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In a candid interview, German Ambassador to Thailand Hanns Schumacher shares with Asean Affairs his assessment of recent events in Thailand.
Q: What is the impact of Germany’s and Europe’s current economic situation on Asean countries?
A: Total EU-share in Asean’s exports amounts to about 13 percent. Intra-Asean trade accounts for more than 30 percent - a figure which is rising due to the reasonable and dynamic free trade policy of the regional body, which has more or less copied the success of the European single market. In addition, direct Asean trade with European problem cases like Greece is marginal. To answer the question bluntly: the impact of Europe’s underperformance on Asean countries in the short and medium term is negligible. But we can turn around your question, “What can Asean countries learn from the European experience”? For sure, one conclusion must be that an excessive debt build-up, if not properly brought under control, can have almost a lethal effect on a country’s financial ratings and political reputation. On the other hand, Europe’s recovery, in particular, Germany’s recovery as Europe’s major economy and the slowly stabilizing Euro, which even during the crisis so far never fell below its emissions rate, will add a fresh and tangible demand impetus to Asean’s markets.
Q: Since our last meeting, political developments have boiled over in Thailand and now seem at a standoff. What are your views?
A:  Thailand has long been seen as an “anchor of stability” in the region. The continuous unrest since the military coup in 2006, the ensuing frequent change of governments and the internal tensions since the Abhisit government came to power put this reputation at risk, no doubt. The world is looking at Thailand to see, whether a lasting reconciliation can be achieved between the different political camps. This takes two to tango and the onus of proof to deliver is on both sides, the government of the day and the opposition. On the other hand, regarding the development of the economy, one could get the impression as if politics and business are separated by a kind of “firewall”. Thailand’s first quarter export figures are on a record level, the growth forecast 2010 is quite positive, the baht gets stronger and stronger. The government’s measures to strengthen the economy are clearly successful. As Thailand is suffering from a phenomenon, which seems to be the negative side of the globalization coin, the uneven distribution of wealth and the widening gap between rich and poor, tensions could be reduced if all parts of the population will be able to take advantage of this positive development, and not only a privileged few.

Q:  How do German companies view Thailand now, particularly as to future investments?
A:  The Asia Pacific Conference APK, the largest gathering of German business representatives in South East Asia, a biannual event, which took place in May in Singapore, provided a good yardstick: Thailand continues to be a hub for German investments in the area. Business people are business people and they look for fundamentals. If you look at these, then even during the recent political crisis, the Thai economy has risen by 12 percent, the highest gross domestic product increment in 15 years. Fundamentals in infrastructure, banking, industrial networks, combined with reasonable costs and a disciplined and qualified workforce, continue to look good. Thailand got good credits for that at the APK. I did regret that Thailand was the only Asean member state, which did not consider it necessary to be represented there on a senior level. One should never take foreign business interests for granted – your neighbours, like for example , Vietnam, are becoming strong competitors for high quality and state of the art German investment as an important means for technology transfer!

Q:  What specific steps are European countries looking for Asean to take in the area of intellectual property rights and the production and sale of counterfeit goods?
A:  An Asean intellectual property action plan, binding from 2004 to 2010, is in existence. This led, for example, to the signing of an EU-financed “ASEAN project on the protection of intellectual property rights” in Bangkok just last year, 2009. Intellectual property awareness, education, their use as a tool for economic development and integration in Asean as well as of Asean countries into the global economy are important to mention in that respect. As for Thailand in particular, many tourists might think about fake textile or watch brands as well as IT products on sale in some street markets. More serious are fake pharmaceuticals, which, to a small extent, still do exist. However, without wanting to downplay these serious problems, overall, Thailand has left such stage of economic development long and far behind. Thailand is at a level of its economy where protection of its own intellectual property, together with high-value product designs manufactured within its borders is of much greater significance than any cheap, short-lived gains from fakes. As for patent-and trademark protection in general, these also work quite well in Thailand, through specified courts and tough law enforcement. Continuing working together in this direction is what Asean and the EU need.

Q:  Has the next meeting of the Thai- German Joint Economic Committee (JEC) occurred or when will it occur? What are your expectations for the results of the meeting?
A:  Thailand has expressed an invitation to the German side to convene the JEC in spring 2011. We are at a stage to negotiate on a convenient date. Foreign Minister Kasit will meet during his forthcoming meetings in Berlin on July 5 and 6, amongst others, German Minister for Economic Affairs and Technology, Rainer Brüderle, to discuss the options. We believe it is necessary to establish a sound and broad-based dialogue, not only on the government level, but between business representatives of both countries, about priorities of our future cooperation. We are very interested to foster our reputation as a partner widening the scope of alternative energies in Thailand. A serious point to be raised, if not solved until then, would be the suspension of pending investments in Map Tha Put, which affects, for example, one of Thailand’s biggest German investors, Bayer Thai – a company with an impeccable record when it comes to environment protection. Thailand’s outstanding international competitiveness in the past has always been based on the predictability of administrative proceedings and the ease of doing business due to quick bureaucratic procedures.

Q:  A recent educational development was that a majority of ICT high school teachers in Thailand could not pass the exam their students were expected to pass. Could Germany help improve the ICT level of Thai high school teachers?

A:  The speed of technological development is simply bypassing a large number of adults and in no country, including Germany, will it be possible for everybody, including teachers, to always keep on top of development.

This is particularly true in a country like Thailand where total industrial and technological development is growing from a lower base than in some European countries, but at such an amazing speed that Europe might easily be left behind in the future if we don’t pay attention. Just imagine that only 10 years ago, less than 4 percent of the Thai population were Internet users, today this number has risen to 25 percent.

Having said that, we believe Germany can help in many ways with further ICT education in Thailand. Education is one of our export products and working together with both government and private industry in broadening ICT education and widening its usage is under way, with the lead-teacher-model and beyond.


Q:  What is the next step in Thai-German relations?

 A:  High level political dialogue will be fostered with the forthcoming visit of Foreign Minister Kasit to Germany. His German counterpart, Minister Westerwelle, might wish to refer to the last visit of a Thai Foreign Minister in Germany, Noppadon, in June 2008. A then envisaged “Joint Plan of action” of both countries was never realized due to the resignation of the Thai Minister.

You mentioned already the forthcoming JEC meeting. 2011 will be an important date insofar, as it will bring to an end our bilateral development cooperation. Thailand is an emerging industrialized country, not seen as a developing country anymore.

However, we might enlarge our technological cooperation into a “Third Country Assistance” project, together with Thailand as partner, aiming at reducing the development gap amongst Asean nations. This still needs to be defined.


Q:  What are your views on the development of the Asean common market in 2015 and perhaps the development of a single currency for the region?

A:  2015 is an important target date. The free movement of goods within ASEAN will definitely boost the region’s development. Surin Pitsuwan deserves a lot of credit for pushing member states towards this direction. Still, when you look around in the world, Asean is a regional body with a rather low degree of integration.

One doesn’t need to compare it with the EU to come to this conclusion. Asean is still miles away from a single currency, starting with the strict adherence to the principal of noninterference into internal affairs, which would make it extremely difficult to transfer financial responsibilities to an Asean Central Bank.

The creation of the Euro – which I clearly believe to be one of Europe’s greatest and lasting achievements – took almost 30 years from the idea to implementation. It still suffers from the lack of harmonization of national fiscal and budget policies – something, Asean member states under their present framework would not even be willing to consider. I don’t see myself paying with ASEAN currency in any foreseeable future.


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