STREET WISE
One step forward, two steps back
Thursday was a day rich with irony. While the World Bank and its appendage, the International Finance Corporation, announced in the morning that Thailand was among the top 20 countries where it's easiest to do business, Thailand's Commerce Ministry revealed in the afternoon a plan to curb the expansion of giant foreign retail stores in the Kingdom.
The International Finance Corporation's survey ranked Thailand highly among 175 countries in terms of the ease in starting a business, hiring and firing workers, tax payments, and seven other factors.But among the 10 indicators used to determine the ease-of-doing-business rankings, special government rules and regulations were not covered - an item which foreign companies which have investment branches or joint ventures here may wish the organisation had included. Certainly, one of these is Britain's Tesco, the retailer which has been demonised in the eyes of small shop owners everywhere who feel intimidated by Tesco Lotus Express, a joint venture with a Thai company. Tesco aims to invest Bt7 billion in stores this year and another Bt7 billion next year. Now that it has become harder to open hypermarkets - those mega-sized shopping palaces that have sprouted all over the Kingdom - it is obvious that most of the new investment will finance the opening of small outlets branded Tesco Lotus Express. But doing so now will risk penalties from the Commerce Ministry. I feel sympathy for the small shop owners. They lack know-how and bargaining power over suppliers. But slapping controls on giant retailers after they have already penetrated every corner of the Kingdom is a bit too late. It is like a father who supports the marriage of his daughter. But when the daughter gets pregnant, he asks her to take birth control measures. What about the child that is to be born? Moreover, I don't see any benefits that consumers would get from the new controls. Will there be any measures to increase the bargaining power of small shop owners or to improve the quality of their service to benefit consumers? I haven't heard of any. Now, due to the controls, I pity the people in remote areas who have dreamed of venturing into an air-conditioned store, only to buy items at same price offered by the old non-aircon shops. Most small retailers inherited their shops from their parents and operate them in the traditional way. These shop owners can be seen supine in reclining chairs and lazily asking walk-in customers what they want. They also sell products with a shelf life that has long expired. It is a pity that the grand policy-makers are not the ones who hop in and out of such shops. They don't have to deal on a daily basis with traditional shop owners. Otherwise, they might look at modern shopping outlets with different eyes. achara_d@nationgroup.com
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