Following trade deregulation stated in the Announcement No. 281 of the Revolutionary Council, Thailand has welcomed a parade of foreign retailers, who are eager for a piece in the Thai retail market pie, worth no less than THB 500 billion annually. The growth momentum should continue this year. It is interesting to note that the ratio of local to modern retail businesses would shift from 70:30 in 1999 to 60:40 this year. This rings an alarming bell for the existing 300,000 local retail shops. After opened up to foreign investments, the country has witnessed Thai major retailers went into the hands of foreigners either through joint venture or business takeover. Those foreign investors possess comparative advantages in terms of sound financial base and high negotiation power due to hefty order volumes. Given the plunging competitiveness, local retailers have called on the public sector for assistance. The public sector has brainstormed to seek ways to protect minor retailers. The existing laws have been studied, while the new regulations have been mapped out to meet business dynamism in years to come. Protection of local businesses can be found in various countries, and is not in contrast with the WTO agreements. The countries with high competitiveness also enacted regulations and measures to tame foreign penetrations.

In the case of Thailand, the short-term guideline is to apply the Building Control Act as a tool to monitor large retailers, prior to the completion of the Retail Trade Act. It is expected to take no less than 1 year for the Retail Trade Act to come into force. The Act would govern retail trade and promote competitiveness of the medium- and small-scale retailers. The law, aimed to control large retailers, can be summarized in the following key issues: Control large retailers regarding locations, service hours, employment, investments and profits. The law also covers the aspect of environmental management so as to avoid traffic congestion, facilitate service users, and ensure adequate parking spaces. Allow small and medium-scale retailers to compete with the large ones by upgrading administration and financial management, for example.

In choosing the applicable law in the immediate period, the Town and Country Planning Act cannot meet the time constraint, as it requires revision of the Ministerial regulations, while the Building Control Act can be enforced within 2-5 months. However, it is crucial to ensure that the adaptation of the Building Control Act would not create adverse effects on large buildings operating other businesses. The application of the Building Control Act should be terminated after the enforcement of the Retail Trade Act.

The Thai Farmers Research Center (TFRC) Co., Ltd. holds the view that the above conditions would serve to impede business undertaking of foreigners in the kingdom. The requirement of minimum investment capital may bar foreign retailers from relatively small cities, where the people do not possess high purchasing power. To really assist small-scale retailers, the public sector may need to come up with additional regulations, e.g. setting service hours or sales areas for large retailers. The regulations may require new retailers to set aside a certain area for the display of local goods. Those regulations should be applied swiftly. Otherwise, large retailers likely to be affected may make a move prior to enforcement of the law. Any move should take into account international
regulations and effects on foreign investments. The government should carefully follow case studies of other countries and cooperate with local retailers so as to gain an insight into the problem. At the same time, small retailers should upgrade their businesses, notably products, prices, supplement services, as well as managerial system. In this free trade era, customers have swift access to information. They would therefore opt to shop where they can gain the utmost satisfaction. Hence, survival should be it for entrepreneurs with the quickest and highest responses to customers' demand.