Sets On a Golden Era
Greenwood, the first foreign stockbroker in Thailand, says he still wants to
die in the country. But he is not sure right now whether he can live there.
“I think people like me feel
as if they are having the door slammed in their face,” says Mr. Greenwood,
now a businessman. “Foreigners have made enormous contributions to
Thailand, but the messages we are getting now are that Thais don’t need us
or want us.
”When Thaksin Shinawatra, the
former Thai prime minister, sold his sprawling business empire to
Singapore’s state investment arm last year, Mr. Greenwood wrote a research
note saying this was an opportunity for Thailand to grasp the nettle of
“It was obvious after the sale
that Thailand was going to have to confront its demons. I thought the Thai
intelligentsia would lay out an unopposable case for vital foreign know how,
but that didn’t happen,” he says.
Thousands of foreign-controlled
companies have used legal loopholes to skirt laws against foreign control
and property ownership, but the $1.9bn Shinawatra sale was too big and too
controversial to ignore. The military junta that ousted Mr Thaksin in a coup
last September, and its caretaker cabinet of retired officials, have warned
that legal contrivances are unacceptable, although it is unclear what
”foreigner” laws will be passed.
The consensus among
experienced foreign executives is that an older Thai
elite is trying to slow, perhaps reverse, creeping foreign ownership.
“While the rest of Asia seems
to be moving faster and faster, Thailand wants to wrap itself up against
foreigners. Do you think an ambitious executive now thinks that a few years
in Thailand will brighten up their resumé, or will they go to China or
Vietnam?” says Anthony Ainsworth of headhunters Richard Glynn.
Mr. Ainsworth says that the
example of the Philippines should give even the most chauvinist Thai pause:
the most dynamic economy in the region half a century ago then proceeded to
slide sideways and is still widely regarded as a relative backwater.
The Thai military junta has said
it would organise national elections after writing a new constitution
designed to block another ”parliamentary dictator”. The next civilian
government is likely to be more favourably disposed to foreign investors
than today’s ruling generals.
This appears to be of little
comfort for foreign executives who say that the fiasco of a new
problem-ridden airport, the recent mishandling of capital controls, an
increasingly violent Muslim insurgency in the deep south and continuing
corruption scandals are not signs of an economy priming itself for ferocious
The foreign head of a local bank
notes how modern western technology and expertise was crucial in preserving
Thai independence even under the old absolute monarchy, in the late 19th and
early 20th century.
“This is the worst time for
foreigners in recent memory. Thais have every right to turn away ruffians,
but the people in charge now don’t seem to understand that without foreign
know how this country is going to have a very hard time,” says the bank
Thailand retains its reputation
among executives as a friendly place, albeit one where residents, at least
those not dazzled by its in-your-face entertainment districts, know that it
floats over layers of conservative culture.
“This is still a nice place to
live in, but I don’t think we’d be able to hire a senior foreign
investment analyst without paying a ridiculous salary. No one who is serious
about Asia wants to work in Thailand right now,” says Gillem Tulloch, head
of Thai research at brokers CLSA.
What seems to surprise many
executives is that Thailand should be going through an inward-looking phase
at a time when China, Vietnam and even India are opening up to foreigners.
“I’ve been an unashamed
cheerleader for Thailand for 20 years, but I’m frankly gobsmacked by what
is going on,” says Mr. Greenwood.
CB Richard Ellis, the property
consultants, say there is no evidence so far of any exodus from Thailand:
the number of foreigners with work permits in Bangkok grew 12.5 per cent to
67,412 last year, slightly down on 13.4 per cent growth in 2005. (There were
54,679 foreigners with work permits outside Bangkok in 2006.)
Yet James Pitchon, the
agency’s transactions manager in Thailand, says signs of a slowing economy
and confusion over foreign investment rules may be starting to show
The increase in occupied office space slowed to 200,000 sq m in the capital
last year, from an average annual addition of 300,000 sq m over 2000-20005.
There was also a 30 per cent
drop in land sales on industrial estates last year.
The foreigners already here will
not be easily dislodged because they play vital roles in carmaking, export
manufacturing and in the tourism industry, argues Mr. Pitchon.
“We could well see a slower
growth in the numbers of foreigners here as international firms look
elsewhere,” he adds.
So should Thailand be worried?
Yes, according to Rebecca Bustamante, the president of Chalré Associates,
an executive recruitment firm in Manila.
“The Philippines is now on the
way up and it looks as if Thailand is slipping. Our clients say they are
confused about Thailand,” says Ms Bustamante.
The ultimate injury:
condescended to by the Asia’s perennial underachiever.
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