Bank of Thailand Governor Veerathai Santiprabhob, in his speech entitled “Formulating for the Future of Corporate Governance”, delivered at the Finance and Beyond National Director Conference 2019 in Bangkok (July 24th), said Thailand faces four challenges that require good governance in businesses to address.
He said that Thailand has a high level of income inequality, citing statistics from the Office of the National Economic and Social Development Council which reveal that the richest 10% of the country’s population have incomes that are 19 times higher than the poorest 10%, adding the former own over 61.5% of the country’s land while the latter barely own 0.07%.
Reckless spending and the debt trap
The BOT governor went on to say that a lot of Thais are still trapped in a cycle of debts with 78.7% household debts to GDP, which was partly resulted from businesses that encourage consumers to resort to reckless spending.
Dr. Veerathai referred to research, from the Puey Ungphakorn Institute for Economic Research, which shows that Thais tended to get into debt faster, for longer and for higher amounts. Indebtedness starts as soon as they begin to work at age 25 and can increase until 56 years old.
Some are still in debt even in retirement. The average debt has risen from about Bt70,000 per person in 2010 to about Bt150,000 in 2017.
Worsening climate change
Dr. Veerathai also said that worsening climate change could also pose a threat to Thailand. Many industries may be required to close down for environmental reasons, and new diseases will emerge because of ecological adaptation to global warming.
Finally he mentioned plastic waste, only 9% of which is appropriately recycled, citing the Great Pacific Garbage Patch phenomenon covering an area of ocean that is three times larger than the size of Thailand.
To deal with the problem, the BOT governor emphasized the importance of conducting sustainable business with good governance at its core, citing three global incidents allegedly caused by irresponsible businesses practices, namely the forest fires in California, the Brumadinho Dam collapse in Brazil and the spread of cash back mortgages, which badly affected people in Thailand.
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