced global hotel markets.”

The report adds that ‘activity in Thailand is projected to increase as some counter cyclical buying opportunities emerge. The political environment is more stable and trading is expected to

rebound over the next 12 to 18 months, notwithstanding the impact of the recent flooding disaster in Bangkok.

Similar to Hong Kong and Singapore, some offshore and long term Thai owners are looking to exit to redeploy elsewhere capital offshore’.

Mike Batchelor said, “Constraint will be driven by illiquid markets and the shrinking balance sheet capacity of international banks to lend significant sources of new money. Still, the market in Asia will be flush with equity capital that will come into play. We expect single asset sales across the gateway markets of Bangkok, Phuket, and Pattaya to be the main centres of activity following a similar pattern in 2011”.

EPL coaches snap up young soccer talent in Thailand

S

even budding soccer stars in Thailand have been selected for trials with two English premier league clubs. Academy coaches from Manchester City and Stoke City led a week-long soccer camp at the New International School of Thailand attended by students from all over the country.

“We wanted to create a soccer camp where children would experience coaching from Premiership academy coaches” said organiser Darren Jackson from Can U Kick It.

Children were also given the opportunity to showcase their talent with the hope of being invited to one or both clubs for a trial. NIST’s Athletics and Activities Director Paul Hodgkinson described

the event as ‘a great learning opportunity for our students’. A second Premiership Soccer Camp is being staged in July with support

once again from Manchester City and Stoke City as well as Liverpool and one other premiership side yet to be named.

KIS scholarships

K

IS International School is now inviting applications for its coveted IB Diploma scholarships for the academic year 20122013. The IB Diploma scholarship winner will be granted full tuition for the duration of the twoyear programme, valued at over one million baht.

Students aged 15 or 16 years and in Grade 10 or Year 11 may apply.

The scholarship is open to applicants of all nationalities that are fluent in English. The school states that ‘applicants should also be academically strong and well-rounded’.

They will be required to sit an exam and undergo an interview as part of the application process.

Candidates who do not receive the scholarships but who do perform above expectations may be eligible for a partial scholarship.

More details from Linda Belonje. E-mail: linda@ kis.ac.th or visit the website: www.kis.ac.th.

Samitivej Sukhumvit Hospital has opened a Sports and Orthopaedic Centre. The new facility brings together orthopaedic surgeons, sports medicine/ rehabilitation experts and physical therapists to provide wide-ranging expertise and services. The centre is open from 7am to 10pm daily. For more information, telephone: 02 711 8494.

The Brief

Issue 1/2012

43

British Chamber of Commerce Thailand

Profiles of BCCT Board of Directors 2012 Newly-elected BCCT chairman Simon Landy co-founded Colliers Thailand, an international property consultancy and brokerage, in 2007. He is the company’s Executive Chairman.

Simon has set three main targets for the new board: providing members with relevant and timely events and information, especially in relation to expected and unexpected political and economic developments; promoting BCCT’s advocacy role both as an independent body and in collaboration with the rest of the business community, such as promoting specific legal reforms and minimising red tape; and ensuring sustainable financial health for BCCT. Chairman SIMON LANDY

“I am also looking to bring up to date some of the BCCT regulations to better reflect today’s business environment,” he says.

Dean is Managing Director of Boots Retail (Thailand) Co., Ltd., the health and beauty retailer with over 200 stores in Thailand.

“I intend bringing the principles used within the retail business world to the Vice Chairman functioning of the BCCT DEAN THOMPSON – including performance management techniques for BCCT management and staff plus disciplines in managing finances and accounts. I will be promoting British industry through the vast network that Boots has set up in the past 15 years in Thailand,” says Dean.

44

The Brief

Issue 1/2012

Vice Chairman MATTHEW LOBNER

Matthew Lobner was appointed CEO of HSBC Thailand in January 2011. He joined the bank in 2005 and has worked with HSBC in the USA, Europe, the Middle East and Asia. Matthew is currently Chairman of the Association of International Banks in Thailand.

“I am delighted to confirm that HSBC is to continue its role in 2012 as annual corporate partner of the BCCT,” says Matthew.

Simon is currently Country Manager for Manpower, having established the operation in Thailand in 1998.

Vice Chairman SIMON MATTHEWS

Simon hopes to assist the Chamber in achieving its short and long range goals and objectives and ensure members are advised on employment and immigration issues.

Andrew is a partner at Grant Thornton, one of the World’s largest independently owned and managed accounting and consulting firms.

“There are so many British interests in Thailand throughout Director Thailand, and so much ANDREW MCBEAN being done by the Chamber, Embassy and British Council. With difficult global economic conditions inevitable, and significant long-term business challenges caused by the recent Bangkok floods, we need to be smart about the way we leverage these significant British assets to improve our business environment here in Thailand. I am committed to doing this to help businesses both small and large, with a particular focus on the needs of SME’s.”

Director COLIN HASTINGS

John Sim moved to Thailand in 2001 to look after the KPMG presence in the Mekong sub-region after spells with the company in UK, Iran, USA, Singapore and Taiwan.

He has served as COO for KPMG in Thailand.

Vice Chairman & Treasurer JOHN SIM

John became treasurer of the BCCT in 2010 and has been concentrating upon the important task of improving the Chamber’s financial situation. “My main focus was to tidy up the financials and help move the Chamber away from a loss position. Significant progress was made during 2011 with the implementation of a new in house accounting system and we are now back in surplus.

This has truly been a team effort with the BCCT staff doing most of the ‘heavy lifting’.

Chris is an individual member of the BCCT with a passion for assisting members at all levels and in particular the SME community.

“As an individual member with no corporate affiliation I am free of all constraints and Director can devote myself fully CHRIS THATCHER to the needs of all our members,” says Chris, formerly a Headteacher and the President of the UK’s National Association of Headteachers. “The BCCT must focus more upon the needs of its members by assisting them to develop and grow their business.”

Colin Hastings is Managing Director of The BigChilli Co Ltd, a long-established publisher of magazines and newspapers. The company’s principal title is the BigChilli, a popular monthly magazine aimed at the expatriate and Thai business communities.

Chamber more active and relevant in promoting the needs of members, especially SMEs. I also wish to encourage greater involvement by members to ensure more cost efficiency and transparency.”

“My mission as a BCCT director is to make the

He is long-time resident in Thailand, having moved here in 1975.

The Brief

Issue 1/2012

45

In 1991, Gary Biesty established the Thailand practice of Hong Kong-based law firm Johnson Stokes and Master – having joined the company some five years previously. He retired from JSM in 2011 and set up South Asia Law Co., Ltd.

David Cumming, General Manager of the Amari Orchid hotel, Pattaya, is Chairman of the BCCT Eastern Seaboard Group.

Director DAVID CUMMING

As a newly-appointed Director of BCCT he is committed to representing effectively the interests of British firms based on the Eastern Seaboard in Thailand.

Jane has lived and worked in Thailand for over 11 years and is employed by Equitech Thailand, now working on secondment to PATT (Plant A Tree Today) Foundation as Country Manager for Thailand.

PATT campaigns against deforestation and climate change through native Director forest restoration and JANE BAILEY environmental education, integrating employment for local villagers and creating a sustainable environment through forestry projects around Asia.

‘I am honoured to serve on the board and hope to bring new initiatives and events to the chamber. 2012 has many prominent British milestones ahead, and I hope to offer some innovative ideas to incorporate more involvement from BCCT members and their colleagues.’

Toni is Director for Corporate Finance Initiatives at TNT Asia Pacific. She has worked for TNT Express for 17 years in a variety of Finance Director roles covering Europe, China, South East Asia and the Americas.

She moved to Thailand in 2009

“During 26 years in Asia I have experienced several cycles of economic and political uncertainty. I have experienced the ups and the downs through my own businesses and those of clients for whom I have been legal advisor. Establishing a new firm has allowed me to re-focus on Thailand and I will endeavour to offer that fresh focus to contribute to the BCCT.” Director GARY BIESTY

Gary has acted as Honorary Consul for Ireland in Thailand since 2001.

Richard Greaves first arrived in Thailand in 1991 for the opening of Grand Hyatt Erawan Bangkok – where he has been General Manager since 2003. Other regional assignments have taken him to Hong Kong and Taipei.

“I believe that the Board and the Chamber will continue to benefit from my background in hospitality and tourism. This is an important sector for the Thai economy and the BCCT can play an important role in contributing to initiatives designed to help shape a sustainable tourism strategy for the nation,” he says.

Director RICHARD GREAVES

Sriram Narayan (Sri) is the British Airways and Qantas Manager for Thailand, Cambodia and Vietnam, based in Bangkok and he confirms that British Airways is to continue as an airline sponsor to the chamber in 2012.

Director TONI WEBER

Toni aims to represent both the Transport and Logistics industry and also the interests of the Chamber’s female members. In 2011 she served as chairman of the Professional Women’s Group and her work on the Steering Committee of TNT’s Women’s Network in developing programmes to advance the careers of the company’s 40,000-plus female employees should prove invaluable.

46

The Brief

Issue 1/2012

Director SRIRAM NARAYAN

“I plan to support BCCT objectives, events and fellow members in an enthusiastic and constructive manner,” says Sri.

British Chamber of Commerce Thailand

Annual Report 2011 Presented to members at the Annual General Meeting on Thursday 26th January 2012 SUMMARY For the majority of BCCT members, 2011 was another very challenging year. Before the floods hit in October and November businesses, particularly SMEs, had been adversely affected not just by the worldwide economic crisis but also by the impact of Thailand’s continuing political instability that was only partially addressed by the mid-year general election.

For BCCT, following the large operational losses of 2009 and 2010, a major restructuring within the office took place. In short, a good financial and operational surplus was achieved that was significantly above budget.

At the end of 2011, BCCT had 540 corporate and 19 honorary members.

There are a further 39 companies with fees outstanding that will be addressed early in 2012. In 2011 BCCT staff spent much more valuable time chasing fees and subsequently terminating memberships than in previous years.

In 2011 the Events Group and BCCT staff worked hard to provide members with a wide variety of ‘value for money’ events emphasising the objectives of being more specific to member needs and being clear on what each event is about.

BCCT introduced one designated ‘free’ event per month in 2011 and

successfully continued the T3 - Third Thursday networking events organised to follow immediately after the monthly board of directors’ meetings.

Evening presentations proved to be a very popular medium for business-related events with very little time taken from members’ working days. A more extensive programme of both English and Thai language workshops was organised by the Management Development Group. Finally, once again, the Tesco Lotus Bangkok Masters Football Tournament and the Annual Christmas Luncheon were both popular and successful.

Unfortunately the second Annual Lecture and Dinner, the second Annual Life and Style Party in the garden of the British Ambassador’s residence and a dinner with Deputy Prime Minister and (then) Commerce Minister,

Kittirat Na Ranong, were all postponed due to the flooding situation but have been rescheduled to take place in the first quarter of 2012.

BCCT remains active in Britain in South East Asia (BISEA), an organisation which meets approximately every six months and brings together all the British chambers and business groups in ASEAN to discuss best practice on operational issues and to work together on policy issues on behalf of member companies. BISEA held one conference in Ho Chi Minh City midyear but the Phnom Penh conference was postponed to January 2012.

BCCT again participated in events in UK in line with its mission statement ‘To serve the needs and promote the development of British business in Thailand and, as Partners in Progress,

The Brief

Issue 1/2012

47

contribute directly to Thailand’s economic advancement’.

During the year the BCCT Executive Director actively supported British business through participation in UKTI or joint Asia House/BCCT events in London (twice), Newcastle, Edinburgh, Newmarket and Stoke-on-Trent.

As 2011 ended the formal registration of the European ASEAN Business Centre (EABC) had just been completed.

EABC is an EU-funded project led by a consortium of European Chambers of Commerce in Thailand and European Industry Federations. Sector trade advocacy groups are being formed to represent and lobby on behalf of European companies in Thailand. BCCT plays a leading role in EABC. There were several changes to the BCCT board during 2011. The first and most distressing change occurred as a result of Paul Millar, Managing Director of Boots Retail, passing away on 31st May. Paul had first served on the BCCT board in 1997 when he was representing Marks and Spencer. He returned to Thailand in 2010 and was elected to the board in January 2011. In addition Robert Hermelin of HSBC, Neil Ager of British Airways and David Viccars of Securitas resigned during the year.

Internally, there were many staff changes at the BCCT office. During the year four (of seven) admin staff left BCCT – the Accountant, Assistant Events Manager, PA/Receptionist and Membership and Website Manager.

Although regrettable, these departures facilitated some major internal restructuring. The new Accountant Khun Kingkaew worked tirelessly to successfully implement KPMG’s changes to the accounting system. In October a new Deputy Director position was created. Khun Jyoti will be working on public relations, membership and sponsorship while also heading the oversight of finance and administration. She is supported by new Membership and Website Coordinator Khun Sivaporn.

BCCT’s excellent working relationship with the British Embassy and UKTI/ 48

The Brief

Issue 1/2012

FCO in UK continued to develop. In June, Deputy Director of Trade and Investment Paul Reid departed for a new posting in India and was replaced

by Ben Raby from the British Embassy in Shanghai.

in Chaiyaphum province) – THB 100,000 • Children of the Forest (school and home for children in Sangkhlaburi) – THB 50,000 CHILD PROTECTION

BCCT GROUPS CHARITY Until the Tsunami in December 2004, BCCT concentrated its charitable work through the British Community in Thailand Foundation for the Needy (BCTFN), organisers of the Annual Ploenchit Fair. Since then, the BCCT Board of Directors has determined that charitable donations should focus largely (but not exclusively) on children and/or education and that funds should come only from the proceeds of auctions or raffles at the annual Christmas luncheon and sporting functions.

Donations in 2011 • British Community in Thailand Foundation for the Needy – Ploenchit Fair Grand Raffle – THB 816,655 (net proceeds) • Students’ Education Trust, Nakhon Sawan (two British volunteer English teachers) – THB 150,000 • Teacher Plus Foundation (train the teacher projects in upcountry schools) – THB 100,000 • TBP Foundation (school project

BCCT has developed a partnership with UK police’s Child Exploitation and On-line Protection Centre (CEOP) in order to engage with the business community in Thailand in order to raise awareness and educate communities in which member companies operate. Working together CEOP and BCCT developed a corporate engagement plan and then a Memorandum of Understanding which was signed at the first child protection conference in Bangkok in 2010. In 7th March 2011 BCCT and CEOP jointly organised a Child Protection Workshop.

On 25th October 2011, a new animated film jointly developed by CEOP and BCCT was officially launched by the British Ambassador. Entitled ‘The Tales of Mai and Tam: Mai and Tam Take Control’, the film has been created in Thai and English and focuses upon issues of child trafficking and sexual abuse by someone outside the family. It was developed with sponsorship from the British Council, Shrewsbury International School, Property Care Services and Spirit of Soccer. The challenge for 2012 will be to ensure the most effective and widespread distribution of the film.

COMMUNICATIONS (COMMS) Last year proved to be quite a significant year for the Comms group as it continued its assessment of how best to communicate with members as well as responding to ever changing communications channels.

At the beginning of the year the content creation and advertising sales of the Annual Handbook and Directory were brought in-house with the printing and publishing contracted to a publishing house, and due to the success of this operation a similar model has been adopted for The Brief. The lay-out, design and content of The Brief have also been reviewed and the transformation has been positively received. In a bid to make The Brief more accessible to members on-thego, the magazine can be viewed online through from BCCT website.

In the world of social media, Facebook and Twitter accounts have been setup and are regularly updated. More needs to be done to alert members to their existence. The website continues to develop and continues to be a valuable resource for members.

EASTERN SEABOARD 1. Four BCCT Eastern Seaboard Group meetings were held in 2011, chaired by Graham Macdonald and the minutes recorded

2. Currently 56 members of the BCCT on the Eastern Seaboard with a further seven Bangkok companies having provincial offices in the area 3. Twelve monthly networking events were held on the Eastern Seaboard with some also being in conjunction with other Chambers such as in September with AMCHAM or December with AustCham and AMCHAM 4. Twelve Eastern Seaboard Group monthly Reports highlighting the development of the region were posted on the BCCT website 5. On 20th May the British Ambassador, H.E. Asif Ahmad, was welcomed to the Eastern Seaboard for a day of field trips followed by a dinner with local business leaders. A total of 55 persons were in attendance 6. The chairman of the Eastern Seaboard group Graham Macdonald and committee member Peter Malhotra met with the Deputy Mayor of Pattaya to discuss the MICE market and its potential. A follow up to this is planned for 2012 with the Pattaya Business and Tourism Association 7. The Eastern Seaboard Group held a stand at the Jester Care for Kids in September which was sadly due to the weather a very wet occasion. The BCCT Eastern Seaboard also supported the Jesters Care for Kids Dinner

8. In October the BCCT also joined the Oktoberfest run by the German Chamber of Commerce on the Eastern Seaboard 9. Plans have been put in place for a series of panel discussions starting early in 2012 with the first on ‘How to retain good people’ and the second on ‘New Educational developments’. Various panel members are being sought 10. The Eastern Seaboard Group attended a number of Bangkok events throughout the year and will continue to do so in 2012 11. In December after 14 years as Chairman on the Eastern Seaboard, Graham Macdonald stood down. David Cumming of Amari Orchid Pattaya has now assumed the role 12. Eastern Seaboard Group has already held its first meeting of 2012 outlining its plans for the year which include (minutes already submitted to BCCT):

- Addition of speakers prior to Eastern Seaboard networking evening - More joint chamber events with other chambers to be recommended - Site visits and networking evening in an industrial estate - Invitation to the Minister of Trade for UK to visit - Dinner with the British Ambassador to be repeated - Panel discussions as above

EVENTS In 2011 the events group continued with its focus on less events but with a higher quality - with the objective of meeting our members’ varied needs.

The 3rd Thursday has become a not to be missed event and was held at some of the leading hotels in Bangkok, attracting regularly over 100 attendees.

We continued to develop events outside of Bangkok and the ESB, namely in Chiang Mai and Phuket.

As you can see below even with the floods that hit in the latter part of the year we still had a comprehensive list of events.

The Brief

Issue 1/2012

49

to whom valuable information and guidance was provided both during the presentations and in the Q&A session.

The second was a presentation on 13th July where the guest speaker was Professor Steve Russ of Warwick University and held at the Courtyard

by Marriott. Attendance was in the region of 60 people and the subject entitled ‘The Technology Emperor’s Nearly New Clothes’ led to a spirited Q&A session (conducted by Chris Thatcher) with intriguing answers coming from Professor Russ. A successful evening.

Types of event • • • • •

•

•

•

• • • •

Total

Breakfast briefings 9 Luncheons 9 Evening presentations 13 Dinners (Bangkok) 1 Dinners/Evening 2 presentations (Eastern Seaboard) Networking evenings 15 (Bangkok) Networking (Eastern 10 Seaboard) Networking (Phuket/ 3 Chiang Mai) Special events 2 Sports 4 Site visits 2 Management Development 11 Workshops

Total

81

We value our members feedback and have used ‘survey monkey’ to monitor feedback on events and what our members want to see in the future.

For 2012 we will continue to improve both in the quality and variety of events. Some of the highlights for 2012 are.

• Our 3rd Thursday event at some of the best locations in Bangkok • At least four major events such as our Lifestyle and Garden party and at the British Embassy in February

50

The Brief

Issue 1/2012

and the annual lecture with a high profile speaker • Free events throughout the year breakfast, dinner or networking events • Breakfast, lunch and evening presentations with wide range of experts on topics that will aid our members in doing business in Thailand The Events Group would like to thank everyone for their help and support in 2011, in particular the BCCT office for their ongoing commitment to provide an extensive portfolio of quality events.

ICT Despite the problems with flooding in 2011, the ICT Group managed to mount three events in the year. I would like to make the point that the enormous support we have received from both Greg Watkins and Khun Rungjit in organising these events has been of inestimable value.

The first event was on 22nd February at the British Club entitled ‘What you need to know about 3-G and Broadband Access in Thailand’. ICT Group members Bob Marchant and Khun Kowit gave presentations which imparted very full information on the current legal and commercial developments in Thailand’s telecoms industry. This had about 50 attendees

The third event took place on 6th December and, through a very useful introduction by Greg Watkins, we managed to obtain Khun Ariya Banomyong – the country manager of Google in Thailand as the soughtafter speaker for an event entitled ‘Google – beyond the search engine’.

This event was held at the Four Points

By Sheraton and attracted over 120 people – a resounding success.

It is worth mentioning for the board’s consideration that, with the valuable help of Khun Rungjit, the ICT Group has established a quite successful formula of offering events at a very reasonable price to members for a standup buffet and presentation of around 350 THB. Drinks are at the discretion of the attendees and providing that the drinks prices are reasonable this seems to be a very workable and popular formula.

In August the ICT Group issued an email warning entitled ‘Don’t let your company’s computers become a crime scene’ which gave useful do’s and don’ts as guidance to BCCT members on detail of this very important legislation which carries serious penalties for infringement. This warning was also carried in an article in The Brief.

Khun Kowit also kindly provided the text in Thai language.

During the year both Khun Kowit and Bob Marchant attended the ICTJFCCT meetings representing the BCCT until the chamber resigned

from the JFCCT in August. Both Bob and Khun Kowit have continued to attend most of the ICT-JFCCT meetings in their private capacity to keep us updated.

On 3rd March 2011 Bob Marchant attended the Thailand Regional Forum meeting entitled ‘Digital Marketing: opportunities and pitfalls’.

In the October/November 2011 edition of The Brief, our BCCT-ICT member David Quine provided an article entitled ‘Online marketing: what works and what doesn’t’, describing techniques for creating a successful email campaign.

MANAGEMENT DEVELOPMENT The BCCT Management Development Group was established for the first time in 2010. Chaired by BCCT Board Director Richard Greaves and assisted by Vice Chair Ian Thornhill - KPMG, Bubphawadee Owararinth - Standard Chartered Bank, Sukhavichai Dhanasundara - Brainforce International, Joe Barker-Bennett JMBB Consulting and most recently, Christina Dodd - ATA LifeCoach, the group’s mission was to present a series of training classes, events and workshops to support the management development needs of BCCT member companies.

and middle management, with a series of half-day workshops. The senior management focused training is conducted in English and is carried out by training companies which are Chamber members. Class sizes are up to 24 participants and held in a hotel location. Prices have been around Baht 3,750 nett for a half-day session.

The middle management classes are conducted in Thai and so far have been generously supported by the training departments of large multinational chamber member companies such as HSBC, Tesco and PCS as well as some local training companies.

Prices have been from Baht 2,000 nett for a half-day workshop to Baht 3,900 for a full-day workshop.

In our second year as a group we had a full programme of classes planned and managed to fulfill most of them until the last quarter when the floods led the cancellation of all activities from mid-October onwards.

BCCT Management Development Group activities in 2011 have included:

• Thai Classes February: Helping your employees Speak Up & Step Up with APM - March: Growing Talents with Tesco - May: Creative Thinking with ADCC - June: Powerful Interview & Selection Technique with PCS - July: Strategic Thinking with ADCC - August: Performance Management with HSBC - October: Managing Teamwork with PCS • Events - March: How to retain good staff – Panel event - October: How do you successfully integrate new university graduates into the workforce Panel event The Group has already mapped out a programme for 2012 which begins in February with a schedule that includes up ten Thai classes and five English classes.

MANUFACTURING

• English Classes - February: Strategic Planning & Goal Setting with Crestcom - May: Problem Solving & Decision Making with APM - September: Communication with Christina Dodd

The purpose of the Manufacturing Group is to promote learning between participating companies through exchange of information, knowledge and experience via focused networking and factory visits. The scope of

Key objectives of the group have been to provide management development for member company employees, particularly the SME’s who would benefit from participation in programmes where they can join as opposed to run directly themselves. The focus of the training programmes has been on soft skills development based upon an established list of core competencies such as time management, change management and planning & goal setting.

The Group also offers a range of panel or keynote speaker presentations on various topics related to management development.

Training classes have been separated into two-tiers, for senior management

The Brief

Issue 1/2012

51

topics covered is broad and can be anything related to managing production operations in Thailand from HR and technical to supply chain and continuous improvement.

Participating companies include Wood Group, Triumph Motorcycles and GKN Driveline. All enquiries welcome from interested parties – please contact Roger Wilson (roger. wilson@gkndriveline.com) PROFESSIONAL WOMEN’S GROUP The Professional Women’s Group held two events in the first half of 2011. In February Dr Michael Moreton, Obstetrician and Gynaecologist and International Medical Co-ordinator at Bangkok General Hospital, gave an interesting talk to mark the 50th anniversary of the introduction of the birth control pill. He covered the pill’s development and how it has changed society, its medical benefits, risks and side effects. This event was sponsored by Unigroup Worldwide UTS & Worldwide Relocations.

In May, TNT Express sponsored a glittering evening with Miss Tiffany.

Khun Alisa Phuntusak, MD of the world famous Tiffany’s Show in Pattaya, shared with us her fascinating story with a behind the scenes look at this spectacular show. We also had the chance to meet the reigning Miss Tiffany and the two runners-up.

Unfortunately the events planned for the second part of the year had to be cancelled due to the flooding situation. We are now rescheduling these planned events for 2012 in conjunction with other chambers that do not currently have their own women’s groups.

PROPERTY & INFRASTRUCTURE The BCCT Property & Infrastructure (P&I) Group’s mission is to support and advance BCCT work in relation to P&I; to organise quality events of interest to members at a reasonable cost and to compile reports on market developments.

52

The Brief

Issue 1/2012

Membership of the P&I Group in 2011 comprised Abigail Evans from Meinhardt; Alan Verstein from Siam Gazette; Ali Adam from Halcrow Group; Attakorn Saropala from the British Embassy; Greg White from Colliers International Thailand; Ian Hamilton from TICON; James Pitchon from CB Richard Ellis; John Mugford from Meinhardt; Simon Landy (Chairman) from Colliers International Thailand; Stephen Frost from Bangkok International Associates; Tim Beaumont from The Beaumont Partnership; and Greg Watkins (ex-officio) from BCCT.

on ‘Update on the High Speed Rail Project in Thailand and how this will benefit the Eastern Seaboard’, a joint event with the AustralianThai Chamber of Commerce at the Amari Orchid Pattaya Hotel • 8 November: Breakfast briefing and panel discussion by Abigail Evans from Meinhardt and Ali Adam from Halcrow on ‘Perspectives on Bangkok and Urban Transport Infrastructure Plans – Still on Track?’, a joint event with the American Chamber of Commerce at the Westin Grande Sukhumvit Hotel

In 2011, the P&I Group achieved its targets of holding four committee meetings as well as organising an event each quarter as follows:

The P&I Group has also supplied various reports on the P&I sector for members which are posted on the BCCT website and compiled presentation materials for the Executive Director to present during trips to the UK. The Chairman of the P&I group also represented BCCT at meetings of the Joint Foreign Chambers of Commerce of Thailand Property Committee which, during the year, submitted a revised White Paper to the Thai government on revisions to the leasehold land law.

• 18 January: Breakfast briefing by James Pitchon of CB Richard Ellis on ‘Prospects for the Thai Property Market in 2011’, a joint event co-hosted by the Australian-Thai Chamber of Commerce and the Royal Institution of Chartered Surveyors at the Grand Millenium Sukhumvit Hotel • 8 June: Site visit to St Regis Hotel & Residences Bangkok • 14 October: Briefing and panel discussion by Dr Chula Sukmanop from the Ministry of Transport and Abigail Evans from Meinhardt

In 2012 the P&I Group plans to continue its activities, including organising an event each quarter, with at least one of these being on the Eastern Seaboard, as well as producing reports on the P&I sector.

SAFETY & SECURITY Under the chairmanship of David Viccars the committee has held regular meetings throughout the year. The principal long term work of the committee has been to follow up on the 2010 approach to Government concerning the lack of manpower in the security guard industry. This task is still ongoing and progress has been very slow.

Thankfully 2011 had none of the significant security concerns of 2010 and it was not until the flooding of late 2011 that major safety concerns arose. The Committee then assisted the chamber staff in making sure that members had all current information relating to the floods.

In addition the group organised a well attended safety and security seminar at the Millennium Grand Hotel at which speakers from the UK Embassy, G4S and Securitas offered considered and sage advice on various topical safety and security issues, including the use of K9 (dogs) in security functions within Thailand.

The committee would like to thank G4S, PCS, Securitas, Pointer Asia, ISS, Investigations Asia and Defence International Security Services for their continued support.

SME The events of 2011 slowed the progress of the SME group significantly and a lack of impetus will mean that in 2012 the group has to re-focus its efforts to regain some momentum.

The joint meetings that used to take place with AustCham and NZ Chamber have all but ceased and despite successful meetings being held (notably the lunch meeting at which Andrew Biggs was one of the speakers) there are no more planned.

Three meetings were held during the year - a luncheon to explore with two speakers the complexity of employing Thai staff and doing business in Thailand; an evening meeting held to gain insights from two businessmen with jointly 70 years of doing business in

Thailand, and a meeting with senior representatives from the BOI.

attended. We are planning four speaker and panel presentations in 2012.

An SME Fair was planned for late September/early October to allow BCCT member companies to show their products or services to a wider audience but events overtook this so it remains a target for 2012 with a possibility of holding a similar event in other parts of Thailand.

UK GROUP

Key tasks for 2012 • Explorations of meetings focusing on the SME needs in respect of Financial management, Business Planning, H.R., Marketing and Research • Getting further data about the needs of BCCT SMEs (questionnaires, existing info?)

• Many people do business in Thailand on an ad hoc basis (i.e. with no formal company structure) and assisting these people could be a useful recruitment tool for the BCCT • Promotion of the group’s existence Possible areas to prioritise and develop some thinking: 1.

2.

3.

4.

5.

6.

Financing Company law Taxation Customs practices and levies Banking Visas/work permits/ residency (particularly One Stop Service being extended to SMEs)

TRAVEL & TOURISM Under the Chairmanship of Andrew Langdon the Travel and Tourism committee has held regular meetings throughout the year with a focus on improving information to members and laying solid plans for a regular series of events commencing in 2012.

We have welcomed new committee members from both the hotel and travel industry in the later part of 2011 to further enhance services to members. In 2011 we held a panel discussion focusing on ‘Thailand’s Tourism Sector - The Future’ which was well

The BCCT UK Group was established in February 2011 during a meeting at UKTI’s HQ in London. Steve Buckley was elected as the first Chairman of the Group with a remit to: • Raise the BCCT’s UK profile • Enhance UKTI’s ability to promote Thailand within the UK • Provide a forum to discuss Thailand-related business activities • Offer advice as necessary to the British Government • Provide advice and assistance to BCCT members Steve Buckley reports that media coverage of Thailand in the UK is not high and tends to focus on negative developments (i.e. political/security issues, accidents involving British nationals, recent flooding etc.).

“As such, stimulating new commercial interest in Thailand is difficult although during the course of the year I attended a range of Asian/Thailand events and was also been invited to speak at a number of Thailand briefings (i.e. Chambers of Commerce/ Trade Associations) potentially interested in bringing trade missions to Thailand (a regular occurrence on my arrival at the Embassy in Bangkok in 2005 but something of a rarity these days!), the FCO etc). I still enjoy excellent relations with the Royal Thai Embassy and have become a Committee member of the Anglo-Thai Society.

Company requests have also been few and far between although I did represent the BCCT at a Tesco event promoting Thai Agricultural/Food produce attended by the Minister of Commerce.”

The next BCCT UK Group meeting was due to take place at Asia House on 7th February 2012 (hopefully, a good omen as this is the first anniversary of the inaugural meeting) which should prove a good opportunity to not only draw up a programme of events for 2012 but also to further raise the Group’s profile.

The Brief

Issue 1/2012

53

the third successive month. Meanwhile industrial capacity utilisation, although in December 2011 at 52.3 percent, up on November figures of 40.5 percent, is a grim reminder of how natural disaster can slow down the engines of growth.

Dataconsult

Chamber Events

By the Numbers Chris Bruton Director, Dataconsult Ltd.

T

he floods have abated, for the time-being at least, so the statistics have begun to flow again, and reveal some indication of damage done. Although agricultural production is showing revival, manufacturing production is still well down on 2010 for

have already shown some recovery from the discouraging November performance, with December arrivals figures not much down on December 2010.

In terms of financial figures, the SET index returned to third quarter levels by year-end with net foreign purchases ahead of sales. The Thai Baht weakened against major currencies, but only marginally. Foreign currency reserves also fell from the historic peak levels of April and August 2011, but still at a respectable US$175 billion.

Domestic product sales also indicate the beginnings of recovery in December, compared with the disaster of November. On a year-on-year basis, however, sales are dramatically down. Prices have not shown much change, indicating that shortages had been averted and consumers had been able to rely on their previous stock-piles to keep them going Industrial and consumer confidence have remained positive and shown some recovery.

Performance 2011 and outlook 2012 The Fiscal Policy Office estimates GDP growth in 2011 at 1.1 percent, indicating that flooding cost Thailand more than twp percent GDP loss. Consumption growth was two percent with both private and public consumption taking hits.

Investment was 4.7 percent with private investment still reasonably strong, but public investment severely negative.

Foreign trade figures have also held up quite well, after an inevitably weak November performance. Tourist arrivals 2012 forecasts (as of Dec 11) 2010

2011

Average

Range

Forecasts GDP growth (%)

7.8

1.1

5.0

4.5 - 5.5

Consumption growth (%)

5.1

2.0

4.0

3.5 - 4.5

• Private consumption (fixed price basis)

4.8

2.3

3.8

3.3 - 4.3

• Public consumption (fixed price basis)

6.4

0.4

4.5

4.0 - 5.0

Investment growth (%)

9.4

4.7

10.0

9.5 - 10.5

• Private investment (fixed price basis)

13.8

8.4

10.3

9.3 - 11.3

• Public investment (fixed price basis)

-2.2

-6.6

8.8

7.8 - 9.8

Export growth, volume, goods and services (%)

14.7

9.3

8.9

7.9 - 9.9

Import growth, volume, goods and services (%)

21.5

9.6

9.6

8.6 - 10.6

Trade account (US$bn)

32.2

26.3

4.9

3.9 - 5.9

• Exports (US$bn)

28.5

16.7

14.1

13.1 - 15.1

• Imports (US$bn)

36.8

23.3

26.7

25.7 - 27.7

13.7

10.1

-2.0

(-4.1) - (0.0)

4.6

2.9

-0.5

(-1.0) - (0.0)

3.3

3.9

3.5

3.0 - 4.0

1

2.4

2.3

1.8 - 2.8

1.0

0.7

0.7

0.6 - 0.8

Current account (US$bn) • % of GDP Inflation (%) Core inflation (%) Unemployment (% of labour force) Source: Fiscal Policy Office, Ministry of Finance

Export and import growth, although both close to 10 percent, were way down on 2010. Inflation, at 3.9 percent, was up on 2010 but less severe than might have been anticipated. For 2012, it is forecast that GDP could be around five percent, with consumption growth back up to four percent and investment growth up to ten percent. Exports and imports are forecast to hold up to 2011 levels, although below 2010 growth performance. Inflation is forecast at 3.5 percent. Thailand employment levels are expected to remain at the very low level of under one percent of the employed population.

Thailand Statistical Update (February 2012) 2011

Item

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Mar

Feb

Jan 9.3

Production Indicators Agricultural Production Index (y-on-y %)

4.8

-3.2

1.0

0.8

2.4

-3.1

-0.3

1.4

28.7

24.4

7.1

Manufacturing Production Index (y-on-y %)

-25.8

-47.2

-30.1

-0.4

6.8

-0.7

3.8

-3.7

-8.1

-6.7

-3.0

4.1

Industrial capacity Utilisation (%)

52.3

40.5

46.5

65.5

65.0

63.1

64.1

58.8

54.4

66.1

59.5

62.3

Key domestic product sales 11.44

11.72

12.60

13.43

13.76

13.70

13.47

13.77

12.58

13.12

11.86

11.91

Benzene/gasohol (mn. litres)

Electricity (KWH bn.)

446.84

404.73

418.44

408.17

620.18

384.28

362.12

374.46

392.05

389.25

406.52

426.98

Beer (mn. litres)

183.60

162.14

114.14

155.68

129.64

132.96

144.83

130.09

149.79

177.98

139.98

126.04

Soda / soft drinks (mn. litres)

69.55

42.44

29.79

44.52

45.29

41.77

48.32

44.92

47.21

57.13

49.79

50.70

Passenger cars (000 units)

16.94

9.78

16.56

35.81

33.02

25.55

26.91

15.74

22.90

35.54

30.95

29.00

Motorcycles (000 units)

133.82

52.28

63.74

168.78

182.87

190.63

197.01

180.72

148.64

187.14

154.50

158.22

Commercial vehicles (000 units)

23.00

4.64

19.14

39.17

41.49

39.21

32.31

24.71

25.85

41.89

37.66

33.29

Cement (mn. metric tonnes)

2.34

2.07

2.12

2.32

2.41

2.29

2.38

2.51

2.21

2.65

2.43

2.33

Passenger cars (y-on-y %)

-28.1

-62.1

-38.8

29.6

26.4

12.2

-0.5

-15.2

17.8

80.3

49.6

49.6

Motorcycles (y-on-y %)

-21.7

-11.0

-4.3

11.4

15.9

11.6

20.3

23.8

11.0

13.1

15.7

5.3

Commercial vehicles (y-on-y %)

-46.9

-71.5

-41.8

25.7

15.7

10.1

-0.3

-6.2

17.7

28.5

37.6

29.7

6.3

-0.3

11.7

12.3

15.3

8.6

4.0

-5.8

-1.0

2.2

1.3

0.9 134.0

Cement (y-on-y %) Producer / Consumer Price Indicators Producer Price Index

138.0

138.4

138.4

139.1

138.4

137.1

138.7

138.3

139.3

137.4

137.3

Change (m-on-m %)

-0.3

0.0

-0.5

0.5

0.9

-1.2

0.3

-0.7

1.4

0.1

2.5

1.4

Change (y-on-y %)

4.5

3.5

4.2

5.6

6.0

5.2

4.5

6.2

6.6

5.9

7.4

6.0

54

The Brief

Issue 1/2012

2011

Item

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Mar

Feb

Jan

123.1

122.9

121.9

120.8

120.9

120.8

120.1

120.2

119.7

119.0

117.9

117.7

Change (m-on-m %)

0.2

0.8

0.9

-0.1

0.1

0.6

-0.1

0.4

0.6

0.9

0.2

2.0

Change (y-on-y %)

6.7

7.3

7.2

5.8

6.3

7.3

6.7

4.8

4.5

6.6

6.0

6.0

112.77

113.31

113.1

112.9

113.2

112.7

112.5

112.4

112.0

110.5

110.0

109.5

Change (m-on-m %)

-0.5

0.2

0.2

-0.3

0.4

0.2

0.1

0.3

1.4

0.5

0.4

0.5

Change (y-on-y %)

3.5

4.2

4.2

4.0

4.3

4.1

4.1

4.2

4.0

3.1

2.9

3.0

Construction Materials Price Index

Consumer Price Index (headline) (2007 = 100)

Core Inflation (2007 = 100)

107.0

106.9

106.8

106.8

106.6

106.4

106.3

106.1

105.6

104.8

104.5

104.4

Change (m-on-m %)

0.1

0.0

0.1

0.1

0.3

0.1

0.2

0.5

0.7

0.3

0.1

0.2

Change (y-on-y %)

2.7

2.9

2.9

2.9

2.9

2.6

2.6

2.5

2.1

1.6

1.5

1.3 112.7

Consumption & Confidence Indicators Industrial Confidence Index

93.7

87.5

89.0

90.7

102.5

105.2

107.4

108.3

106.6

102.3

108.2

Business Sentiment Index

48.5

39.0

36.7

48.5

52.2

51.2

53.1

50.9

47.3

54.1

52.3

52.8

Private Consumption Index

137.3

135.1

135.8

140.8

143.0

138.0

141.3

141.3

140.0

141.6

137.9

138.4

Private Investment Index

181.0

186.3

198.9

206.3

206.8

202.5

201.7

206.9

206.2

208.3

198.6

195.5

Consumer Confidence Index

21.4

19.1

23.8

30.4

30.0

30.6

22.4

18.4

17.7

16.0

18.9

20.4

Fuel Prices Benzene 91 (Baht per litre)

34.69

35.26

35.97

36.29

40.92

43.02

42.41

43.09

43.41

42.12

40.36

39.06

Diesel (Baht/litre)

29.12

28.88

27.83

27.99

29.51

29.99

29.99

29.99

29.99

29.96

29.99

29.99

454.49

403.11

441.14

548.91

558.26

573.74

544.55

500.79

461.36

554.11

497.11

431.99

54.3

55.63

62.71

71.40

65.64

63.13

58.74

64.51

52.25

75.95

62.42

57.37

Total exports (Baht bn.)

524.43

474.09

520.22

637.16

640.55

652.09

620.80

579.28

527.62

646.21

573.01

501.08

Total exports (y-on-y %)

-2.0

-12.4

0.3

19.1

31.1

38.3

14.5

17.4

25.0

30.6

31.0

22.3

Foreign Trade of Thailand: exports Manufactured products (Baht bn.)

Agricultural products (Baht bn.)

Foreign Trade of Thailand: imports Consumer goods (Baht bn.)

52.22

49.32

45.10

53.17

54.54

46.55

48.82

46.99

45.63

50.80

40.89

44.84

Raw materials (Baht bn.)

184.48

178.63

204.85

229.43

234.91

220.41

241.31

230.18

224.33

231.88

198.30

205.31

Capital goods (Baht bn.)

139.56

126.95

128.64

131.82

175.69

141.76

155.32

125.82

136.77

168.15

129.61

135.18

Other Imports (Baht bn.)

221.11

167.61

179.09

223.97

219.80

165.71

157.44

176.05

151.30

148.40

156.82

148.21

Total Imports (Baht bn.)

597.36

522.51

557.67

638.40

684.93

574.43

602.89

579.05

558.04

599.22

525.62

533.53

Total Imports (y-on-y %)

19.1

-2.4

21.5

41.9

44.0

13.5

26.1

33.8

26.3

25.7

22.2

33.3 1,183

Tourism Indicators Suvarnabhumi Arrivals (000 persons)

1,101

730

917

1,029

1,109

1,124

964

889

1,004

1,101

1,142

Change (y-on-y %)

-4.82

-27.53

6.22

31.25

32.87

32.86

64.42

91.64

48.61

15.77

6.75

6.20

Nationwide Arrivals (000 persons)

1,775

1,214

1,409

1,490

1,721

1,516

1,485

1,369

1,498

1,759

1,805

1,792

Change (y-on-y %)

-2.47

-17.92

7.02

22.68

35.43

18.80

53.90

65.61

35.17

22.23

11.80

11.62

Hotel Occupancy Rate (%)

57.14

56.65

53.41

55.12

57.87

57.79

50.07

49.86

56.10

62.49

68.93

62.69

Loans (Baht billion)

n.a

9,655.6

9,588.0

9,440.9

9,692.4

9,602.4

9,466.3

9,540.6

9,636.7

9,244.9

9,405.8

9,073.6

Deposits (Baht billion)

n.a

7,864.7

7,839.2

7,614.1

7,723.8

7,633.4

7,568.0

7,670.9

7,598.7

7,625.9

7,598.0

7,446.9 964.10

Commercial Banking Indicators

Stock Exchange and Foreign Investment indicators 1,025.32

995.33

974.75

916.21

1,070.05

1,133.53

1,041.48

1,073.83

1,093.56

1,047.48

987.91

Market Capitalisation (bn. Baht)

SET Index (1975 = 100)

8,408

8,160

7,987

7,502

8,757

9,271

8,513

8,742

8,860

8,488

8,004

7,811

Foreign Purchase (bn. Baht)

99.09

108.97

128.04

113.15

165.33

168.36

114.96

125.82

144.49

157.33

141.65

166.21

Foreign Sale (bn. Baht)

87.08

121.55

97.24

129.65

207.37

130.49

141.86

142.53

114.98

137.73

133.20

194.84

Foreign Direct Investment (net, bn. Baht)

n.a

29.07

26.57

27.88

15.95

27.77

34.79

25.24

16.21

18.53

26.82

-17.64

Foreign Portfolio Investment (net, bn. Baht)

n.a

-0.47

5.50

-32.02

-49.40

132.77

-38.78

-81.95

96.97

28.18

23.27

35.76

Board of Investment indicators Applications (Baht bn.)

69.9

132.1

44.7

104.5

34.8

52.6

42.0

37.5

51.6

45.8

39.8

26.3

Approvals (Baht bn.)

56.0

114.6

4.4

4.9

4.2

11.7

68.9

38.6

35.8

30.7

57.0

22.3

Certificates (Baht bn.)

57.2

5.9

17.2

15.9

54.2

40.5

47.2

39.8

47.8

28.1

17.7

46.8

US$ / Baht (mid-rate)

31.21

30.95

30.89

30.42

29.88

30.08

30.51

30.24

30.05

30.37

30.72

30.58

ÂŁ / Baht (mid-rate)

48.66

48.94

48.59

48.04

48.91

48.54

49.52

49.42

49.19

49.09

49.54

48.23 40.83

International monetary indicators

Euro / Baht (mid-rate)

41.03

41.99

42.28

41.90

42.86

42.99

43.91

43.30

43.43

42.51

41.97

Japan (100) Yen / Baht (mid-rate)

40.10

39.93

40.26

39.61

38.74

37.90

37.90

37.26

36.18

37.16

37.23

37.01

Exports (f.o.b. US$ billion)

16.86

15.29

17.02

21.26

20.94

21.10

20.38

19.27

17.24

21.08

18.41

16.53

Imports (f.o.b. US$ billion) Trade balance (US$ mn)

17.09

15.07

16.01

18.84

20.23

16.55

17.02

17.10

15.93

17.33

15.32

15.38

-237.85

218.43

1,012.70

2,419.05

704.77

4,552.36

3,366.27

2,166.47

1,313.54

3,755.20

3,090.18

1,140.91

Current account balance ( US$ mn)

1,939.86

-136.26

39.30

404.16

-696.74

3,438.31

1,969.34

-675.60

-345.83

1,700.67

3,164.74

1,067.55

Balance of payments ( US$ mn.)

-1,029.00

-1505.80

-1,885.90

-1,674.20

-556.30

541.20

-971.60

-2,599.60

3,570.40

1,364.60

4,270.90

1,688.90

175.12

178.25

182.01

180.11

188.32

187.64

184.89

185.47

189.88

181.58

179.45

173.99

Foreign currency reserves ( US$ bn.)

Statistical sources: these statistics have been derived from the following official sources: Bank of Thailand, Ministry of Commerce, Ministry of Finance (Department of Customs, Fiscal Policy Office), Ministry of Industry, Board of Investment, Immigration Department, Stock Exchange of Thailand.

The above statistics represent the principal economic indicators for Thailand, but the original sources provide much more extensive and detailed coverage of different aspects of the economy. Statistics as presented are, in most cases, provisional figures, which will be adjusted at a later date when final returns are available from the respective sources. While best efforts have been made to ensure accuracy, readers are referred to original sources for definitive statistics.

Note 1: month-by-month figures are updated as adjustments are made in the original statistical sources Note 2: up to December 2010, Index was 2000 = 100; From January 2011, Index is 2005 = 100 The Brief

Issue 1/2012

55

Chamber Events

Chamber Events BCCT Christmas Luncheon 14 December 2011 Many were surprised how fast the year went by as the highly anticipated BCCT annual Christmas Luncheon came around on 14th December. This was the largest gathering of BCCT members in 2011 and all of our guests were in festive spirit and delighted by a plethora of fun and games. Thanks to all generous sponsors.

56

The Brief

Issue 1/2012

Chamber Events

The Brief

Issue 1/2012

57

Chamber Events

BCCT ICT Evening Presentation 6 December 2011 Google - beyond the search engine The BCCT ICT Group organised an Evening Presentation with guest speaker Khun Ariya Banomyong on ‘Google – beyond the search engine’ on Tuesday 6th December at Four Points by Sheraton.

01 01 - Audience members search for answers.

02 02 - Khun Ariya Banomyong - Country Manager for Google in Thailand

BCCT/AustCham/AMCHAM Christmas Eastern Seaboard Networking 9 December 2011 Amari Orchid Pattaya kindly sponsored the joint BCCT/AustCham/AMCHAM Christmas Eastern Seaboard Networking event on Friday 9th December. It was a great night and well attended.

01 01 - Children take to the stage at the Amari Orchid Pattaya.

02 02 - All smiles as a lucky draw winner collects his prize.

Thank you to our sponsors and partners.

58

The Brief

Issue 1/2012

Chamber Events

BCCT Evening Panel Discussion 10 January 2012 Solar Energy On 10th January 2012 Raymond Schonfeld, Philip Napier-Moore and Steven Burkill formed a panel to discuss the topic of ‘Solar Energy’. The event took place at the Holiday Inn Silom.

01 01 - The Solar Energy panel discussion was well attended.

02 02 (from left) - Raymond Schonfeld, Single Market Ventures, Brussels - Philip Napier-Moore, Mott Macdonald, Thailand - Steven Burkill, Watson Farley Williams, Thailand

Third Thursday Social Networking 19 January 2012 Meet the 2012 Board Candidates This Third Thursday networking event on 19th January was an opportunity for members to meet the board candidates for 2012.

Grateful thanks to Anantara Bangkok Sathorn for hosting and sponsoring this event.

01 01 - Board candidates prepare to meet chamber members.

02 02 (from left) - James Fowler, Veritas Enterprises Co., Ltd. - Mike Holloway, RSM Advisory (Thailand) Limited - David Williamson, Cascade Club Ltd.

Thank you to our sponsors and partners.

The Brief

Issue 1/2012

59

Chamber Events

BCCT/AustCham/AMCHAM Eastern Seaboard Networking Evening 20 January 2012 On 20th January the BCCT joined hands with AustCham and AMCHAM for an Eastern Seaboard Networking Evening at Jameson’s The Irish Pub Pattaya. Special thanks to our sponsor MBMG Group and to Jameson’s.

01

02

01 (From left to right) - Chris Thatcher, BCCT Board of Director - Simon Matthews, Manpower Thailand/BCCT Vice Chairman - Graham Macdonald, MBMG Group - John Sim, KPMG in Thailand/BCCT Vice Chairman and Treasurer

02 (From left to right) - Guests mingle at the BCCT/AustCham/AMCHAM Eastern Seaboard Networking Evening.

BCCT Annual General Meeting & Luncheon 26 January 2012 On 26th January BCCT members attended at the BCCT Annual General Meeting sponsored by Asia Excellent (Thailand) and RSM Advisory (Thailand) to cast their votes for the BCCT Board 2012. Daniel Pruce, Deputy Head of Mission – British Embassy Bangkok, conveyed his thoughts on ‘The Chamber and the Embassy: Working together for the future’ while the crowd waited in anticipation for the votes to be tallied.

01

02

01 New Chamber Chairman Simon Landy (third from left) pictured with members of the BCCT Board elected on 26th January.

02 (From left to right) - Matthew Lobner, HSBC/BCCT Vice Chairman - Daniel Pruce, British Embassy - Mark Butters, RSM Advisory (Thailand) Limited - Graham Macdonald, MBMG Group

Thank you to our sponsors and partners.

60

The Brief

Issue 1/2012

Chamber Events

BCCT Half-day Workshop 31 January 2012 Emotional Intelligence – in a Nutshell On 31st January the BCCT Management Development Group, in collaboration with ATA-lifecoach, offered an interactive workshop on the topic of ‘Emotional Intelligence – in a Nutshell’ filled with insights into what you need to know and do to become better managers.

01 - Anna Whitcraft, Harrow International School

01

02 - Taking a break from the interactive workshop on Emotional Intelligence.

02

Joint BCCT/NZTCC/AustCham Professional Women Group Speed Networking 31 January 2012 The Joint BCCT/NZTCC/AustCham Professional Women’s Group Networking Evening on 31st January at Courtyard by Marriott was an enjoyable event with a theme of speed networking. A warm thanks to our sponsor Bangkok Patana School.

01

02

01 (From left to right) - Sally Holloway, KIS International School - Rachel Jones, Bangkok Patana School - Toni Weber, TNT Express Worldwide (Thailand) Co., Ltd/BCCT Board - Valerie McKenzie, Thana Burin Asia Pacific

02 - Guests networking at speed.

Thank you to our sponsors and partners.

The Brief

Issue 1/2012

61

Forthcoming events FEBRUARY

MARCH

28/2 – HALF-DAY WORKSHOP (IMPLEMENTING CHANGE)

8/3 JOINT PWG EVENING WOMEN ENTREPRENEURS NIGHT

Venue: Bangkok Hotel Lotus, Sukhumvit 33. Nearest BTS station Phrom Phong (exit 5) Sponsor: Tesco Lotus Fee: THB 2,500 net per participant (BCCT members) Training provider: Khun Aorravan Kowathana, HR Manager Leadership Development, Tesco Lotus

This course will be conducted in Thai. It is one of a series of courses offered by the BCCT’s Management Development Group in partnership with experienced management training companies and supported by multinational member companies.

Check website for more details 15/3 – THIRD THURSDAY NETWORKING EVENING Check website for more details

Open to BCCT members only

Comings and Goings The British Chamber of Commerce Thailand welcomes the following new members: 137 Pillars House 2 Soi 1, Na Wat Gate Road Tambon Wat Gate, Muang Chiang Mai 50000 Tel: +66 (0) 53-247-788 Fax: +66 (0) 53-247-780 Representative: Bobbie-Jane Skewes, Regional Director of Sales & Marketing Business Activity: Hospitality Administration Outsourcing Co., Ltd. 12th Floor, Vanissa Building, 29 Soi Chidlom, Pathumwan Bangkok 10330 Tel: +66 (0) 2655-7933 Fax: +66 (0) 2655-4692 Representative: Peter Upperton, Director Business Activity: Specialist professional accounting firm which focuses on being the complete finance and accounting department for international and private businesses in Bangkok.

Anthony Collier Associates (Thailand) Co. Ltd. 110/113 M.2, Prayasajja Road T.Samed, A. Muang Chonburi 20000 Tel: +66 (0) 38-467-092 Fax: +66 (0) 38-467-091-2 Representative: Anthony Collier, Principal Architect

62

The Brief

Issue 1/2012

Chatrium Hotel Riverside Bangkok 28 Charoenkrung Road Watprayakrai, Bangkholame Bangkok 10120 Tel: +66 (0) 2307-8888 Fax: +66 (0) 2307-8899 Representative: Adrian Brown, General Manager Business Activity: Spacious panoramic haven with an ability to tailor everything to your specific needs, located on the river yet on the doorstep of the buzz and excitement of one of the world’s most exciting cities.

Danebury (Thailand) Co., Ltd 283/31 Home Place Office Building 2rd Floor, Sukhumvit 55 Road Klongton Nua, Wattana Bangkok 10110 Tel: +66 (0) 2712-5315 Fax: +66 (0) 2712-7090 Representative: Reveille Hugues, Director Business Activity: Danebury is a food service company dedicated to offer catering services to the healthcare, education, industry, and remote onshore and offshore sectors with a team of specialists with over 30 years experience.

DHI Services (Thailand) Co., Ltd. 10/162 Room 2001D, 20th Floor The Trendy Office, Soi Sukhumvit 13(Sangchan), Khlongtoey Nua Wattana, Bangkok 10110 Tel: +66 (0) 2168-7475 Fax: +66 (0) 2168-7476 Representative: Ian Beardsworth, Country Manager Business Activity: DHI Services (Thailand) Ltd is a client oriented company that provides quality well-site formation evaluation services for oil, gas and geothermal exploration companies in Thailand.

Dream Hotel (Thailand) Limited 10 Sukhumvit Soi 15, Sukhumvit Road Klongtoey Nua, Wattana Bangkok 10110 Tel: +66 (0) 2254-8500 Fax: +66 (0) 2254-8534 Representative: Ranjit Singh Ghura, Director Business Activity: Hotel

Equitech (Thailand) Ltd BB Building, 7th Floor Sukhumvit 21 (Asoke) Klongtoey Nua Wattana, Bangkok 10110 Tel: +66 (0) 2259-6455 Fax: +66 (0) 2259-6456 Representative: Jane Bailey, Country Manager Business Activity: Equitech is a professional forestry management consultancy company engaged in plantation management and consultancy, carbon footprinting and calculations for commercial and non-commercial sectors.

Factorytalk Co.,Ltd. 12th Floor, Room 1204 287 Liberty Square Silom Road, Bangrak Bangkok 10500 Tel: +66 (0) 2630-4525 Fax: +66 (0) 2630-4527 Representative: David Margetts, Managing Director Business Activity: Specialists in compliance services and technical solutions across the regulated industries.

Gaysorn Land Asset Management Co., Ltd. 4/F Gaysorn, 999 Ploenchit Road Lumpini, Pathumwan Bangkok 10330 Tel: +66 (0) 2656-1516 Fax: +66 (0) 2656-1501 Representative: David Tibbott, General Manager Business Activity: Property and Retail Management GLOWFISH 219/18 Asoke Towers 6th Floor, Soi Asoke, Sukhumvit 21 Road, Klongtoey Nua, Wattana Bangkok 10110 Tel: +66 (0) 2664-0895-7 Fax: +66 (0) 2664-1515 Representative: Gavin Vongkusolkit, Managing Director Business Activity: Property/Real Estate Services, Serviced Offices, Event Organisation

IMS Health Inc. Thailand 16th Floor, Ploenchit Center Bldg, 2 Sukhumvit Soi 2, Sukhumvit Road, Klongtoey, Bangkok 10110 Tel: +66 (0) 2613-6300 Fax: +66 (0) 2656-9134 Representative: Helen Featherstone, Country Manager Business Activity: Market Research (Pharmaceutical) Regent Phuket Cape Panwa 84 Moo 8, Sakdidej Road Tambon Vichit, Amphur Muang Phuket 83000 Tel: +66 (0) 76-200-804 Fax: +66 (0) 76-200-803 Representative: Brice Borin, General Manager Business Activity: Hotel St. Stephen’s International School 998 Viphavadi Rangsit, Lat Yao Chatuchak, Bangkok 10900 Tel: +66 (0) 2513-0270 Fax: +66 (0) 2513-8271 Representative: Gary Rodbard, Principal Business Activity: British Curriculum International School TĂœV Rheinland Thailand Ltd. 2445/36-38, 16 Floor Tararom Business Tower, Bangkapi Huay Kwang, Bangkok 10320 Tel: +66 (0) 2318-4862 Fax: +66 (0) 2318-6083 Representative: Arno Zimmer, Managing Director Business Activity: Global technical service provider for testing, inspection and certification.

Resignations: 1.

2.

3.

4.

Asian University Aspect Ltd. BMJ Consultancy Brainforce International (Thailand) Co., Ltd. 5. British International Education Co., Ltd. 6. Cripps Harries Hall LLP 7. Damanino 8. David Hoyle (Individual Member) 9. Globecorp Ltd. 10. Horizon Mobile Communications Co., Ltd. 11. Humanitarian Affairs Asia 12. INEOS Asiatic Chemical Co., Ltd. 13. Jardine Schindler (Thai) Ltd. 14. KFMS (Thailand) Co., Ltd.

15. McConnell Dowell Constructors Thai Ltd. 16. MLG Insurance Brokers 17. MRD Audio Co., Ltd. 18. Omega Movers New Company Representatives: 1. British International School, Phuket: Neil Richards 2. British Airways PLC: Sriram Narayan 3. Ek-Chai Distribution System Co., Ltd.: John Christie 4. Forbears Freedom Wealth Management Co., Ltd.: Mark Purslow 5. Great British Pub Company Limited: Somchart Sudhammachan 6. Geodis Wilson Thai Ltd.: Laurent Nicolas Ferry 7. Santa Fe (Thailand) Co., Ltd.: Thomas Anthony Donatelli Changes of company name: 1. Deacons, changed to PriceSanond Members with new addresses: 1.

AA Insurance Brokers 206/22 Moo 6 Rimping Meechoke Plaza Faham, Chiang Mai 50000 Tel: +66 (0) 53-230-127 Fax: +66 (0) 53-855-253

2.

Bangkok International Associates Ltd 17th Floor, New ITF Tower 140/36-38 Silom Road Bangkok 10500 Tel: +66 (0) 2231-6455 Fax: +66 (0) 2231-6203

3.

InsurExcellence Insurance Brokers Ltd 2nd Floor, 8/7-8 Cathay House North Sathorn Road Silom, Bangrak Bangkok 10500 Tel: +66 (0) 2696-8688 Fax: +66 (0) 2696-8699

4.

Management and Executive Recruitment Consultants Ltd. 82/2 Soi Sukhumvit 61 Sukhumvit Road, Klongton Nua Wattana, Bangkok 10110 Tel: +66 (0) 2714-1326

The Brief

Issue 1/2012

63

FINAL WORD

Tourism leaders hope for trouble-free year

By Dale Lawrence

T

ourism and aviation industry leaders are praying for an incident-free year as Thailand looks to bounce back from the latest dip in international arrivals.

Community in 2015, as well as to revive tourist confidence in the country’.

Identifying Thailand’s role as a gateway to the Mekong region she urged tour operators to tap emerging markets such as India, identifying in particular the lucrative wedding segment.

Media coverage of the devastating floods prompted widespread debate and considerable criticism. The images of Don Mueang airport under water prompted some journalists to report that ‘Bangkok airport was closed’ with no mention that Suvannabhumi airport remained fully operational.

It’s easy to blame the media – but this was essentially another example of poor media management and ineffective crisis communications. Lessons should be learned and the Tourism Authority of Thailand, to its credit, is responding to the positive leadership displayed by Governor Suraphon Svetasreni (pictured above right) by engaging with the private sector and tourism organisations such as the Pacific Asia Travel Association to ensure more effective communications with business and consumer stakeholders.

The TAT’s new Tourism Intelligence Unit and Communications Centre (TIC) hopes to get a better grip on crisis management but there is always the danger that such organisations become too bureaucratic and unwieldy.

The challenge for Governor Suraphon is to cut through the red tape and ensure that the TIC acts with speed, precision and accuracy in the face of events that may threaten Thailand’s outstanding and long lasting image as a destination for both leisure and corporate travellers.

Now for the good news. Last year Thailand welcomed just over 19 mil64

The Brief

Issue 1/2012

She urged federation members to look at the wider picture, the arrival of the ASEAN Economic Community in 2015 and events that they could tap to improve tourism revenue outside of the travel sector. lion international arrivals – an increase of almost 20 percent on 2010 (a year when the nation’s tourism image was hit hard by riots, arson, vandalism and acts of commercial terrorism in Bangkok and elsewhere).

And the TAT is focusing upon the increasingly influential RICHI markets – Russian, India, China and Indonesia – as the sources for further growth in the wake of continuing economic problems in the US and the hitherto important source markets across western Europe.

Tourism is also on the mind of Thailand’s prime minister Yingluck Shinawatra. She told travel industry representatives that ‘tourism will prosper this year’ but also warned that competition will be tough in the lead-up to the adoption of the ASEAN Economic Community in 2015.

Addressing a recent seminar organised by the Federation of Thai Tourism Association the prime minister added that there was a need to create a clear strategy to develop the industry ‘to usher in the ASEAN Economic

“Thailand will host the World Economic Forum on East Asia (30th May to 1st June) in Bangkok and this a vital opportunity to boost tourism revenue and negotiate on behalf of tourism,” she added, stressing the importance of domestic tourism in the post-flood recovery phase and stating that provincial governors were being encouraged to highlight tourism, raise competitiveness and create more travel products.

The delegates heard that government priorities in relation to tourism include developing transport networks, restoring historical tourist attractions and infrastructure, resolving water management system problems and establishing funds to support community tourism.

The last word goes to experience crisis communicator Bert van Walbeek, long-time resident in Thailand and MD of The Winning Edge. “There’s a pent-up desire for tourists to visit Thailand and this will help the country to rebound from its most recent problems. This should be very good year for tourism in Thailand.”

BRITISH CHAMBER OF COMMERCE THAILAND

THAILAND & UK

– Partners in Progress

WHO WE ARE Working to represent members’ business interests in Thailand

OUR FOCUS Promoting constructive links for members’ business

www.bccthai.com

WHAT WE DO Seminars, workshops, training, networking and much more