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Widespread corruption is driving away investment from Thailand

Big multinational corporations with their own codes of conduct may claim they no longer bribe politicians or bureaucrats. But if the climate is such that it demands bribes or bribes are offered by their competitors, these corporations may lose out given the lack of a level playing field

Boris Sullivan

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Bribery, red tape and corruption have to be reduced before Thailand becomes non-competitive and unsuitable for many corporations, which would seek to invest elsewhere, a roundtable on corporate good governance concluded last week. Building a climate of good governance will take years and will also require the government to be less corrupt than it is, said the panelists at the seminar organized by Krungthep Turakij, a sister daily of The Nation.

Big multinational corporations with their own codes of conduct may claim they no longer bribe politicians or bureaucrats. But if the climate is such that it demands bribes or bribes are offered by their competitors, these corporations may lose out given the lack of a level playing field, warned Deunden Nikomborirak, a specialist in economic governance at the Thailand Development Research Institute.

“If the demand [for bribes] continue, it’s either you leave or you comply,” Deunden said. “There can be no level playing field if competitors do not stick to integrity.”

Deunden’s recent research revealed that out of the more than 200 cases of illegal practices by firms listed on the Stock Exchange of Thailand from 1999-2010, those punished were just slightly over 5 per cent.

corruption Thailand

A survey among 1,000 business respondents nationwide and found that 93 per cent perceived corruption existed, 88 per cent felt it would worsen and 77 per cent felt it was increasing.

Many of these cases involved fraud worth Bt3 billion-Bt4 billion, and given the low rate of punishment and fines, which on average amounts to Bt500,000-Bt1 million, it all seems worth the risk to break the law, she said.

via Widespred corruption undermining business, causing companies to invest money elsewhere.

World Bank report titled “The Business Case for Collective Action AgainstCorruption” estimated the cost of corruption surpasses US$1 trillion worldwide each year. Corruption not only has costs for business development but also cripples countries trying to ward off poverty as that money could have helped create jobs.

“We want to encourage whistleblowers by collaborating with leading business sectors to create a code of conduct as a guideline to say no to corruption,” said Mr Charnchai. He suggested Thailand study the example of the Philippines.

“We hope to see most civil servants and company staff dare to say no to corruption 10 years from now. Building this new attitude is similar to the practice of corporate social responsibility, which is now booming among corporate and government agencies here,”

said IOD president Charnchai Charuvastr.

A survey of school children by the Clean, Open and Transparent Thailand group suggested an attitude of resignation to graft.

Of the children in 38 schools surveyed, 34% said corruption had become a part of Thai culture and could not be eradicated. Forty-five per cent did not object to giving small sums to government officials to iron out inconveniences; another 54% could tolerate corrupt politicians as long as their work benefited the country.

Thai adults share a similar attitude. In a survey on moral integrity by an Abac poll conducted in 2007, 50.5% of 4,753 respondents would accept a corrupt government if it would help improve their lives.

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