Expensive Baht and No Tourists
An Interview with Thomas Wehr, Managing Director of Detecon Asia-Pacific Ltd.
Although the state of emergency officially lasts until 31 May, Thailand relaxed its coronavirus restrictions to some degree in early May. Restaurants, markets, parks, or sports clubs have re-opened. Flights on some domestic routes in Thailand are again possible. The king is spending his time in a luxury hotel in Garmisch-Partenkirchen, although, being a trained pilot, he usually flies the planes to his kingdom himself. Around 40 consultants and employees work for Detecon in Southeast Asia. When the crisis began in early March, Thomas Wehr, Managing Director of Detecon Asia-Pacific Ltd., first had to recall the consultants working in various countries and set the guidelines for an orderly entry into the coronavirus working age.
Mr. Wehr, what is it like not being allowed to leave one of the most popular travel destinations in the world? There could be worse places to be in a time of crisis, wouldn’t you say?
Thomas Wehr: We haven’t had many opportunities to enjoy the beautiful beaches in the last two months. Travel within the country was almost impossible. As this is the hottest season of the year in Thailand, a dip in the sea would be more pleasant than being stuck here in Bangkok (where I work) and Chiang Mai (where I live). But the Thais remain comparatively calm about the situation. That makes it all quite bearable. And there’s plenty of work. So I’m never bored.
So the crisis has not had any impact on the consulting projects?
Fortunately, all current projects are continuing. Our clients have indicated that they want to complete the projects. We have also been able to acquire new projects in Singapore and Malaysia, and even a completely new client awarded us a contract at the conclusion of a tender in April. We are lucky to have so many clients from the telecommunications sector. At the moment, we are busy advising them on the many regulatory issues revolving around 5G. No country wants to fall behind in this area. Our consulting projects also include infrastructure measures relating to telecommunications networks. They, too, must continue. Well-developed data networks are important for the economy and private households, especially now. The real challenge will come in the second half of the year and when we can return to our APAC countries and our clients.
Your team of about 40 people is active in consulting projects throughout Southeast Asia. Are they all in Bangkok now?
The first travel restrictions in Thailand went into effect at the beginning of March. The country was relatively quick to close its international airports soon after. We decided without further ado to bring all our colleagues in Malaysia, Singapore, and Papua New Guinea back to Bangkok. There were ten of our people in Papua New Guinea alone. Medical care is not so good there. That was a good decision; the virus has been relatively contained in Thailand so far.
Thailand had a surprisingly low number of infections on 9 May, just over 3,000, although initial restrictions were not even that tight.
The military government declared a state of emergency on 24 March, giving it the authority to enforce stricter rules. And some measures that were very painful for the Thais had already been initiated. Leaving home at night has been prohibited since the beginning of April. Then the Thai New Year in mid-April was canceled. This is usually the most important holiday period in the country, a time when people travel among the various regions to visit their families. But they could not do that anymore because traveling, even within Thailand, was almost impossible. And the government took the further precaution of banning the sale of alcohol. There is some hope, however, that the holidays will be celebrated later.
How hard has the economy in Thailand been hit?
There had been signs of a downturn even before the crisis, and the new government was repeatedly subject to tremendous pressure to act. Tourism, for example, had suffered in previous years from the very high exchange rates for the Thai baht. Thailand has become expensive for tourists from the euro and dollar regions, and the numbers have stabilized solely because of the high number of tourists from China. About one-fifth of economic performance depends on tourism. Moreover, the drivers from strong domestic demand are missing, and the export motor is stuttering because production chains have been interrupted.
And, as on many emerging markets, the government is probably not in a position to provide much help.
Funds for large-scale relief programs, continued payment of wages, or financial stimulus for micro-enterprises are indeed limited. Nevertheless, the government is coming up with measures to help people. People have to stay at home now, of all times, during the hottest season of the year in Thailand. This would be unbearable without the air conditioning systems that now run around the clock. The government has obligated electricity providers to give discounts on electricity bills so that households have some financial relief. Or it is distributing small sums of money to the poorest who are no longer earning anything because the informal sector of the economy has almost completely disappeared. And the telecommunications companies have been required to offer larger data volumes and more free minutes for their customers, although the companies have been compensated for this from the regulator’s budget.
There are some extraordinarily rich families in Thailand. Are they showing any concern about their country and its people?
Most business magnates believe they have a self-evident responsibility to support their country and its people. Companies bear an enormous social responsibility. The Charoen Pokphand, or CP Group for short, for example, is owned by one of the most influential families in the country. This is a conglomerate of companies in the agricultural and food industry, distribution, and retail trade. CP also owns the second-largest telecommunications company in Thailand. The CP Group decided very quickly not to lay off any employees and offers job security with full pay. Another example: one foundation, which belongs to the duty-free empire of King Power, donates large sums of money for the medical treatment of coronavirus patients
Now that the Detecon consultants who are otherwise scattered throughout Southeast Asia have almost all gathered in Bangkok, does that mean working from home for everyone?
There is no lockdown during the day in Thailand and the office buildings have not been closed. The economic effects would have been catastrophic for the country. But early on, fever measuring stations for taking people’s temperature were set up at the entrances to the office buildings. At Detecon APAC, we have decided on a mixture of “working from home” and “working in the office.” We have set up a fixed schedule determining who comes to the office and when. We never have more than ten people working in the office at the same time, and we can easily comply with the social distancing rules. Everyone wears a mask during meetings. And all these measures were initiated when the crisis started to become serious in March.
More than two months of crisis have passed. What would you like to see happen in the rest of the year?
The most important thing is for everyone to stay healthy. As far as our work is concerned, we hope that we will soon be able to travel to our clients in the region again and acquire new contracts. And I hope that Thailand will soon be able to re-open its borders and tourists will be allowed to enter, even if that means a return to full beaches and congested roads; the very lives of so many Thai people depend on this.