About 200 people attending a business forum were told that an estimated Bt200 billion could be generated through logistics alone, an amount described by one speaker as “an easy but largely overlooked income”.

Kettivit Sittisoontornwong, president of the Thai International Freight Forwarders Association (TIFF), said the term “free trade” coined by leaders of the countries involved meant little in relation to the actual implementation of imports and exports by Thai customs officials.

He said they were scarcely uninterested in promoting exports because their experience was that the country gained little in tax and tariffs through such trades.

Kettivit also called on the government to do more to make modern technology available, especially in relation to updating databases in the import-export sector. He said many private businesses had already updated their own systems and these were ready to be implemented, pending changes in the law.

Narongchai Akrasanee, of the Mekong Institute, said businesspeople and regional travellers had suffered many administrative and legal setbacks, especially those involved in cross-border trades.

For the first half of the year, rice exports came to 4.36 million tonnes, down 19.6 per cent from the same period of last year, when 5.42 million tonnes were shipped, he said.

He said orders for rice in the global market had dropped in the first half of this year, although orders in the second half should be higher than in the first six months. The effects of the drought will directly impact the production capacity in the market.

“If the drought still persists into August, that would further impact rice production and may result in the year’s exports being lower than our estimate of 9 million tonnes. We may to revise the figure again,” Charoen said.

The latest survey in 2018 indicated that 40 per cent of the surveyed fraud cases were detected by tips.

Globally, governments and regulatory bodies recognise the importance of whistleblowing. For example, in the US, the Sarbanes Oxley Act (section 301) mandates companies trading on the US Stock Exchange to provide a mechanism for employees to anonymously report concerns about accounting or audit irregularities. In the US, the whistleblower can make a report about fraud and white collar crime to the Department of Justice, while in the UK, the whistleblower can make a report about fraud including bribery and corruption to the Serious Fraud Office.

The US Securities and Exchange Commission (SEC) reports that the Commission’s receipt of whistleblower tips reflects an upward trajectory. Total tips received in 2018 were 5,200 while only 6 tips were reported from Thailand.

Recently, the Thai National Anti-Corruption Commission (NACC) proposed that organisations introduce a reporting channel as 1 of the 8 principles of the bribery control system. In addition, Thai authorities such as NACC and SEC provide channels for whistleblowers to directly report any misconduct.

With an increasing demand for whistleblowing from authorities and its effectiveness as indicated by ACFE’s survey, has the time come for all organisations to consider internal reporting channels putting in place?

Whistleblowing in the wind?

Companies understand that employees see and hear everything that goes on within, including inappropriate behaviour and who is involved. Whistleblowing is, perhaps, the only tool that comes close to pointing out fraud in its nascent stages. It is thus important to build, monitor and continuously nurture this channel. Data from the whistleblower needs to be continuously monitored and integrated into fraud risk management for early detection.

Managing whistleblower complaints effectively

The whistleblower and the complaint are the two main components of every whistleblowing report. Dealing the two with maturity and sensitivity can help the mechanism be successful.

Ongoing support to the whistleblower is important to ensure his/her comfort and that he/she does not face any adverse treatment as a result of his/her actions. Policies should ensure that any detrimental action taken against the whistleblower is treated as a serious matter and that appropriate action is taken.

A clear and well-documented process for managing complaints can give greater confidence to the whistleblower. Usually, an appropriate senior staff member is assigned to deal with the matter. If the allegation is against that or other senior staff members this scenario can run the risk of allegations being ignored or investigations becoming compromised. Employees need to be made aware of the detailed processes around how their complaints will be handled, so that they can gain trust in the system.

Opening wide enough?

Effective whistleblowing must have an “open wide” concept.

– Service hours and channel

Most companies provide a phone number that employees can call during business hours. The calls may be received by dedicated team. Whistleblowers may be reluctant to make hotline calls from the workplace where they could easily be overheard, have their name show up on caller ID, and tracked in telephone call logs. Thus, enabling access to a 24/7 reporting channel can increase the reporting rate. Offering multiple methods of reporting can also help to generate more tips than just a hotline.

– Language:

Whistleblower reports are sensitive and tricky things to communicate, so not being able to use local language can deter whistleblowing or adversely impact a report’s completeness and accuracy.

– Constituencies:

A significant number of tips may come from external sources such as customers, vendors, shareholders or competitors. Encouraging these stakeholders to use your system could generate better tips.

Other characteristics that can encourage whistleblowers to use a hotline include providing anonymity and confidentiality, communicating the independence and transparency in the process, and offering protection to the whistleblower.

Effective communication

A successful whistleblower system requires effective communication to create and maintain awareness of its existence, build employees’ willingness to report, as well as develop employees’ ability to identify potential wrongdoing.

Companies need to focus their communication on assuring employees that their tips will remain confidential and be properly treated. Once employees trust the whistleblowing and are confident to report, they should be educated about red flags, risks and schemes related to unethical activities. This awareness can be part of a fraud risk management and ethical awareness programme. It is important to communicate that every employee has a role in preventing and detecting fraud and the hotline is a key tool to use for that purpose. Armed with this knowledge, employees will be in a better position to act if they experience/witness suspicious behaviour.

Surasak Suthamcharu is a partner in the Forensic Service of Deloitte Thailand. He can be contacted at ssuthamcharu@deloitte.com

Panyarat Chutiratmanee is associate director of the Forensic Service of Deloitte Thailand. He can be contacted at pchutiratmanee@deloitte.com.

Foreign investment in Vietnam is expected to increase significantly now that the country has signed two important trade deals – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union-Vietnam Free Trade Agreement (EVFTA).

According to experts, foreign investors in Vietnam will enjoy the benefits of both the international market and preferential domestic policies.

The agreements also offer a great opportunity for businesses that are not from the EU or CPTPP’s 10 other member countries. For example, when investing in Vietnam, they can take advantage of tax incentives Vietnam has agreed upon with those countries.

Investors originating from the EU or CPTPP would enjoy the full range of incentives, especially in terms of investment conditions, vice president of the National Economics University Hoang Van Cuong told the website vov.vn.

“These investors are on Vietnam’s priority list as they can help bring advanced technology that will transform domestic enterprises,” Cuong added.

According to Luong Van Khoi, deputy director of the National Centre for Socio-Economic Information and Forecast (NCIF), EVFTA and the investment protection agreement (EVIPA) will open the market at a higher level than the World Trade Organisation (WTO) and EU investors will receive the same treatment as domestic enterprises.

In addition, Vietnam is committed to protecting the benefits of EU investors with such measures as forbidding the illegal nationalisation of EU investors’ assets.

This agreement also allows foreign contractors to bid for projects that use State capital.

“With such strict regulations, EVIPA will have a positive impact on attracting investment in Vietnam – not only from the EU but also other countries – to take advantage of tax incentives when exporting to the EU market,” Khoi said.

Minister of Planning and Investment Nguyen Chi Dung added: “EVFTA and CPTPP are high-quality, new-generation free trade agreements that will contribute to strengthening the confidence of foreign investors in Vietnam’s attractive, safe and friendly investment environment”.

Vietnam is a large market with more than 96 million people. The CPTPP is the third largest free trade area in the world by GDP after the North American Free Trade Agreement and the European Single Market.

Strict rules of origin in the two agreements would encourage increased investment in Vietnam to take advantage of the country’s access to the EU and CPTPP’s member markets, Dung said.

According to Nguyen Dinh Cung, director of the Central Institute for Economic Management, EVFTA will help Vietnam improve the quality of foreign investment, attracting more capital in a number of industries in which the EU is strong such as processing and manufacturing, hi-tech applications, clean energy and financial services.

Production value chains are changing and this is an opportunity to reduce reliance on Asian investors and increase investment from the EU. However, to attract high quality investment from this region, Vietnam needs to make swift progress in reforming administrative procedures.

According to the Ministry of Planning and Investment, EU investors have 2,244 projects in Vietnam with total registered capital of US$24.67 billion (Bt762.8 million).

The mobile app lets users create personal profiles, upload video, images and share posts to a Facebook style “news feed”. It also offers livestream and blogging functions and allows users to identify accounts to protect information, pay online or use public services.

Gapo, the app that mimics Facebook, is aiming to attract three million users in 2019 and 50 million by 2021.

Speaking at the launch ceremony, Gapo’s chief executive Ha Trung Kien, said the app was developed in April and was launching now to encourage responses from users.

“Gapo will focus on personalising the user experience,” Kien said.

Gapo received VND500 billion (Bt663.8 million) in funding from tech corporation G-Group, whose other assets include Mekong Capital-backed pawn shop chain F88 and Belt Road Capital Management-backed P2P lending start-up Tima.

With the investment commitment, Gapo became the 9th member under G Group ecosystem including F88, Tima, G-Pay, Ginnovations, BEATVN, GameTV, VSEC and G-Capital.

The capital injection will be used for Gapo’s first phase of development.

In addition, it also announced it would team up with Sony Music Entertainment to feature music content by the strategic partner.

The launch of Gapo comes at a time when the Ministry of Information and Communication is calling for the establishment of “made in Vietnam: social platforms. Several apps have been built, such as VietnamTa and Hahalolo, but they have lacked basic investment.

Of its population of 97 million, 42 million Vietnamese people use Facebook every day, local media reported in 2018.

Although most investors believe that the Fed will cut the interest rate, they are concerned that the rate will be between 0.25 per cent and 0.50 per cent, Globex Securities Co Ltd said on Wednesday.

Meanwhile, investors will also be looking closely at the policies to be announced by government on July 25 and 26, particularly the urgent measures to drive the country’s economic growth in the remainder of this year following the drop in exports in the first half of the year, the broker said.

On Tuesday, the SET index closed at 1,724.87, a drop of 2.71 points from Monday with a trade value Bt62.13 billion.

Passkorn Linmaneechok, deputy managing director at Kasikorn Securities Co Ltd, said the policies will focus on improving lower-income people’s quality of life, especially in helping them secure a private residence.

This will benefit listed property firms that build low-cost housing, such as LPN Development Plc and Pruksa Holding Plc, Passkorn said.

Also coming are pledges to reduce the cost of living, improve labour conditions, help farmers and promote innovation, all of which will boost purchasing power in the agricultural sector and in society in general, thus particular benefiting the retail sector, where CP All Plc, Siam Global Plc and Robinson Plc do most of their business.

Companies managing industrial estates, such as WHA Corp Plc and Amata Corp Plc, will reap the rewards of efforts to realise the grand ambitions of the Eastern Economic Corridor (EEC), Passkorn said.

True Corp Plc, Total Access Communication Plc (Dtac) and Advanced Info Service Plc are sure to benefit from investments in telecommunications infrastructure, especially 5G.

And construction firms including Italian-Thai Development Plc, Ch Karnchang Plc and Sino-Thai Engineering and Construction Plc will see earnings rise thanks to a policy to speed up development of infrastructure such as railways, roads and airports.

Terdsak Taweethiratham, vice-president at Asia Plus Securities, said a policy was coming aimed at boosting domestic purchasing power – by raising social welfare for the elderly, disabled and poor, the Mom Pracharat scheme, an increase in the number of state welfare cards issued, agricultural product-price insurance and farmers’ income insurance, among other means.

Medium-term tax reform that will reduce personal income tax by 10 per cent and trim taxes for online retailers is also in the pipeline, he said, as is a plan to increase the minimum daily wage to Bt400 from Bt325.

Such reforms will take time because tax cuts invariably result in a bigger budget deficit, while the hike in the minimum wage will affect manufacturers and must first be endorsed by the Triple Committee representing the public and private sector and employees.

“Nevertheless, we believe these policies will benefit the retail sector, such as CP All Plc, Home Products Centre Plc, Robinson Plc, Siam Makro Plc and Berli Jucker Plc,” Terdsak said.

Phyu Yamin Myat, general secretary of Myanmar Microfinance Association, told the first-ever Microfinance Success Asia event in the country that foreign businesses are keen on entering this “huge market”.

“Many investors are aware of the huge opportunities. Myanmar’s microfinance sector is competitively young but is growing very fast,” she said.

“This is where we are right now. We have to grow fast because our country has a very high demand for this service [microfinance].”

She said, currently, there are more than 3.4 million clients in the microfinance sector with a total loan portfolio of nearly US$350 million.

“You can imagine how stressful it is [to manage the big market]. Our employees are overloaded, executives and management are constantly under pressure,” she said.

“Microfinance is not only about providing finance solutions or loans to our customers; it is also about guiding them to a sustainable business operation and income generation.”

She said all stakeholders must strive for fast growth as it would have to support 25 per cent of Myanmar’s population who are living below poverty line.

“We are facing increasing challenges and pressures that we believe can be solved with technology. We are delighted to partner with HBZ Events to host this event to facilitate an exchange of knowledge and discussions on the latest technology solutions for the sector in Myanmar,” she said.

Gonzalo González A, chief executive of DAWN Microfinance said Myanmar has done very well promoting financial inclusion since it introduced the Microfinance Law in 2011.

“I believe the next stage of microfinance industry development will be to encourage partnerships among different actors to provide services to low income segments and small businesses in Myanmar,” he said.

“Through panel discussions, we analysed the benefits of different microfinance models as well as lessons learned from other markets which can be studied for future policy reforms in Myanmar.”

The event brought together Myanmar’s government officials and representatives from the inclusive finance arena: microfinance institutes (MFIs), SME and entrepreneurship promotion agencies, banks, farmers associations, technology companies, consultancy companies, financial cooperative experts, development partners as well as policy makers and regulators.

It provided an opportunity for delegates to engage in professional exchanges and to form networks between players from all sectors of the industry.

Herman Zaidin, managing director of HBZ Events, said both local and regional microfinance industry stakeholders now have a platform to learn, network and synergise for the advancement of microfinance solutions and operations to bring more impact to the lives of millions.

Said Syed Mamnun Quader, group managing director of Southtech, said the firm has been supporting MFIs and the development banks to improve the lives of millions by providing them with the right tools, technology, advice and training since 1996. He encourages stakeholders to explore ways to grow their business in the region.

“We have enabled them to be highly efficient and cost effective. More than a million people have already benefited from our solutions in Myanmar alone and having established our full-fledged office in Yangon for the past five years, we are well-placed to help MFIs in Myanmar grow and prosper ,” he said.

Cameron Goldie-Scot, chief executive of Musoni, said there is now a huge opportunity for MFIs to leverage technology, improve efficiency and expand outreach in Myanmar.

“We discussed different ways that MFIs can go digital, and shared our case studies that highlighted how Musoni, with our local partner ThitsaWorks, supports some of the largest MFIs in this country,” he said.

With 8.8 million of the population in Myanmar owning a business, 56 per cent of the enterprises do not have a savings/checking account and only 7 per cent of small enterprises have a line of credit. According to a study by United Nations Capital Development Fund, 52 per cent of businesses identified access to finance as an obstacle.

Alison Grun, regional director for Asia Pacific of Software Group, said microfinance is thriving in Myanmar, offering a means of leverage to MSMEs to grow their potential and push the country’s economy forward at the same time.

“We are working with Fullerton Finance Myanmar and Early Dawn Microfinance to help more MFIs address the evolving needs of customers in terms of convenience,” he said.

However, Sorada Lertharpachit, director for the department’s business promotion and development division, said the 5,586 new businesses set up in June was 6 per cent less than the 5,942 registered in May. Also, the number of new businesses set up in June this year had dropped by 14 per cent when compared to June last year, when 6,514 new businesses had been created.

The top three categories for new businesses were construction, real-estate and restaurants, which attracted a total investment of Bt15.147 billion in June, down Bt20.071 billion or 57 per cent compared to May, when Bt35.218 billion was invested. Investment in June this year had also dropped by Bt9.442 billion or 38 per cent year on year in comparison to June last year, when Bt24.589 billion was spent on setting up new businesses.

Sorada said 1,264 businesses were closed this Jun, 12 per cent more than in May but 9 per cent less when compared to June last year. The top three categories of businesses closed in June were construction, real-estate and management consultation. Their total capital was Bt4.973 billion, 41 per cent more than the businesses closed in May.

Meanwhile, 38,222 new businesses were registered from January to June this year, 2 per cent more than the same period last year. The top three categories for the newly registered businesses were construction, real estate and dining outlets. Though the number of new businesses set up in the first half of this year was higher, the total capital invested was Bt117.756 billion, 18 per cent less than the amount invested in the same period last year.

Up to 6,667 businesses, in construction, real-estate and management consultancies, closed down in the first six months of this year, 6 per cent more than the same period last year, while their total investment was Bt22.336 billion, 43 per cent less than that of businesses shuttered last year.

Sorada said in June, 42 foreign businesses set up shop in Thailand, bringing Bt8.322 billion in investment. Of the foreign businesses, 14 are from Japan with a total investment of Bt2.999 billion, followed by seven from Singapore with Bt178 million and two from China that have spent Bt115 million on their capital.

In the first half of this year, 287 foreign businesses have brought Bt54.293 billion in investment to Thailand, which is 23 per cent less than the same period last year. However, the amount spent on setting up these businesses in the first half reached Bt7.933 billion, or 17 per cent more than the same period last year.

Sorada said the department had previously forecast that 70,000 to 72,000 businesses will be registered this year, similar to the 72,109 businesses registered last year. However, setting up new businesses this year is riskier, especially since the baht is appreciating against the US dollar, which is affecting competitiveness both in terms of pricing and income, the impact from the US-China trade war and Thailand’s political situation.

“We expect the new government to launch new stimulus measures, which will boost the confidence of new investors, especially small and medium enterprises [SMEs]. We have seen some 6,370 new businesses registered every month, and if this figure is stable throughout the year, there should be 70,000 to 72,000 new businesses registered this year. On average, 1,100 businesses are shut down per month, which is lower than last year’s average of 1,800,” she said.

He expressed concern that the drought gripping the upper half of the country could hamper plans to export 10 million tonnes this year.

In a related matter, Anan Suwannarat, permanent secretary of the Agricultural Cooperatives Ministry, said the Department of Agricultural Extension had set up “war rooms” in all provinces to closely monitor the drought situation.

The drought that has extended from May into July could cost the economy at least Bt15 billion, representing 0.1 per cent of Gross Domestic Product, the Kasikorn Research Centre estimates.

The estimate is mainly based on the drought’s impact on the first rice crop of the year, known as the “in-season” crop.

The economic loss could be greater if damage to other kinds of farm produce is also taken into account.

In Lop Buri, the Pa Sak Jolasid Dam reservoir has dropped dangerously low, to only 4 per cent of capacity – even lower than it was four years ago when the central province withered in the grip of severe drought.

In Nan in the North, millions of worms have infested 47,000 acres of cornfields spanning all 15 districts, more than half the province’s land devoted to corn.

In Nong Khai in the Northeast, the Mekong River is running too low to catch any fish. The level is more than 10 metres below the top of the bank on the Thai side.

Residents are instead earning a living in construction or small business.

The news was only good in Ubon Ratchathani, also in the Northeast, where a significant amount of rain fell on Tuesday, credited to cloud-seeding operations.

A Muang Ubon farmer said his rice had narrowly escaped devastation in what he called the most severe drought he’d ever seen.

The Kwang Noi Dam in Phitsanulok currently holds 134 million millimetres of water – 14 per cent of its capacity. One of four major dams designated for dispensing water for public consumption, it is able to release just 10 per cent of what it normally shares.

Warawut Niumnoi, director of water distribution and maintenance at the dam, said only 91 million millimetres of water was available to distribute.

There is currently no inflow at all, he said, and what is being released into the Chao Phraya plain can only be let go at 25 cubic metres per second.

Phitsanulok Governor Piphat Eakphapun has directed agencies to closely monitor the drought situation, prepare remedial plans for farmers, especially those growing rice and corn, determine the need for artificial rainmaking, and coordinate with the Department of Groundwater Resources on further plans.

The Army has established a centre to monitor the situation in real-time so that water can be provided to the drought victims efficiently.