Given the economic structure, laws and regulations in Thailand, what would be the most suitable type of natural monopoly for the society? Private ownership or State-Owned Enterprises (SOEs) and Why?
Is private enterprise more efficient than state-owned enterprise? The empirical evidences in Thailand says so. However, Thai economy is different from the advanced economies like United States. Therefore, adopting or reforming the natural monopoly companies' structure requires applicability of various factors such as political interests, expertizes in specific businesses, and commitment of government official in the SOEs. Thailand would always need to think twice before adopting a package of laws and regulations that affects many lives and may triggers resistances. The government and the law provision should carefully develop as natural monopoly and its public utilities such as electricity or telecommunication have substantial impacts on economic development.
First, let us assume that private enterprises in natural monopoly is more efficient and the SOEs are not. Private firms deliver a lower price and higher quality under good provision of independent experts and regulators. But does Thailand has the professional executives and experts to provide efficient private ownership of natural monopoly? Strong incentive and legal provision to bring in the best personnel and look after the enterprise are the two crucial factors of success. Otherwise, private enterprises can cause a problem as well.
Second, if the price and quality is better in private firms, why there is little progress on privatization? The first statement gives us some insights of how difficult it is to have private companies. Having said that, SOEs are also powerful in political agenda and vital to Thai economy. Even though the inefficacy exists but SOEs gives government the power to control and generate revenue if it is managed properly. We must say that there is a grey market in Thailand, consisting oft good SOEs and terrible ones with bureaucrats in businesses. Therefore, our focus may move towards new questions. Is it possible to eliminate bureaucracy apart from privatization? Or the privatization that will not provoke resistance by having reduction in state-ownership but still sufficient to get access to control and revenue? This leads us to a mixed strategies and middle-way approach to natural monopoly.
The implication is that the reformation is necessary but how to do it in a wise way. Whatever the solution is, forceful public interests on natural monopoly lay upon many sectors including public, private, producers, consumers and our people. Thus, the cooperation of private and public decision-makers to eliminate inefficiency and promote the favorable outcomes for the vast majority is predominantly needed.
Is private enterprise more efficient than state-owned enterprise? The empirical evidences in Thailand says so. However, Thai economy is different from the advanced economies like United States. Therefore, adopting or reforming the natural monopoly companies' structure requires applicability of various factors such as political interests, expertizes in specific businesses, and commitment of government official in the SOEs. Thailand would always need to think twice before adopting a package of laws and regulations that affects many lives and may triggers resistances. The government and the law provision should carefully develop as natural monopoly and its public utilities such as electricity or telecommunication have substantial impacts on economic development.
First, let us assume that private enterprises in natural monopoly is more efficient and the SOEs are not. Private firms deliver a lower price and higher quality under good provision of independent experts and regulators. But does Thailand has the professional executives and experts to provide efficient private ownership of natural monopoly? Strong incentive and legal provision to bring in the best personnel and look after the enterprise are the two crucial factors of success. Otherwise, private enterprises can cause a problem as well.
Second, if the price and quality is better in private firms, why there is little progress on privatization? The first statement gives us some insights of how difficult it is to have private companies. Having said that, SOEs are also powerful in political agenda and vital to Thai economy. Even though the inefficacy exists but SOEs gives government the power to control and generate revenue if it is managed properly. We must say that there is a grey market in Thailand, consisting oft good SOEs and terrible ones with bureaucrats in businesses. Therefore, our focus may move towards new questions. Is it possible to eliminate bureaucracy apart from privatization? Or the privatization that will not provoke resistance by having reduction in state-ownership but still sufficient to get access to control and revenue? This leads us to a mixed strategies and middle-way approach to natural monopoly.
The implication is that the reformation is necessary but how to do it in a wise way. Whatever the solution is, forceful public interests on natural monopoly lay upon many sectors including public, private, producers, consumers and our people. Thus, the cooperation of private and public decision-makers to eliminate inefficiency and promote the favorable outcomes for the vast majority is predominantly needed.
