THE THAI EXPERIENCE
The Sunday Times of India, February 18, 1996

"The Rice Bowl of Asia is not jsut an enchanting place for tourists to visit, it is also a country abounding in opportunities both for business, and employment, says HIRU BIJLANI"

One of the most enchanting and beautiful countries of South East Asia, Thailand, brings to mind images of the famous river Kwai, miles and miles of sandy beaches, cool mountainous plateaus, and dense jungles.

It was a classic war film 'The bridge on the river Kwai' which attracted people from all over the world to this exotic country. Situated in the centre of the South East Asian continental region, Thailand occupies an area of 514,000 sq. km. It is surrounded by the Union of Myanmar (erstwhile Burma) from the west to north and by Laos in the east and north-east. To its east lies Kampuchea and to the south lies Malaysia.

Thailand is divided into five major geographic parts with the mountaineous North East region rich in forests, the Korat plateau, an important area for cash crops, the Southern region which is on the boundaries of Malaysia which is rich in agriculture, mineral and marine resources and the central plains surrounding the Chao Praya river, around which the capital Bangkok is located.

The word Thai means 'free' and Thailand is the only South East Asian country which was never colonised. With 55 per cent of the population being Buddhist, Thailand has 73 provinces and each has a Provincial governor.

At the national level it has a cabinet with the Prime Minister as the head of it. The Government functions under the benign guidance of a constitutional monarchy. Though it has had military dictatorships on and off, the nature of the military dictatorship tends to be benign and does not have any dramatic impact on economic policy or social order.

Apart from its serendip charm, the country also abounds in opportunities both for business, tourism and employment. Thailand appears to be 'riding the crest' of an economic boom.

Growing Economy

A consistently strong export base, a growing tourism sector, and a highly deregulated market economy are the hallmarks of Thailand. Having posted an impressive growth in GDP, close to ten percent at constant prices, despite a strained infrastructure, the economy is surging ahead.

With a boom in the Thai economy, the Government has taken measures to accelerate the development of infrastructure. It has excellent air connections to cities all over the world. The railways are also reasonably well networked in the country. The ports are well developed, with Bangkok being the main port. As of now highway building has been given top priority in the country which has about 5,000 kilometres of roadways.

With a well sustained growth rate, between eight and ten percent per annum, agriculture continues to be the mainstay of the economy. Agriculture accounts for about 17 per cent of the GDP and 36.9 per cent of the exports.

Known as the 'Rice bowl of Asia' the country is a net exporter of food. The principal agricultural products are rice, maize, casjava, sugar and rubber. Fishing is another major industry in Thailand with Malaysia and Japan being the largest importers of Thai fish. Incidentally, Thailand is one of the largest exporters of shrimp in the world.

The importance of manufacturing has been increasing. Manufacturing accounts for about 24 percent of the GDP and 36 per cent of the exports, employing 8.9 per cent of the workforce.

The main industrial products include processed foods, precious stones and jewellery.

The industries that have been showing a boom in the last few years are processing, cement, footwear, glass, paper, ceramics, petrochemicals, furniture, pharmaceuticals and engineering goods. Factories that support such economic activities are centered in and around Bangkok - the capital.

Construction, mining and mineral industries are the other major industries in Thailand. Textile and leather products are also major industries in Thailand. Local processing of wood has been encouraged and exports of plywood vencer, parquet, furniture, household utensils and paper products are increasing.

Tourism is also one of the major industries in Thailand and a major foreign exchange earner. Significantly, Thailand has over three million tourist visiting it every year.

Investments

The Board of investments controls investments and provides incentives for foreign investments and comes under the office of the Prime Minister. The Prime Minister is the Chairman of the Board. While the Board of Investments is very open it does not encourage majority shareholding by foreign investors.

The administrative and bureaucratic process is very smooth and efficient and bureaucrats are very co-operative to foreign investments. The Board of Investments provides extensive and clear guidelines for the same. Information regarding taxation and incentives on foreign investments, foreign currency controls etc. are presented in well developed handouts and brochures.

Thailand has all forms of business organisations, proprietorships, public limited companies as well as developed stock market.

Currency

The Thai currency is very stable and while it floats against a basket of currencies, it tends to be closely linked to the dollar and has been consistent at around 25 Bahts to the dollar for the last several years. It is also a freely convertible currency.

Employment and residence

Thailand is quite liberal in its work permit laws for foreigners especially for the purpose of doing business or working on jobs in a vast variety of industries. Making of local handicrafts is forbidden to foreigners as this might deprive the local artisans of jobs at the lower end of the economic spectrum. Similarly certain professional services such as legal and architectural work is also forbidden. However, in joint ventures even these are possible.

Thailand is one of the few countries where even Indians can get a visa at the airport on arrival and which is valid for three months. It is also fairly easy to get extensions upto a period of one year on a non-working basis.

For residence permits, the procedure entails application by the employer or evidence about business that one wishes to start to the concerned authorities. This includes a certain amount of investments or evidence of jobs.

The resident laws applicable are also liberal for teachers or persons coming to Thailand for education. Similarly, various flexibilities exist for the study of religion or to be with one's spouse etc. Thai citizenship is granted only by birth and if it is a mixed marriage, it is the father whose nationality prevails.

Labour laws

The labour laws in Thailand are well developed. Working hours permitted are clearly defined for various categories. For instance, transportation workers have a maximum permit of 48 working hours per week. Banks and general workers in offices are permitted to work for no more than 54 hours a week. People in toxic or hazardous industries cannot work for more than 42 hours a week. All workers are entitled to a break every five hours of work of about 20 minutes. All workers are entitled to one paid holiday per week plus 13 traditional holidays, 30 days of medical / annual leave subject to medical certification and 60 days of maternity leave.

Persons working for three months or more but less than one year will be entitled to one month's termination compensation in their pay and a person who has worked for more than one year up to three years is entitled to six months termination compensation. Employers have rights under various conditions of misconduct, dereliction of duties, dishonesty, abandonment, imprisonment etc. to take action without termination compensation. The minimum wage is around 70 Bhat per day and unfair measures are controlled and regulated by the Labour Ministry. Thailand is a party to GATT and WTO.

Population

Thailand has a population of 16 million people and a land area about the size of France. About 70 per cent of the population live in rural areas and 30 per cent live in and around Bangkok and its suburbs. Bangkok itself has around six million inhabitants. About 15 per cent of the Thai population are of Chinese origin. Buddhism is the predominant religion and one can find extensive statues of Buddha and many beautiful temples, the most striking one being the Golden Buddha, the Reclining Buddha and the Jade Buddha.

Since Buddhism preaches religious tolerance, there is no religious friction in Thailand although there is a significant Muslim population in the south. All education in Thailand is conducted in Thai, English is a second language. Most commercial establishments and business houses have a number of people who speak English fluently. There are two impeding factors for visitors or businessmen.

  • The lack of English as a common language. It is fluent only at the top levels and hence Indians would need to learn Thai to be successful and effective in Thailand.
  • The traffic in Bangkok leaves much to be desired and the lack of an effective public transportation can be a big problem.

Cultural Characteristics

South East Asian countries have been open to various outside influences due to their geographical position. Their cultural traditions have developed over thousands of years.

Indian influence has been dominant in the region for almost over a thousand years. The Indian epics of Ramayana and Mahabharata have become the theme for innumerable dramas and folk dances. With the spread of Buddhism and Jataka tales also became thematic in the shadow-plays, dances and dramas of Thailand.

Thailand has been a favourite zone for tourists and of late many business ventures have also been started. While Indians have been lured to the Gulf in high numbers, Thailand has not been so attractive. But the future may well see this tiny neighbouring country playing host to a large number of Indian ventures.
 

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