PATTAYA, Thailand – At the National Economic and Social Development Council’s (NESDC) annual seminar on September 26, themed “Thailand’s Institutional Reform”, Dr. Veerathai Santiprabhob, Chairman of the Thailand Development Research Institute (TDRI) and former Governor of the Bank of Thailand, delivered a keynote on structural reform.
He pointed to the revival of Thai Airways as a prime example of how reducing the state’s operational role can improve governance and competitiveness. According to Veerathai, the airline’s turnaround demonstrates that the government does not need to act as an “operator” but should instead allow professional managers from the private sector to lead restructuring efforts.
“Thai Airways is one of the few national carriers worldwide that did not receive a government bailout during COVID-19, yet it managed to successfully restructure,” he said. “This was possible because it was no longer bound by the constraints of being a state enterprise. Freed from bureaucratic control, the company was able to reform with agility and professionalism.”
Virathai stressed, however, that while private-sector expertise enabled the recovery, concerns remain as the airline’s new board has once again been filled with government appointees. “This raises questions about whether governance and competitiveness can be sustained,” he warned.
Call for Limiting Government Board Seats
Veerathai argued that one of Thailand’s chronic weaknesses is the state’s tendency to act as an operator, making government agencies bloated and inefficient. The state’s true role, he emphasized, should be as a policy maker and regulator, not as a day-to-day business manager.
He also highlighted the lack of accountability in state enterprises competing in global markets. In many major state-owned enterprises listed on the Stock Exchange of Thailand, more than 40% of board members are civil servants or former officials. This, he said, undermines both governance and performance.
To address the issue, Veerathai proposed a new rule: state enterprises listed on the stock exchange should not have more than 25% of their board seats occupied by government representatives. Such a cap would ensure that boards are composed mainly of external professionals with the expertise needed to drive competitiveness and strengthen corporate governance.
Building Professionalism and Accountability
“Having senior civil servants, who already carry heavy full-time responsibilities, serve in large numbers on state enterprise boards weakens professionalism and limits global competitiveness,” Veerathai said. “It also distorts corporate culture, which must increasingly adapt to competitive pressures in the future.”
He concluded that restructuring state enterprises should shift them from being sources of government expenditure into sources of revenue generation, with governance that prioritizes accountability, efficiency, and long-term competitiveness.
