Government Affairs in Thailand
Full country name: Kingdom of Thailand
Area: 517,000sq km
Population: 67 million
Capital city: Bangkok (pop 6 million)
People: 75% Thai, 11% Chinese, 3.5% Malay, also Mon, Khmer, Phuan and Karen minorities
Religion: 95% Buddhism, 4% Muslim
Government: Democratic constitutional monarchy
The many benefits Thailand offers foreign investors make it one of the region’s most attractive investment destinations. Comparative analysis of costs of doing business in Asia underscores Thailand as a cost-competitive location for investors, offering a quality lifestyle for expatriates. Adding a healthy macroeconomic environment, a positive regulatory business environment and a welcoming culture clearly sets Thailand apart from its competitors.
Thailand is the geographical heart of South-East Asia. At the nation’s northernmost point Thailand’s borders meet those of both Laos and Myanmar (Burma). The border with Myanmar continues to the west and then south as far as the Malay peninsula, much of which is occupied by Thailand. On the east, the border with Laos meanders southeast along the Mekong River until it reaches Cambodia, which is due east of Bangkok, the Thai Capital. In the south is the Gulf of Thailand. Thailand is roughly the size of France (200,000 sq. miles).
Thailand offers exciting business opportunities to companies prepared to take a serious interest in this dynamic market. Thailand with a population of 67 million has managed to transform its economy from one that was previously agriculture-based to one of the most diverse in the region. As well as agriculture, major industries include food processing, cement, integrated circuits, automotive parts and assembly, petroleum products, textiles, footwear, toys, furniture, synthetic fibre and tourism. The country has a well developed infrastructure, a free enterprise economy and generally pro-investment policies.
Strategically located at the heart of Asia, Thailand is also well placed to offer a gateway to both the ASEAN (Association of Southeast Asian Nations) and Asia-Pacific markets, particularly India and China. The ASEAN region has a cumulative population of more than 500 million and a GDP in excess of U.S.$ 700 billion. Within ASEAN, Thailand’s economy is in the top three in terms of size and volume of international trade. It is therefore well positioned as the region moves towards integration and a single free trade area in 2015.
Thai Governmental Structure
The Royal Thai Government (RTG) or the Government of Thailand is the unitary government of the Kingdom of Thailand. Thailand has been a constitutional monarchy under a parliamentary democracy system since 1932. The country has existed in some form since the 13th century, but the country emerged as a modern nation state after the foundation of the Chakri Dynasty and the city of Bangkok in 1782. The Revolution of 1932 brought an end to absolute monarchy and replaced it with a system of constitutional monarchy. However from then on the democratic system has been weak and the country was ruled by a succession of military leaders installed after coup d’etats, the most recent in 2006. Under the 2007 Constitution (drafted by a military appointed council, but approved by a referendum) the present structure of the Government of Thailand was established. Thailand has so far had seventeen Constitutions; however the basic structure of government has remained the same. The Government of Thailand is made up of three branches: the executive, the legislative and the judiciary, the system of government is modeled after the Westminster system. All branches of the government are located within Bangkok, the capital city of Thailand.
The role of the King
The King of Thailand, currently King Bhumibol Adulyadej (or Rama IX) is the world’s longest reigning monarch, and has reigned since 1946. The Constitution stipulates that although the sovereignty of the state is vested in the people, the King will exercise such powers through the three branches of the Thai government. Under the Constitution the King is given very little power, but remains a figurehead and symbol of the Thai nation. As the Head of State however he is given some powers and has a role to play in the machinations of government. According to the Constitution, the King is the Head of the Armed forces, required to be Buddhist as well as the defender of all faiths in the country. The King also retains some traditional powers such as the power to appoint his heirs, power to grant pardons and the royal assent. The King is aided in his duties by the Privy Council of Thailand.
Bills passed by both the House of Representatives and the Senate become law upon approval of the bill by the King. The King has the power to approve or disapprove bills adopted by the Parliament; bills do not become effective as laws without the approval of the King, unless later re-approved by the Parliament. If the King disapproves a bill as a proposed law, the bill is returned to the Parliament to consider the King’s objections. If the parliament nonetheless approves the law again, by at least a 2/3 vote of both houses of the parliament, the bill is returned to the King for reconsideration. If the King still declines to sign the bill into law, the Prime Minister is authorized to promulgate the bill as a law by publishing it in the Government Gazette, the official newspaper of the Government, as if the King had signed it.
The Executive Branch of Government:
The executive branch of the Government is headed up by the Prime Minister. It consists of the Prime Minister, the ministers of the various ministries, deputy ministers, and the permanent officials of the various ministries of the government. The Prime Minister is selected by the House of Representatives, with the President of the House of Representatives submitting a recommendation to the King for appointment. Usually the person recommended for appointment as Prime Minister is the leader of the political party having the largest number of elected Members of Parliament. Sometimes, however, a “coalition government” may be formed in which a number of political parties collectively represent a majority of the members of the House of Representatives. If such a coalition government is formed, the coalition may choose some other person as Prime Minister, and the President of the House of Representatives would then usually submit the name of the coalition’s suggested Prime Minister to the King. The Prime Minister, as head of the executive branch, is also the leader of the Cabinet of Thailand. The Prime Minister therefore retains the prerogative to appoint or remove any Minister he or she so chooses. As the most visible member of the government the Prime Minister represent the country abroad and is as well the main spokesperson for the government at home.
The Prime Minister is the “Head of Government.” He is responsible for the administration of all government agencies except the courts and the legislative bodies. The Prime Minister selects those persons, usually members of the House of Representatives, whom he wants named as Ministers or Deputy Ministers to head up the activities of each of the individual ministries of the government. When a coalition is formed of various political parties, each party traditionally seeks a representative proportion of ministerial and deputy ministerial appointees to be from that party’s membership, as recommended by the head of that political party. Upon recommendation of the Prime Minister, the King appoints all Ministers and Deputy Ministers.
The Prime Minister and the other ministers (ministers or deputy ministers) collectively make up a body known as the Council of Ministers. The Council of Ministers, sometimes called the “Cabinet”, are in day to day control of the government and all of its activities, except those of the Parliament and those of the Courts. They set governmental policy and goals, and expect that the individual ministers and deputy ministers will carry out those policies and goals within their own designated ministries.
The present Cabinet has been active since August 9, 2011, when its members were officially sworn in by the King. The Cabinet is made up of five parties that form the current governing coalition. The Cabinet comprises: 21 Ministers of State, 5 Deputy Prime Ministers and 12 Deputy Ministers.
The individual ministers head up their respective departments. These ministries are: Office of the Prime Minister; the Ministry of Finance ; the Ministry of Foreign Affairs ; the Ministry of Defense; the Ministry of Agriculture and Co-operatives; the Ministry of Education; the Ministry of Transport and Communications; the Ministry of Commerce; the Ministry of Public Health; the Ministry of Science, Technology and Environment ; the Ministry of University Affairs; the Ministry of Justice; the Ministry of Labor and Social Welfare; the Ministry of Industry; and the largest and most powerful, the Interior Ministry, under whose auspices come a wide range of responsibilities, from provincial government to the police department, reaching down to the villages at the base of the pyramidal government structure. Ministers give policy direction to the permanent officials (the regular employees of the agency who are there on a permanent, long term basis, as part of the civil service); the permanent officials of the agency then give direction to the various supervisors and other leaders within their department, and they in turn supervise the employees who perform the actual “work” of the agency under their control. In addition, all ministers and deputy ministers sit as members of the Council of Ministers, which normally meets once a week to establish government policy on any and all issues arising needing governmental attention. The Council of Ministers has the power to submit urgent legislation to the King for immediate implementation by Royal Decree, to be followed by consideration by the Parliament within one year. Once such a proposal has been adopted by Royal Decree, it is the law of Thailand unless overturned by action of the Parliament. The Council of Ministers also prepares a budget for consideration by the Parliament, and approves and submits to the Parliament bills desired by the Prime Minister or by individual ministers or ministries affecting governmental policy and procedures.
Below national government level Thailand is divided into 76 provinces (Changwat) who are administered by appointed governors. Provinces are further divided into districts (Amphurs), sub districts (Tambons) and villages (Moo Bans). The Bangkok Metropolitan Administration comes under an elected governor.
The Legislative Branch of Government
The Legislative Branch of the government (the Parliament, also called the National Assembly) is the law-making arm of the government, charged with primary responsibility for adoption of laws to govern Thai society. The National Assembly consists of the two legislative bodies, each with its own responsibilities. These bodies are the House of Representatives and the Senate. The National Assembly has 630 members. Both houses of the National Assembly meet at the Parliament House of Thailand
House of Representatives
The House of Representatives, which is also known as the “lower house of parliament”, comprises 500 members. 375 of the MPs are elected directly from single-seat constituencies around the country. The other 125 members are selected using ‘proportional representation’ through party-lists. There are 8 electoral areas from which the proportionally representative votes are taken and 375 constituencies. This system is called the ‘Mixed Member Majoritarian’ in which a voter has two votes one for the constituency MP and the other for a party in the voter’s electoral area.
The House is a partisan chamber with 7 political parties. The House is the primary legislative chamber and the more powerful of the two houses. The House has the power to remove both the Prime Minister and Cabinet Ministers through a vote of no confidence. The House sits for a term of four years however a dissolution of the House can happen anytime before the expiration of the term. The House is led by the Speaker of the House of Representatives, who is also the President of the National Assembly. He is assisted by two Deputy Speakers. The leader of the largest party or largest coalition party will most likely become Prime Minister, while the leader of the largest party with no members holding any ministerial positions will become the Leader of the Opposition. The Leader of the Opposition is a powerful position with considerable influence, he is assisted by a Shadow Cabinet.
The Senate, under the Constitution, has the duty to enact all of the required “organic laws” called for by the Constitution if the National Assembly fails to enact those laws within the time limits specified. In such an event, the House of Representatives is disbanded (terminated), and the full law making authority then passes to the Senate to draft, pass and submit the organic bills meeting constitutional requirements to the King for approval. This applies even if it is the Senate itself which is delaying final adoption of the required organic laws.
The Senate, the “upper house of Parliament” has 150 members. 76 members are elected each from one per province from the 75 provinces of Thailand and 1 from the Bangkok Metropolitan Area. The other 74 are selected by the Senate Selection Commission, made up of both elected and appointed officials.
The chamber is strictly a non-partisan chamber, and members may not be a member of a partisan organization, House of Representatives, judiciary and the Cabinet for five years. The Senate has little power legislative -wise, but retains considerable powers of scrutiny and appointment. The Senate is vested with the power to ‘advise’ on the appointment of several members of the Judiciary and independent government agencies. The Senate sits for a set six years non renewable term, the Senate cannot be dissolved. The Senate is presided by a President of the Senate, who is also the Vice President of the National Assembly. He is assisted by two Vice Presidents of the Senate.
The House of Representatives is the first to consider most new legislation, proposed by the Cabinet or by a group of Members of Parliament. If the House approves a proposed bill, it is sent to the Senate for consideration. If the Senate approves the bill as submitted to it, and each house approves the bill on the third consideration by that house, the bill will be submitted to the Prime Minister for forwarding to the King for his approval. (Each bill must be considered on three separate occasions by both the House and Senate before being sent to the King for his approval.) If the Senate does not agree to the bill as proposed by the House of Representatives, it may amend the bill, and return the bill, as amended, to the House of Representatives for consideration. If the House does not agree with the amendment, the two bodies appoint a committee to try to resolve the differences. If this is not possible, the House of Representatives may enact the bill, without the Senate’s amendments, after a lengthy period of time (six months or more) has passed. It is then submitted, through the Prime Minister, to the King, for his consideration.
The Judicial Branch of the Government
The Judicial Branch of the Government consists of all the courts of Thailand. The courts are independent bodies, intended to serve as a “check and balance” on both the Executive and Legislative branches of government. The judiciary hears cases involving actual conflicts between individuals, between individuals and businesses, or between individuals or businesses and the government, and decides each case on its own merits. When a law applies to a case being considered, the court will apply the terms of the law, but if it feels the law may be contrary to the Constitution, it has the duty to refer the case to the Constitutional Court for a determination of whether there is such a conflict. Other than in cases of conflict with the Constitution, the courts apply the laws as enacted, and determine how the facts they find in hearing the evidence are affected by the laws. The courts also review executive actions of the government, how the executive branch carries out its functions, and can render judgments against the governmental bodies in appropriate cases.
The courts of Thailand basically consist of the trial courts (courts of the first instance), the appeal courts, and the Supreme Court (the Dika Court). In addition, a new Constitutional Court has been established to rule on the validity of laws, regulations and governmental decisions under the provisions of the Constitution. The court also considers the applicability of a law as applied, and whether it is applied in a manner consistent with the Constitution. Also, an Administrative Court is established, dealing with how the government administers the law and its policies.
The trial courts consist primarily of the district courts and provincial courts, as well as the Central Courts (Central Criminal Court and Central Civil Court) situated in Bangkok. The military courts, labour courts, family and juvenile courts and the International Trade and Intellectual Property Court are also courts of the first instance (trial courts).
Appeals courts are authorized to consider appeals from most trial courts, and the Supreme Court (Dika Court) considers cases appealed from the appeals courts as well as from other courts from which an appeal may be taken directly to it (such as Labour Court decisions) without having to first be considered by the Appeals Courts. Decisions of the Constitutional Court are not subject to review by the Supreme Court (Dika Court). For most other cases, the decision of the Supreme Court is the final authority on any controversy, and that decision, when announced, is not subject to further appeal or review. The decisions of the Constitutional Court are final and binding on the National Assembly, Council of Ministers, Courts and other State organizations. The scope of the Constitutional Courts powers is very broad. The Constitutional Court may decide on the legality of any bill being considered or adopted by the National Assembly. It may decide whether the bill or law complies with or is in any way contrary to the Constitution, and has the power to declare the law void, or to declare any part of the law void and unenforceable.
Balance of Powers
Each of the three branches of government has a degree of control over the actions of the other branches of government.
The Executive Branch carries out most government activities, and establishes governmental policy. It also proposes most laws to be considered by the Legislative Branch, and proposes the annual governmental budget.
The legislative branch can approve, amend or reject proposed bills, and it gives thorough review to the budget submitted to it, and can make changes to the budget within limitation specified in the Constitution.
The Courts have a degree of control over legislation approved by the Parliament, in interpreting the law and, as to the Constitutional Court, in determining whether the law is consistent with the constitution. Any law found to be inconsistent with the Constitution by the Constitutional Court is rendered ineffective, and cannot be followed. The Courts also review governmental actions, and can require changes or reconsideration in appropriate cases, such as environmental reviews.
The Executive Branch, through the power of preparing the budget, has a degree of control over the functions of the courts, and how many employees the courts may have, etc. The legislative branch also has a direct say in the budget process. The executive branch also has control over legislation passed by the Parliament, in that all bills must be submitted to the King through the Prime Minister, and if the Prime Minister is opposed to a particular bill, he can express those feelings to the King, who may refuse to approve it in the form in which it is submitted to him.
The power of each separate branch of government to in some way or other affect the others’ actions is known as the system of “checks and balances.” Each branch has at least some authority to place limits upon the actions of the other.
The strategic approach to policy advocacy in Thailand stresses the need for synergistic interactions between three powers; i) the power of wisdom, ii) social power, and iii) political power, to affect significant policy change or reform. According to this approach, the effective bridging of three powers; a.) knowledge and evidence generated through research and analysis, b.) mobilization of civil society and public support, and c.) leadership of politicians and policy makers – in a “triangle” can result in the resolution of seemingly insurmountable problems.
Important roots of Thai society are found in the prevalence of patron-client relationship. At best a company that believes to have a political grievance or interest to pursue can only hope to establish some personal, individual patron-client relationships with an official to ensure that authority will not operate to its disadvantage especially at a time when the company is least prepared to deal with it.
The Thai political and administrative system is significantly different from that found in Western countries. Through this system, the bureaucrats play a key role in controlling decision-making processes and has the real power. All crucial decisions regarding the development of the country are the purview of the privileged few, thus preventing a more representative approach to the collective future of the country.
Officials, decision-makers and staff alike continue to consider themselves above and apart from the public and in no way accountable to it, free to pursue their own interests as they see fit. The decision-makers in particular not only are indifferent to popular political participation, but often even are indifferent to communicating government policy to the general public. Officials are notoriously difficult to see and are indifferent to requests and complaints from below. Conversely, officials too are impatient with public compliance of their requests.
Under the current Thai regime, two forms of political influence by business are in existence: (1) direct participation in Parliament and the Cabinet, both through elections and the support of political parties and (2) group-based lobbying or membership in the Joint Public-Private Consultative Committee (JPPCC).
An increasing number of businessmen have been elected to the House of Representatives and are also present in the Cabinet. Politicians in the legislatures, in parties and in government who have a business background readily represent their particularistic interests.
Public policy advocacy by business is done through chambers of commerce and trade associations. Generally, business associations make their case by sending letters, holding press conferences by representation on various government appointed committees or by paying special visits to high government officials. Some associations, however, are turning to more sophisticated means such as organizing seminars to influence the informed public as well as concerned government officials. Some leading associations commission studies by research team in order to persuade the government with analytical data.
The target of lobbying or other influencing activities of business associations is mainly the executive branch of government. More contacts are established with the executive rather than the legislative branch and most of these contacts take place at the departmental level, which is the most immediate to the policy implementation. Contacts with the legislature by business associations has also significantly increased.
In recent years the number of trade associations has sharply increased and there is a proliferation of provincial chambers of commerce.
The JPCC’s (Joint Public Private Consultative Committee on Economic Problems) membership consists of the Prime Minister, Ministers in charge of Economic Affairs and Representatives of the Thai Banker Association, the Association of Thai Industries and the Thai Chamber of Commerce. The JPCC holds monthly meetings at which the problems of both the public and the private sectors are discussed and resolutions passed on to the Cabinet or relevant agencies for necessary action.
In the end government affairs in Thailand requires a knowledge of the Thai political system, an understanding of how different arms of government work, how policies are crafted and laws are made. Businesses need to have a good perspective on Thai economic, political and social trends.
There are seven concepts of Thai culture that need to be well understood. They are: the concept of helping each other; the concept of Bunkhun; the concept of kreng-jai, nam-jai, hen-jai and sam-ruan, the concept of face saving; the concept of criticism avoidance; the concept of sympathy; and the concept of compromising.
1. The concept of helping each other
One of the most important concepts in the Thai culture is helping each other. The helping mind is instilled in Thai people and they help others without expecting anything in return or any compensation. At the same time the person who receives help feels indebted to the helper and will remember that and try to repay or return the favour at a later date.
2. The concept of Bunhun
This concept is the concept of gratitude or repaying a favour with a favour. It is instilled in the Thai people deeply.
3. The concept of kreng-jai, nam-jai, hen-jai and sam-ruan
Kreng-jai is a powerful element of Thai culture that has no literal, precise translation in English . Kreng-jai is generally best expressed as being a polite attitude of deference and consideration for others; however, it is far more complex. Kreng- jai carries with it an implicit obligation to respect others’ feelings. This involves two aspects, the first of which is to avoid imposing on other people, and the second of which is to avoid confrontations which suggest dissent. All of this leads to indirectness and reticence, both in language and behaviour. The Thai people have a remarkable ability for saying things without actually saying them, but foreigners often fail to pick up such subtle signals.
Kreng-jai is deeply enshrined in Thai culture. It represents the Thai and Buddhist concept of having compassion for others and striving not to be selfish. It defines the essence of the Thai character. Kreng-jai manifests itself as a general desire not to disrupt the happiness of others, even at the expense of efficiency, honesty, or one’s own interests. Kreng-jai is usually a function of feeling uncertain or distanced from people and desiring to avoid offending them.
Kreng-jai is an integral part of Thailand, and what it is to be Thai. Although in an effort to adapt to modernization, Kreng-jai may have lost some of its importance in Thai culture, it still is and likely always will be a big part of Thailand.
Respect for Elders (Unequal Age Status)
Respect for elders imbues the Thai way of life and underpins the operations of kreng-jai.
Respect and obedience to elders, trust in their wisdom and protection, and the need to return favours received, all these are strong themes in Thai culture. The underlying idea is the principle of mutual dependence and reciprocity, and the principle of being practically and morally indebted. It is the recognition that people need each other if they want to go on living, formulated in a system of mutual but unequal moral obligations, with due respect for tradition and wisdom of elders
Respect for/ Fear of the Powerful (Unequal Power Status)
Since Thai bureaucratic institutions wield great power, business organisations – and their employees – are often placed in the position of supplicant. The Thai society is constructed as ‘a network of connections’, so to get things done, in Thai culture, it is best to have more connections. And with the people who have more connections, you have to be kreng- jai to them. Thus the person with less power is obliged to adopt the position of supplicant so that the more powerful person in turn feels obliged to behave in a generous manner befitting his or her station. Unlike the immutable respect for elders, this form of kreng- jai is superficial rather than sincere. Respect in the form of obsequiousness allows certain roles to be played out in order to achieve functional business ends.
Respect for Superiors (Unequal Rank Status)
Thai workers are likely to feel kreng-jai towards those of higher rank, and work efficiency may be hindered by a Thai feeling too kreng-jai to impose on a superior. This can cause problems with Westerners who attach most importance to getting the job done.
Consideration for Foreigners (Distance: boundaries unknown)
Thai people feel kreng-jai towards foreigners because they are an unknown quantity. They don’ know them at all, what they think, what they want. This distance involves the avoidance of imposition because boundaries are unknown.
Consideration for Thais (Distance: feelings unknown)
Since Thais conceal their own feelings, their colleagues are often unsure about what might cause offence and have to exercise caution.
Such is the nature of kreng-jai, that self-effacement becomes a positive virtue. Self-effacement, though prized, is not automatic or easy. If foreigners focus their attention on building relationships instead of getting the job done, they could actually break down the barriers of formal politeness which hinder efficiency. .
Nam-jai is one of the most admired values in Thai culture. It means ‘water from the heart’ that is genuine kindness and generosity without expecting anything in return.
Hen-jai (see into the heart) means understanding, sympathy and empathy which can be practically expressed by being willing to listen, being flexible and forgiving and accommodating towards one’s fellow human beings in time of distress
Sam-ruan refers to moderation in expressions and conduct. When a person is sam-ruan, he would restrain his emotions, whether being elated or in grief or in anger so as to avoid excessive display of emotions which could cause embarrassment and discomfort to others.
The law of karma ensures that Thais are generally very motivated towards righteous conduct for fear of the results of bad karma and for counting on the benefits of good karma as well.
4. The concept of saving face
This concept is an expression of top concern for ego. Whenever there is any problem to be solved that would directly or indirectly involve persons, the first criterion to consider is saving the face, the ego of the person involved. Thai people will usually find indirect ways to soften a negative message. Most important is to avoid public confrontation, regardless of whether it involves an inferior, an equal or worse still a superior. To make a person lose face regardless of rank is to be avoided at all cost.
5. The concept of criticism avoidance
This concept reflects that Thai people are very ego oriented to the extent that it is difficult for the Thai to dissociate one’s idea and opinion from the ‘ego’ self. This is why strong criticism to the expressed idea is often automatically taken as criticism to the person holding those ideas.
6. The concept of sympathy
Thai people are sympathetic to others and it becomes the nature of Thais in general.
7. The concept of compromising
Thais are compromising in nature and it is one of the strengths of Thai people. They practice this concept in their daily lives and meeting others half way is understandable by the Thais.
Useful Political Resources
Royal Thai Government
Office of the National Economic and Social Advisory Council
Ministry of Agriculture and Cooperatives
Ministry of Commerce
Ministry of Energy
Ministry of Finance
Ministry of Foreign Affairs
Ministry of Industry
Ministry of Information and Communication Technology
Ministry of Natural Resources and Environment
Ministry of Science and Technology
Department of Export Promotion
Thailand Board of Investment
Tourism Authority of Thailand