Does Thailand have a democracy? As CEO of a multinational that has already inves

Question

Does Thailand have a democracy? As CEO of a multinational that has already invested in and been successfully produced in Thailand (for both Thailand and overseas markets), when you heard the news about the 2006 and 2014 coup that toppled democratically elected governments, should you be concerned? As CEO of a company that is ready to export to Thailand or that is ready to source from Thailand, would you be concerned about the political risk in Thailand? Would you proceed as planned or look for alternative export markets or alternative countries from which to source products?

Explanation / Answer

Thailand is a moderately prosperous country with solid banks, present day processing plants, thriving tourism, a developing white collar class and other regular markers of an effective Democracy. Which is precisely what it needs. Thailand has had such a significant number of upsets in its recent history that researchers once in a while allude to the most recent eight decades as its “coup season.” In between, there has been violent political strife. The latest round featured deadly street clashes, politically tainted corruption trials and the army taking control after an election derailed by protests. More than three years on, the junta is still in charge and there’s no exact date yet for new elections.

Thailand entered a one-year mourning period after King Bhumibol Adulyadej, then the world’s longest-reigning monarch, died Oct. 13, 2016. He was a symbol of stability and prosperity for the country and has been successful in implementing economic reforms that benefit the country. However with military coups becoming a norm, citizens are arguing for a robust political system that further benefit the poor especially the northern area.

Such coups to gain control should concern any CEO who is invested in the business of the country. I am assuming minimal microrisk as the operations have already been successful. However, the macro risk is quite present inside the country as in the worst case scenario, the country can be bifurcated.

While keeping the above in mind, we must point out that the economy of Thailand is thriving and have been able to withstand a lot of challenges. So a country who is an exporter to Thailand may still make an economic profit. It however has to take care of the Microrisk associated with industry as the political situation is in a flux.

As for the manufacturers in Thailand depending upon the investments made and the strategic value of operations, they have to take a call. They can maybe aid the stronger political party establish to a more inclusive democracy to eliminate the risk. However, that is a difficult feat to achieve. Political flux can create a large number of operational nightmares from labour strikes to problems with transportation. They can buy a political risk insurance if they generate huge business value from their Thailand operations. Insurance can also help secure current operations for a company that is planning to move out in the years to come. If they are unable to find any form of resolution between their business, the government and society, they should look for alternative markets and countries from which they can source products.

I hope this helps. Feel free to contact me in case of doubts!

Regards,

Adesh

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.