Small and Medium Enterprises in Distress: Thailand, the East Asian Crisis and Beyond by Philippe Regnier

Author:Philippe Regnier [Regnier, Philippe]
Language: eng
Format: epub
ISBN: 9781138729056
Barnesnoble:
Publisher: Taylor & Francis
Published: 2019-01-16T00:00:00+00:00

Bureaucratic Hazards

In addition to the loose commitments of both old and younger generation politicians, some bureaucratic hazards may also prevent the SME policy from taking off. This is of particular importance, considering that elected politicians’ terms are normally limited, whereas senior civil servants tend to stay.

First, when the government decided at the end of 1998 to restore small business confidence as rapidly as possible, the new SME Promotion Bill was submitted through the normal but lengthy legislative process during 1999. The Bill was finally adopted on January 12th, 2000, but there is a long road to go before concrete action can be initiated and coordinated under the SME Promotion Office to be set up.

Second, Thai bureaucrats are well known for their propensity to reach consensus at the policy planning stage, but for their ineffective and poorly coordinated implementation efforts.

Thirdly, there have been some deadlocks and rivalries within the bureaucracy. This has been particularly true between the Ministry of Finance and the Ministry of Industry for control of the Miyazawa funds put at disposal for an SME strategy. This divide has overlapped with further divergences of views within the Cabinet regarding ways to deal with the crisis. It has poorly augured the ability to coordinate the new SME policy among a rather large number of ministries and state agencies in charge of various economic and social matters. Among them, some specialized financial agencies like SIFC and SICGC will be restructured in 2000–2001 and this could also complicate the SME policy prospects.

Other concerns can be traced such as the frequent struggle between the Ministry of Industry and the Ministry of Commerce, which are usually headed by different political parties. The Mol issues licenses for the creation or the expansion of factories while the MoC gives or denies approval for the importation of machinery. Some conflicts can also occur between ministries and the National Economic and Social Development Board (NESDB).

The matter can be further complicated because a special legislative act is often required for different ministries to share information or to work together on any specific project such as an SME-oriented one. The likely outcome is the over-fragmentation of policy, its lack of integration and focus, and the creation of illusive and face-saving coordinating bodies, often placed under the Prime Minister’s Office (such as the newly created SME financial advisory centers). But, from another perspective, it can be argued that the fragmentation of public administration does not lead to one single political faction controlling access to crucial economic decision-making. The fact that the Ministry of Industry and the Ministry of Commerce are generally not controlled by the same political party guarantees that newcomers are not discouraged from entering business sectors and can obtain both factory licenses (Mol) and import permits (MoC).

Fourthly, there has been rising criticism during the second half of 1999 regarding the absence of SME expertise, understanding and good will in the ranks of the civil service, even at top levels and both in Bangkok and provincial capitals. The Ministry of Industry itself is hardly an exception, apart from the Department of Industrial Promotion (DIP).

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