The Roles of Foreign Minister in the Next Government

The Roles of Foreign Minister in the Next Government

Dr Kriengsak Chareonwongsak

Senior Fellow, Harvard University’s Center for Business and Government

If one were to ask the question as to which Minister would face the toughest job in the next government in rebuilding foreign confidence towards Thailand, which is one of the most pressing problems, especially the lack of confidence in Thailand’s economic outlook and direction that has caused some investors to shy away from investing here and others to relocate their investment overseas, what would the answer be?  

Several people might think the answer would be one of the economic ministers. But I am inclined to view that the Foreign Minister would have an equally tough job. This is because the lack of confidence problem is mainly about the psychological perception by foreign countries towards Thailand—something that the Foreign Ministry should understand better than other Ministries. 

Besides, the lack of confidence is not only limited to the economic dimension. It is undeniable that economic woes constitute the hottest issues at the moment, particularly the erroneous perception about the sufficiency economy policy, the problem of nominee shareholding, and the 30 per cent foreign reserve requirement. But the lack of confidence is also caused by other problems; namely compulsory licensing, violence in the three southern provinces, and political conflicts, among others.     

One question that follows is: what kind of roles should the new Foreign Minister take on?

With a closer look, one would find that the lack of foreign confidence is caused by serious doubts about the government’s policy and capability to manage problems, be it policy direction or the inconsistent policy approach. Foreigners also think the government does not understand the cause of the problems, or is slow to respond to those problems. These perceptions cause serious doubts about the government’s ability to manage.  

Under a more positive light, the government’s policy and measures to solve problems may be well-intended and based on good principles. But the failure to clearly convey or communicate those policy measures has inadvertently sent the unfriendly signals to foreign investors. It so happens, too, that different government agencies give out different or conflicting information that causes confusion and the gap of understanding between the government and foreign investors.   

The job of foreign public relations undertaken by the government will therefore need to be carried out in a more integrated manner, with the Foreign Ministry doing the government’s PR work with foreigners through participation by and consultation with other Ministries in order to achieve a more pro-active or aggressive PR objective.

The Foreign Ministry should therefore work more closely in parallel with other Ministries in planning policy communication. Such a practice will enable foreigners to better understand government policy, allow the government to explain the rationales behind those policies before they are officially announced, and allow for better preparation for solving any problems of miscommunication that may arise. 

In Cabinet meetings, the Foreign Minister should play a role in reflecting foreign perception about issues with potential impact on the confidence of foreign countries. He or she should work more closely with economic ministers to fine-tune economic policy decisions and communication, while taking into account the potential impacts on foreign perception.

As such, the Foreign Minister should have an excellent understanding about the works of economic ministries. This will help ensure that economic policy formulation takes into account foreign perception, as well as improving communications to make sure that foreign countries understand and have confidence in Thailand’s direction and outlook.  

I am of the view that the new Foreign Minister should have a role in ensuring that government policy direction is characterized by transparency and good governance, fairness to both Thais and foreigners, and stability, so that foreign investors can predict the policy direction and have confidence in the consistency of policy. It is also important that policy outlook does not lean towards any anti-foreign investment direction. 

Apart from that, the Foreign Minister should use more public relations strategies overseas, for examples, by coordinating with and making foreign government agencies display confidence towards Thailand, identifying and rallying support from countries that support Thailand’s policy approach to certain issues, seeking recognition from international organizations for the policy approach, or finding ways to make foreign investors in Thailand display more confidence towards the Thai economy. 

          Apart from a good knowledge in diplomacy, another favorable trait of the new Foreign Minister is that he or she should be a good communicator and public relations expert with multi-disciplinary knowledge, particularly about the economy. Most importantly, he or she should have extensive connections and networks overseas, have good relations with fellow diplomats, as well as with journalists and the foreign investors in Thailand.

Reaching the Limit with a Government We Fail to Trust

Reaching the Limit with a Government We Fail to Trust

Dr. Kriengsak Chareonwongsak

                                                                                     Democrat Executive Committee

          It is now known that government income collection for May 2006 is 3,349 million baht below target, thus signaling the danger of economic slowdown for the second half of 2006, with failure to reach targeted income collection a real risk.

          In addition, on the political horizon, looming scenes of continued strong conflict hint to the possibility of no election at all on October 15, 2006, which would result in delayed Budget consideration for 2007, and continued economic slowdown until the beginning of 2007 as investment funds cannot be withdrawn from 2007’s budget in the last quarter of 2006.

          As it plays a caretaker role, this government is limited in its implementation of financial policies. If it were a government that people trust, it would, moreover, have other measures to use besides the injection of budget into the economic system. However, since it does not have the people’s trust, the government is limited in its use of other equipment to stimulate the economy.

          A government may conceptually play with the people’s expectations. If trust is placed in a government’s policy announcements, people will modify their behaviour accordingly and the government will achieve its economic target before even embarking on policy implementation.

          For example, when the government announced its investment plans for mass transportation infrastructure, many people believed that the government really would conduct that project and investors and others found ways to invest in it. Thus, the economy grew even though the government did not conduct such a project. 

          Or, when the Bank of Thailand announced it would control the inflation rate, entrepreneurs and others could anticipate the Bank of Thailand’s use of high interest policy during periods of high inflation.  Consequently, the public prepared in advance by decreasing expenses and investment, which lowered Thailand’s inflation pressure, though the Bank of Thailand had done nothing about it up to that point.  

          However, this government’s past behaviour has been self-discrediting, as has the behaviour of other government organizations looking after economic policies.  Most obviously, the government announced many policies, but did not carry them out, for example, its Nakornnayok new city project, the regional center energy trading project and the construction project for skytrain route changes, none of which have been carried out, though announced as large-scale projects. Therefore, investors and others who were preparing to invest in these projects have suffered loss.

          A further point is the government’s lack of transparency, with its doubtful behaviour making it unworthy of trust, and leading the public to suspect complex layers of corruption and benefits behind the running of these huge projects. Thus, people fail to believe in government honesty when it comes to investment projects, and instead worry that such projects will be unsuccessful due to public opposition.

         The government also signals messages that conflict with those of the Bank of Thailand, especially where the Finance Ministry expresses disagreement over the Bank of Thailand’s policy of increasing rate. Society therefore believes that the government’s financial policies conflict with those of the Bank of Thailand, possibly resulting in inefficient financial policy management and the Bank of Thailand being unable to control or mange the inflation rate according to plan.  

        The government’s policy-setting behaviour has always been very erratic, along with its lack of transparency and lack of unity amongst other government organizations. Thus, people tend to distrust the policy announcements of this government. For example, though the government announced the construction of three skytrain routes, many do not believe that it can or will do so. Thus, investors and others dare not move in the direction of government policy as announced, and there is no economic stimulation due to the people’s lack of confidence. All that remains is to wait and see.

        It has been suggested that the government clarify its project policies, as to when, how and what policies it will pursue, also giving the completion date for each project. The government should, moreover, reveal its financial status to assure the public of sufficient budget to run these projects and assure the government’s sure completion of them.   

       As far as Mega Projects go, the government should study carefully, let the people participate sufficiently, and then use academic standards to measure operational priorities before carrying these out transparently through clear project bidding procedures, all the while revealing the contract details. The Prime Minister and other politicians should also be barred from presiding on the committee boards of those considering any submitted bids.

       Despite limits placed upon the Caretaker Government’s financial policy options, if the government did display trustworthy behaviour by sending proper economic signals and setting clear, stable policy in place, it would not find it difficult to drive the economy, as it now does.

  

The Roles of Foreign Minister in the Next Government

The Roles of Foreign Minister in the Next Government

Dr Kriengsak Chareonwongsak

Senior Fellow, Harvard University’s Center for Business and Government

If one were to ask the question as to which Minister would face the toughest job in the next government in rebuilding foreign confidence towards Thailand, which is one of the most pressing problems, especially the lack of confidence in Thailand’s economic outlook and direction that has caused some investors to shy away from investing here and others to relocate their investment overseas, what would the answer be?   

Several people might think the answer would be one of the economic ministers. But I am inclined to view that the Foreign Minister would have an equally tough job. This is because the lack of confidence problem is mainly about the psychological perception by foreign countries towards Thailand—something that the Foreign Ministry should understand better than other Ministries.  

Besides, the lack of confidence is not only limited to the economic dimension. It is undeniable that economic woes constitute the hottest issues at the moment, particularly the erroneous perception about the sufficiency economy policy, the problem of nominee shareholding, and the 30 per cent foreign reserve requirement. But the lack of confidence is also caused by other problems; namely compulsory licensing, violence in the three southern provinces, and political conflicts, among others.      

One question that follows is: what kind of roles should the new Foreign Minister take on? 

With a closer look, one would find that the lack of foreign confidence is caused by serious doubts about the government’s policy and capability to manage problems, be it policy direction or the inconsistent policy approach. Foreigners also think the government does not understand the cause of the problems, or is slow to respond to those problems. These perceptions cause serious doubts about the government’s ability to manage.   

Under a more positive light, the government’s policy and measures to solve problems may be well-intended and based on good principles. But the failure to clearly convey or communicate those policy measures has inadvertently sent the unfriendly signals to foreign investors. It so happens, too, that different government agencies give out different or conflicting information that causes confusion and the gap of understanding between the government and foreign investors.   

The job of foreign public relations undertaken by the government will therefore need to be carried out in a more integrated manner, with the Foreign Ministry doing the government’s PR work with foreigners through participation by and consultation with other Ministries in order to achieve a more pro-active or aggressive PR objective. 

The Foreign Ministry should therefore work more closely in parallel with other Ministries in planning policy communication. Such a practice will enable foreigners to better understand government policy, allow the government to explain the rationales behind those policies before they are officially announced, and allow for better preparation for solving any problems of miscommunication that may arise. 

In Cabinet meetings, the Foreign Minister should play a role in reflecting foreign perception about issues with potential impact on the confidence of foreign countries. He or she should work more closely with economic ministers to fine-tune economic policy decisions and communication, while taking into account the potential impacts on foreign perception. 

As such, the Foreign Minister should have an excellent understanding about the works of economic ministries. This will help ensure that economic policy formulation takes into account foreign perception, as well as improving communications to make sure that foreign countries understand and have confidence in Thailand’s direction and outlook.   

I am of the view that the new Foreign Minister should have a role in ensuring that government policy direction is characterized by transparency and good governance, fairness to both Thais and foreigners, and stability, so that foreign investors can predict the policy direction and have confidence in the consistency of policy. It is also important that policy outlook does not lean towards any anti-foreign investment direction.  

Apart from that, the Foreign Minister should use more public relations strategies overseas, for examples, by coordinating with and making foreign government agencies display confidence towards Thailand, identifying and rallying support from countries that support Thailand’s policy approach to certain issues, seeking recognition from international organizations for the policy approach, or finding ways to make foreign investors in Thailand display more confidence towards the Thai economy.  

         Apart from a good knowledge in diplomacy, another favorable trait of the new Foreign Minister is that he or she should be a good communicator and public relations expert with multi-disciplinary knowledge, particularly about the economy. Most importantly, he or she should have extensive connections and networks overseas, have good relations with fellow diplomats, as well as with journalists and the foreign investors in Thailand.

10 MRT lines: An unacceptable and far-fetched policy

10 MRT lines: An unacceptable and far-fetched policy

           

Professor Kriengsak Chareonwongsak, PhD
                                 President of the Social Science Association of Thailand
                                         kriengsak@kriengsak.com,http://www.kriengsak.com

            In December 2005, the government invited all foreign ambassadors to Thailand to hear its modernization proposals for the whole country. After discussions of the full details, foreign companies or trade emissaries will be invited to submit tenders on projects.

            I am absolutely certain that government policy on this proposed addition to the MRT system is as unclear as it was when the project was first announced as part of a pre-election platform.

            Vagueness of the construction budget

            Because the government is proposing to exchange investment in the MRT project with latex rubber, it is apparent that the government doesn’t have the finances for this project. Economic slowdown and, in particular, the now suspended privatization process have put financial pressure on the government. Therefore, it is forced to barter to obtain enough funds the project. This doesn’t look good.

Moreover, five countries – England, USA, France, Germany, and Japan – all who are the biggest names in MRT technology, have recently rejected the project. So, offering latex rubber, will not work in this case.

            In addition, if the government wants to exchange MRT system with rubber, it is necessary to deal with Thailand’s greatest para rubber buyer, namely, China. Yet, China is unlikely to have the best MRT technology because China only began building MRTs a few years before Thailand.

However, if there is a country willing to invest in a Thai MRT and willing to exchanging its investment with Thai goods, the specific source of Thailand’s financing portion still has not been definitively named. Furthermore, this barter system assumes that the investing nation lack the goods Thailand is suggesting for an exchange. Also, if the government produces these goods using private sector financing, who will be willing to pay the private sector the goods they have extended as a part of raising finances for the MRT ?

Vagueness of MRT type

Because the Thai government will invite foreign companies to submit tenders on projects without project specifications, it is clear that the government is not clear about the type of MRT construction it wants to have.

The uncertainty of government plans is further evidenced by its back-and-forth policy changes, i.e. from seven lines to five lines and then to ten lines. What is the government doing? Has the government conducted feasibility studies yet? Simply, because of the ambiguity of government plans, these public declarations by the PM may merely be stall tactics, a way to delay MRT construction.

In addition, if the government really wants foreigners to bid on the project, why hasn’t it taken the time to clearly define issues that would concern Thailand, that is, foreign technology issues within which Thailand has no knowledge ? For example, “What criteria will the government use to choose one particular type of MRT?” “Is it desirable for Thailand to choose foreign investment based on foreign options?” and “Will the decision be transparent?”

Such obscurity makes people doubt the validity of such projects. If foreigners reject the government’s proposed barter trade system, what can the government do? How can the government seek other investment? And if the type of rail system still has not been clearly identified, when will people be able to use the new MRT lines?

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