III. Proposals regarding Thailand

Improve market access.

1. Revise the quarantine system.
   (Thailand is among the countries identified as having a problem with hoof-and-mouth disease, but Japan does not even allow imports of pork, which is not affected by this disease.)
2. The government should relax or eliminate restrictions on the import of raw fruits as well as confections made of gelatinous and non-gelatinous rice.

Relax restrictions under Alien Business Law NEC281 (Thailand)

This law prevents Thailand from overcoming its current credit crunch in spite of its best efforts. (In Thailand, no company in which foreign investors hold a majority interest is allowed to hold more than one-third of the capital of any other company. Furthermore, any corporation in which more than one-half of the total capital is owned by foreign investors is restricted in how it may invest in other companies. These restrictions are of types A, B, and C, depending on the type of company in which the foreign-controlled company wishes to invest. The most severe restrictions are placed on investments in domestic retail and wholesale companies. Foreign investors are not allowed to hold more than a 49% interest in such companies. Similarly, foreign investors are only allowed to hold a maximum 49% interest in manufacturers that produce for the domestic market. The Board of Investment (BOI) and Ministry of Commerce (Thailand) however, have tended to take a very flexible approach to the approval of investments. The Alien Business Law NEC281 (Thailand) is scheduled for amendment in May, however. At that time, it is expected that these provisions will be eliminated.)

Train certified public accountants and lawyers.

Study adoption of international standards.

With regard to the licensing of certified public accountants and lawyers, it is necessary to consider whether such licensing should be based on international standards used in the West. The issue of whether to adopt international standards is not limited to the question of qualifications for certified public accountants and lawyers. The same question must be addressed when defining what constitutes a non-performing loan, for example. (International standards define a non-performing loan as one for which repayment is either six months or three months in arrears. If these standards were applied to loans, it would aggravate the credit crunch.)

Avoid tariff hikes.

Raising import tariffs should not be used as methods of maintaining a desired level of annual revenues.

Improve the performance of rating agencies.

In countries where rating agencies already exist, their performance should be improved. A new rating agency should be established in countries where no such agency has been established yet.

Strengthen the enforcement of new systems and laws, and enhance the authority of the financial regulatory agencies upon which this implementation depends.

In order to enforce laws, it is also necessary to enhance the authority of financial regulatory agencies.

Relax and/or eliminate restrictions on land ownership.

Foreign companies cannot buy land without BOI approval. This situation should be improved.

Change the type of support provided by the World Bank to Thai financial institutions.

(The World Bank is providing guidance regarding the way to exercise financial oversight to the Bank of Thailand (the central bank), but some criticize the World Bank's efforts as ineffective.)