The Organisation for Economic Co-operation and Development (OECD) is requiring Thailand ensure non-discrimination in the bidding processes of its state-owned enterprises (SOEs), while Thailand has requested a five-year period to implement the necessary adjustments.
According to a Finance Ministry source who requested anonymity, in negotiations for Thailand’s OECD membership, one of the chapters requiring discussion and agreement between Thailand and the organisation concerns SOEs.
The OECD frowns upon discriminatory practices in the procurement processes of SOEs, such as setting bidding conditions that favour subsidiaries of those SOEs. Instead, bidding should be open and fair to all participants, whether Thai or foreign.
The source said negotiations on this chapter are ongoing. Thailand requested around five years for SOEs to adjust, as some have established subsidiaries specifically to handle the parent SOE’s projects.
In addition, the OECD wants Thailand to amend certain laws concerning specialised financial institutions owned by the state, which currently stipulate their services are provided only to Thai nationals. The OECD sees this as an unequal practice.
Prime Minister Anutin Charnvirakul said recently the government plans to pursue OECD membership, which requires adherence to standards, good governance and the rule of law, through three main agendas:
1. Creating a rule of law roadmap to prepare Thailand for OECD membership by setting plans to upgrade legal standards and the justice system.
2. Unlocking corruption and reforming laws that hinder business operations, while preventing legal loopholes or opaque mechanisms that could give rise to grey businesses, ensuring that legitimate businesses can compete fairly and receive genuine support.
3. Promoting transparency and public participation by enhancing open government practices, using digital technology to disclose government information transparently and accessibly, and allowing citizens to monitor, scrutinise and provide systematic feedback on government work, with institutions in place to listen to such input.
Mr Anutin said the goal is “creating an ecosystem of transparency” where all decisions and budgetary expenditures are subject to scrutiny, and policies are transparent and genuinely inclusive of public participation.
No Asean country has become an OECD member yet, with Indonesia in the membership application process, while Thailand submitted a letter of intent of its wish to join the OECD to the group’s secretary-general at the end of 2023.
The membership process is relatively long, with some countries taking 7-8 years from application to approval by a council of the 38 OECD member states.
For Thailand, the National Economic and Social Development Council serves as the secretariat for the OECD membership task force, and plans to complete the process in just five years.
However, achieving this would require a collective effort from both public officials and the private sector to elevate various national standards to align with the OECD’s global standards.