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Foreign investors in Thailand: A relationship self-check
Healthy relationships feature compromise, mutual respect and trust ... but when viewed as a partnership, rather than simply a transaction, foreign investors in Thailand – particularly expats – seem to be copping the rough end of the stick.
By: Bruce Bickerstaff
Most people would agree that healthy relationships - true partnerships - are characterised by features such as balance, compromise, mutual respect, and trust. Is this what we see when we look at the relationship between foreign investors and the Thai government, civil service and academia?
I had a hunch that this was a relationship that could do with some help, so I went looking for answers and happened upon the web site of helpguide.org. The good folks there suggested, "To determine whether your relationship is abusive, answer the questions below. The more "yes" answers, the more likely it is that you're in an abusive relationship."
Does your partner:
* criticize you and put you down?
* ignore or put down your opinions or accomplishments?
* blame you for their own … behavior?
* see you as property … rather than as a person?
* control where you go or what you do?
* keep you from seeing your friends or family?
* limit your access to money, the phone, or the car?
* constantly check up on you?
* prevent you from working or choosing your own career?
* steal from you or take your money?
Ouch, a few tics there. By now I’m getting worried and looking over my shoulder. Let’s look at a few of these points in more detail.
Criticize you and put you down
In May 2009 a senior officer of the Thai Land Department was alleged to have issued directions concerning the common practice of Thai wives buying a home to live in with funds provided by foreign husbands. This situation arose largely because Thai law prevents foreigners from owning most types of real estate in Thailand. That gentleman appeared to suggest that all such transactions were highly suspect and frequently involved deliberate attempts to circumvent the law, and that the likely outcome of investigation would be the forcible revocation of the land titles in question. As I am unaware of any revocations subsequently occurring I can only assume that either the Land Department is desperately incompetent, or the assertions reportedly made amounted to little more than irresponsible scare-mongering.
More recently Dusit Nontanakorn, chairman of the Thai Chamber of Commerce, was quoted in the Bangkok Post as having stated, "Foreign investors have for too long taken advantage of Thailand . . . The latest strong antidote at least makes foreign investors think twice before investing easily in the Thai bonds." In the same article Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, went on to exhort: "The tax exemption on the income that foreigners earn from investing in Thai bonds has pampered foreign investors too much. They need to be kept in check."
In many other countries one might have expected a subsequent public correction (perhaps even rebuke) from higher authorities, in response to intemperate statements such as these. This is all the more curious given that Thai Cabinet meeting minutes from that time suggest that such anti-foreigner sentiments were certainly not shared by all, including then Prime Minister Abhisit. One can only speculate that there is more political mileage to be gained in Thailand by appearing indifferent or negative towards the interests of foreigners, rather than to be sympathetic or supportive towards them.
Ok, so Thai politicians don’t want to be seen as soft on foreigners because there’s currently little support for pro-foreigner positions amongst the general public. I get that. But perhaps they could demonstrate leadership by using the education system to foster a more informed and outward-looking orientation amongst the next generation?
Anyway, so no outward support for foreigners from those in high places. Quite to the contrary in fact, as in March 2011 we were treated to some illuminating comments by Thailand's (then) Deputy Prime Minister Suthep Thaugsuban. Whilst discussing the issue of independent election monitors, Khun Suthep informed the world that he didn't respect foreigners … setting off a predictable fire-storm within expat forums. Nice.
Limit your access to money, the phone, or the car
Well how about limit your access to something even more important, your own home? Foreigners cannot own house in Thailand despite the fact that the Thai constitution guarantees that:
Section 33. "A person shall enjoy the liberty of dwelling. A person is protected for the peaceful habitation in and for possession a dwelling."
Section 34. "A person shall enjoy the liberty of travelling and the liberty of making the choice of the residence within the Kingdom."
Oops, sorry, I just remembered that the provisions of Chapter III of the Constitution only guarantee rights for Thai citizens and not the several million others who live in Thailand. My bad.
My wife recently attended a guest lecture by a Thai real estate expert at a major university. The speaker asked the audience (who were mainly post-graduate business students) "Who thinks it would be a good idea to allow foreigners to buy a home in Thailand?" No-one raised their hand. He then asked "Who thinks that it would be a bad idea?". Most of those present then raised their arms.
With such an obviously polarized topic one would have thought it was incumbent on the visiting lecturer to provide background information, and to set his question into some sort of context. None of us foreigners expect Thai people to roll over and unquestioningly agree to such a proposal, but we do believe that the issue at least warrants an informed debate. After all, we are not talking about lines on a chart, this issue concerns the welfare and happiness of many families.
The type of information that the guest lecturer might have shared with his audience – but chose not to - could have included:
* Details of just how strict the existing property investment laws in Thailand currently are, and how these affect people who would like to live here
* Details of how much (little!) land in Thailand is truly under foreign control or ownership. Some time ago the Thai media featured a claim that most of the coastal land in Phuket was owned by foreigners. On that occasion the matter was actually investigated … and surprise, surprise … found to be bogus.
* That (in most cases) land transactions by the wealthy Thai elite have profoundly greater effect on the real estate market than do purchases by foreigners.
* The fact that Thais who choose to live or invest abroad benefit from the far more liberal property ownership laws that exist in western countries
* The obvious fact that foreigners don’t steal land – Thai people choose to sell it to them under the terms and conditions of their choosing. And the foreigners who buy it can’t ever take it home with them ... it will forever be part of Thailand, and that
* The purchase of property by foreigners has flow-on benefits for the local community. These include the employment of tradesmen, domestic staff and contractors – and the up-skilling thereof. It also includes the purchase of furniture and fittings and building materials, as well as ongoing supplies like groceries.
Ignore or put down your opinions or accomplishments
When the Thai media discusses the value of foreigners it normally focuses just on spending by international tourists. That, however, is just one component of a much larger picture. Indeed, in 2010 alone in excess of 14.26 trillion baht was either brought into the country by foreigners (... continues ... to see the complete paper, including sources, see http://www.burning-
# # #
'Your Investment Guide to Thailand' is the foremost English-language reference concerning the Thai personal investment landscape.
The most recent hard-copy version of the 'Guide' was released in May 2011. Hard-copy versions of the 'Guide' are published by Silkworm Books (www.silkwormbooks.com)
An e-book version, currently available exclusively through amazon.com, was then released in August 2011.
Further details concerning the 'Guide' can be accessed at www.burning-
Page Updated Last on: Sep 14, 2011