Banyong Pongpanich thinks it is senseless to ask when a reform will be done.
“It’s a never-ending process. It is continuous. There is no such thing as: let’s get the reform over and done with. To have a reform before an election? How? It’s not possible,’’ said the chief executive officer of Kiatnakin Bank PCL.
An investment banker by profession, Banyong has become involved in ongoing national reform as a member of the committee to improve state enterprises, known as the “superboard”.
The 61-year-old financier also serves as an adviser to Prime Minister Gen Prayut Chan-o-cha.
On occasions, however, Banyong plays the role of the government’s critic.
When Gen Prayut staged the coup in May last year, he urged the National Council for Peace and Order (NCPO) to stay in power for as short a time as possible.
Recently, when proposals were made for PM Prayut to prolong his tenure for a few more years, Banyong was among minority voices urging the premier not to do so.
Banyong said he spent the past 38 years focused on the capital market, first as a floor trader earning 2,450 baht a month and now as Kiatnakin Bank’s CEO, chairman of the board of directors of Phatra Capital PLC as well as Phatra Securities PLC, amongst other positions.
“I am very happy with my work. I earn good money. I have never felt ashamed of being wealthy,” Banyong said.
It was the deadly clashes between armed forces and red shirt protesters in Ratchaprasong area in 2010 that jolted the veteran banker out of complacency and brought him out of his favourite playground. “Like other Thais, my state of mind sank deeply during those times,” Banyong recalled the incident, which left more than 90 dead.
“The situation was a mess. It was terrible. I asked myself what really is the root cause that has sent Thai people into such a ferocious conflict?’’
He said many Thais caught in the highly polarised political conflict are still pointing to personalities as causes of the deep division.
Some say it was former Prime Minister Thaksin Shinawatra. Others point the finger to chairman of the Privy Council Gen Prem Tinsulanonda.
“I don’t think so. I believe it’s more than that,” Banyong said.
While he agrees with a prevailing idea that the political conflict believed to be the deepest and most violent in the country’s recent history is attributable to inequalities, he does not believe they are straightforward, rich-poor gaps.
By conventional benchmarks, the country’s income gap may not be good but it’s not that bad either, Banyong said.
What has changed and pitted people against one another more forcefully is the disappearance of an urban-rural boundary. Urbanisation is occurring everywhere while the countryside and what was once known as a rural lifestyle is vanishing.
Demographic changes translate into the migration of young people into the city.
An emergence of a new class of urban poor has created a more powerful friction even though many of these people are earning more than their rural ancestors.
“They are exposed to the double-standards and stark differences in lifestyles. People who drive a Mercedes are treated differently from those who go around in pick-up trucks. The discrimination is in their faces,” Banyong said.
A pragmatic man, Banyong said he started to study how to tackle the problem of inequality systematically and effectively.
“To reduce inequalities, creating economic opportunities is crucial. What I found out, however, is the biggest obstacle that has prevented us from getting there. It is corruption,’’ Mr Banyong said. Exploitation distorts everything in society.
“And it exists everywhere. I believe that out of every ten people we meet, seven could be involved in some form of corruption,” Banyong said.
He classified corruption into four main types. First, there is a blatant theft of state assets such as VAT fraud or falsifying title deeds for state lands.
The second kind is paying for convenience, also known as tea money. Banyong said people who are caught in this vicious practice are quite pitiful. “It is like being extorted. If you don’t pay, your business does not get done. There is no choice,” he said.
An uglier type is bribing justice, paying to get away from legal obligations.
In Banyong’s opinion, the most damaging type of corruption is an attempt to buy out competition. An example would be paying bureaucrats to designate procurement specifications to fit only one’s own products or to win a concession or monopoly.
“The benefit is shared between the authorities and payer while the cost is borne by people around the country. Such a practice destroys market competition. Companies have no incentive to improve their services or competitiveness as some can use money to eliminate competitors. With no improvement in business competitiveness, there will be no economic growth,” he said.
Banyong put his studies of corruption in the book Hang Kradik Ma or Wag the Dog, which he co-wrote with Thanakorn Juangpanich. The book’s second installment was launched recently.
It promises to be a handbook to fight against corruption in a scientific way which goes beyond asking for “good people” to save the country.
“People often see corruption as a morality issue,” Banyong wrote in the book’s forward. “That is why they have come to believe that corruption can be solved via campaigns that make people good and moral,” he wrote.
He admitted that while raising awareness against corruption is necessary to curb the practice, putting in a system that can prevent it will offer a more efficient and permanent solution.
He said there are countless examples of how countries learn to institutionalise anti-corruption efforts.
“Studies show that corruption is always most prevalent during an initial phase of democratisation. After that, the society will learn to curb it. The problem with Thailand is our politics is geared towards full-blown corruption and we have never got past an early stage of democratisation,” Banyong noted.
For Banyong, Thai society is particularly vulnerable to corruption because it prizes personal connections.
“Corruption and cronyism are the same thing,” he emphasised. “Corruption is an act of helping people who are in ‘our’ circle to have an advantage over those who are not,” he said.
For him, one simple way to curb corruption is to make the state smaller.
“The Thai state has expanded several times during the past 10 years. Based on an increase in its budget, the Thai bureaucracy has grown about three times,” Banyong said.
The problems with government agencies or state enterprises are that they are inefficient and prone to “leakages”.
“There are about 1,700 forms in the process of giving public services, involving 10,500 procedures,’’ said Banyong who in his capacity as a superboard member proposed that a public service facilitation bill be enacted to streamline the red tape.
He said the cumbersome bureaucratic processes are not only inefficient but also open room for fraudulent offers to “buy or sell convenience”.
Functions that are no longer necessary should be abolished. Those that can’t be cancelled immediately must be made to operate in a transparent and efficient way, he said.
In the end, however, how will all these attempts go back to reducing inequalities?
“You can’t reduce inequalities when the economy is growing at 3% per year,” Banyong said.
“We have to improve on our efficiency and productivity first then try to close the gaps when the economy is expanding.”
As a liberal-minded person who is passionate about capitalism being paired with democracy, why is he working with the coup makers?
“I am not helping the military,” Banyong said. “I am doing what I believe is useful to the country and should be done.”
He admitted that under normal circumstances, a reform would be best carried out under a democratic environment as it requires healthy debates amongst citizens.
“That is why I focused on only two issues which I believe no one would argue against, which is scaling back the state power and instilling efficiency and transparency into the system,” Banyong said.