Thailand has long been stuck in a middle-income trap. Beyond the series of cyclical headwinds its economy faces, the root cause of this lies in weak institutions that prevent economic actors from adapting to challenges, interacting efficiently and delivering sustainable social value.
One particular problem that is acknowledged across the political spectrum are the administrative burdens placed upon Thai businesses by nearly 1000 primary laws and over 100,000 subordinate pieces of legislation, which grant sweeping discretionary power to the government to regulate firms and sole traders. Research by the Thailand Development Research Institute shows that the legal burden of business licensing alone amounts to a staggering THB 130 billion (US$3.9 billion) annually.
The current government has promised a package of major law reform. Deputy Prime Minister Pakorn Nilprapunt’s ‘Better Regulation for Better Life’ program aims to review over 7000 secondary laws, abolish laws that put unnecessary burdens on the business sector, digitise the legal process, increase transparency and minimise officials’ discretion in applying regulations. The initiative also creates ‘super licenses’ which bundle all permissions required for businesses, reducing the amount of contact required with different agencies.
