Our long holiday from reality

This week’s cover story in Asia Focus started with a simple question prompted by the endless string of holidays Thailand has been having. Can there be too much of a good thing? Finding the answers was an exercise in frustration. Many of the people we wanted to talk to were on holiday. This was the case even on the “hump days” between long weekends, when government and private-sector offices were supposed to have been open.

During the course of our reporting we realised that despite the claims by some businesses that holidays had a minimal impact on the operations of the private sector, there could be a price to pay in the longer term.

It is not a bad thing to stimulate tourism through extra holidays, but does the government realise what it is doing by declaring so many days off?

Thailand is attempting to transform itself into a services and value-addition economy and away from being a low-cost production base. It is also trying to compete directly with Singapore by encouraging companies to set up regional operating headquarters (ROH) to further enhance the country’s stature as a hub for anything and everything. The Board of Investment offers decent incentives, but any company looking to set up a headquarters office in, say, Bangkok, will want assurances that there will be people working in it.

The fact is, a company considering an ROH in Thailand will think twice if the government keeps giving away “special holidays” at the rate we’re seeing. And with the current regime looking to stay in power, at least behind the scenes, for years to come, I for one would tell the government to kiss its ROH plans goodbye.

As an employee, I would certainly welcome more holidays. But think about it: not too long ago there was one country that always seemed to be in a party mood and looking for excuses not to work. That country was Greece.

Of course, Greece had many problems, starting with huge public debt and endemic tax evasion. However, low productivity also sapped the economic health of the country, which only got into the euro zone by faking its economic data while its would-be partners looked the other way.

Ways to measure productivity can be debated endlessly but by one generally accepted measure, GDP per hour worked, Greece ranked 31st out of 62 developed and developing countries surveyed by The Conference Board in 2013. That put Greece behind almost all its euro zone peers. (Thailand’s ranking on the same list was a dismal 59th, by the way.) All last year we watched the Greek drama play out. Hard-working Germany, over the objections of many of its citizens, led the efforts to find a solution because a Greek exit from the euro could have been catastrophic for everyone. In the end an 86-billion-euro bailout package led by the IMF was put together. So far 21.4 billion euros have been disbursed but the creditors are now threatening to turn off the tap unless the debtor cleans up its act.

Thailand is far from being in the kind of mess that Greece has faced, but I fear trouble ahead if the current relaxed attitudes toward work prevail.

Today’s business environment is far different from what it was a decade or two ago. Businesses are not only looking for a diligent workforce but also for skilled workers, reasonable wages, government incentives, lower taxes and host of other things. But a workforce that is always in holiday mode is not going to cut it when it comes to competing with the likes of Singapore, Malaysia or Hong Kong in value-addition and services, or Cambodia, Laos, Myanmar and Vietnam at the low end.

I am writing this piece from Singapore after a day of meeting with half a dozen senior bankers, and I’m embarrassed to report that they laughed when I told them Thailand was on holiday yet again.

It is therefore essential for the government to realise that in the modern era of cutthroat competition, more vacation days are counterproductive. There may be modest gains in tourism but these are unlikely to offset the losses in the real sector.

It would be better to stimulate the economy by other means, such as tax breaks for shopping or dining, which would probably have a better impact without tarnishing the image of the country as one on permanent vacation.

Readers can send their feedback or comments to umeshp@bangkokpost.co.th