In recent years, concerns have mounted over Thailand’s governance, with fears that the nation could become a failed state due to its inability to enforce laws effectively.
This perceived weakness in the rule of law has allowed cross-border crimes to flourish, eroding public confidence in the country’s safety and security and raising significant concerns about its stability and economic future.
The impact of these governance issues has been particularly noticeable in the tourism sector. In the early months of the year, there has been a notable decline in tourists from China, Taiwan, and Hong Kong—regions whose residents have increasingly fallen victim to scams in Thailand.
This decline is worrisome for a country that heavily relies on tourism for its economic health.
Business leaders have voiced their concerns over this weak law enforcement, which is often entangled with corruption. They fear that the ongoing failure to combat crime effectively and to close legal loopholes exploited for personal gain could lead to severe economic repercussions.
Foreign businesses using nominee structures to circumvent local laws are a particular area of concern, suggesting a deep-rooted problem within the enforcement mechanisms.
The term “failed state” is used to describe a situation where a government is no longer able to perform its essential functions such as maintaining law and order, protecting human rights, providing basic public services, and ensuring economic stability.
This failure typically leads to widespread corruption, political instability, violence, and a breakdown of both social and economic structures.
Tourism Sector Under Threat
Paisarn Suethanuwong, a committee member of the Professional Tourist Guides Association of Thailand, highlights a specific example of law enforcement failure in the tourism industry.
According to him, there has been a lack of stringent action against illegal activities committed by foreigners, such as unlicensed foreign guides operating freely.
This negligence has opened the door for other illicit activities in sectors like transportation, real estate, and tour operations, directly impacting the income of local businesses.
Mr. Paisarn points out that the enforcement of existing laws, such as the Immigration Act’s Section 12 which prohibits foreigners from working in Thailand without proper authorization, is lax.
He notes that the current 60-day visa-free entry for tourists from 93 countries has been exploited by some to engage in unauthorized work, further complicating the issue.
Thanet Supornsahasrungsi, president of the Chonburi Tourism Federation, addresses another significant challenge in the city of Pattaya. Investors have been illegally renting out residential units as short-term accommodations, often booked by Chinese tourists.
These practices not only violate the law requiring a minimum rental period but also undermine the benefits to local residents and the legal framework meant to regulate such activities.
In response to these challenges, Tourism and Sports Minister Sorawong Thienthong mentioned that new legislation is being drafted to better regulate the hotel industry, particularly targeting small and medium-sized establishments. This new Hotel Act is expected to help standardize and control the sector more effectively.
Thaniwan Kulmongkol, president of the Thai Restaurant Association, has observed a dramatic increase in foreign-owned restaurants, particularly Chinese establishments that often open multiple locations simultaneously.
While restaurants generally contribute positively to the local economy by sourcing ingredients locally, some foreign restaurants, especially Chinese hotpot eateries, import most of their materials from abroad, bypassing local suppliers.
Mrs. Thaniwan emphasizes the need for better training and compliance with food safety regulations to ensure the health and safety of consumers. She also calls for stricter enforcement of licensing regulations, noting that many restaurants operate without the necessary legal permissions, only seeking to rectify this when faced with inspections.
Somchai Pornrattanacharoen, an advisor to the Thai Wholesale and Retail Trade Association, points out the growth of retail stores in areas like Huai Khwang, now dubbed “The second Chinatown” due to the dominance of Chinese-owned businesses.
He stresses the importance of ensuring these businesses comply with Thai laws and standards to maintain fair competition and protect Thai small and medium-sized enterprises (SMEs).
Thailand faces significant challenges in enforcing its laws and regulations across various sectors. From tourism to retail, the lack of effective governance not only threatens economic stability but also compromises public trust and safety.
For Thailand to avert the risk of becoming a failed state, it must strengthen its law enforcement mechanisms, ensure compliance with existing laws, and work diligently to close loopholes that currently hinder economic and social stability.
