Foreigners Say Basics Need Work Before Investing Anymore in Thailand by Phairath Khampha 24 January 2001 To foreign investors, political uncertainties in Thailand are temporary hurdles. The real challenges come when they encounter local business ethics and the high level of corruption, according to Abac-KSC Internet Poll Research Poll Centre. "We need to clean our house before inviting guests," said Srisakdi Charmonmarn, chairman of Abac Poll. The centre's survey of 126 joint ventures and 497 foreign executives found that a favourable alien business law, tax system and low wages, as well as sound infrastructure in comparison with that in much of Southeast Asia, were prime reasons for investing in Thailand. About 61 percent of foreign investors expressed confidence in Thailand's overall business and investment climate. As well, 60 percent of those surveyed said they were poised for further expansion and were priming the country as a regional hub for direct foreign investment in Southeast Asia. But they remained frustrated by the quality of Thailand's workers and bureaucratic impotence and the high level of corruption. Indecisiveness, a lack of punctuality and irrational thinking topped the list of flaws found in Thai businessmen. Cronyism, bribery and dishonesty were also cited. All those factors created tension that had to be resolved to attain optimum business performance, Dr Srisakdi said. The research found that Thai businesses were outdated in management and strategy, low in growth potential and productivity, and lacked expertise in their specific area. Bureaucratic bottlenecks, internal corruption and bribery topped the concerns when dealing with government. Business wisdom dictated that where there was money to be made, people would invest regardless. However, Dr Srisakdi warned that if core fundamentals were not improved, neighbouring nations could, in the long run, lure foreign direct investment that would otherwise have gone to Thailand. In 1998, foreign direct investment in Thailand was a record US$7.5 billion, compared with $3.7 billion in 1997. The amount fell by 18% to $6.1 billion in 1999, partly due to the downturn in the massive recapitalisation wave in the banking industry.