Laws and regulations are comparable to machine code instruction executed by computers. If code is written correctly, the computer can function properly; however, if programmers write code poorly, the computer will not function well or will not even function at all. In Thailand, there is red tape and a number of outdated laws that obstruct free competition and increase the cost of doing business.
To increase our country’s competency, Thailand urgently needs to dispose of these excessively burdensome laws and regulations, asserts TDRI Research Fellows Dr Saliltorn Thongmeensuk and Dr Kiratipong Naewmalee in their talk on “Laws as Computer Code.”
In the same manner as computer code, if the law is designed properly and proportionately implemented, citizens have a better quality of life.
On the other hand, bad laws can exceedingly create unnecessary burden and negatively restrict the rights and freedoms of people.
According to a TDRI study, there are approximately 1000 laws and regulations that require businesses to acquire licenses to operate in Thailand, which costs the private sector more than 200 billion baht a year, regardless of additional processing fees. If the government axes these overlapping laws and regulations, the private sector can save costs of up to 130 billion baht a year, or about 0.8% of the GDP in 2018.
“Revamping laws and red tape then can effectively assist the private sector’s competitiveness and boost the economy without state financial interventions,” said Dr Kiratipong. “This measure is especially urgent while the economy is hit hard by the Covid-19 pandemic.”
Instead of trimming laws and red tape, the government has passed about 70,000 new laws each year. Meanwhile, the country has more than 1,700 types of business licenses which require over 10,500 bureaucratic procedures.
Also, the government has set up 345 committees to monitor a variety of laws which more often than not, aggravate the red-tape maze rather than provide legal solutions.
Some regulatory provisions are vague and up to interpretation, causing confusion and weakening legal enforcement. In addition, some of them are out-of-touch with changes in society and technology. Some maintain business monopoly which hurts small-scale merchants and is also against our constitutional mandates.
One case in point is the 2008 Alcoholic Beverage Control Act. It prohibits both direct and indirect promotion of alcohol consumption. As a result, if a logo of an alcoholic beverage appears on a personal posting on social media or a restaurant menu, it may be interpreted as marketing of alcoholic beverage and therefore illegal. Furthermore, there is a maximum fine of 500,000 baht for this offence while there is only a 200,000-baht maximum fine for drunk driving resulting in death.
The 1934 Postal Act exemplifies how outmoded laws maintain state monopoly and hurt consumer interest. The Postal Office Department has transformed into Thailand Post, a state enterprise, its monopoly over postal services is still protected by the 86-year-old regulations. As a result, other postal service companies have to pay Thailand Post certain fees
“Business monopoly violates the right to free and fair competition guaranteed by the constitution,” Dr. Saliltorn pointed out.
“Therefore, before passing any law, it is necessary for legislators to make sure that such legislation can truly solve the problem and that creating new laws is the best solution to the problem, which does not exceedingly affect the rights and freedoms of the citizens” emphasized by Dr Saliltorn.
But with political will, there are solutions, said Dr Kiratipong.
Before issuing any new laws and rules, they must go through Regulatory Impact Assessment (RIA) to estimate their impacts on the public, state mechanisms, and the businesses.
For existing laws and rules, they must be re-evaluated for their usefulness. If no longer so, they must be eliminated or simplified to fit with the needs of the market economy. This process is called Regulatory Guillotine (RG).
Many countries have experienced similar problems from outdated and redundant laws and rules which hurt citizens, businesses, and the economy. But their efforts to eliminate outdated laws and rules have significantly cut business costs and improve competitiveness, he said.
South Korea’s RG efforts, for example, succeeded in eliminating 48% of its laws, cutting government costs by 4.4% of the GDP, and increasing one million job placements.
Although the 2017 Constitution has institutionalised the RIA and RG assessment under Section 77, the government has issued about 70,000 new laws since then.
Dr Kiratipong outlines what should be done to free the country from outdated laws and rules:
- Improve the competency of officials involved so they understand their roles in Regulatory Impact Assessment and Regulatory Guillotine;
- Set up clearer frameworks for the RIA and RG procedures as guidelines for concerning officials;
- Set up a quality control agency to evaluate RIA and RG reports and improve their assessment standards with internal and external auditing;
- Develop a central database to facilitate people’s participation and public input;
- Seek other options to solve problems outside legal frameworks.
The success in eliminating and simplifying outdated laws and rules depend on three main factors, said Dr Kiratipong.
“Political commitment and clear goals, close collaboration between the government, civil society, and business, and, lastly, a quality control agency for RIA and RG procedures.”
If the government is determined to improve RIA and RG performance, then laws and rules as the country’s software will contribute to national competency, he said
“Equally important, we must look at other options that are more efficient and less costly to tackle the problems,” he said.
“We must look outside the legal framework. We must realise that laws are not necessarily the only solution.”