New Thailand Competition Law Makes Little Difference in Grand Scheme

by admin on May 30, 2019

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Thailand’s new competition law has had little effect on the country’s dominance by monopolies and oligopolies, indicated by the huge disparity among the rich and poor in the nation.

In fact, Thailand’s wealth inequality ranks among the worst in the world with the top 1% controlling 67% of the entire country’s wealth.

But the market dominance by big businesses at the expense of small and medium-sized businesses is surprising when you consider the fact that Thailand was the first Southeast Asian nation to pass competition laws in 1999, which set up a Competition Commission to enforce a fair market in the country.

Despite that 1999 law though, laws against unfair trade practices in the marketplace have seen lax enforcement due to the Competition Commission’s coziness with big business.

In fact, until the new competition amendment passed, nearly the entire commission was made up of politicians, industry representatives, and bureaucrats, which is one reason why Thailand recently ranked as 96th in a study of market dominance.

Similar Southeast Asian nations such as Malaysia and Indonesia rank much higher, coming in at 24th and 51st respectively.

After the 2014 military coup, the current amendments were passed to make the Competition Commission as an independent body, filled with economists, reputableĀ Thai business lawyers, and other individuals with no current ties to big businesses.

Even though it is a right step, experts have little hope for the new amendments to competition laws in Thailand.

Why? Because, in most cases, government policies rather than business trade practices and regulations stifle market competition and provide unfair protections for monopolies and oligopolies.

For example, many large government contracts are givenĀ to certain business without competitive bidding.

Another illustrative example is Thailand’s beer regulations, which protect the giant beer manufacturers in the country.

In Thailand, in order to obtain a license to produce beer, applicants must prove investments up to $3.3 million and have the capacity to produce over 100,000 liters of beer per year, effectively barring small craft breweries and beer brands from entering the marketplace.

Read the full story here.

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