Today the much-hyped plans of allowing foreigners to be able to buy up to 1 rai of land or about 0.16 hectares of land that was approved on October 25th by the Cabinet of 2014 coup leader Prayut Chan-o-cha.
The decision to scrap the plans just 2-weeks since it was approved and made headlines around the world, comes as Thais have been labelling the scheme as ‘selling the country’ to foreigners.
The scheme that was put in place was for ‘wealthy’ investors to invest a minimum of 40 million Baht for a minimum of 3-years. These people also need to be in a category of either being wealthy global citizen, wealthy pensioner or those who want to work from Thailand and/or are highly skilled professionals or specialists.
The scheme was valid for Bangkok & Pattaya municipalities and/or other municipalities that are designated as ‘residential’ zones. This was to avoid the sale of farmland that creates a negative sentiment among the masses.
The positive thing about this bill was that it was supposed to be for a short period of 5-years.
The aim of this scheme was to attract high net worth individuals and talent into Thailand, a move that could have helped uplift Thailand as a destination for retirement and a destination for the wealthy.
But all that is coming to an end today after Deputy Prime Minister and Interior Minister – Anupong Paochinda, is set to propose the move at the Cabinet meeting to scrap the plans.
The director of Department of Land – Chayawut Chanthorn, has come out to accept that the scheme is set to be scrapped later today.
Reports are already coming out that Deputy Prime Minister Prawit Wongsuwon, has already signed off on the rescinding of the law as there has been a huge backlash from the public and opposition politicians.
A Good Move but Bad PR
The move to allow foreigners to buy small parcels of land is not a bad idea, as it helps uplift Thailand to being a destination for the wealthy individuals to have a place to stay in Thailand, a kind of vacation or retirement home.
Other countries around the world, be it the UK, France, Germany, United States, Singapore and the list can go on, all allow free land ownership and there is nobody who is buying the country out or is taking away the land they have purchased out of those countries.
In fact, London’s much sought after high-end area – Mayfair, is now the place where all the billionaires of the world have a mansion, while the millionaires are buying out other areas such as Kensington and South Kensington.
Will London become unaffordable for the Tom, Dick and Harry? Yes, it has become but London has expanded, and those working-class people have opted to move to the suburbs like Wembley and others.
But has London and UK benefitted from the millionaires and billionaires in the city? Sure, hell they have as the city’s vibrance has risen, the economic activities in the country have seen a sharp increase and overall business environment has remained vibrant as these businessmen have been investing in the UK.
Similarly, Thailand could benefit from the influx of these high-net-worth investors/retirees if the country allowed foreigners to be part of the society.
But that dream came crashing down like it had in 2002 when the self-exiled Prime Minister Thaksin Shinawatra came out with similar policy but had to rescind the scheme amid backlash from the anti-Thaksin camp.
Gen. Prayut who has the backing of the anti-Thaksin camp and has the backing to the government should have had the opportunity to pass the move to allow foreigners to be able to participate in the economic activities of the country.
What Prayut, Prawit and Anupong, the 3 generals who were the mastermind of the 2014 coup, missed was the marketing and public relations side of the entire process.
Knowing well that there could be a backlash like those seen in 2002, the Prayut government could have learnt a lesson or 2 from the mistakes and the criticism against the move in 2002 to look at how to improve on them.
A good PR campaign would have helped make the implementation of the law much smoother, but as it has always been the case, the Prayut government is unable to turn the sentiments of the public around to help support the moves it undertakes.
Flip Flop Policy Implementation
The flip flop policy implementation of the Prayut government is also bad for the investor’s sentiment as it only helps make the government look weaker.
The inability of the government to keep on the path of the policy it undertakes and also its inability to garner support from the general public for its policy implementation is something that is not considered positive for the government or the economy.
A flipflop in policy implementation of a government is a clear indication of what a weak government is.
It does not send a positive signal to the markets who are always watching out for such flaws to hammer the markets.
A weak government in power would mean foreign investors would not be looking to undertake their investments nor will they be willing to buy into the capital markets of Thailand thus could lead the Thai Baht to be weaker.
All this is not a good sign for a government that has 4 ½ months remaining before its term ends by March 23, 2023.
The rescinding of the law that allowed foreigners to be able to buy a small piece of residential land in Thailand has not only made Prayut a lame duck Prime Minister but his entire cabinet is now likely to be held hostage to the criticism of the public for every policy they try to implement in the 135 days it has before its term ends.