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USCIB op-ed: Is Thailand ready for prime-time trade?

The Mercury News, San Jose, California, USA

22 October 2003

Is Thailand ready for prime-time trade?

By Franca Gargiulo

With a branding effort rivaling that of Tommy Hilfiger, Thailand prepared to receive delegates last weekend to the Asia-Pacific Economic Cooperation summit in Bangkok. The welcome mat took many forms, from roadside billboards to headrest protectors on Thai Airways. But like many ad campaigns, Thailand’s efforts call attention to its own insecurities.

U.S. and Thai business leaders anxiously awaited the announcement made Monday of the beginning of negotiations for a free trade agreement between the two countries. Coinciding with President Bush’s visit to Bangkok, the agreement serves as a natural next step in an increasingly prosperous trade relationship and deepening security ties.

Enthusiasm for the free trade agreement stems not only from the trade relationship but also from the Bush administration’s commitment to strengthen the Association of Southeast Asian Nations. It also merges with Thailand’s desire to promote itself as a hub in a region of economic and political uncertainty.

The government of Prime Minister Thaksin Shinawatra has kept to its economic recovery plan designed to address concerns raised by the 1997 economic crisis. Mandatory education through the 12th grade, extension of health care benefits and support for rural farmers have all proved popular and helped to present a picture of Thailand as an oasis of stability as it convened the APEC summit.

But the Thai ``comeback’’ has had a flip-side: increasing debt, which has attracted quiet criticism from both business and pro-democracy forces. Activists say the government is in a slow slide to unmanageable debt (presently 54 percent of gross domestic product, while the business community views the rural development plan as an example of unsustainable handouts and no help for future growth.

The government’s detractors also cite the painfully slow growth of public participation in Thailand’s democratic institutions. The rise in violence, especially a spate of extra-judicial killings tied to authorities’ efforts to combat drugs, has raised eyebrows around the world. Many observers worry that, far from a comeback, Thailand may be on the brink of an economic and social collapse.

Many of the government’s detractors say that Thailand may not be ready for real democracy. In the United States, opponents of the trade agreement can be expected to echo this sentiment, saying we have no business throwing open our markets to a country that has yet to prove itself in this arena. But as many Thais I met on a recent visit observed, democracy is like a marriage: If the two parties hold out for perfection, the union never takes place. The same can be said for trade agreements.

Franca Gargiulo of San Francisco is the Western region representative for the United States Council for International Business. She wrote this column for the Mercury News.