Commentary: Bangkok’s flawed plan to allow foreign land ownership

Commentary: Bangkok's flawed plan to allow foreign land ownership

POLITICAL AND SOCIAL RAMIFICATIONS

The proposed plan may well increase land tax revenue and benefit the Thais fiscally but its political and social ramifications merit careful consideration. Foreigners may begin to invest freely in property, but whether they will reside in the country is another matter. In addition, increased foreign purchases of luxury dwellings will intensify perceptions of inequality and rising land prices will worsen the actual inequality.

These concerns have led the opposition Phuea Thai Party to oppose the scheme. The party reasons that nearly 80 per cent of Thais do not own any land and that allowing foreigners to buy land will benefit the more affluent segments of Thai society with land to sell. It will exacerbate the inequality in land ownership.

Beyond Phuea Thai’s concerns, it is not clear that easing restrictions on land ownership will be the magic formula to kickstart the Thai economy that the Prayuth government hopes for.

Thailand would do better to create a sound investment environment with improved and more transparent regulatory and legal structures to make investors feel that it is worth doing business in the country. That approach is a more promising way to lure investors, technology, and ultimately innovation to the country.

Given its flawed design and its potentially adverse impact on inequality, the Thai administration’s proposal to reinvigorate the economy by easing restrictions on land ownership merits careful scrutiny.

Prem Singh Gill is an adjunct lecturer at the College of Interdisciplinary Studies, Thammasat University, Thailand and senior researcher at the Research Centre for Advanced Science and Technology, The University of Tokyo, Japan.

Ratana Boy is an independent researcher and an undergraduate senior at the Faculty of Global Studies, Thammasat University.

This commentary first appeared on ISEAS – Yusof Ishak Institute’s blog, Fulcrum.

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