Interview with the British Ambassador Lloyd Barnaby Smith

The Thai Farmers Bank recently asked 188 Thai businessmen what came to mind when they thought of Britain. Many mentioned innovative high technology; others saw Britain as a modern and developing economy. It was good to see that the UK isn’t just seen as traditional, though many of our traditions are of course very worthwhile.

But what was most remarkable was that over half of those polled said that to them the UK represented Premier League football. Liverpool and Manchester have just visited Thailand, and it was nearly impossible to get tickets for the Manchester game. So it is indeed obvious that Premier League Football is an important part of the Thai view of the UK.

There used to be a time when there was a maximum wage for footballers (I think about 15 Pounds a week) and many of them held part-time jobs. Everybody would go see the games standing on the terraces with their children. Then football went through a more difficult phase, with a number of outbreaks of violence, but I very much hope that we have now come through that to a modern situation in which the people who play the game are very well rewarded for what they do. Top footballers count in the same bracket as film stars, musicians and designers.

Please tell us about the growing number of Thais who are choosing to study in Britain.

Our figures show more and more Thai students going to the UK. Last year the number was over 4,000. This reflects the efforts made by the British government to simplify the visa procedures for genuine students, and make it easier for them to work part-time as well.

These higher numbers now mean that there are more Thai students in the UK than anywhere else in the world except for the USA. There are many scholarships to help with the costs of study. The most prestigious are the Embassy’s Chevening Awards, under which twenty-five to thirty Thai students go to the UK to take their Masters Degrees each year. (There have been 270 Chevening Awards over the ten years since the scheme was started.)

Many of these scholarships are jointly funded with the British Government paying half and British universities or British companies in Thailand paying the other half. The former may waive the tuition fee. The companies split the costs with us. But there are also 400 other full or partial scholarships for Thais to study in the UK.

What do you recommend parents should look for in trying to send their children to a school with a good English curriculum here in Thailand?

One key indicator is what success the school has had in sending its pupils on to tertiary education. Has the school been successful in sending most of its students on to universities, and if so, which universities?

Then what sort of curriculum does it teach? For example, if a British university says that a student must have A levels to be admitted, you will need a school here that teaches A levels and has a good success rate.

Would you give us some examples of a few British firms whose technology and know-how is helping to make Thailand a better place?

The Standard Chartered Bank has bought a Thai bank, and is engaged in a major campaign to improve and modernizing the banking methodology and technology here. This will have the overall effect of improving the standards of the Thai banking industry.

The recent investment by Orange, the UK-based mobile phone company will bring up-to-date mobile phone technology to Thailand.

And then there’s water companies like Anglia and Thames Water, which are both engaged in trying to modernizing the water industry here by improving the quality of the water people drink, and dealing more effectively with wastewater using proven methods from the UK.

It is important to be clear about the advantages a modern and efficient retailer brings to Thailand. There is always the risk that the general advantage is concealed by a small number of people who are very vocal. If you look at the figures, five percent of all the foreign investment in Thailand since 2 July 1997 is by Tesco (600 million British pounds). And almost five percent of Thailand’s (1.7 billion pounds) exports to the UK are by companies connected to Tesco.

Tesco and its Thai partners such as the CP Group now send an enormous amount of goods such as chicken products to the UK. This is a direct result of Tesco deciding to do business here, so that’s a benefit and opportunity to Thailand that would not have arisen if Tesco hadn’t come here.

Almost everything that Tesco Lotus sells comes from Thailand, and is produced in Thailand. Thai companies make these products here. And those Thai companies, as a result of producing goods for a company like Tesco Lotus, which has such high quality standards, are now better able to export than they were before.

Tesco Lotus sells to the Thai public. Nearly six million Thais go to a Tesco Lotus store every month. What does that tell you? Thais are very keen and experienced shoppers, so they probably quite like what they are buying and appreciate both the quality and prices of the goods. Tesco Lotus also employs 13,000 people – almost all Thai. Almost all its shoppers are Thai; almost all the people that produce the goods it sells are Thai.

And there is something you won’t often see mentioned which I think is important. If you went down to the Revenue Department and asked them why it was that tax revenue was so buoyant, and why they are getting so much money from VAT, I think they would say because it is much easier to raise tax from Makro, Carrefour and Tesco Lotus. They only have to go see one person and say, “Excuse me, can you pay the tax?” Whereas if you have to go to 2000 small shops, which may have no centrally run accounting system, that’s much more difficult. So superstores enable Thailand to collect tax more efficiently.

There has been some criticism that these bigger stores are forcing many of the smaller shops out of business.

This is not a new phenomenon. In the UK, we have large superstores, which are very competitive. And unless the smaller shops are providing good services and good quality goods they will have a problem. But it’s not the case that the superstores have destroyed all the smaller shops in Britain, far from it. But it does have a competitive effect on the smaller shops. They need to raise their standard so that people still want to shop there.

Are there other areas where British firms, or British people, can play an important role in Thailand’s growth?

A sector where Thailand clearly has a competitive advantage is agro-business. And over the last ten to fifteen years, it has become clear that packaging, processing and labelling are absolutely crucial to this industry. So this is an area where a number of small British companies have been working very hard at in recent years. There is a food-processing sub-group, which is part of a private sector initiative called the British-Thai Business Group, and it has been particularly successful.

What is most noticeable about this is that Thai businessmen interested in exporting to the UK have changed their attitudes. Twenty years ago, they would have said, “Oh, there are all these horrible restrictions. They make life very difficult. Surely, we can work together so that the restrictions can be removed.” Now they are saying, “Tell us what you want the products to look like. We need to know what your labelling requirements are and we will meet them.” This is an enormously encouraging change of attitude. Thais are now very professional at exporting.

It’s important to note the number of British tourists coming to Thailand is enormous: 480,000 last year alone, which was equal to the number of American tourists, and much more than the number of Germans, Australians or French. This creates a demand for certain types of Thai foodstuffs. When I first came to Thailand thirty years ago Thai food was almost unknown in the UK. There was only one Thai restaurant in London. Now there are hundreds of Thai restaurants. In every supermarket you can find Thai spices and Thai ready-made meals and a lot of these have been shipped from Thailand by companies who discover what the proper packaging and labelling requirements are and then meet them.

Firstly, it’s important that the government makes it clear that it welcomes foreign investment. Most companies thinking of investing in Thailand could probably invest somewhere else. Simply, they need to be persuaded that Thailand is a good location. It’s important that the government makes sure those potential investors feel that they will be reasonably well treated if they were to come to Thailand.

Secondly, when an investment is being processed it’s important to make sure that the bureaucracy, both in terms of the Board of Investment and the ministries that investors run up against, are once again transparent and effective. Even people who want to invest can get put off if they are kept waiting for too long. They will eventually lose patience and decide to go somewhere else.

Thirdly, the government should make sure that the current investors in Thailand are treated in a transparent way because if a company is thinking of making an investment in Thailand it will ask companies who are already here about the situation. If the people who are already here say it’s very difficult, that doesn’t help.

So in a sense it’s a cascade. First of all you have to make sure that people get the idea that it might be a good idea to invest in Thailand. Secondly, when they start pursuing the idea, they need to be encouraged and dealt with promptly. Finally, once they have made their investment they still need to be dealt with in a transparent way, which will send a message to other potential investors that this is a good location for investment.

The demands on your time must be enormous. How do you prioritize and decide on which events to attend and how to best optimize your time?

The crucial distinction is between things I am here to do and things I do because I am here, and the key is to do as many as possible of the things I am here to do. So if someone calls me and says, “Wouldn’t it be lovely if you came and gave a talk to the Rotary or a school or university”. I would be happy to do so, if I had the time, but I might not give it much priority. But if a British company comes in and says we have a real problem with the Ministry of Commerce, and we need your help now, I would see that as a priority.

THE BRITISH POINT OF VIEW

Interview with the British Ambassador Lloyd Barnaby Smith