Jun 30, 2014

Thailand - Seven Years not Enough Time For Thailand SMEs (and Government) to Ready for AEC

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Despite having had seven years to prepare more than 60 per cent of Thailand’s small and medium-sized enterprises (SMEs) are said to be ill prepared for the start of the Asean Economic Community (AEC) when it comes into effect at the beginning of next year.

According to Aat Pisanwanich, dean of the University of the Thai Chamber of Commerce’s (UTCCs) economics faculty and director of the International Trade Studies Centre, a recent survey has found just 36.9 per cent or less than 189,000 of Thailand’s 512,000 SMEs thought they were adequately prepared to meet the challenges of a common Asean market.

According to Mr Pisanwanich the survey, “How Thai Exporters and Manufacturers Make Adjustments for the AEC” polled 1,000 Thailand SME manufacturers and exporters across 19 product categories from those in high labour intensive industries to agriculture with 60.8 per cent claiming they needed another two-and-a-half years “to make necessary adjustments”.

The survey follows a similar one last year aimed at gauging Thailand SMEs preparedness for AEC which found 43.7 per cent had not made any preparation for AEC while just 42.2 per cent were “in the adjustment process”.

To overcome the lack of preparedness Mr Pisanwanich said the UTCC is proposing the establishment of a Bt 1 billion (about US$ 30.792 million) fund to support Thailand SMEs with insufficient capital to establish manufacturing facilities in neighbouring countries.

The UTCC is also calling for the establishment of an agency similar to the Japan External Trade Organization (Jetro) to promote trade and investment.

According to Mr Pisanwanich about 23 per cent of Thailand SMEs need financial assistance to get through the AEC transition period while 13 per cent need assistance with improving their English language skills and seven per cent want to see import tariffs on raw materials significantly lowered.

Thailand Government AEC Failure

However, it is not just Thailand’s SMEs who need to get their act together in preparedness for AEC.

A quick check of Thailand government departments and agencies shows that very few have fully functioning websites with content duplicated in English, the official language of the AEC. This includes the Royal Thai Police (RTP), including its Tourist Police Division, the Ministry of Public Health, the Ministry of Commerce, the Ministry of Education, and the Department of Foreign Trade.

Even Mr Pisanwanich’s own Thai Chamber of Commerce and the Federation of Thai Industries (FTI) websites contain limited information in English for those wishing to do business in Thailand to access.

While some appear to have an English language version of their websites links and menu items often take visitors to either Thai language pages, result in 404 errors (not found) or simply do nothing when clicked on. The websites of most ministers, including the Minister of Labour, the Minister of Agriculture and Cooperatives, and the Office of the Prime Minister are also strictly Thai language only affairs.

In addition very few government websites contain information for contacting relevant government agency officers, while those that do contain telephone numbers or (rarely) email addresses are often received by staff with little or no English language skills resulting in replies to English language inquiries being a rarity.

Despite thousands of seminars, courses, brochures and public signs being printed and hung in public locations and schools across the nation, It has been seven years since Asean leaders adopted the AEC blueprint at the 13th Asean Summit in Singapore. Despite numerous seminars, courses, brochures and public signs being printed and hung in public locations and schools across the nation, Thailand SMEs, government departments and agencies remain among the least prepared in Asean to capitalise on the 600 million person market the AEC will provide access to. Free movement of goods, services, investment, skilled labour, and capital envisaged is likely to fall well short of the lofty goals planned.

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