pledged to stamp out unethical business practices. Yet, for ordinary Thai citizens, the mood isn’t optimistic. There are increasing concerns that nowhere near enough is being done to make good on that promise. And it’s a concern that global firms should (at least) be aware of.For global firms who are looking to invest in Thailand, the spectre of corruption continues to be a leading concern. The current military government, which rose to power in 2014 in a bloodless coup, had
Thailand is the second-largest economy in the Association of Southeast Asian Nations (ASEAN), however. That status makes the country hugely attractive for foreign investment – not least for countries who want to scale back their reliance on China. But operational and reputational risks still exist for firms who plan to invest in Thailand. For the most conscientious companies, it means taking the necessary steps to improve and ensure corporate transparency in 2021 and beyond.
Corruption in Thailand: The Current Landscape
In terms of doing business in Thailand now, the corporate landscape is varied. The World Bank ranks the country among the best in the world for ease of doing business – more so even than developed economies such as Japan, Canada and Germany. And efforts to eradicate corruption did seem to be working too; the country’s rank in the global Corruption Perception Index (CPI) for 2017 rising to 96 in the world – up five places from 101 in the previous year.
The bad news for Thailand and its government is that progress now seems to be lost. The most recent CPI shows those gains are now undone, with the nation sliding back down to 101st in the rankings. The Global Corruption Barometer Asia 2020report also makes for unhappy reading in Thailand. More than half of its citizens believe corruption is on the rise, while almost nine-in-10 think corruption in government is a big problem. And just 29% trust the national government.
It certainly doesn’t help that national perception when a domestic travel subsidy initiative must be suspended due to a probe into allegations of corruption and bribery. Nor is it helpful when a national anti-corruption panel is investigating complaints of irregularities at national flag carrier Thai Airways. This shows global firms just what challenges exist when it comes to transparency and quality when they come to invest in Thailand. But there are measures businesses can take.
How Can Global Firms Ensure Business Transparency?
For any potential investor, it is essential to have a thorough understanding of the market you’re entering. Thailand is, of course, no different. But gaining the insight and knowledge you need is often hard if you don’t have feet on the ground. Fortunately, such as RSM exist to provide that advice and guidance. And it is with this international expertise that firms can enter new territories and jurisdictions with much greater confidence. global professional specialists
In its 2019 Transparency Report, RSM explains how its “member firms are driven by a common vision of providing high quality professional services both in their domestic market and in serving the international professional service needs of their client base. The RSM network connects member firms through common methods and processes, including commonly agreed and applied quality standards.”
By drawing on a common set of standards in the field of corporate transparency and integrity, firms investing in Thailand can be certain their business needs will be met. With this comes an expectation, too, that current and future risks can be effectively managed and mitigated.
The Impact of Transparency in Business in Thailand
A sense of transparency and corporate responsibility are important attributes for any reputable firm. If investing in Thailand against the backdrop of distrust in the government and other state institutions, companies who want to portray a positive image must be seen by the public to act in an ethical manner. And trust – whether from consumers, potential partners or even workers – is a critical component for success in the modern business age.
It isn’t confined to the domestic market either. The world today is now much smaller due to the advances in communication and digital technology. Brand image and company reputation cross borders and boundaries with seamless ease. Yet some firms can overlook how the greatest risk to their reputation could be found in a foreign subsidiary. This is why corporate transparency is an essential aspiration for any global firm – no matter where they eventually choose to invest.