With the coronavirus crisis hammering Thailand’s economy and millions of citizens registering for cash handouts, Prime Minister Prayuth Chan-ocha recently made an unusual public appeal to the kingdom’s powerful billionaire business families, asking them to “do more”.
“I would like to ask you if you could do more in utilising your abilities and talents in helping and healing the people of Thailand, who are suffering very badly, in a quicker, more efficient manner,” he wrote in an open letter to 20 of the country’s richest people last month.
Thailand has confirmed just over 3,000 coronavirus cases and 57 deaths. This is a relatively light caseload but the disease has devastated the country’s tourism sector and many of its industries, turning this year into a defining one for Thailand’s billionaire-led conglomerates — companies that grew rich over decades in symbiosis with the ruling establishment and are now being asked to pay back.
Thais sometimes speak of the “five families” that control much of their economy, who built sprawling businesses from modest beginnings in Bangkok’s Chinatown: the Chearavanont family controls Charoen Pokphand; the Chirathivats are behind department store operator Central Group; the Sirivadhanabhakdi family controls drinks group ThaiBev; the Srivaddhanaprabhas are the family behind duty-free giant King Power, whose assets include Leicester City football club; and Yoovidhya family members are major shareholders in Red Bull, the energy drinks business co-founded by the late Chaleo Yoovidhya.
“Big business groups and family-owned conglomerates exist in all countries,” said Pavida Pananond, associate professor at Thammasat Business School. “But the extent of wealth and power that they control in Thailand is much more concentrated.”
At the top of Mr Prayuth’s intended targets was Dhanin Chearavanont, the 81-year-old scion of Thailand’s richest family and honorary chairman of CP, the largest of the family groups and one of Asia’s biggest conglomerates.
Even before Mr Prayuth had sent his letter, CP was already at work on a $3m mask factory outside Bangkok, which it built in just five weeks and handed over to a leading hospital and the Thai Red Cross Society.
In the same week as Mr Prayuth’s appeal, the company announced donations of coronavirus test kits, protective equipment, food for frontline medical personnel, and other assistance totalling Bt700m ($22m).
“We are a company in Thailand, we are part of Thailand,” Suphachai Chearavanont, CP’s chief executive and Mr Dhanin’s son, told the Financial Times in an interview. “If Thailand has a problem, under this circumstance we are all in it together. We have to survive this situation as a country.”
Perhaps most crucially for Thailand’s largest private-sector employer, the group also promised to protect the jobs of its 300,000 employees.
“One of the things the prime minister was pushing was, ‘please don’t fire your people’,” said Jessica Vechbanyongratana, assistant professor of economics at Chulalongkorn University. “He was saying companies had a responsibility to keep them employed during the crisis, and not to put an additional strain on the government.”
CP’s reach runs from the seeds and animal feed it sells to farmers to poultry and seafood processing and restaurant and retail operations, including Thailand’s more than 12,000 7-Eleven stores.
Overseas, CP is best known for launching a successful $10.6bn bid to buy Tesco’s Thai and Malaysian supermarkets, in what would be Asia’s biggest acquisition this year. Thailand’s competition office is reviewing the deal because of the commanding retail footprint it would give CP, which also owns Siam Makro, the country’s biggest cash and carry chain.
Mr Supachai limited his remarks to the FT to the company’s Covid-19 response and declined to comment on the transaction, other than to say CP is “moving forward with the deal”.
Other tycoons who have offered help include Thai-German Harald Link, chief executive and owner of the conglomerate B. Grimm, which offered Bt46m of coronavirus aid. Prasert Prasarttong-Osoth, owner of Bangkok Airways and Bangkok Dusit Medical Services, pledged Bt100m for digging ponds and wells in drought-stricken areas.
Central Group vowed to cut prices for some consumer essentials, make medical donations and preserve jobs for its 74,000 staff.
However, Thailand’s billionaire conglomerate owners have made it clear they will not be giving the state any money.
Mr Suphachai pointed out that Thailand was in far better shape to handle the economic fallout of Covid-19 than in 1998, when the Asian financial crisis caused the country’s financial system to teeter.
“For Thailand, this is a good time for the government to borrow and invest more in infrastructure and in supporting the transformation of all the major industries,” Mr Suphachai said. Mr Prayuth himself clarified that he wanted the billionaires’ advice, not money, after critics accused him on social media of heading a “beggar government”.
CP has offered the government a white paper listing ideas ranging from transforming farming and tourism with the help of digital technology to using tax breaks to lure skilled foreigners to work in the kingdom.
“Singapore has 6m people, of which 2m are foreign workers,” Mr Suphachai said. Thailand, with its larger population, could afford to accommodate “5m knowledge workers from around the world”.
CP has actually hired during the pandemic, confirming some Thais’ belief that it can profit in all business conditions. Its 7-Eleven convenience stores, which were allowed to remain open during lockdown, recruited 20,000 staff to accommodate home deliveries.
“We are moving forward, we are looking at Thailand in the long term,” Mr Suphachai said. “We will be here forever.”
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