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Summary

Discord between red shirt factions and the Phue Thai party carry on and the result was made clear during the mayoral election in Chiang Rai this week, which saw Phuea Thai lose to the Bhumjaithai Party. Also in the political headlines is the death of Ampon Tangnoppakul, a.k.a. “Uncle SMS”, the 62-year-old grandfather who was sentenced to jail for 20 years on charges of sending SMS messages that had insulted the monarchy. Ampon’s case had garnered controversy due to the harshness of his sentence and the vague evidence presented by the prosecution. In economic news, the Commerce Ministry has announced price controls for 20 staple items, such as rice and soap. Due to complaints, it has also included ready-to-eat items to its list. As well, Thailand’s government froze energy and transportation prices as another measure to control the costs of living. On the security front, Thailand continues to cope with issues on its borders. This week Thailand announced, along with its partners, another round of joint patrols on the Mekong River. Meanwhile it’s also grappling with its foreign relations with Cambodia, whom it is pressuring to acknowledge the problem of illegal loggers trespassing into Thailand from Cambodia.

Politics

Political infighting between the Pheu Thai Party and red shirt communities continues as disappointment over the governments’ performance takes hold. Pheu Thai suffered its third electoral defeat in two weeks, losing the Chiang Rai mayoral election to Bhumjaithai Party candidate Wanchai Chongsutnamani. As with previous Pheu Thai defeats, red shirt supporters increasingly opt to contest the election themselves or support a non-MP nominated candidate because they feel they have yet to benefit from the government they originally helped to elect.

Another internal strife is the possible appointment of red shirt leader Jatuporn Promphan as deputy interior minister. The proposal has received criticism from Pheu Thai MP Chalong Riewraeng. Chalong explained that Jatuporn should first clear his name regarding his supposed lese majeste offence. Even if he did though, Chalong warned Prime Minister Yingluck to reconsider bringing someone into the cabinet who was involved in the 2010 unrest and the “burning of the city”. Pheu Thai MP and red-shirt leader Korkaew Pikulthong argued that Chalong’s comments confirmed suspicions that Pheu Thai MPs from the Central region were campaigning against Jatuporn’s appointment. The Department of Special Investigation has meanwhile dropped the lese majeste charges against Jatuporn, DSI director general Tarit Pengdith announced on May 10.

In regards to a possible Pheu Thai – red shirt split, red shirt chairwoman Thida Thavornseth stated that it would all depend on the future direction of the Pheu Thai Party and if it would remain a party for the masses, adding “We have to consider what kind of political party it is; if it’s a party of capitalists who think they have money and can win – many MPs think so – if they don’t care about the masses, the red shirts, and only want canvassers or want to change the red shirts into canvassers. In that case, the red shirts will have to decide if it will quit, be part of the party or be a fighting agency.”  (Bangkok Post) (The Nation)

Major headlines in both national and international Thai coverage this week were over the death of Ampon Tangnoppakul, also known as “Uncle SMS” and Ah Kong at the Corrections Department Hospital . The 62-year-old grandfather was convicted of lese majeste on November 23, 2011, for allegedly sending four SMS messages to Somkiat Krongwattanasuk, secretary to then prime minister Abhisit Vejjajiva in May 2010, that were  defamatory to the King and the Queen. This claim, however, was never proven by the prosecution and was always denied by Ampon, who stated he would not even know how to send a SMS. He was nonetheless sentenced to 20 years in jail and denied bail eight times, although he suffered from liver cancer. While opposition leader Abhisit Vejjajiva and Green Politics Group coordinator Suriyasai Katasila already warned the red shirts not to use this incident for political gains, reform minded groups like The Campaign Committee for the Amendment of Article 112 announced they will step up their activities to prevent “more loss and damage”.  Committee member Suthachai Yimprasert , lecturer at Chulalongkorn University’s Faculty of Arts, announced that they would submit a draft amendment of Article 112 to the House of Representatives on June 27. United Front for Democracy Against Dictatorship (UDD) chairwoman Tida Thawornset rejected any criticism of exploitation of Ampon’s death by the UDD, stating that activists of the UDD were seeking amendment of Section 112 and hoped for a review of legal proceedings including the granting of bail and medical treatment for inmates. Thai academic Pavin Chachavalpongpun called Ampon’s death “a slap in the face of the Thai hyper-royalists who have employed the draconian lese majeste law as a political weapon to control differences in political views in society”. According to an autopsy at the Police General Hospital, Ampon died from liver cancer.

With both the government and opposition repeatedly rejecting any intention to even think about amendments to Section 112, no movement is expected even after Ampon’s death. This is despite a speech from His majesty King Bhumibol Adulyadei explicitly stating that he wasn’t opposed to criticism of the monarchy.  (Bangkok Post) (The Nation) (The Diplomat) (Financial Times) (The Wall Street Journal)

Information and Communication Technology Minister Anudith Nakornthap finally signed a contract with Shenzhen Scope Scientific Development for the first batch of 400,000 computer tablets, worth 2.4 billion baht. According to the contract all tablets have to be delivered within 60 days, which Scope chairman Liu Jun is confident of being able to fulfill, as they are able to produce 20,000 tablets per day. After the first batch of Scope Tablets passes government quality control standards, another batch of 530,000 will be ordered. The model features a seven-inch touch screen, a 1.2 GHz single core CPU, 1 GB RAM, a storage memory unit of 8GB, Google’s Android 4.0 Ice Cream Sandwich operating system, and a GPS navigation system and includes a two-year warranty for the device and one-year for the battery. (Bangkok Post)

Economics

The Commerce Ministry is prepared to set up a special operation center, which will specifically monitor the living cost situation and the prices of 20 necessity goods, such as rice, vegetable oil, soap and washing detergent, among others. The Commerce Minister will directly supervise the center to focus on methods to ease the burdens of the initial production costs for manufacturers and increase options for the public. Due to the complaints about overpriced food, the Commerce Ministry has announced a new decision to include ready-to-eat food in its list of price controlled goods, in addition to 42 other items approved in January. The price control measures will initially apply to popular daily dishes, including those available on the street. The targeted areas will include food courts in supermarkets, fresh markets in community and business areas, and the measure will initially focus on provinces where the 300 baht minimum daily wage has been imposed. According to Minister Boonsong Teriyapirom, all the measures are expected to be finalized next week. Furthermore, Prime Minister Yingluck Shinawatra optimistically expected the coming rainy season to help ease food prices as crops would be abundant and cheaper in the rainy season. Also, the government had launched a sale campaign for essential goods to help people cope with the high cost of living.(National News Bureau of Thailand) (Thailand Business News) (Bangkok Post) (The Nation)

Following the announcement of the underground train system operator Bangkok Metro Company Plc (BMCL) to increase fares from the current range of 14 – 36 baht to 16 – 40 baht which are scheduled to rise on July 3, the Cabinet authorized Transport Ministry to ask the subway operator to delay the fare adjustment plan.  (Bangkok Post)

The government of Prime Minister Yingluck Shinawatra froze energy prices and transportation fares on Tuesday, May 8, as an effort to slow down domestic price rises. The Energy Policy Committee agreed to delay a plan to increase the price of compressed natural gas (CNG) and liquefied petroleum gas (NGV) for the transportation sector for three months. According to Deputy Prime Minister and Finance Minister, Kittiratt Na-Ranong, the Cabinet will also continue to extend a cut in fuel tax, which is scheduled to expire this month. On the other hand, Democrat Party and Opposition Leader and former Prime Minister, Abhisit Vejjajiva, criticized that the government needs to understand that freezing energy prices would just briefly prevent product prices from rising but will not lower the cost of living as product prices have already gone up; instead, the government needs to revise its entire economic policy.(Wall Street Journal) (Bangkok Post)

The supply of condominiums in Bangkok and its suburban areas showed a 31 percent growth in the first quarter this year following recovery in the residence demand in March and April this year after last year’s floods disrupted the market. Most new condominium projects are located close to the mass-transit system because most homebuyers prefer locations that they can conveniently travel to work. According to Plus Property Co, a subsidiary of Sansiri, condominium’ market price is likely to rise 1-2 percent due to increase in demand and the rise in construction cost.(The Nation)

Last year, Thailand stepped up one place to 11th in the ranks of the world’s top destinations by international tourism receipts, according to UN World Tourism Organization (UNWTO). Thailand was among five global destinations whose international tourism receipts grew by 5 billion dollars or more in absolute terms in 2011 among United States, Spain, France and Hong Kong.  The country’s tourism income rose by 6.2 billion dollars to a record 26.3 billion dollars. Moreover, Thailand’s 2011 receipts and ranking remarkably surpassed two main competitors in Southeast Asia which are Malaysia and Singapore. (Bangkok Post)

India, the second largest rice grower after China, will surpass Thailand to match Vietnam as the world’s biggest exporter after favorable weather and higher government prices boosted the harvest and due to a weaker rupee. Thai rice exports had slowed down since Prime Minister Yingluck Shinawatra’s attempts to boost farmer incomes through state purchases last August. Indian rice is now approximately 100 dollars cheaper than supplies from Thailand, which is paying above market prices to farmers. (Bloomberg)

The Stock Exchange of Thailand’s main index fell by 1.38 percent on Thursday, May 10, as worries about the euro-zone crisis and weak Chinese trade data weaken investors’ sentiment. Analysts mentioned worries about the European debt crisis and the recent political changes in Greece and France, which could affect policies, will continue to put pressure on market sentiment in the near future. Meanwhile, a slowdown in Chinese exports also heightens worries about global economic growth. The SET president, Charamporn Jotikasthira, recommended investors to focus on stocks with good fundamentals to withstand negative global factors.(The Nation) (Bangkok Post)

Fitch Ratings has affirmed Thailand’s long-term foreign and local currency issuer default ratings at BBB and A-, respectively, with stable prospects. Meanwhile, the agency affirmed its short-term foreign currency at F3 and its country ceiling at BBB+. Fitch viewed that Thailand’s ratings reflect strong external financial position and sign of political stabilization. However, the Kingdom still has high risks in policy management and risks to fiscal transparency in the government’s tendency to resort the off-balance sheet channels to achieve its policy goals. Fitch sees that the Kingdom has broader structural weaknesses, and the flood measures and policies pledge under current administration will drive up public debt. Moreover, public disagreement between the Bank of Thailand and the government over the conduct of monetary policy could cause problems for coherence of policy management and may ultimately compromise central bank independence. (Bangkok Post)

Security

This week regional law enforcement agencies announced the fourth joint patrol of the Mekong River, with the first patrol boats set to leave at the end of the month. The joint patrol combines the efforts and capacities of law enforcement from Thailand, Laos, Myanmar, and China. Following the same route as the previous three patrols, the boats will start at Guanlei Port in Xishuangbanna, China, and end in Chiang Saen, Thailand.  Joint patrols of the Mekong River began at the urging of China, after the killing of 13 Chinese sailors on two cargo ships on October 5 of last year. Security analysts say that rampant drug trafficking along the river contributes to the danger of armed confrontation.  (China.org.cn)

Following Thailand’s move to put him on its most wanted list for drug dealers, Maj Gen Na Kaw Muay of the Democratic Karen Buddhist Army (DKBA) ordered his troops to seal off the Thai-Myanmar border in Karen-controlled territory parallel to Tak province in Thailand. Additionally, he is, by some reports, alleged to have issued a threat to Thais living in Tak. However either his tone has changed or the reports conflict, because at a press conference this week he indicated he would be willing to allow Thai anti-narcotics agents into KDBA territory to investigate claims against him.  In pursuit of Maj Gen Na Kaw Muay, Thailand’s government has asked Myanmar’s authorities to arrest the ethnic rebel leader. (Bangkok Post) (The Nation)

Sayed Kassem el-Masry, ambassador of the Organization for Islamic Cooperation (OIC) and special envoy on Thailand, met with Thailand’s Foreign Minister Surapong Tovichakchaikul to discuss Thailand’s handling of the southern insurgency. Mr. Masry expressed concerns over the emergency decree’s use in the three southernmost provinces, citing its potential for leading to human rights abuses. But he lauded the government’s nuanced recognition that the insurgency was not merely about religion, but rather rooted in culture and identity. He also praised the Thai government’s development policies and encouraged Thailand’s leaders to consider education as a potential solution to the problem. During his visit to Thailand, Mr. Masry also traveled to Hat Yai to meet with prominent spiritual leader, Asis Phithakkhumphol, and visited neighboring Pattani.  (Bangkok Post) (The Nation)

In Narathiwat, 20 militants attacked a military base in Ruso district on Wednesday evening. Chief investigator of the Narathiwat police, Pol Col Sathanfa Wamasing, said that the base was home to the Narathiwat Task Force 30, and that the attack lasted about 30 minutes. Two militants were killed and one soldier was wounded. The rifles recovered from the militants’ bodies were found to be rifles that had been previously stolen from Narathiwat Task Force 38 in an attack on January 19th of this year. Police also recovered four homemade hand grenades. (Bangkok Post)

Following a deadly fire last Sunday at a petrochemical factory in Map Ta Phut that killed 12 and injured 129, Prime Minister Yingluck Shinawatra has directed a tripartite committee to investigate the level of local contamination. The factory where the fire occurred has since been shut down by Industry Minister Pongsvas Svasti. The prime minister has also ordered nationwide safety inspections of all factories that use flammable chemicals or that which can cause toxic air pollution. If in violation, an offending company will face difficulties in renewing its operating license. (Bangkok Post)

The Thai Foreign Ministry is urging Cambodia to admit that its citizens are engaged in illegal logging in Thailand. This move comes after repeated arrests and clashes along Thailand’s border with Cambodia, in which Thai authorities say illegal loggers are coming from Cambodia. In response, Cambodia’s government has asked that Thai troops to not fire on Cambodians, but has not addressed the issue of trespassing directly. It has also rejected accusations from Thailand’s army of deliberately placing land mines along the border to retaliate against Thai troops who fire on poachers.

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Summary

Dissent within the United Front for Democracy (UDD) is threatening to split the group apart, as hardcore members continue to voice displeasure over the perceived direction of the current reconciliation process and compromising attitudes of the Phuea Thai-led government. Additionally, with the coming end of the five-year ban on Thai Rak Thai (TRT) executives, there is speculation of a cabinet re-shuffle, with such well known and polarizing figures like Jatuporn Prompan poised to take a ministerial position (pending the outcome of his case in Constitutional Court over not voting in last year’s general election).  The Bank of Thailand (BOT) is set to receive a new chairman if Mr. Chatumongol Sonakul, the BOT’s current chairman, is not re-appointed. Observers note that his primary competitor is Dr.Virabongsa Ramangkura, the current chairman of Prime Minister Yingluck’s advisory team.  Meanwhile in the South, despite a visit by the prime minister and a pledge of support and increased focus, violence continued throughout the three border provinces. Similarly, all was not well along Thailand’s other borders with Myanmar and Cambodia, as Thai troops in Mae Sot are on alert for possible combat with the Democratic Karen Buddhist Army (DKBA) and a firefight occurred with Cambodian soldiers.

Politics

Prime Minister Yingluck Shinawatra’s meeting with Privy Council president Prem Tinsulanonda remained a major focus of political conjecture this week. PM Yingluck insisted that she did not discuss politics with Gen Prem but focused on possible improvements to the southern security environment. Sources also confirmed that Ms Yingluck offered the government’s cooperation on projects initiated by Gen Prem, which he apparently politely declined with a smile. A significant wing of the United Front for Democracy against Dictatorship (UDD) continued to voice their dismay over the meeting, which they see as being submissive to the amataya clique. Core red shirt member Chinnawat Haboonpart clarified that “The red shirt people have said that reconciliation does not mean we have to kowtow or to perform rod nam dam hua for Gen Prem so that everything will just be fine and we will be swallowed by the amataya.” He even hinted at the possibility of a red-shirt split and that street protests as well as forming their own political party would be an option. Red shirt family members of those killed during the 2010 protests remain adamant to not support the government’s reconciliation plan which they see as a sellout of the grassroots movement. UDD chairwoman Tida Tawornseth therefore announced that the movement would distance itself from the reconciliation plan as the distrust towards the amataya elite remained high. Other red-shirt leaders like Petchawak Wattanapongsirikul meanwhile were supportive of the prime minister’s decision to meet with Gen Prem as it would be in the tradition of northern people to settle differences at Songkran in a peaceful manner. For most grassroots red-shirt members, the feeling that they would be singled out alone to sacrifice for reconciliation seems to become the predominant emotion though. Abac polls, meanwhile, show public support for the meeting, with almost 50% responding that the meeting would be a boost for reconciliation, while 26% opposed this notion. (Bangkok Post) (The Nation)

Prime Minister Yingluck announced that the government will design its water resources management and flood control model after the Chinese example. Yingluck stated that China has more than 20 years of experience in flood and drought management and would thus be equipped with a strongly integrated system including related laws, which the Thai government would use as a standard. The Chinese government will send its water experts to advise the National Water Resources and Flood Policy Committee (NWFPC). Concurrently, 14 Chinese companies seem to have expressed their interest in setting up a heavy industrial base in Thailand. (TheNation)

In anticipation of the upcoming rainy season Prime Minister Yingluck asked the Bangkok Metropolitan Administration (BMA) to accelerate its flood protection work along the Chao Phraya River. Cabinet secretary-general Ampon Kittiampon announced his confidence that all construction work to prevent future flooding would be finished by the end of August. (Bangkok Post)

Doubts about the functionality of the flood prevention plan were uttered by the senior architect of the Interior Ministry’s Department of Public Works and Town and Country Planning Thongchai Roachanakanan. He voiced his concern that flood management plans are set-up to cope with regular amounts of rain but will not be sufficient should there be more storms than usual or should the storm direction change. “This is what we call dynamic climate change. The current plan to prevent floods does not take this into account. And that is what we’re concerned about the most,” Thongchai concluded. Some areas suitable for water catchment belong to politicians, which could cause further problems, he added. His concern was supported by Thanawat Jarupongsakul, director of the Unit for Disaster and Land Information Studies at Chulalongkorn University, who argued that the government’s flood plan was based on the amounts of water from last year and would thus not be able to cope with more. (Pattaya Mail) (Bangkok Post) (Asia One) (The Nation)

With the five-year ban on the 111 former Thai Rak Thai executives finishing at the end of May, speculations about an upcoming cabinet reshuffle are heating up. Pheu Thai Party list MP and red shirt leader Jatuporn Prompan is one of the names frequently mentioned to receive a cabinet post. With the intention to maintain political support from the red shirts Jatuporn is tipped to become a deputy interior minister replacing Chuchart Hansawat. The Constitutional Court might thwart this plan though as it will deliver its decision on May 18 if Jatuporn loses his House seat and Pheu Thai membership due to not voting in the July 3 general election last year.  Sita Tiwari is one of the 111 Thai Rak Thai executives mentioned to be included in the next cabinet reshuffle. Inside sources see him as a possible replacement for Anudith Nakornthap, currently the Information and Communication Technology Minister. Prime Minister Yingluck is, by some sources, unhappy with Anudith’s performance due to his handling of the One Tablet per Child programme. (Bangkok Post)

Economics

The new chairman of the Bank of Thailand (BOT) will be appointed after the tenure of the former chairman, Mr. Chatumongol Sonakul, ended last month. The contest comes down to two contenders which are Mr. Chatumongol Sonakul, who is nominated to be in the position again by the BOT, and Dr.Virabongsa Ramangkura, who is currently the chairman of Prime Minister Yingluck’s advisory team and the chairman of the Strategic Committee for Reconstruction and Future Development. While there is no doubt that both are qualified for the position, the selection committee should consider public’s perception over the independence of the central bank and the integrity as an independent pillar in protecting the country’s economic interests from political influence. Mr. Chatumongol is known to value the independence of the central bank, whose mission is to guard against monetary instability. On the other hand, Dr. Virabongsa supports a pro-growth strategy to use the country’s foreign reserves to finance the government’s policies and wants the BOT to cut interest rate to generate growth as well as weaken the baht to boost exports. Critics are concerned that if Dr. Virabongsa is appointed, the current BOT governor, Dr. Prasarn Trairatvorakul, who is more conservative on monetary policies, will have a hard time running the institution and the BOT will also be at risk of losing its independence. (Bangkok Post) (The Nation)

Thai baht reached a two-week high after foreign investors raised holdings of the nation’s assets due to optimism improving regional economies which is likely to boost export growth. On Monday, April 30, the bath value touched 30.72 per dollar, which is the strongest level since April 13, making a 0.4 percent increase from the previous month. This monthly gain in baht occurred after the US Federal Reserve Chairman, Ben Bernanke, stated he may add more stimulus if needed to boost the US economy. (Bloomberg)

Thai rice exports dropped by 63 percent year-on-year in March, followed a 27 percent drop in February, as the government mortgage scheme pushes rice prices well above competitors such as India and Vietnam, causing Thai rice to lose competitiveness in the world market. According to the Bank of Thailand’s senior official, Mathee Supapongse, rice exports had fallen due to flood disruption, but the substantial decline this year is a result of government policies implementation to boost farm income. The prices are expected to rise further as more paddy is pledged to this mortgage program. (Bangkok Post)

The Thailand consumer confidence index has risen for the fifth consecutive month to reach a 7-month high in April while the cost of living index in the same month has made a 21-month record high. The consumer confidence index rose to 77.6 in April, from 76.6 in March, according to a survey by the University of the Thai Chamber of Commerce’s Economic and Business Forecasting Center shown on Wednesday, May 2. The higher confidence level was a result of consumers’ optimistic expectation from the minimum wage hike and higher consumer spending especially during the long Songkran holiday. Nevertheless, consumers showed concern over the high cost of living following the rising oil and product prices. (Nasdaq) (Bangkok Post) (The Thai Financial Post)

Thailand is planning to develop its own port and supply chain, a senior Thai official told the UK’s Port Strategy journal. Thai government last week gave approval for the plan to build a new port on Thailand’s Andaman Sea at the small fishing village of Pak Bara instead of waiting for Burma’s decision to go ahead with the Dawei port project. The British magazine also quoted the Thai Deputy Transport Minister Chadchart Sittipunt’s statement to give concession and go ahead on the Pak Bara port project. The plan also calls for Pak Bara to be connected by rail from outside similar to Thailand’s Port of Laem Chabang on the eastern coast. This new plan, together with Japanese industrial companies’ shifting interest to develop Thilawa Port close to Yangoon, may signal the end of the multi-billion dollar dream of creating a major industrial center at Burma’s southeast coastal city of Dawei. (Thai BSAA) (The Irrawaddy)

Production costs in Thailand have risen 16 percent on average due to the minimum wage rise to 300 baht per day, resulting further in higher prices of goods of nearly 14 percent, according to Dhurakij Pundit University Research Center (DPURC). The research also indicated that 38 percent of 900,000 SMEs in the seven provinces might have to stop hiring workers who are under 20 years old in the next eight months, for they will have the right to a wage increase within 12-18 months. Some 76 percent of employers have chosen to adjust by encouraging more efficiency in their employees, 61 percent have tried to reduce other production costs apart from labor costs, and 45 percent will start using machinery as a replacement of labor. Mr. Kiatanan, the director of DPURC also stated that the wage increase will affect Thailand’s ability to compete in the long-run, particularly labor intensive enterprises. (Thailand Business News)

The Credit Guarantee and Investment Facility (CGIF) will begin offering bond guarantees for private firms in ASEAN, including Thailand in July, according to the statement of Mr. Chakkrit Parapuntakul, director-general of the Public Debt Management Office on Wednesday, May 2. The fund, with capital of 700 million US dollars (216 billion baht), was established last year by the 10-member ASEAN, together with China, Japan, and South Korea, in collaboration with the ADB. So far, approximately 80 firms have applied for the guarantee from the CGIF. Both listed and non-listed firms are eligible; however, they must obtain a credit rating on debts by local or international rating agencies. The CGIF will also have to work closely with ASEAN commercial banks on this program. (The Nation)

The Stock Exchange of Thailand (SET) index reached a new 16-year high on Wednesday, May 2, at 1,239.06 as  global investors cheered good news on the improvement of factory output in the US and China. Moreover, the next day, on Thursday, May 3, the SET index finished even higher in seven straight trading days, climbing more than 45 points, or 3.9 percent, to close at 1,240.03 with the trade volume of 5.052 billion shares worth 38.412 billion baht. Thai stocks are expected to have negative bias on Friday, with the weakness of the oil market pressuring on energy shares and sentiment elsewhere in Asia remaining cautious about prospects for the US recovery. (The Nation)

Foreign investors were also more active in trading Thai bonds with the first quarter average daily trading of bonds with duration of one year or more and short-term bonds showing an increase of 48 percent and 29 percent, respectively, from the year before.  (The Nation) (Reuters) (RTT News)

Security

Prime Minister Yingluck Shinawatra visited Pattani last Sunday to meet with religious leaders from the five southern border provinces to follow up and give assurances on the security situation. Following a briefing with local security agencies, Prime Minister Yingluck stressed the need for cooperation between religious groups and authorities. She conceded that with 66 agencies operating under 17 ministries, the government’s work in the South requires better coordination as well. Further, she announced that more checkpoints would be set up in the interest of security for residents, and as well as the establishment of a new committee focused on solving the problems in the South. Finally, in cases where security budgets are insufficient, she pledged to inject more funding.  (Thailand Business News) (Pattaya Mail) (Bernama)

More violence was reported in Pattani and Narathiwat this week. On Monday in Pattani’s Panare district, a woman was injured by a grenade attack in her shop that sells farm equipment. Reports indicate that two men arrived on a motorcycle, threw the grenade into the shop, and then fled.  On Tuesday morning in Mae Lan district, a roadside bomb at No 418 Highway in Bang Wang Kwang killed three paramilitary rangers and wounded seven others.  On Thursday afternoon in Saiburi district the chief of sub-district Thung Kla and his three deputies were killed when armed assailants in a passing pickup trick fired on them with M16s an AK-47s. The gunmen stopped and stole 300,000 THB in cash from the vehicle. This money was to be used to pay salaries of defense volunteers. On Monday in Narathiwat’s Rangae district, a roadside bomb injured two defense volunteers. Militants fired onto the volunteers and there was a brief exchange of gunfire before the militants fled. In that same afternoon, four gunmen wielding assault rifles attacked an outpost guarded by two security defense volunteers. In the ensuing firefight, one volunteer was killed, while the other volunteer died later in the hospital. Afterward, authorities on the scene found two pesticides cans filled with explosives. On the following day, 100 Thai security forces, made up of paramilitary rangers and police, raided 150 houses in Chanae district searching for the gunmen involved in Monday’s attack. No arrests were made, but two rifles and three boxes of ammunition were seized in the raid. (Bangkok Post) (The Nation)

A faction of the Democratic Karen Buddhist Army (DKBA) raised tensions on the Thai-Myanmar border this week after it closed 12 border checkpoints between Tak and Kanchanaburi province. The move came in retaliation to the Thai government’s decision to list the faction’s leader on Thailand’s “five most wanted list” for involvement in the drug trade. Vendors and businesses on both sides of the border have been affected. DKBA commander Lt-General Na Kha Muay has reportedly mobilized forces and told troops to be ready for combat. Meanwhile, Thailand’s taskforce of the 4^th Infantry Regiment, based in Mae Sot, has been put on alert in Mae Sot and Phop Pra districts. (The Nation) (The Irrawaddy)

Tensions flared on Thailand’s other border with Cambodia, as Thai and Cambodian security forces reportedly exchanged gunfire in a ten-minute skirmish. Deputy military commander of Cambodia’s Preah Vihear province, Lt. Col. Men Ly, claims Thai forces attacked a Cambodian patrol, wounding one of his soldiers. Meanwhile, Thai Army spokesman Col. Sansern Kaewkamnerd asserts that Thai soldiers returned fire after illegal loggers shot at them and fled back into Cambodia. In a separate incident, a Thai soldier stepped on a landmine while on patrol in Si Sa Ket’s Khantaralak district. The explosion reportedly damaged both his legs below the knees. (Fox News) (The Nation)

Policemen clashed with suspected drug traffickers on the bank of the Mekong river in Nakhon Phanom’s Muang district on Thursday morning. At around 1:30am, police spotted four men arrive in a longtail boat from the other side of the river. When one man stepped out with a backpack, police sought to initiate a search. The men in the boat threw a grenade at police and opened fire. After a brief exchange, the four men fled in the boat, leaving behind a backpack with 10,000 methamphetamine pills, 10,000 methamphetamine pills and an unspecified amount of ya ice and crystal meth. (Bangkok Post)

In Bangkok’s Bueng Kum district, police arrested two suspects as they were about to deliver illegal drugs to a customer.  A search of their car and a subsequent raid of the suspects’ house turned up 1,020,000 methamphetamine pills. The suspects confess to being part of a northern drug syndicate and that they bought the drugs from Talad Thai market in Phatum Thani. They also told investigators that the drugs were smuggled in from Myanmar. (The Nation)

Following the fatal crash of a Porsche that had been driving 280 km/hour on one of Bangkok’s tollways in the early hours last Saturday, police are considering harsher measures against car racing in the city. Speed racing among Bangkok’s elite is a problem that Pol Maj Gen Worrasak admits is beyond the police’s ability to address due to limited resources. When confronted by police, racers often speed away, and police generally do not chase them. If racers are caught, the most severe penalty is a fine – which is hardly a punishment for the very rich. However, the police say they are making plans to install more CCT cameras and radio frequency identification systems along popular racing routes. (Bangkok Post)

Thailand’s Ministry of Information and Communication Technology, the Electronic Transactions Development Agency, the Thailand Computer Emergency Response Team, and Symantec have recently signed a Memorandum of Cooperation (MoC) to establish a national cyber security system. A digital threat monitoring system will be established and operated to monitor and analyze threats within the network. Permanent Secretary of ICT Ministry Jeerawan Boonperm explained that the MoC would establish a system that protects users and analyzes threats, such as malwares. “The new technology would significantly assure safety for online banking for people and businesses,” she said.  (Future Gov Asia)

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Summary

In a move that has attracted significant attention, speculation, and even revulsion, Prime Minister Yingluck Shinawatra visited General Prem Tinsulanonda, president of the royal Privy Council, to pay respect to the elder statesman in the post-Songkran rod nam dam hua ceremony. The two reportedly met for thirty minutes afterward, signaling what could be an important step towards bringing the reconciliation process to some kind of a resolution. Anxious about the proposed wage hikes, business owners across Thailand are asking for a delay in the measure, citing that businesses need more time to prepare.  Meanwhile, in a sign of the times, the Central Land Transport Control Commission has approved fare hikes for public buses and song-thaews across Thailand. In security, Thailand’s southern region was rocked by more violence. However, in a shootout with militants, Thai authorities claim they killed a key leader of the insurgent group Runda Kumpulan Kecil (RKK). In Bangkok, authorities seized another 86, 740 methamphetamine pills and 941 grams of crystal methamphetamine in a house in Thonburi district. And finally, a new medical study reveals that malaria on the Thai side of the Thailand-Myanmar border has become increasingly resistant to current forms of treatment.

Politics

After official visits to China and Japan to discuss economic cooperation as well as water management and cooperation on a high-speed bullet train, Prime Minister Yingluck Shinawatra led a group of government representatives, consisting of Kittiratt Na-Ranong, Yongyuth Wichaidit and General Yutthasak Sasiprapa, to a highly symbolic meeting with Privy Council president Prem Tinsulanonda. General Prem, considered to be an arch-rival of exiled former Prime Minister Thaksin Shinawatra, doled out the traditional Songkran rod nam dam hua blessing. Afterwards, Gen Prem held a discussion with Prime Minister Yingluck, which lasted about 30 minutes, in a meeting which political analysts see as a move to help bring Thaksin back to Thailand. Kasian Tejapira, of Thammasat University’s political science faculty, argued that the meeting between the two rival camps might lead to reconciliation with a blanket amnesty for both sides but admitted that this would be a “raw-deal” for the red-shirts, stating, “It’s sad to say, but it may be the only feasible political deal at the moment, given the present balance of political forces.” To counterbalance the deal, Kasian proposed an immediate amnesty, release, and bail for political prisoners and lese majeste detainees as well as a reform of the lese majeste law. Puangthong Rungswasdisab, political scientist at Chulalongkorn University, argued in a similar fashion that the Thaksin family was willing to reconcile with Gen. Prem to bring Thaksin back home. The red shirt faction in the Pheu Thai Party might not accept the deal though says Puangthong, adding, “If such an amnesty-based reconciliation law is enacted, I believe the Pheu Thai Party will split. If it’s not broken altogether, it will lose a large support base especially from the red shirts. A blanket amnesty law is a direct affront to what the red shirts have been fighting for, namely justice for the dead.” Woravat Au-apinyakul, the prime minister’s Office Minister of the Pheu Thai Party, acknowledged the disappointment of the red shirts but stated that it was time for reconciliation. Joshua Kurlantzik, on the Council on Foreign Relations blog, argued that by coming home through an amnesty deal, Thaksin surrenders one of his main advantages, namely, “that he, unlike his opponents, is willing to sacrifice greatly for some real reconciliation.”

The United Front for Democracy against Dictatorship (UDD) handed the Pheu Thai Party a not-so-subtle reminder about their importance in the April 21 by-election in Pathum Thani, in which a low voter turnout of 35 percent was recorded (compared to 75% in the general election of 2011). This led to Pheu Thai losing the seat formerly held by MP Sumeth Ritthakanee, who resigned, to Democrat candidate Kiatisak Songsang. Pheu Thai spokesman Prompong Nopparit attributed the loss to discontent over the governments’ handling of the flood crisis as well as the election being held on a Saturday, a day when Pheu Thai supporters had to work. Thawee Surarittikul, a political analyst at Sukhothai Thammathirat Open University, attributed the election loss to the disappointment inside UDD factions, stating “The red shirts suspect that the government is not serving them and instead trying to help only Thaksin. When Thaksin said he was not in conflict with Gen Prem that raised their suspicious [sic] because it was totally different from his remarks in the past when he urged the red shirts to come out and protest against the Democrat-led government.” Then the UDD side perceived the controversial meeting between Prime Minister Yingluck and Gen. Prem comes at a time when chief army General Prayuth Chan-ocha announced that the army would not support any political sides. In a message to PAD supporters he clarified that they would not be allowed to use military compound for their protests because ”the army belongs to the people, not certain groups.”    (Bangkok Post) (The Nation) (Council on Foreign Relations)

Two scandals rocked Parliament in recent days. First an MP was caught looking at a picture of a “half-naked” woman on his phone. The Thai-language daily Matichon identified the MP as Democrat Nat Bantadtarn, the son of former Democrat Party leader Banyat Bantadtarn. The parliamentary session later came to a halt when monitors flashed the picture of an Asian woman in a provocative pose. Democrat MP Nat later apologized, saying friends sent the picture to tease him. Only days later Bangkok Senator Rosana Tositrakul accused MPs of voting for other absent MPs with their identity cards left behind.  Rak Thailand Party leader Chuwit Kamolvisit, at a press conference, presented a button camera in his suit jacket, stating he has videos of MPs reaching to other panels to vote. According to the videos both Pheu Thai and Democrat Party representatives are involved in the scandal. Pheu Thai MP Wiwatchai Hotrawaisaya admitted to be the person in the photo Senator Rosana presented, but stated that he was just stretching. Pheu Thai MP Jirayu Huangsap rose to defend his colleague saying that the panel Wiwatchai was reaching for had no slot for an ID card, while Prompong Nopparit, spokesman for the ruling Pheu Thai Party, assumed the new scandal might be aimed at distracting the public from the one involving Democrat MP Nat Bantadtarn. (Daily Telegraph) (The Nation)

Chinnicha Wongsawat, niece of former Prime Minister Thaksin Shinawatra and Pheu Thai MP, has been banned from politics for five years by the Supreme Court for a false financial declaration. According to the verdict she failed to disclose a debt of 100 million baht when she became a lawmaker last year. The Pheu Thai Party announced it would appeal against the ban. (Associated Foreign Press)

In the ongoing debacle to provide school children across the Kingdom of Thailand with tablet computers, Education Minister Suchart Tadathamrongvej had to admit that the government had to switch to their alternative plan – plain, simple textbooks – as no finalized contract with the Chinese supplier could be reached yet. Inside sources blame the Shenzhen Scope Scientific Development Company for making last minute changes and backtracking on many of their promises, such as guarantees on its products or post-sale service centres (from 30 to 12). Additionally, the Chinese company tried to negotiate for an advance guarantee from the Thai side and a partial payment as well as parts of the production burden to be taken over by the government. (Asia One) (The Nation)

Economics

Prime Minister Yingluck Shinawatra embarked on a three-day official visit to China, April 17-19, where she met with Chinese President Hu Jintao. In a statement she said China and Thailand will continue to strengthen friendly exchanges at all levels and enhance mutual trust and friendship. The two leaders also agreed to upgrade bilateral links to a comprehensive strategic cooperation partnership and aim to boost mutual investment by 15 percent and increase bilateral trade by 20 percent annually over the next five years to reach 100 billion US dollars by 2015. Meanwhile, the Thai premier attended the roadshow which was held from 17-20 April in Beijing. According to the Industry Minister Pongsvas Svasti, the roadshow received a very good response from Thai and Chinese investors and yielded much success in attracting Chinese investment, business match-making, and embracing the bilateral collaboration. Over 65 billion baht worth of investment is expected to flow into Thailand after this official visit. (Xinhua) (Bloomberg) (Thailand Business News)

After her visit to China, Prime Minister Yingluck Shinawatra joined the 4th Mekong-Japan Summit in Japan which occurred on Saturday, April 21, together with leaders from the Greater Mekong Sub-region (GMS)– Cambodia, Laos, Vietnam, Myanmar – and Japanese Prime Minister Yoshihiko Noda, who chaired the event. The Thai Premier has praised the Japanese government for pledging 7.4 billion US dollars aid to help develop infrastructure and transport in five Mekong region countries, including Thailand. (MCOT online news) (Bangkok Post)

The Finance Ministry has proposed a three-year debt moratorium for good state-bank customers whose debts are no more than 500,000 baht. The ministry expects the new scheme to cover 3.76 million borrowers with combined outstanding loans of 459.11 billion baht. The borrowers can either choose to get an interest reduction by 3 percentage points from September 1, 2012, through August 31, 2015, or to suspend payments on the principal for three years plus the 3 percentage point interest rate cut. If the scheme is approved by the Cabinet, it will cost taxpayers 22.85 billion baht as a subsidy to support state-run banks which participate in the project. Critics have commented that such a debt moratorium would be a moral hazard, which would harm state-run banks and push the burden to taxpayers. However, Deputy Finance Minister Tanusak Lekuthai claimed that it is an opportunity for lower-income groups and expected to help boost Thailand’s GDP. (The Nation) (The Thai Financial Post)

Business owners have urged the government to postpone the minimum wage hike in 70 provinces to 2015.  According to Suwanchai Lohawatanakul, secretary general of the Association for Promotion of Thai Small and Medium Enterprises, companies need time to adjust and that government should also provide soft loans and labor skill development to the SMEs. Tourism Council of Thailand vice president Thaniwan Kunmongkhon also requested the government to consider coming up with more measures to cushion the impact from this wage hike. Nevertheless, Labour Minister Padermchai Sasomsap had announced on April 20 that the new minimum wage deadline will maintained the starting date on January 1, 2013, while the minimum wages in 7 provinces including Phuket and Bangkok has already been in effect since April 1. The minister stated that the policy would draw back Thai workers who are now moving abroad to chase higher pays (The Nation) (Asia News Network)

The Central Land Transport Control Commission has approved a fare hike of no more than 0.04 baht per kilometer for public bus operators running between Bangkok and other provinces, and for inter-provincial buses. The fare for two-row passenger vehicles or song -thaew in Bangkok will increase to 7 baht. Minibus fare will also rise from 6.50 baht to 8.50 baht. The new fares will come into effect on May 15. However, Bangkok Mass Transit Authority (BMTA) buses operating in Bangkok and its vicinity will only see a fare increase once the NGV price rises from 8.50 to reach 9.50 baht per liter. As for the new taxi fare, the Department of Land Transport will conclude the new rate, responding to the government’s policy to raise CNG price, to submit to the Ministry of Transport for further approval by the cabinet in May. The new rate for taxi is expected to come into effect in June. (National News Bureau of Thailand) (The Thai Financial Post)

One of Thailand’s main fitness operators, California Wow, is being sued in a lawsuit filed by Bangkok Bank for its unpaid debt. In reporting the bankruptcy lawsuit to the Stock Exchange of Thailand on Wednesday, April 25, California Wow disclosed that Bangkok Bank had filed a bankruptcy suit with the court seeking payment of 71.9 million baht in debt and 3.97 million in interest.
If the court declares the company bankrupt, the club members can file claims for damages from the Legal Execution Department. George Saab, the company’s chief of staff, told the Stock Exchange of Thailand it was continuing to make progress in its rehabilitation plan and said the bankruptcy suit could result in difficulties in acquiring future bank finance. (Bangkok Post)

Security

In two separate incidents, Thai security forces in the South engaged in firefights with members of the insurgency group Runda Kumpulan Kecil (RKK), resulting in six dead insurgents and one injured policeman. In the first incident, on April 20, a group of 40 Thai soldiers, made up of paramilitary rangers and police, sealed off a village in Yala province after receiving intelligence reports that militants were hiding inside. After gunfire erupted between the two sides, five bodies of men believed to be RKK militants were recovered. One of them was Sakueri Japakiya, a key leader within the RKK who had seven outstanding warrants for arrest. The second firefight occurred on April 22 in Ruso district of Narathiwat. After police surrounded the home of a wanted RKK militant, the man climbed on the roof and exchanged gunfire with security forces. Police shot and killed the suspect, though one policeman was wounded from the explosion of an M67 grenade thrown by the suspect. (Jakarta Globe) (Bangkok Post)

A school in Narathiwat was burned on April 18 prior to the scheduled visit of Deputy Prime Minister Yuthasak Sasiprapha and General Prayuth Chanocha. The school was set ablaze when security volunteers temporarily left their posts for their prayers.  Following the incident, a roadside detonated about 300 meters from the school when a vehicle of security force members, composed of police and soldiers, hurried to inspect the scene. Police believe insurgents set fire to the school in order to ambush security forces coming to respond. Reports do not indicate that the bomb struck the vehicle. (The Nation)

Narathiwat was the setting of more violence this week. On Monday, a village headman was shot dead by gunmen with an M16 and an AK-47 in front of his home in Sungaipadi district. The village headman had been attacked by militants before and had apparently tried to fight back on the morning of his murder, as he was found with a 9mm pistol in his hand. On Tuesday, in Tak Bai a bomb hidden in a pushcart injured eight people, one seriously, including a 3-year-old boy. Five of the injured were members the Narathiwat Task Force 36, which was most likely the intended target of the attack. On Wednesday, two men were killed in a drive-by-shooting incident as they rode a pickup truck in Bacho district. The victims had been driving home from a fresh market in Saiburi district when they were attacked by gunmen, armed with M16s and AK-47s, in another pickup truck. The victims’ truck swerved and hit a tree, where gunmen unloaded more bullets into the victims before fleeing. (Bangkok Post)

There was a close call in another incident in Narathiwat’s Rueso district, when a village defense volunteer sitting in front of his unit’s building noticed a mound on the ground which appeared to have been freshly dug. After brushing away the soil, he discovered an explosive device made out of a fire extinguisher. Bomb squad personnel were able to jam the local phone signals – to prevent detonation by cell phone – while they disarmed the 20kg-bomb. (Bangkok Post)

In Pattani, a security volunteer was killed as he rode his motorcycle to an assignment at a local school on Monday. Attackers were reportedly riding in another vehicle as they shot him with an M16 and a .38 revolver. (Bangkok Post)

This week, Thailand’s cabinet approved a 2.08 billion baht budget of compensation payments as part of a “healing” process for victims of violence in the South. According to Justice Minister Pracha Promnok 500 million baht will go to ordinary civilians, about 200 million baht is for state officials, about one billion is for those who suffered as a result of the operations of state forces, and the remainder, about 300 million baht, is for those being detained or facing legal action as a result of the violence in the South. However, Deputy Prime Minister Yutthasak Sasiprapha reported at a recent Cabinet meeting that during his visit to the South, locals told him they had been approached by strangers demanding a 20% cut of their compensation payments. Defence Minister General Sukampol Suwannathat has ordered soldiers in the South to look into the matter. (Bangkok Post) (Phuket  News)(The Nation)

In a series of raids on Nakhorn Sri Thammarat prison this week, Thai authorities have confiscated 333 mobile phones, 31 SIM cards, over 1,7000 pills of methamphetamine, at least 50kg of ya ice, several “sharpened objects”, and 47,000 baht in cash. Out of 1,282 inmates, 655 tested positive for drugs in urine tests. Three officers in the prison have been fired after being implicated in smuggling drugs. Authorities suspect that two major drug gangs have linked up in the prison, forming what the provincial police chief calls the country’s biggest drug network. Reports state that as they are already in prison, traffickers are unafraid of arrest.  Moreover, current law prohibits authorities from taking further action against any inmate who continues the drug trade in jail until one year after being sentenced. (Bangkok Post)

In a related development, Bangkok authorities have seized 86, 740 methamphetamine pills and 941 grams of crystal methamphetamine and made three arrests in connection. The stash was found in a house in Thonburi district. Police also reported that they had arrested three monks in Nakorn Ratchasima’s Pimai district for testing positive for ya ba. Authorities were tipped off about the trio after arresting their dealer.  (Bangkok Post)

Speaking to the media this week, Depart of Special Investigation (DSI) chief Tarit Pengdit revealed that cold medicine containing pseudoephedrine had been transported into Thailand from South Korea nine times in 2010 under false claim forms. Pseudoephedrine, a common cold medicine, is the key ingredient in methamphetamine. The unveiling of such news highlights the very complex problem authorities face in controlling the substance, as it shows that regional cooperation is crucial in combating drug trafficking. (The Nation)

The Ratchaprasong Square Trade Association (RSTA) has invested 50 million baht in a closed-circuit security system in Bangkok’s most important shopping district. Under the new system, 1,300 security cameras have been installed in key areas, such as the skywalk area, the Erawan shrine, and 11 surrounding buildings. Further, the RTSA has trained 1,000 personnel in security measures, self-defense, and preventing crime. The move is part of an overall strategy to make Ratchaprasong a “zero-crime area,” according to RTSA president, Chai Srivikorn. (Bangkok Post)

A recent medical study published in the journals The Lancet and Science confirms that strains of malaria on the Thai side of the Thailand-Myanmar border have become increasingly resistant to the current standard treatment, artemisinin. The study draws upon data collected from blood samples that were gathered from infected patients between 2001-2010. From the data, scientists are able to demonstrate an increase in resistance on the Thailand-Myanmar border. For example, the number of slow-clearing infections rose from 0 .06 percent in 2001 to 20 percent in 2010. Researchers have since between able to identify seven genes in collected malaria strains they believe are responsible for the resistance, which they say explains 35 percent of the growing resistance of malaria in the Southeast Asia region. Despite this breakthrough, however, the trend of increasing resistance is worrying because the disease could spread and researchers say a new malaria drug is unlikely to reach the market before another decade. (Phuket News)

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Summary

Almost all was quiet on the political front this week due to the Songkran holiday. Nevertheless, the polemical former Prime Minister Thaksin Shinawatra, while celebrating the water festival in Laos and Cambodia, stirred waves once more when he told journalists he would like to return to Thailand in time for his July 26 birthday this year.  In economic news, Thailand’s stock market fell sharply due to a disappointing employment report from the United States, worries over European debt, and apprehension about instability arising from the earthquake off the coast of Indonesia. However, it made a surprise recovery on April 12, just before closing for the 4-day weekend. The Asian Development Bank (ADB) has revised its Thailand growth projections upward to 5.5 percent, owing to government spending on flood-related construction and reconstruction, mandated wage hikes, and consumption incentives on cars and houses. In spite of the high security across the Kingdom during the holiday, the danger of Thailand’s roads proved tragic for another year. Between April 9-15, there were 253 people killed in traffic accidents and 2,751 others injured in 2,134 road accidents, representing an increase over last year’s totals. Moreover, there were a number of disturbing violent outbreaks in the three southernmost provinces resulting in at least one death, multiple wounded, and widespread property damage.

Politics

As expected, the Songkran holiday resulted in a low-pitched week, relatively speaking, for Thai politics because most politicians went home to their respective provinces to celebrate with their families and constituents. Prime Minister Yingluck Shinawatra returned to her home province of Chiang Mai and opened celebrations at Tha Phae Gate. Addressing the attending crowd, she called on Thai people to unite, forgive, and love one another saying, “May this year be full of love, forgiveness, and reconciliation in Thailand.” (AsiaOne)

National reconciliation remains on top of all political headlines as the decisive figure, Thaksin Shinawatra, announced his desire to be back in Thailand for his birthday, July 26. Celebrating his “best Songkran ever” surrounded by red shirt supporters in Laos and Cambodia, Thaksin stated he would be back once the political situation returned to normal, which he foresees happening in the near future. But later, talking to a crowd of journalists in Vientiane, he sounded off a more cautious tone saying, “It doesn’t matter whether I can return this year. It’s OK if I still cannot. But I think the country is on the path to reconciliation. I want to make sure all sides are happy.” In an apparently conciliatory mood, Thaksin praised Privy Council President General Prem Tinsulanonda, who most people would regard as his arch-enemy, affirming his respect and admiration for the elder statesman. While he promised to his redshirt supporters that the government would implement projects to help poor people and farmers, he explicitly praised his sister for avoiding his mistake of wading into the morass of countering political attacks. Regarding the opposition parties and groups Thaksin urged them to work with the government towards reconciliation as “it’s hard to clap with only one hand.”

Previously, opposition leader Abhisit Vejjajiva criticized the government’s reconciliation efforts as purely designed to whitewash former PM Thaksin and warned of a “political tsunami” in case Thaksin would return as a free man. At a seminar to commemorate the death of Gen Romklao Tuwatham, who was killed on duty on April 10, 2010 when soldiers clashed with red shirt protesters at Khok Wua intersection, the opposition made their stance against the reconciliation movement explicit.  Senator Rosana Tositrakul argued that a constitutional change will lead to a government – and thus Thaksin-led –takeover and exploitation of Thailand, while Boworn Yasintorn, a scholar at the October 14 Academic Institute, favors renewed mass street protests saying, “If the government still defies the public’s sentiments against the enforced reconciliation and the push for rewriting a new constitution, the people must take to the streets again.” With Senator Somchai Sawang-Karn accusing the government of trying to forget the deaths of soldiers through their push for reconciliation and Democratic heavyweights, led by deputy leader Korn Chatikavanij, commemorating only the deaths of soldiers, the opposition presented their non-reconciliatory mood in no uncertain terms.

Analysts regard the circumstances for the opposition as increasingly hopeless. Prominent Thailand analyst W. Scott Thompson of Tufts University in the United States, for example, wrote last week,  “About the only good solution that is faintly possible is if the ‘opposition’ — from Democrat Party to the palace itself — realized its hopeless position and negotiated a long-term deal, in which they gave up much of their privilege, yielded full power to Thaksin’s people, but with a backed-up and locked-in guarantee that he would not himself take the leadership, and that the palace was safe.” (Bangkok Post) (Al Jazeera) (AsiaOne) (Reuters) (San Francisco Chronicle)

Economics

During the week before the Songkran festival, overall Thai stocks fell 1.10 percent compared to the previous trading week, resulting from foreign investors’ sales of Thai stocks. Thailand’s stock market fell sharply on Tuesday and Wednesday, influenced by disappointing news about the United States non-agricultural sector employment number, the concern on eurozone debt situation as well as the earthquake in Indonesia. However, the SET index went back up 14.96 points, or 1.30 percent, to finish at 1,169.45 at the end of the trading session on Thursday, April 12, with 2.38 billion shares traded worth 20.60 billion baht. Thailand’s stock market was closed for 4 days during the Songkran holiday from April 13-16. (Thairath) (Bangkok Post)

The Asian Development Bank (ADB) projected Thailand’s economic growth of 5.5 percent, revised from the institution’s earlier projection of 4.5 percent. The anticipated rebound in economic growth this year relies on the government’s flood-related reconstruction and long-term projects involving flood prevention and water management. Also, private consumption is expected to grow due to minimum wages hike and incentives for first-time buyers of houses and cars introduced by the government. However, the ADB’s senior economist, Dr. Luxmon Attapich, said there are still risks including recession in the eurozone, which is an important source of Thai exports and incoming tourists, the increasing oil price, and the perennial threat of future flood and drought scenarios. (MCOT)

A statement by Moody’s released on April 16 stated the outlook for Thailand’s local and foreign government bond ratings is stable at “Baa1”according to moderate risk profiles despite series of crises. The ratings are based on moderate levels of economic and institutional strength, a high degree of government financial strength, and a low-to-moderate vulnerability to event risk. (The Nation)

The Cabinet has decided to postpone the 15,000 baht salary base raise for civil servants with a bachelor’s degree to January 2014 as well as adjust upwards the salaries of other types of employees. The bachelor’s degree civil servants’ salary base will be raised to 13,300 baht in January 2013 and to 15,000 in 2014. For those holding high vocational diplomas and vocational diplomas, the minimum salaries will be raised to 10,200 and 8,300, respectively, in 2013 and increased further to 11,500 and 9,400 in 2014. The budgets required for this policy implementation is 5 billion baht in the first year and 7 billion baht in the second year. (Thailand Business News)

The Board of Investment (BOI) revealed that in the first quarter this year, 470 investment projects have been submitted for BOI promotional privileges with a combined value of over 231 billion baht. The major types of business that are planning to expand investment this year are in chemicals, paper, and plastics, followed by public utilities and services. At the same time, the number of foreign investment applicants in quarter one has substantially increased comparing to the same period last year. The biggest number of foreign investors comes from Japan, Malaysia, the United States, the Netherlands, and Hong Kong, respectively. (The Thai Financial Post)

Prime Minister Yingluck Shinawatra is officially visiting China from April 17-19 under the invitation of Chinese Prime Minister Wen Jiabao to strengthen bilateral relations and upgrade strategic partnership and cooperation between Thailand and China. The main agenda is on the promotion of national development, particularly a high-speed train project, water management system development, renewable energy, human resources development, education and cultural cooperation as well as cooperation under the framework of the ASEAN and the Greater Mekong Sub-region. According to Commerce Minister Boonsong Teriyapirom, the premiers of Thailand and China are likely to announce a joint push for bilateral trade to reach 120 billion US dollars in five years. (Bangkok Post) (MCOT)

Last week, PTT Plc and Bangchak Plc had announced the reduction of all retail oil prices by 0.3 baht making the price of gasohol 91, gasohol 95, and benzene 91, to be at 38.68, 40.43, and 42.78 baht per liter, respectively. Diesel would be priced at 32.03 baht per liter while E20 and E85 would be sold at 37.68 and 23.98 baht. These new prices came into effect since Thursday, April 12, in Bangkok and its vicinities. Shortly afterward, on April 15, the two giant oil companies announced again to increase the price of benzene 91 by 1.07 baht per liter to be at 43.85 baht per liter while leaving other kinds of fuel prices will remain unchanged. (Bangkok Post)(The Thai Financial Post)

According to the Thai Home Constructions Association, demand and purchasing power for homes rose 15-20 percent in the homebuilding market in the North, Northeast, and South, while not much growth was shown in Bangkok during the first quarter this year. The factors contributing to growth in the provincial areas were economic vigor and demand from Bangkokians for a second home in other provinces as well as the expansion of homebuilding firms outside Bangkok. But the major problem for the industry is the shortage of labor, particularly in Bangkok as many workers went back to their hometowns during the flood.  The association also forecasts continued momentum in the second quarter, with the full-year outlook depending on future flood situation. A survey by the Real Estate Information Center showed that Chon Buri had the highest property development outside of Bangkok, with 534 projects and 87,500 units worth 246.8 billion baht. (Bangkok Post)

Thailand’s first private wind turbine operator, Wind Energy Holding Co. (WEH), plans to invest 40 billion baht in seven wind turbine farms over the next four years. According to the Board chairman Noppon Suppipat, the company is now developing the first three projects in Nakhon Ratchasima and in Chaiyaphum.  WEH also plans to list on the Stock Exchange of Thailand in 2014 and has set a long-term investment plan for wind farms to have a capacity of 2,000 megawatts by 2020. Half of the total capacity would come from Thailand capitalizing on the government’s commitment to support renewable energy development, one-fourth of the capacity would come from Southeast Asia and India, and the remaining one-fourth would be from South America and the United States. (Bangkok Post)

Security

Following an 8.6 magnitude earthquake that struck off the coast of Sumatra on April 11, Thailand’s National Disaster Warning Centre issued a tsunami warning and an evacuation order for the six western coastal provinces of Phuket, Krabi, Phangnga, Satun, Trang and Songkhla. For their safety, people along the Andaman coast were instructed to head for higher ground, away from the shore. The National Disaster Warning Center warned that waves of up to one meter were expected to hit Thailand’s Andaman coast by the evening. The resulting panic caused telephone signals to become disrupted in some of the affected areas. However, as night fell and no tsunami materialized, the tsunami warning was lifted. The highest recorded waves were 20cm at Si Island.  (Bangkok Post)

Residents and tourists on Thailand’s western coast were sent into panic once more on April 16 by another 4.3 magnitude earthquake that struck in Phuket’s Thalang district. Tourists were seen fleeing beaches and shopping centers. Residents, clutching their possession, had already begun showing up at Phuket’s Provincial Hall expecting to be moved to evacuation center. But no evacuation order was issued, and calm gradually resettled over the town. In response to locals’ concerns, Phuket’s provincial governor, Tri Akaradecha, has announced plans for an evacuation drill on May 10. (The Nation)

Despite the heightened security during the Songkran festival, many were killed or injured on Thailand’s roads. With festivities in high gear and multitudes returning home or traveling for the holidays, key roads and transit arteries, such as the Mitraphap highway, were heavily congested and brimming with reckless revelers.  The Disaster Prevention and Mitigation Department reported that during the period between April 11-15, a total of 253 people were killed in traffic accidents and 2,751 others injured in 2,134 road accidents, representing an increase over last year’s totals. Surat Thani and Nakhon Si Thammarat in the South had the most deaths with 10, and Chiang Rai reported the most injuries at 106 people, as well as the most accidents. A representative for the Road Safety Centre, Probation Department, said drunk driving was the major cause, at 42 percent, followed by speeding, at 22 percent, while most accidents involved motorcycles, at 83 percent. Also, 52 percent of road casualties were people of working age. (Bangkok Post)(The Nation)

In a bit of good news, tourists flocked to Hat Yai during the Songkran holidays, defying expectations that the recent attack on the Lee Gardens Plaza Hotel would scare away holiday-goers. Increased security following the deadly incident two weeks ago is credited with improving tourist confidence. Media outlets reported that Hat Yai hotels were experiencing 80-90 percent occupancy rates during the Songkran festival. The president of the Tourism Business Federation of Songkhla province announced further plans to boost tourist confidence with roadshows in Malaysia and Singapore. (Bangkok Post)

Thailand’s South was hit by another spate of violence during the Songkran week, as authorities continue to look for suspects involved in the string of car bomb attacks two weeks ago. In Pattani, three were shot dead as they exited a mosque late Wednesday evening. In another incident over the weekend, a bus leaving Pattani headed towards Narathiwat was attacked by two gunmen wielding assault rifles on motorcycles.  Two passengers, ages 14 and 70, were seriously injured in the attack. In two separate attacks in Yala’s Raman district, a woman was injured by a K75 grenade and a village defense volunteer was shot in the torso and right leg. Both were attacked by gunmen riding motorcycles. Preceding these attacks, 18 closed circuit cameras were burned Yala’s Raman district. Authorities reported that the cameras were wrapped in motorcycle tire tubes, doused with petrol, and lit on fire. Locals reported seeing groups of youth traveling on motorcycles between 2-3 AM burning the security cameras. On late Sunday, a man was shot while attempting to attack soldiers guarding a power plant in Pattani. The 29-year-old assailant was carrying a knife and refused to stop after soldiers fired into the air. The attacker was shot in the leg and rushed to a hospital, where he later died. In yet another incident that same evening, three elderly women, aged between 53 and 87, were shot while sitting outside a home in Patani’s Mayo district. Lastly, a stash of explosives and weapons were found buried on a rubber plantation in Yala’s Betong district. Initially, bomb dispersal experts were called in after locals reported two men acting suspiciously around the plantation. (Bangkok Post)

In a statement, National Security Council chief Wichean Potephosree reaffirmed that security authorities will never hold ceasefire talks with insurgents in the South. They also would not accept demands to amend the constitution separating the three provinces from Thailand or granting amnesty to violent offenders. Pol Gen Wichean said Deputy Prime Minister Chalerm Yubamrung planned to establish a rear operations centre on southern violence, or “Pentagon 2”, with the aim of solving intelligence information integration problems. (Bangkok Post)

The Mekong River Navy Peacekeeping Force seized 230 kilograms marijuana, stored in several compressed packs, along with 23 logs of protected wild rosewood. The rosewood was found in Nakhon Phanom’s That Phanom district and Mukdaharn’s Muang district. Authorities also found 978 methamphetamine pills in a house in Nakhon Phanom’s Baan Paeng district. No arrests were made, as the smugglers probably escaped ahead of time due to a tip off. (Bangkok Post)

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Summary

Wading deeper into controversy, the Truth for Reconciliation Commission of Thailand (TRCT) has called for reforming the lese majeste law to foster reconciliation and prevent abuse for political gains. Meanwhile, Thailand’s two largest political parties continue to exchange rhetorical attacks on one another over the sincerity of their intentions in the reconciliation process.  Also, Thailand’s Film Censorship Board recently banned a Thai-language adaptation of Shakespeare’s Macbeth, citing its allegedly politically divisive content. In economic news, inflation during the month of March increased 3.45 percent over last year, exceeding expectation and representing a larger increase than February. However, in a bit of good news, a new survey says that spending during the upcoming Songkran celebration will be up 7 percent from last year. On the security front, Thai authorities are beefing up security nation-wide in preparation for Songkran and following the deadly blasts in the South that killed 14 and injured hundreds. Police have already made arrests but are still seeking more suspects believed to be involved in the car bomb attacks.

Politics

After a short trip to southern Thailand due to the increased violence over the weekend, Prime Minister Yingluck Shinawatra left for Phnom Penh to attend the 20th Summit of the 10-nation Association of Southeast Asian Nations (ASEAN). Speaking about the bombings, particularly in the tourist town of Hat Yai, the prime minister announced that her government will compensate all families of the dead and agreed with her Malaysian counterpart, Najib Razak, to step up border security and increase cooperation on intelligence sharing to prevent dual-nationality holders from exploiting their status to create trouble in the region. Outgoing ASEAN secretary general Surin Pitsuwan confirmed that “the Malaysian and Thai prime ministers held unofficial talks on this issue and ASEAN hopes things will return to normal soon.” Concurrently, Ms. Yingluck took the initiative on arguing for a more proactive role of ASEAN in security matters and to increase their interconnectedness. Regional security issues and transboundary crimes will need regional attention, thus requiring ASEAN’s attention, she contended. Thai government officials proposed maritime security and environmental protection as cooperative regional issues that could help gain trust and confidence among member states. On the sidelines of the event, Prime Minister Yingluck also congratulated Myanmar on their by-elections of April 1, which saw Aung San Suu Kyi and her National League for Democracy secure 40 of the 44 seats it contested. Yingluck stated that, “The election has been very clear and peaceful so I think that is good for ASEAN.” (Bangkok Post) (Mcot) (The Nation) (AsiaOne)

As in the past two weeks, reconciliation debate continued to attract a fair amount of national media attention. The Truth for Reconciliation Commission of Thailand (TRCT) released its latest report, renewing its call for more open-mindedness amid recurring animosity on both sides of the political divide after recent parliamentary debates. Besides identifying inequalities in the power structure and the management and attitude of the military as complicating factors, the TRCT also argues for changing the lese majeste law. In its current form it would represent an “obstruction to reconciliation” and be misused by political forces, resulting in more division between the two sides. Concurrently, the Pheu Thai Party and Democratic Party continued to deepen their differences while debating the adoption of the King Prajadhipok’s Institute’s (KPI) report. Democrat leader Abhisit Vejjajiva continued to voice his opposition towards the selective adoption of the report warning of a coming “war of reconciliation”, a term previously used by the KPI itself. Deputy Premier and Interior Minister Yongyuth Wichaidit was quick to respond, reasoning that the Democrats would try and distort the majority rule stating, “we don’t ignore the minority. The majority decides, and listens to the minority. That’s it.” Pheu Thai spokesman Prompong Nopparit urged the public not to pay too much attention to the Democrats concerns, as they would oppose anything Pheu Thai proposes. Democrat leader Abhisit Vejjajiva wants Pheu Thai to prove it is doing reconciliation for the good of the people and not to whitewash former Prime Minister Thaksin Shinawatra. He also proposed to exclude him as well as deputy Democrat leader Suthep Thaugsuban and Thaksin Shinawatra from receiving legal immunity, adding, “Let’s prove the proposed reconciliation. If the exclusion of the three of us can make a contribution, then our country should move forward.” (Bangkok Post)

A former member of the coup-installed National Legislative Assembly, Prapan Khononmee, used air time on the yellow-shirt satellite channel ASTV to launch speculation about a possible switch of prime minister during the next government reshuffle. Mr. Prapan claimed that current Prime Minister Yingluck Shinawatra would step down next month and make room for Gen Sonthi Boonyaratkalin, chairman of the reconciliation committee and 2006 coup leader, to take over. Gen Sonthi quickly and explicitly tried to choke off any speculation stating, “This is nonsense. There is no likelihood of that.” (The Nation) (Bangkok Post) (AsiaOne)

International media outlets picked up on censors in Thailand banning a Thai language adaptation of Macbeth called Shakespeare must die. The Film Censorship Board issued a statement arguing that the film “has content that causes divisiveness among the people of the nation”, leading to speculation that the political imagery used attracted the censors’ attention. The movie trailer uses images of the 1973 crackdown on students and the 2010 protests to bring the Shakespearean story of a power-hungry general in ancient Scotland who kills the king for his throne, and commits more murders to hold onto it, closer to a Thai audience. Director Ing Kanjanavanit expressed her surprise saying, “I was shocked. I didn’t expect this film to be banned.” While Ing stayed true to Shakespeare’s use of the color red depicting murder in the play, this color is associated with the 2010 protesters and Thaksin supporters in Thailand. Ing defended her use of the color stating, “Red is the universal color for killer. In Thai soap operas the bad guys wear red, so why am I not allowed to use it?” Shakespeare must die is the second movie to be banned in Thailand under the 2008 Film Act after Tanwarin Sukkhapisit’s Insects in the backyard. Ing Kanjanavanit is a controversial figure among the Thai art community, having also been responsible for the production of the feature My Teachers Eat Biscuits which has never been publicly shown in Thailand and its première was raided by police in 1997. Ing is expected to appeal against the decision, adding “I asked the committee which part of the film fits that verdict and how I should go back to fix it, but they cannot tell me which scene. This is a Shakespeare story. It’s a tale of greed and lust for power. Since we’re banned, I wonder if Thai film-makers are allowed to have opinions, to criticize and to reflect on the reality of the situation.” (Reuters) (BBC) (Asia Sentinel) (The Wall Street Journal)   (Al Jazeera)

Economics

The Thai baht dropped down to a two–month low, by 0.6 percent, to 31 baht per US dollar on Wednesday, April 4, after the US Federal Reserve signaled that the United States economy is not likely to need further monetary easing, pulling back investors’ sentiments toward the US dollar. The Thai government bonds also dropped while interest-rate swaps rose after official data showed fast rise in March’s annual inflation on Tuesday. (Bangkok Post)

Thailand’s inflation accelerated unexpectedly in March, mainly resulting from high oil prices, according to data released on Tuesday, April 3, by the Ministry of Commerce. The general consumer price index (CPI) increased 3.45 percent from last year to stand at 114.30 in March, faster than the 3.35 percent increase recorded in February. The inflation rate in March quickened for the first time in the past five months and largely exceeded economists’ expectations of 3.2 percent. The core CPI, excluding fresh food and fuel prices, for March rose 2.77 percent, boosting the first quarter’s average core CPI to increase by 2.74 percent from last year. The price index for food and beverage rose 7.07 percent, and the price index for non-food and beverage also went up 1.23 percent annually in March. (Bangkok Post) (RTTNews)

A survey by the University of the Thai Chamber of Commerce (UTCC) has forecasted spending during the Songkran festival to reach 100 billion baht, 7 percent rise from the previous year, which is a new record high in six years. According to Thanavath Phonvichai, an economist at the university,
most spending during the festival from April 13 to 17 will be used for celebration, consumption, making merit, and travel. The minimum wage hike, which is taking effect now, is also expected to encourage more spending during the holiday. The survey found that most people plan to travel domestically, while 14 percent of people surveyed plan to travel abroad, which the popular destinations are Hong Kong, Japan, China and Malaysia. (Bangkok Post) (The Thai Financial Post)

Ethanol producers in Thailand are seeking export markets after constantly changing government policies have left domestic sales far below expectations and raised doubts about ambition to make the country an Asian hub for fuel. Deputy Director of the Energy Policy Planning Office, Nathie Thabmanie, stated Thailand aims to be a regional fuel hub and have potential to produce, since it has plenty of raw materials to supply to the ethanol industry while fuel plants are running now at half capacity. Thai ethanol exports tripled from 2010 to 2011 after a government’s move to cut fuel prices by removing levies on some gasoline, diminishing the drivers’ incentive to switch to the cleaner fuel. As domestic demand is low, ethanol producers are trying to export the surplus production by targeting traditional fuel importers such as South Korea and Japan as well as a new potential importer like the Philippines. (Reuters)

The Energy Ministry is expected to raise petrol retailers’ contribution to the Oil Fund by an additional 1 baht per liter, while it will increase the price of liquefied petroleum gas (LPG) for transportation sector by 75 satang per kilogram to ease the burden on the fund. The decision will be announced at the end of this month. (The Nation)(The Thai Financial Post)

The Federation of Thai Industries (FTI) announced that the private sector would like the government to set up a 1 billion baht fund to enhance the SME entrepreneurs’ capacity and encourage them to invest overseas in order to minimize the impact of the recent 300 baht minimum wage hike and brace for the ASEAN Economic Community (AEC). Also, the FTI proposed that the Board of Investment of Thailand (BOI) increase special incentives to urge Thai investors to invest more in the neighboring countries. Meanwhile, the Thai Credit Guarantee Corporation (TCG) is ready to extend more loan guarantees to SMEs and low-income people, whose loan requests were rejected by financial institutions. According to the Chairman, Santi Vilassakdanont, the TGC will also provide loan advice to Thai SMEs and support them in planning to invest abroad in order to help strengthening their ability to compete in the AEC. (The Thai Financial Post)

The National Broadcasting and Telecommunication Commission (NBTC)has promised to prevent any possible legal loopholes relating to the planned 3G auction in order to discourage attempts by any parties to disrupt the auction.  NBTC commissioner Suthiphon Thaveechaiyagarn stated at a seminar on the legal aspects of the watchdog’s master plans and the 3G spectrum auction that the commission would ask potential bidders to vow that they would bid on a transparent basis. The NBTC aims to auction the 2.1-gigahertz spectrum license in either the third or fourth quarter this year to provide 3G broadband cellular service after the plan was suspended in September 2010. The commissioner was confident that, this time, the NBTC is fully authorized to auction the new spectrum licenses, based on the 2010 Frequency Allocation Law. (The Nation)

The European Union reached a consensus to allow import of Thai fresh chicken after eight years ban since January 2004 due to the bird-flu outbreak. However, Thai fresh chicken has to come under an export quota and comply with the EU restrictions. Thailand’s trade association had predicted that exports would increase slightly by 3.78 percent to 180,000 tons of fresh chicken worth 64.11 billion baht this year. Now only Brazil can access the EU market; therefore, Thailand will become second country to export fresh chicken meat to the region.  (The Nation)

The peaceful development and opening-up of Myanmar has the business community wondering about the consequences for the Thai labor market. Migrants form Myanmar currently make up one quarter to one third of all lower-skilled or minimum wage workers in Thailand, earning 30 to 50 percent less than their Thai colleagues. Andy Hall, a Bangkok-based migrant and trafficking rights activist at Mahidol University’s Institute of Population and Social Research, concluded that the Thai government might have to focus on attracting labor from other countries such as Vietnam, Nepal, or Bangladesh because 95 percent or more of the migrants from Myanmar could return home. Hall’s opinion got support from a recent research note from the New York-based risk consulting firm Eurasia Group, which argued for a “tightening of the labor market over the next few years with fewer Burmese laborers willing to migrate.” Higher labor costs are therefore a likely probability for manufacturers in Thailand and elsewhere in the region. (The Wall Street Journal)

Prime Minister Yingluck Shinawatra has urged provincial governors to promote the best-known agricultural items of their provinces as a part of the solution for falling agricultural product prices. Ms.Yingluck is positive that various researches from ecological studies in waterfront areas assigned to the governors to create long-term environmental development plans would help improve agro-products; moreover, One Tambon One Product (OTOP) items should boost the country’s economic potential. (The Thai Financial Post)

Security

Following the deadly bombings in Hat Yai and Yala last week, Thai authorities are warning of more possible attacks and are on the lookout for five stolen pickup trucks that insurgents might use as car bombs. On Monday, after the bombings, Prime Minister Yingluck Shinawatra flew to Hat Yai to visit victims of the bombing and consult with authorities.  Speaking to the media she said, “I have told all agencies and all ministries to get serious about security and [we] will convene a meeting to discuss the overall situation to make people confident.” (Asia One) (Bangkok Post) (New Straits Times)

In response to the attacks, authorities at the local and national levels have ordered increased security in the region and at key points nationwide. Transport Minister Jarupong Ruangsuwan said the Airports of Thailand (AOT) has raised its security alert to Level 3, under which vehicles visiting its airports are checked at random.This measure goes into effect at Suvarnabhumi, Don Mueang, Chiang Rai, Chiang Mai, Phuket and Hat Yai airports. As well, the Civil Aviation Department is on Level 4, its maximum alert, at its 28 provincial airports, which requires that all vehicles visiting airports must be checked. Transport Co. has stopped taking unattended packages aboard its inter-provincial buses and is deploying more security guards at its bus terminals in Bangkok. In Hat Yai police have installed 400 security cameras and will bring in K-9 sniffer units to patrol sensitive areas.  Additionally,  National Security Council will consider whether the executive decree on public administration in emergency situations should be exercised in Hat Yai district (Asia One) (Free Malaysia Today) (Voice of America) (Bangkok Post)

Police have issued several arrest warrants for suspects believed to be involved in the attacks and have arrested three of them. National Police Chief General Priewphan Damapong revealed that there was solid evidence against one of the men arrested and added that it was believed that the suspect might have been involved in the attack on the Lee Gardens Plaza Hotel in  Hat Yai. One of the suspects, Samlee Puluduereh, was arrested on Tuesday on charges of terrorism, attempted murder, and possessing explosives. He is suspected of planting a roadside bomb in Pattani, one of the many bomb attacks on Saturday. The other is Anuwat Tohjeh, 22, a Yala resident, who was seen on security camera video driving a vehicle following a pickup that was used in the Yala attack. He has denied any involvement. (The Nation) (Bangkok Post)

Worries over security have led to massive cancellations of hotel bookings in the South, prompting concerns about the economic damage of the bomb attacks and the consequences for those whose livelihoods will be directly affected.  Somchart Pimthanapoonporn, head of the Songkhla Tourism Business Council and the Hat Yai-Songkhla Hoteliers Association, estimated that it will take three to six months for the situation to return to normal. Reflecting the worries of the private sector, he opined, “Operators not only in tourism but also other businesses are not confident in the security standard of the government”. Tanit Sorat, vice-chairman of the Federation of Thai Industries (FTI), expressed concern that tourism in other popular sites, such as Krabi or Phuket, will be affected too. To counter these concerns, officials are establishing safety zones with intensified security in the South. These zones are not a new practice for the Thai government, but enforcing them in populated urban areas is unprecedented. The purpose of such zones is to restore peoples’ confidence and allow small businesses to continue trading. (Bangkok Post) (Asia One)

Analysts have observed the disturbingly high sophistication of the operation compared to previous insurgent attacks. The Saturday bombings represent the insurgents’ first successful coordinated attack using several car bombs in populated urban areas where security was supposedly strong.  In the Hat Yai attack, they used tactics such as building a bomb out of a gas tank and placing it in the passenger seat to avoid detection by hotel guards who only check the trunk. Panitan Wattanayagorn, a security analyst at Chulalongkorn University, noted the insurgents’ improved tactics: “The capability of these people although [sic] when you look at the bombs is not that different but the ability to coordinate several bombs at the same time is something quite new.” Foreign Minister Surapong Tovichakchaikul concurred with this sentiment when he said of the attacks, “Right now it seems to us that it’s more professional, the way they do it.” Analysts also point to the rise in violence in the South over the previous months and a general trend of increasing sophistication in the use of explosives and tactics since 2005. The Saturday bombings, then, could be seen in the context of an escalation of violence in the South. (Asia One) (The Sun Daily) (Voice of America)

In light of the bombings in the South and in preparation for the upcoming Songkran holiday, authorities in Songkla, Bangkok, and Chiang Mai, are ratcheting up security measures. National Police Advisor Pol Gen Chatchai Potranan told the media that in order to rebuild tourist confidence during the Songkran holidays, police will deploy 1,000 security personnel and institute security measures such as checkpoints on four main roads and at least 40 minor roads on a 24-hour basis.Bangkok Metropolitan Administration (BMA) City Law Enforcement Department director Kramol Olarawat stated they will mobilise 1,240 law enforcement personnel from the city’s 50 district offices to assist police in providing security and to help drivers during  Songkran. Chiang Mai Governor Panadda Disakul said the province increasing security at all entry points to the province, including road, rail, and air. (Thailand Business News) (Pattaya Mail)

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Summary

Heads clashed for another week as debate over Thailand’s reconciliation continued. In a move that has drawn fierce criticism, the Democrat Party representatives withdrew from the reconciliation committee, calling the committee’s support for a general amnesty an attempt to exonerate former Prime Minister Thaksin Shinawatra. Meanwhile, the King Prajadhipok’s Institute (KPI) is playing damage control after it claims that its report to the reconciliation committee is being distorted for political gain on all sides. On the economic beat, the Bank of Thailand (BOT) Governor Prasarn Trairatvorakul and Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong disagreed over measures to weaken the Thai baht and further lowering the Kingdom’s policy rate. At the same time the Thailand Board of Investment (BOI) is offering tax exemptions and waivers to companies in flood-hit Ayutthaya and Pathumi provinces to prevent factories from relocating. In security, the South was hit by the deadliest wave of bomb attacks in the past few years, killing 14 and injuring hundreds. The explosions occurred in crowded areas and were clearly targeting shoppers and tourists. Police are looking for an insurgent gang, led by Sahudin Tohjemah, who  they suspect is responsible for carrying out the bombings.

Politics

Prime Minister Yingluck Shinawatra joined other heads of state in Seoul for the 2012 Nuclear Security Summit this week while also using her stay in South Korea to boost investor confidence. At a luncheon with executives of large companies such as Samsung, LG Electronics, Hyundai, Korea Water Resources Corp, SM Entertainment, and Korea Railroad Corp, the prime minister reminded them of Thailand’s investments into infrastructure and flood protection and mitigation measures as well as the government’s business-friendly policies, such as the decline of the corporate tax rate to 23% this year and 20% next year. Thailand and South Korea agreed to exchange technical support on water management and increase trade and investment. South Korean investors plan to pour 12 billion baht into Thailand over the next two years, while South Korea’s government plans to set up a cultural and studies center in Thailand in the next year. Before leaving to Seoul Prime Minister Yingluck also agreed to launch “exploratory talks” on a free trade accord with visiting Canadian Prime Minister Stephen Harper. (AFP) (Bangkok Post) (The Nation)

As controversy from the reconciliation debate continued to dominate news headlines, the King Prajadhipok’s Institute (KPI) threatened to withdraw its study, fearing it was being misused by political forces that are cherry-picking parts of the study. A majority of the reconciliation committee agreed on an amnesty for all cases related to political protest and all crimes that stemmed from political motives as well as dropping all cases probed by the now-defunct Assets Examination Committee. The KPI sent a letter to media outlets stating that they actually proposed nationwide dialogues to be held and that a majority vote would only lead to “justice for the winner.” The reconciliation committee nonetheless submitted its report to a joint meeting of the House and Senate. Although reconciliation committee Chairmen Gen. Sonthi Boonyaratkalin, ironically also the leader of the 2006 coup, agreed to drop the majority vote out of the report to Parliament, the opposition Democrats quit the committee.

The Democrat Party fears a general amnesty was intended to whitewash the misdeeds of former Prime Minister Thaksin Shinawatra and thus facilitate his return. To block any attempts of enacting an amnesty law based on the KPI’s report, the opposition Democrats announced they would seek a Constitutional Court ruling first. Opposition leader Abhisit Vejjajiva expressed his concern that amnesty would severely damage the country’s justice system which prompted an open letter response by former Prime Minister Chavalit Yongchaiyudh, arguing it would actually help improve its image as the justice system would then not be used to solve political problems. The Democrats’ resignation from the committee was heavily criticized by Pheu Thai MP and red shirt leader Jatuporn Promphan, accusing them of narrow mindedness and wanting “to return to power through military help again.” Deputy Agriculture Minister Nattawut Saikuar accused the Democratic Party of trying to derail the reconciliation process by misleading the public through claims it would all just be about Thaksin. Opposition leader Abhisit Vejjajiva claimed in the parliamentary debate that, “They are citing reconciliation in order to whitewash the wrongdoing of corruption. This is worrying and will finally lead to renewed violence.” Constitution Court President Wasant Soipisut expressed his frustration over the reconciliation issue by stating that “maybe this generation of political rivals has to die first” before true reconciliation can be achieved.

KPI’s report received additional criticism from Human Rights Watch for its recommendation to remove the names of those responsible for violence from the report of the government-appointed Truth for Reconciliation Commission (TRCT). Human Rights Watch stated that Thailand has to overcome its history of impunity for political violence, and handing out amnesty and blocking the release of names would only further block accountability. Brad Adams, Asia Director at Human Rights Watch, stated, “Thai people should no longer suffer in silence, while generals and politicians make peace with each other in the interests of escaping accountability for criminal conduct.” The KPI will have a high-level meeting on Monday, April 2, to consider if the report should be pulled back at all, after voicing their frustration over the alleged misuse of the researchers’ work.  The Pheu Thai Party and its coalition parties voted to forward the report on the parliamentary agenda for urgent consideration on April 4 and 5. (Reuters) (Human Rights Watch) (Bangkok Post) (The Nation)

Thaksin Shinawatra meanwhile reminded his supporters to be patient and that his return would take some more time claiming he wanted to “return in style”. Phoning in to a red shirt party, he additionally indicated that he would be in discussion with judges regarding bail arrangements for jailed red shirt members. The Courts of Justice’s spokesman Sitthisak Wanachakit instantly denied those claims stating, “He might have said this to impress his people but the truth is that there has never been a discussion.” (Bangkok Post) (The Nation)

Economics

On Friday March 30, the SET index closed at 1,196.77, down 7.14 points, or 0.59 percent with the trade volume of 28.42 billion baht from 3.16 billion shares traded. Thailand’s stock market started off negatively at the beginning of last week before it picked up on Tuesday, following the US Federal Reserve Chairman Ben Bernanke’s comments on implementing a third round of quantitative easing (QE3), then slightly declined at the end of the week from the pressure of weakening oil prices and the drop in the energy sector. Kasikorn Security and Kasikorn Research Center expect the SET index to move up this week during 2-5 April in accordance with projections about the Fed’s economic stimulus and the results from EU Summit on March 30. (Reuters) (Thairath) (The Nation)

The Bank of Thailand (BOT) Governor Prasarn Trairatvorakul expressed confidence on post-flood economic recovery. He mentioned the BOT’s growth rate expectation of 4.9 percent for the year 2012 projected in January is likely to be revised upward, but may not reach 7 percent, as stated by the government. He added there is no need for further monetary easing since the 3 percent policy rate is quite accommodating already. Furthermore, both headline and core inflation figures are still within the target range in spite of the rising oil prices. Meanwhile, the Fiscal Policy Office (FPO) Director-General, Somchai Sujjapongse, has also revised upward Thailand’s economic projection to 5.5 percent, driven by both public and private investment as well as domestic consumption. High investment would lead to the current account deficit of 0.9 percent of the GDP but it should put no harm to the economy, Mr. Somchai assured. The FPO also expected the headline inflation will be 3.6 percent this year.(The Nation)

Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said on Wednesday, March 28, that he wanted to see a weaker baht ranging between 32-34 baht per US dollar to help exporters and boost the economy. Also, he said the BOT should lower its key policy rate, which is currently at 3 percent. The BOT Governor Prasarn Trairatvorakul, as well as many experts, opposed this measure to devalue the Thai baht while insisting that the current baht value, under the managed floating regime, is in line with the market mechanism. The governor said using a current account deficit to weaken the baht was not a tool for monetary policy and stated his support for the current account surplus because it reflects the country’s prosperity, and added that the government should take the advantage by encouraging local businesses to make more investments abroad. On the policy interest rate of 3 percent, the BOT governor believed it is suitable and sufficient to support economic revival. Over the past two months, there had been signs of economic recovery in the consumption, tourism and industrial sectors. He also forecasted that the Thai economy would gradually resume to the full level by the third quarter of this year; however, high oil price, increasing minimum wage and government spending would continue to put upward pressure on inflation.

Thammasat University economist Praipol Khumsap also agreed that Mr Kittirat should not set the baht at a particular value because it might trigger another economic crisis like in 1997. He also questioned the real reason behind this policy to weaken the baht. He added that the problems of Thai exporters do not arise only from the strong currency value, but largely from international economic conditions. Moreover, Mr. Thanavath Phonvichai, the Economics dean at the University of the Thai Chamber of Commerce, said Mr. Kittiratt’s comments could lead to short-term speculation against the baht and could be interpreted as interference in the independence of the central bank’s operations. (Bangkok Post) (The Thai Financial Post)

The Thailand Board of Investment (BOI) is offering incentives to help companies investing in Pathum Thani and Ayutthaya provinces to prevent factories’ relocation from flood-hit zones. Call for applications will be open until the end of the year. New or existing projects in industrial estates in Pathum Thani province will receive an eight-year tax exemption at a rate of 150% of new investment value. Projects in Ayutthaya will be given the same incentives plus another 50% tax waiver for three years afterward. Import taxes for machinery will also be exempted for the machinery less than then years. (Bangkok Post)

Thailand’s Ministry of Commerce postponed the release of Consumer Price Index (CPI) data for March to April 3. The delay is due to an official visit accompanying Prime Minister Yingluck Shinawatra to Cambodia by Commerce Ministry Permanent Secretary Yanyong Phuangrach, who normally presides over the news conference to release the monthly data. (Nasdaq)

Thousands of pineapple farmers blocked Petchkasem highway in Prachuap Khiri Khan’s Muang district on Friday March 30 blocking the main route to Bangkok from the South, demanding the government buy their surplus crop to reduce supply and raise depressed prices. Prachuap Khiri Khan’s governor, Veera Sriwattanatrakul, met with the farmers to inform them an urgent meeting of the National Pineapple Committee had agreed to allocate an 800 million baht budget to buy 200,000 tons of surplus pineapples from the market, as they demanded. The protesters reopened the highway in the afternoon after their demand was met. (Bangkok Post)

Security

On Saturday, there was a coordinated series of deadly bomb attacks in Thailand’s restive South.  The first bomb, loaded in a pickup truck, tore through a busy shopping area in Yala’s commercial district, scorching shop houses and ripping apart nearby vehicles. As onlookers descended onto the sign, a second explosion occurred from another parked car about twenty minutes later. The blast killed eight people immediately and wounded 113. Of the wounded, three more died in the hospital later. Col. Pramote Promin, deputy spokesman of the Regional Security Agency, remarked that the incident is “the worst attack in the past few years”. (International Herald Tribune) (Dawn.com)

Another explosion occurred mid-day Saturday at the 405-room Lee Plaza Gardens Hotel in Hat Yai. Experts believe a car bomb was set off in the hotel’s basement, tearing through gas lines which subsequently fueled a massive fire that spiraled upward and trapped many of the hotel’s guests in their rooms. Rescue operations were hindered by insufficient equipment, as the Hat Yai municipality fire truck’s platform could not reach high enough to be fully effective. However, by the late afternoon, the fire was brought under control. In total, 3 people in the hotel were killed, including one Malaysian national, and 336 were reported injured. Regional Police Chief Lt. Gen. Jakthip Chaijinda said the Hat Yai incident “is likely related to what happened in Yala and might have been plotted by the same group of insurgents.” (Bangkok Post) (New Straits Times) (Adelaide Now)

Following the bombings, security authorities in Hat Yai have been on high alert searching for four more vehicles, all stolen, that they believe could be used for further attacks. Police say they have identified an insurgent gang who they allege planted the bombs in Yala and Hat Yai over the weekend. The gang is led by suspected mastermind Sahudin Tohjemah, and is feared to be planning more attacks in Hat Yai. Police claim to have security camera footage that shows the suspects leaving the scenes in Yala and Hat Yai in stolen vehicles, one of which had belonged to a policeman who was shot and killed by militants in Narathiwat last October. Fourth Army Commander Lt. Gen. Udomchai Thamsarot said on Sunday that authorities expect to make arrests soon. (Bangkok Post)

The effect that Saturday’s bombings will have on the local tourism industry will be devastating, as hotelier, Somchart Pimthanapoonporn estimates that the violence will cause at least 1 billion baht in damage to the tourism sector. Mr. Somchart, who is chairman of the Songkla Tourism Business Council and president of Hat Yai-Songkla Hoteliers Association, said that 60 percent of the city’s rooms that were booked have already been cancelled. However, despite the attacks, he insists that Hat Yai’s Songkran festivals will proceed as planned and this will help restore tourists’ confidence. At Hat Yai’s main airport, no flights have been canceled but the security level has been elevated to level 4, the highest level. Across Thailand, security at all airports has been raised after the bombings in Hat Yai and Yala. (Bangkok Post)

The news of deadly bomb attacks in Yala and Hat Yai overshadowed other troubling acts of violence in Thailand’s South, such as the bomb attack in Pattani’s Mae Lan district that occurred 50 meters from a police station on Saturday, which injured one police officer. Also, there was an M79 grenade attack on the home of Muslim provincial MP Najmudeen Uma on Friday. There were no casualties but the explosion left some property damage. The incident took place in Ra Ngae district and coincided with a bomb attack on a squad of Army paramilitary rangers. (Lubbock Online) (The Nation)

In Seoul, South Korea, Prime Minister Yingluck Shinawatra participated in a two-day summit on combating nuclear terrorism, which was attended by 53 world leaders. Prime Minister Yingluck affirmed her government’s intention to prevent Thailand from being used as a transit point for nuclear weapons and reiterated that Thailand is interested in improving its capacities in nuclear and hazardous materials detection. In the final session of the summit, all the participants agreed to the “Seoul Communiqué” which consisted of 13 points outlining general pledges of participating nations to voluntarily improve protection against loose nuclear materials. (The Nation)

At a recent seminar in Bangkok, Thairt Pengdit, Chief of the Department of Special Investigation (DSI), revealed that 17 percent of the pseudoephedrine medicine, a common decongestant, used in Thailand’s methamphetamines was taken from the public health system while the remaining 83 percent was smuggled through Suvarnabhumi Airport and the southern border. As such, he contended that authorities must focus more attention on the smuggling operations through these channels, not just the siphoning from hospitals. Prapon Angtrakul, the Chief of FDA Narcotics Control Division, said the Public Health Ministry, in consultation with his office and leading doctors, has agreed that Thailand does not need pseudoephedrine. Therefore, current stocks will be distributed for one year and the rest will be destroyed. Its future imports will be discontinued and the drug will be replaced with phenlyephrine. (The Nation)

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Summary

The atmosphere was tense as key players in Thailand’s political milieu discussed and debated reconciliation at a conference this week. In response to controversial recommendations that were to be considered during the meeting, protests formed outside the hotel where the conference was held in what one local newspaper described as a “furious, if not explosive” scene. On the economic beat, policymakers at Thailand’s central bank unanimously voted to keep the country’s policy rate unchanged at 3 percent, which they deemed as appropriate for supporting recovery as well as in keeping with inflation. To combat rising costs of living, Thailand’s government approved funding for “One Shop One Community”, a project to distribute cheaply-priced goods to Thai consumers nationwide. In security, Thailand’s military admitted its troops killed four civilians in Thailand’s deep South in January. Also, Thai authorities seized another multimillion cache of methamphetamine pills in the North, and Thailand’s military, in a surprise move, revealed that 5,000 Rohingya boat people have been arrested or intercepted off of Thailand’s Andaman coast since last November.

Politics

Reconciliation was on everybody’s mind this week as two studies presented differing views at a conference attended by Thailand’s key political players on the Kingdom’s political situation and possible ways moving forward.  Thirayuth Boonmi, formerly secretary-general of the National Students Centre of Thailand (NSCT), which played an important role leading to the Oct 14, 1973 student uprising, and currently serving as director of the Sanya Dharmasakti Institute for Democracy and Sociologist at Thammasat University, presented his analysis at a press conference, arguing that the root of the current political rifts are due to political centralization and political and socio-economic inequality between urban and rural areas. His prediction of another possible coup if the political conflict is not solved was vehemently rejected by Deputy Prime Minister and Interior Minister Yongyuth Wichaidit, as well as representatives from the Army. Mr. Yongyuth concluded that the Army was now democracy-minded and thus no coup would happen this time around. Noppadon Pattama, Thaksin’s legal adviser and close aide, criticized Mr. Thirayuth’s analysis as biased against Thaksin Shinawatra as it does not include, what Noppadon considers to be the root cause of the problem – namely the military coup of 2006 and the destruction of the rule of law by the military.

Incidentally, criticism for glossing over the true causes of the current political conflict was also heaped upon the second study on reconciliation that was debated this week. The King Prachadipok’s Institute (KPI), an independent think tank, examined the causes of political conflicts in a study sanctioned by the House Special Committee on Reconciliation, but received heavy criticism from opposition leader Abhisit Vejjajiva as being biased in favor of the government. While the study did explore the history of political conflicts in Thailand and all the major theories on reconciliation building as well as how to settle political conflicts, the report received criticism for avoiding what had caused the current conflict. Wuthisarn Tanchai, KPI’s deputy secretary-general, defended the study arguing that the goal was to find ways to rebuild harmony and foster national reconciliation, for which an analysis of the conflict would not be necessary. KPI’s research team concluded that all sides must be forgiven to achieve reconciliation, but admitted that the goal was still a long way off. Natchapat Oontrongjit, a member of the research team, said that the team’s interviews revealed that there was still no change in attitude among the key players, adding, “I don’t think the atmosphere is conducive to national reconciliation. There is a long way to go.”

It was not only the KPI’s study that received criticism, but also the chairman of the House Committee on National Reconciliation, Gen Sonthi Boonyaratkalin, who commissioned the study. Gen Sonthi, being the former coup leader in 2006, was in an awkward position to convince the public that he is the right person to work towards reconciliation. Nonetheless, he argued that people need to “forget the past [and] think about today and build the future.” Maj Gen Sanan Kachornprasart, advisory chairman of the Chartthaipattana Party, was not convinced and tried to steer the debate more intensely towards what caused the coup and Gen Sonthi’s own potential culpability by asking:

“Who was behind that coup? Was it you or did you have [outside] motivation? Unless the truth is spoken, Thais nationwide will remain in doubt, especially Thaksin and the red shirts who support him and still think that aristocrats and powerful people beyond the reach of the constitution backed the coup.”

Gen Sonthi refused to answer the crux of Maj Gen Sanan’s  inquisition by stating:

“These questions should not be posed to me. I cannot answer them. Some questions cannot be answered, even after death. Some matters will reveal themselves at the right time. If they are revealed today, I wonder if it will do any good.”

As key players in the reconciliation process discussed the KPI’s proposals, which includes the recommendation to grant an amnesty to people involved in past political protests, at the Miracle Grand Hotel in Bangkok the atmosphere soon turned – according to The Nation – “furious, if not explosive”, therewith bolstering Natchapat Oontrongjit’s skepticism on Thailand’s readiness for reconciliation. (Bangkok Post) (The Nation)

In what can only be called a  public relations disaster, the government approved the purchase of 900,000 tablet computers to supply to school students, a previous Pheu Thai election promise, signing an MoU with the little known Chinese company, Shenzhen Scope, which offered the lowest-bid price of $81 for each seven-inch touch screen computer. Concurrently all 650 MPs and Senators in Thailand will receive a free iPad, costing the administration US$1.6 million. As Thailand’s MPs include some of the wealthiest citizens of the country, the addition of free iPads in addition to free domestic air travel, a laptop and five assistants caused an understandable uproar on social networking sites. (Channelnewsasia) (Businessweek) (Bangkok Post)

Economics

The Thai stock market finished sharply lower on Thursday March 23, after gaining almost 20 points or 1.9 percent the day before, following heavy fall among the financial shares and energy producers. On Thursday, the SET index fell 16.67 points or 1.38 percent to finish at the daily low of 1,191.00 with the trade volume of 7.853 billion shares worth 40.149 billion baht.  According to Markit Economics, China’s manufacturing sector still contracted for the fifth consecutive month and Eurozone private sector activities still fell more sharply than expected in March. The European and U.S. markets finished lower and the Asian bourses are expected to follow the lead. (RTTNews)

On Wednesday, March 21, policymakers at Thailand’s central bank unanimously voted to keep the country’s policy rate unchanged at 3 percent. The Monetary Policy Committee (MPC) decided that the current level of the policy rate is appropriate in supporting economic recovery as well as being consistent in keeping the inflation target. Still, the MPC observed upside risks to inflation persisting from rising global oil prices and the expected minimum wage increase. Also recovery in private demand and heavy government spending could put upward pressure on inflation. In February, headline inflation remained at 3.35 percent and core inflation, excluding fresh food and energy, was 2.72 percent. The BOT will continue to use its core inflation target of between 0.5 – 3 percent this year and will reconsider the plan next year to see whether a change to headline inflation is required.

The central bank is issuing longer term bonds to reduce local market volatility caused by changes in energy prices and foreign investment inflows. According to the Assistant Governor of the bank’s Financial Markets Operations Group, Pongpen Ruengvirayudh, a gradual appreciation of the baht is good for the economy when energy prices are rising. Also the central bank does not believe that short-term investment inflows are excessively speculative. Meanwhile, the BOT will potentially start investing in China’s exchange and interbank bond market with the permission to invest up to 300 million dollars in China’s exchange and 1 billion dollars in China’s interbank bond market. This plan has the purpose of diversifying foreign exchange reserves in a currency that has acceptable level of stability and is expected to play important role in the future, instead of reserving heavily in US dollar. (The Nation) (Bangkok Post) (RTTNews)

Delloitte, the major professional service firm, stated Thai banks are the best prepared for the ASEAN Economic Community (AEC) due to the Kingdom’s financial strength and competitiveness. Of all industries in Thailand, banking seems to be the most ready for the opening of regional market under the AEC in 2015, resulting from years of building capital in compliance with the Bank for International Settlement’s Basel lll requirements. Besides the banks, Thai companies in the food, construction material, energy, and consumer product industries also show potential to prosper by looking for joint ventures or mergers and acquisitions with partners in other countries. (The Nation)

Finance Minister, Kittiratt Na-Ranong, reversed the policy on market liberalization. He suggested that the commission fees and broker licenses liberalization, in place since January, need to be reviewed. Local brokers immediately offered support to the policy change, saying they would propose to go back to the sliding fee structure used before liberalization took place. Meanwhile, The Securities and Exchange Commission (SEC), under former secretary-general Thirachai Phuvanatnaranubala, had argued that fee liberalization would help improve competition within the capital market and lead to lower transaction costs for investors. However, brokers have long argued that heavy competition would decline in key services, such as investor education and research and could result in the detriment of the overall market. Mr. Kittiratt stressed that capital market should be ready for competition before the ASEAN Economic Community take place in 2015.(Bangkok Post)

The Ministry of Commerce aims to use the 25th Asian Trade Promotion Forum (ATPF) CEO Meeting which Thailand will host during April 18-20, to publicize its potential in export growth in order to generate growth of the country’s international trade activity. Furthermore, Prime Minister Yingluck Shinawatra will hold a road show in the Republic of Korea to rebuild investor’s confidence during her official visit on March 26-27. (The Thai Financial Post)

Attempting to curb rising cost of living, on Tuesday March 20, the mobile Cabinet approved 1.62 billion baht budget for the “One Shop One Community” project to distribute cheaply-priced goods to the consumer nationwide as well as for other aspects of the populist “Blue Flag” scheme. The Commerce Ministry will spend 1.32 billion baht from the total budget to form alliance with groceries shops to implement its brand “Raan Thook Jai” (satisfied shop), which will be under the “One Shop One Community” project, and the remaining budget will focus on Blue Flag measures such as cheaply-priced food shops and 878 cheaply-priced fairs. Goods in the Raan Thook Jai will have 20 percent lower prices than those in the market and will be delivered to all designated locations by the service of Thailand Post.  Nevertheless, some consumer-goods producers are concerned that the project will distort market mechanisms and suggested the government should focus more on the problem of rising wages and raw material costs. Meanwhile, some critics, including the Democrat Party, blamed the rising cost of living on the government’s mishandling of policies, such as the reduction of contributions by refineries to the State Oil Fund and huge pay rises which pushing production costs higher.  (The Nation) (Bangkok Post)

Security

Thailand’s military admitted that Thai troops had shot dead four Muslim villagers who were traveling to a funeral ceremony in late January. The incident occurred in Nongchick district of Pattani province when troops were pursuing militants who had attacked a ranger outpost.  The troops fired on a pickup trick, killing four and wounding four others. In a statement from Southern Region Army Command, the mishap was blamed on a “misunderstanding resulting from the surrounding circumstances”. The statement went on to say that the soldiers involved will enter the justice process. (Channel News Asia) (The Phuket News)

A proposal in Thailand’s House of Representatives to give Thailand’s violence-plagued three southern provinces – Pattani, Yala, and Narathiwat – designation as a special administered region is being considered. In an attempt to placate secessionist fury, the proposal would set up a “Pattani Maha Nakorn”, or a mega city of Pattani, as the center of administration for the three southern border provinces, led by a directly-elected mayor. So far, the proposal has the support of the ruling Phuea Thai Party, but critics and skeptics allege that the proposed bill would not go far enough in actually devolving power. Despite the provision of a directly-elected mayor, critics like Munso Salae, deputy chairman of the Southern Islamic Culture Foundation, contend that the proposal fails to push for public participation in administration, citing that the proposal does not setup a local council made up of southerners who would manage their own affairs. (Bangkok Post)

In a recent development, a Thai joint military-police force seized a large cache of methamphetamine pills in, totaling 2.5 million. The cache, along with 50 kilograms of crystal meth, was found in a house in Chiang Rai province. This is the second major haul of drugs confiscated by authorities in Chiang Rai in recent weeks and puts the total number of methamphetamine pills seized this year at 12 million. Three Thai nationals, one man and two women, were arrested in connection to this incident. (Seattle Times)

Activists from the Alliance to Protect the Land in the Lower Isan and the East claim they’ve surveyed several sections around the disputed 4.6 square-kilometer-area between Thailand and Cambodia and have found Cambodian troops and civilians occupying some of them. As a result, the network has submitted a petition to the Second Army not to remove Thai troops from the disputed territory, as ordered by the International Court Justice. The activists’ leader, Dr. Pratheep Talapthong, said they’ll give the Army two weeks to respond to their petition. (Bangkok Post)

In an unexpected gesture, Thailand’s commander of Internal Security Operations Command, Fourth Region, Colonel Manat Kongpan, disclosed in an interview that 5,000 Rohingya boatpeople have been arrested or moved to other destinations outside the Phuket-Andaman coast of Thailand since last November. Prior to the interview, the number of intercepted Rohingya boatpeople had been unknown. According to Colonel Manat, there were 32 arrest incidents, taking in 2,490 men and boys, and 25 cases in which the Rohingya boatpeople were forcibly moved onto other destinations, totaling 2,522 Rohingyas. The Colonel said that when intercepted at sea, the Rohingyas were interviewed and told if they proceed further inland, they would be arrested. When necessary, Thai authorities gave the Rohingyas fuel, medical support, and food to last for 15 days. If the figure of 5,000 is correct, then it is the largest number of Rohingya’s arrested or intercepted since 2007. (Phuket Wan)

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Summary

In politics, Prime Minister Yingluck Shinawatra returned from Japan, touting the successes of her trip. Meanwhile, the specter of former Prime Minister Thaksin Shinawatra’s conceivable return is still rattling nerves in Thailand’s parliament. On the economic scene, the industrial sector is considering salary rises to compensate for conflict with the government’s proposed minimum wage hike. Also, the price of petrol will increase as the Energy Policy Management Committee agreed to increase the State Oil Fund levy on petrol 91 and 95 by 1 baht per liter. As for security matters, Thailand’s government has extended the emergency decree in the South and is meanwhile trying to make buildings in Bangkok safer.

Politics

Back in Thailand after a four-day trip to Japan, Prime Minister Yingluck Shinawatra announced assuredly that her visit helped restore investor confidence and secure Japanese grants for more flood-reduction projects. In an act of support, the Japanese government is considering a plan of providing a 2.9 billion baht grant to Thailand through the Japan International Cooperation Agency (JICA), envisioned to be spent on both short and long term flood-prevention measures. Seiji Kojima, Japan’s ambassador to Thailand, stated that although another flood crisis is a risk factor to be considered in future investments, he believes the advantages of investment in Thailand still outweigh the concerns. The Japanese ambassador confirmed that Japanese firms are continuing to expand their investments and production in Thailand. However, Mr. Kojima urged Thailand to speed up its flood prevention measures, especially the construction of floodwalls and a floodway, so as to be finished before the next monsoon season. Apart from financial assistance, Japan has already sent water management experts to assist the Thai government in its effort to protect flood-prone areas.

A government committee is still on the lookout for 2 million rai for use as flood catchment and diversion areas. Kijja Pholphasee, an adviser to the National Water and Flood Policies Commission (NWFPC), declared that negotiations with interested farmers could start immediately. He explained that owners would be paid 600 to 800 baht per rai for empty plots and 4,000 to 5,000 baht per rai where crops have not been harvested. Additionally, a 600-baht-per-rai-payment is being considered for residents whose land is to be used for floodways for up to three months during the flood period. Furthermore, the NWFPC approved 246 flood prevention projects, in turn leading to the cabinet appropriating a 24.8 billion baht budget for those actions. (Bangkok Post) (The Nation) (AlertNet)

In related news, government ministers gave differing forecasts on the future of climate change effects on Thailand. Science and Technology Minister Plodprasop Suraswadi predicted that “We don’t need to worry about another big flood for at least 70-80 years”, while Thailand’s Vice Minister of Natural Resources and Environment Pithaya Pookaman warned, in his speech at the Asia Pacific Climate Change Adaptation Forum in Bangkok, that Bangkok may be submerged in 20 years if key infrastructure and land use issues aren’t addressed. To mitigate climate change influences, Thailand has set up a climate change policy board, chaired by Prime Minister Yingluck, and is preparing a 10-year master plan. (Bangkok Post) (Eco-Business)

The possible return of former Prime Minister Thaksin Shinawatra continued to garner substantial media attention as Deputy Prime Minister Chalerm Yubamrung announced his intention to submit a reconciliation bill. The move, supported by at least 20 MPs, would ultimately bring home the exiled former prime minister. However, details of the bill will not be available any time soon, Mr. Chalerm stated, as he wants to explain the purpose of the bill over the next four to five months to the people of Thailand before submitting it to the House of Representatives. Anticipating that media outlets would use this issue to pressure Prime Minister Yingluck to take a side, Mr. Chalerm stressed that his reconciliation bill would be a private initiative and that neither the prime minister nor the Pheu Thai Party would be involved in any way. He added that he had never talked with Mr. Thaksin about the matter. Prime Minister Yingluck maintained her previously stated position on the issue: “No, he [Thaksin] won’t come back.” Opposition leader, Abhisit Vejjajiva , on the other hand, stressed the prime minister’s obvious conflict of interest due to her family relations. (The Nation) (Bangkok Post)

The People’s Alliance for Democracy (PAD), or yellow shirts, announced this week after a gathering of around 2,000 supporters, that no mass rallies would be held opposing the charter rewrite, as long as the monarchy would be left untouched and Mr. Thaksin would not be eligible for amnesty afterwards. Yellow shirt leader, Sondhi Limthongkul, still a free man despite being convicted for fraud recently, announced that he would continue his fight against Mr. Thaksin and doesn’t trust the government’s pledge to keep the section on the monarchy unchanged.

This week, the mudslinging between the Pheu Thai Party and the opposition Democrat Party played out over various legal issues. The Pheu Thai party is supporting a motion to get the Democratic Party disbanded over billboards they had erected in the South that were intended to rally opposition to a charter change. They argued that such tactics could be construed as an expression of hostility towards democratic rule, which is an offence punishable by party dissolution.  Prompong Nopparit, Pheu Thai spokesperson, accused the Democrats of attempting to fabricate charges against the government by suggesting it was trying to topple the monarchy and grant amnesty to Thaksin Shinawatra. For their part, the Democratic Party deputy spokesman, Mallika Boonmeetrakul, said the Democrats are seeking the removal of Prime Minister Yingluck, via a dereliction-of-duty case, for her failure to bring back Mr. Thaksin to face his legal verdict, and they also want to purge Information and Communications Technology Minister Anudith Nakornthap for alleged fraud. (The Nation) (Bangkok Post)

Economics

Prime Minister Yingluck Shinawatra met with representatives of the US-ASEAN Business Council (USABC), which represents over 100 major US corporations, and delegates from China’s sovereign wealth fund on Monday March 12. Both leading American and Chinese investors reaffirmed their intentions to continue investing in Thailand and the ASEAN region as a whole. The council urged the Thai government to eliminate trade barriers as well as accelerate spending, including on the flood prevention. American companies also called for the relaxation on the law that limits their maximum share ownership and the excise tax. Meanwhile, China’s sovereign wealth fund would like to participate in Thailand’s infrastructure investment as well as investing in the agricultural sector. The Thai prime minister also pointed out that Thailand is ideally positioned to act as the gateway to other ASEAN countries.  (The Nation) (MCOT)(The Thai Financial Post)

After discussing with the Asian Development Bank (ADB) officials on March 14, Deputy Permanent Secretary for Transport Jamroon Tangpaisalkit revealed that the ADB has offered to give technical and administrative assistance in terms of financial and income management to the Thai government to improve its rail system. The minister said the ADB has offered to assist the State Railway of Thailand (SRT) on infrastructure and technical improvement, provided that the Thai government has committed 170 billion baht into the development of the SRT’s infrastructure. (The Thai Financial Post)

During an international conference on “Balancing the Economic Growth and Social Strengthening” held in Bangkok during March 12-14, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD) Supachai Panitchpakdi urged Thailand to restructure its tax system in order to eliminate the big income gap between the rich and the poor. He stated that under current conditions, the higher the economic expansion, the higher income inequality will be in a country. He added that the government’s populist policies do not help much to solve such a gap; instead, it should turn to focus on social and educational investment. (The Thai Financial Post)

Former Commerce Minister Mr. Narongchai Akrasanee advised the government to stop its populist policies, such as first-home and first-car policies, as they are unnecessary while producing more debt for the administration. Furthermore, he said the rice-mortgaging scheme is ineffective. He also stated that the number one problem Thai people are facing is having high living costs but low earnings. Moreover, the government’s flood relief coupons have been found to be unpopular. Nearly 900,000 coupons, worth two billion baht, have been distributed to flood victims for the purchase of electrical appliances under the flood relief project. However, less than 10 percent of them have been used so far, while the coupons will expire at the end of this month. (The Thai Financial Post)

The Federation of Thai Industries (FTI) has revealed that the industrial sector is currently considering a 15-20% salary raise for foremen, skilled workers and long-time workers to prevent possible conflicts stemming from the implementation of the government’s minimum wage-hike policy. According to the policy, companies will have to pay an additional 60 billion baht each year to their employees, which might cause production cost and goods price to increase by 3-6 percent. (The Thai Financial Post)

The Bank of Thailand has raised its crude oil price benchmark for this year to 140 US dollars per barrel from 103.3 US dollars per barrel. On Thursday March 15, the Energy Policy Management Committee agreed to increase the State Oil Fund levy on petrol 91 and 95 by 1 baht per liter. The increase in the petrol levy took effect from midnight Thursday, making the price of petrol 91 and 95 go up by 1.07 baht per liter on Friday. However, the Oil Fund levies on diesel and gasohol were unchanged. Also, the Committee on Energy Policy Administration recently raised the prices of LPG and NGV to 20.33 baht and 10 baht per kilogram, respectively. The Ministry of Transport has authorized an increase in the taxi starting fare, in line with the rising fuel costs. However, fare-hike proposals from other public transport systems that run on diesel are still pending and will have to rely more on the process to stabilize the cost of diesel first. According to the president of the Thai Bus Operators Association, Ms. Sujinda Cherdchai, in spite of the not getting authorization from the Central Land Transport Committee, operators of interprovincial buses will increase fares by 0.06 baht per kilometer starting April 1. Ms. Cherdchai claimed that the operators would rather pay the related fines because it is still cheaper considering the costs of their competition with the illegal mini-vans that operate on the same routes. (Bangkok Post) (The Thai Financial Post)

The Commerce Ministry has confirmed that Thailand’s exports will grow by 15 percent, or an equivalent of 263 billion dollars this year. However, the first quarter’s figure is predicted to be negative given that the sector is still recovering from the flood impact. From the second quarter onward, the situation in the export sector should return to normal, while a full recovery should appear in the second half of the year. The Department of International Trade Promotion (DITP) has also reiterated that the export growth will reach its target of 15 percent, as the department clearly aims to promote the country’s export to other potential markets, such as China, India, Russia, Africa and ASEAN to compensate for the crisis in traditional markets. Additionally, the ASEAN market is currently a new main target since the integration of the ASEAN Economic Community (AEC) is approaching in 2015. Furthermore, given its status as the trading center in Southeast Asia, Thailand is considered to have an advantage over its competitors in the AEC establishment. (The Thai Financial Post)

Security

Thailand’s cabinet has decided to extend the emergency decree in the three southernmost provinces, Yala, Narathiwat, and Pattani, for another three months from March 20 to June 19. The government’s decision came after a recent series of bomb attacks in the three border provinces that killed and wounded both soldiers and civilians. Under the decree, which had been extended 26 times previously, the state security forces have special powers of arrest detention. Deputy Prime Minister Yuthasak Sasiprapha stated that authorities want to keep the decree in place while a new national security policy is launched. He added that government agencies supported the decree’s extension despite the cessation of violence in other areas.  (Washington Post) (SF Gate)

An Iranian man, Masoud Sedaghatzadeh, appeared in a Malaysian court this week over accusations of involvement in a failed bomb plot in Bangkok on February 14. Mr. Sedaghatzadeh, speaking through an interpreter, claimed he had nothing to do with the bomb incident that, among other things, destroyed a taxi and blew the legs off another suspect in Sukhumvhit 71. Moreover, he insisted that he did not know the two other Iranian men he was seen leaving with from a rental house where the first blast occurred.  Thai authorities are eager for their Malaysian counterparts to handover Mr. Sedaghatzadeh. But because no extradition treaty exists between Thailand and Malaysia, they must wait for the formal judicial process in Malaysia to be carried out. A hearing is scheduled for Mr. Sedaghatzadeh for April 16. (Washington Post)

In the wake of the fatal fire in Bangkok at the Grand Park Avenue Hotel that killed two Russian tourists and injured 21 foreign nationals and two Thais, the head of Thailand’s Hotel Association, Prakit Chinamourphong, maintained that Thai hotels are safe and the fire incident will not deter tourism. Mr. Chinamourphong added that four and five-star hotels are especially secure, noting that they are usually managed by international brands that follow stringent security measures.  His comments followed the revelation that the room in which the fire had started did not have sprinklers, prompting many to question Thailand’s safety standards. The 1992 Building Safety Control Act requires hotels to install sprinkler systems, but enforcement of the measure was not severe enough to compel owners of older buildings, such as the Grand Park Avenue Hotel, to comply. As a result, City Hall is drafting a new ordinance to close this security gap. (TTR Weekly) (Bangkok Post)

Thai authorities intercepted a timber smuggling operation in Phanom Dong Ra National Park in Sisaket province, resulting in the arrest of 38 Cambodian nationals. The suspects were found with 109 pieces of rosewood timber and logging tools. Authorities were tipped off from local Thai villagers who reported seeing around 70 Cambodians crossing into Thailand to smuggle timber back into Cambodia. Touch Ra, Cambodia’s Chief of Border Relations at the Chhom Sror Ngam border checkpoint in Oddar Meanchey province, said the group crossed into Thailand via the Dangrek mountain range in Preah Vihear’s Cham Ksan district. (Phnom Penh Post)

Malaysian maritime authorities caught three Thais, aged 19 to 49, attempting to cross into Thailand at an undesignated border crossing point. Aided by a 29-year-old Malaysian local, the Thais were headed for Takbai district by boat. The local involved had a history of smuggling diesel and other goods into the Thai side. The arrests came as authorities were undertaking a seven-day operation aimed at curbing smuggling between Malaysia and Thailand, which Deputy Superintendent Tan Cheng Saen in Pengalan Kubor, a Malaysian border town, said is still rampant. (New Straits Times)

Thailand’s government is steeling itself for a possible downgrade on the US State Department’s watch list of countries with the worst human rights records in combating human trafficking. In 2010, Thailand was ranked Tier Two for not complying with minimum standards to address the trafficking of people. If after two years there is no improvement, its level will drop to Tier Three, joining ranks among countries with more notorious reputations, such as North Korea, Myanmar, and Cuba.  News of the possible downgrade, which could trigger non-humanitarian sanctions, came after sharp criticism from international advocacy groups, such as Human Rights Watch, and a scathing report by the United Nations Special Rapporteur for Trafficking in Persons. Among their allegations are that trafficking of girls between age 11 and 15 has actually increased, and that Thai authorities are often clients of trafficked prostitutes or involved in trafficking themselves. (Voice of America)

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Summary

Prime Minister Yingluck Shinawatra made an important visit to Japan this week to rejuvenate investor confidence in Thailand after last year’s catastrophic flood which resulted in heavy losses and disruption for the business community. The Thai government announced several water management plans in seeking to assure investors such disasters would not occur again. On the economic side, Thailand’s growth outlook is optimistic with the International Monetary Fund (IMF) forecasting between 5.5 to 6.5 percent growth in gross domestic product this year. In security, the South continues to experience more violence as two more bomb attacks occurred in Narathiwat province, prompting the Thai government to seek an extension of the emergency decree. In the meanwhile, Thai authorities intervened on a large drug smuggling operation in the North, arresting two suspects and seizing over four million methamphetamine pills.

Politics

Prime Minister Yingluck Shinawatra visited Japan this week to restore investor confidence after last year’s flood and assure the Japanese business community that there would be no repeat of such disasters in the future. With 49% of foreign direct investment to Thailand coming from Japan, exports to Japan up 8.3% and tourists from Japan rising by 13% last year, Japan is playing a crucial role in Thailand’s economic plans. Prime Minister Yingluck therefore not only affirmed that floods will never be a problem again but also offered financial incentives for returning investors. As a visible short-term measure, around 90 miles of flood walls are currently being built around the six low-lying industrial estates north of Bangkok. While this should please business and industrial lobbyists, local villagers fear that their homes and farms will be inundated as a consequence. In cooperation with the Stop Global Warming Association, locals are planning to seek a suspension of the flood wall construction through the Central Administrative Court. Prime Minister Yingluck pleaded for understanding, stating “The barrier policy does not mean that the government wants to save the estates without caring for the residents. But it’s important that if foreign business owners are not made confident about the flood prevention plan, and relocate from Thailand as a result, local residents will not be hired.” (The Nation) (Bangkok Post)

Apart from flood walls, reforestation, as proposed by His Majesty the King, artificially lowering water levels in several dams, elevation of roads to prevent supply chain disruption and setting up of water retention areas, the government’s plan is centered around a centralized command. But critics argue that different departments and local administrations still have overarching powers. Above all though, critics maintain that the plan lacks an essential measure in not addressing a further floodway to transport water towards the Gulf of Thailand, as the Chao Phraya River simply does not have enough flood absorption capacity. (Eco-Business) (New York Times)

Japan’s Economy, Trade, and Industry Minister Yukio Edano assured visiting Prime Minister Yingluck that he continues to see Thailand as Japan’s investment and manufacturing base in the ASEAN region, and he therefore supports further investment and economic cooperation. In a joint statement, Prime Minister Yoshihiko Noda and Prime Minister Yingluck further stressed the importance of cooperation among other areas than the economy, highlighting disaster management as well as security and regional affairs. (The Nation) (The Japan Times)

Meanwhile, exiled former Prime Minister Thaksin Shinawatra was in South Korea, commenting on the Thai government’s flood prevention measures and acknowledged the fact that Bangkok is sinking while seawater levels are rising. Therefore, he said, it will be necessary to protect Bangkok from rising sea levels by building a dyke, which could be completed in 2015. In addition, he said, this plan would include setting up an irrigation system which will boost the country’s agricultural output. (The Bangkok Post)

Prior to Prime Minister Yingluck’s four-day visit to Japan, the government announced that it will offer 250,000 dollars in compensation to the family of Hiroyuki Muramoto, a Reuters cameraman killed during the crackdown on the red shirt demonstrations in 2010, arguing that evidence pointed towards Thai soldiers being responsible for Muramoto’s death. The Yingluck government approved a 2 billion baht budget last month to pay compensation to family members of victims of violence and political protests since 2005. (AFP) (The Japan Times)

Thaksin was back in the headlines after claiming in an interview with The Bangkok Post that the envisioned charter changes will not favor him: “I have my own way of getting back home without having to rewrite the charter to favor me.” As his sister, Prime Minister Yingluck, has already stated numerous times, Thaksin also stressed that the section on the monarchy will stay untouched amid the proposed changes to the constitution. In a video-linked message at a recent red shirt gathering, Thaksin addressed this issue saying, ”Today’s constitution is undemocratic. It does not respect the rights and freedom of the people. It downgrades the power of the people. The person who is the prime minister and who came from the people throughout the country has to operate under the discretion of a handful of people who do not have to be responsible to the people.” Analysts opine that constitutional changes would not stir public uprisings because most affected issues are too far removed from daily life – with the exception of a return of Thaksin as a free man. As scholar Chris Baker put it, “A Thaksin government without Thaksin is absolutely perfect at the moment,” adding, “We are back on the path before the coup. The one thing that can throw this is if Thaksin tries to return.” (AFP) (The Bangkok Post) (Bloomberg)

Economics

The Stock Exchange of Thailand’s main index finished sharply higher on Thursday, March 8, recovering further from the sell-off on Tuesday.  The index soared 15.15 points or 1.31 percent to finish at 1,168.31 with the volume of 4.503 billion shares worth 35.757 billion baht resulting heavily from large gains in the financial shares and the energy producers. The global forecast for the Asian markets suggests limited upside from the success of Greece to close its bond swap offer for private creditors with the participation rate in the country’s debt swap high enough to avoid a default. Adding to the market upside, U.S. payroll processor ADP reported stronger than expected private sector job growth in February. European and U.S. markets finished firmly higher, and the Asian bourses are expected to follow that lead. (Nasdaq) (Reuters)

Thailand’s Board of Investment (BOI), supported by the Ministry of Industry, has launched a new roadshow campaign, starting in Japan to regain foreign investors’ confidence along with promoting the country’s tourism image. The BOI’s main argument under the theme “Unbeatable Thailand, Unparalleled Opportunities” is the country’s ability to recover and overcome any challenge and comeback stronger when facing economic obstacles. The BOI also pointed out the Thai Fighting Spirit by saying it is “embedded in the DNA of all Thai people”. Prime Minister Yingluck Shinawatra and her entourage made an official visit to Japan on Tuesday March 6, 2012, and used the occasion of the 125th anniversary of the establishment of diplomatic relations between Thailand and Japan to enhance bilateral relations between the two countries and to rebuild confidence among Japanese investors after last year’s flood crisis. (ThailandBusinessNews)

To calm investors’ worries about future flood-related disasters, Prime Minister Yingluck said the Thai government had allocated 350 billion baht to implement an effective plan for sustainable water management, with both urgent and longer term measures. The plan has already initiated and is progressing with the current urgent measures expected to be completed by the end of this month. Furthermore, the Thai and Japanese prime ministers agreed to expand and target the value of the countries’ bilateral trade to reach 100 billion US dollars by 2017. After the roadshow in Japan, the Thai government will try to take the campaign to other countries, starting with China and South Korea, in order to provide good opportunities for Thailand to garner investment in varied industries and types of services and become a production hub to welcome the ASEAN Community in 2015. (ThailandBusinessNews)

The Thai baht advanced by the most in two weeks with 0.6 percent appreciation on Tuesday, March 6, after foreign investors raised holdings of the nation’s shares on the optimistic expectation that the country’s economic growth will improve this year. According to Prime Minister Yingluck Shinawatra’s speech in Tokyo, Thailand’s GDP this year may rise between 5.5 to 6.5 percent.  Meanwhile, The International Monetary Fund (IMF) forecasted positive economic growth in Thailand to be 5.5 percent this year and 7.5 percent in 2013. The IMF’s mission chief in Thailand agreed with the need for Thai government to allocate budget for water management projects. However, there are some concerns such as the flood prevention implementation, which might be slower than anticipated. Any renewed domestic uncertainty could put pressure on still-fragile investment sentiment, and the government’s populist policies could worsen its budget deficit. (Nasdaq) (Bangkok Post)

Don Mueang Airport, which is used by budget airlines, private planes, and freight carriers in Bangkok, reopened on Tuesday, March 6, after being closed down since last October by Thailand’s devastating flood. All airlines will return to Don Mueang, except for Orient Thai Airlines, which will remain at Suvarnabhumi Airport.  Orient Thai Airlines CEO said the airline did not want to keep moving back and forth while the state policy on airports was inconsistent, and it is also more convenient for international flight operations to be at Suvarnabhumi. Airports of Thailand claimed that it will build a flood protection barrier, 6 km. long, around the airport by this September. Nevertheless, not much is being done to build protective barriers on the river banks, just west of the airport. To restore Don Mueang Airport, the Thai government spent 392 million baht (12.8 million US dollars) and Thailand’s tourism authority contributed 1.2 billion baht (39.3 million US dollars). (Reuters) (TTR weekly)

Security

A roadside bomb killed four soldiers in Narathiwat. The bomb, estimated between 10-20 kilograms, ripped the soldiers’ jeep in half and left a meter-wide crate in the ground. Prior to the explosion, the soldiers had been providing security for a ceremony marking Macha Bucha, a day on which many Thai Buddhists perform merit-making, at Ratsamoson temple. The attack occurred as the soldiers were returning to their barracks in Rueso district, and it is thought to be the handiwork of insurgents who target government personnel. Following the attack, Deputy Prime Minister Yuthasak Sasiprapha said Thailand’s government is likely to extend the emergency decree in the deep South for another three months. (Telegraph) (Bahrain News Agency) (Stars and Stripes)

Another attack occurred in Narathiwat’s Takbai district, where suspected insurgents set off a bomb hidden in a pot at a riverside market. The explosion injured four soldiers and four civilians. All were sent to a local hospital where one of the civilians, a 37-year-old boat driver, later died. (The Washington Post)

In the wake of these attacks and the recent failed bomb plot in Bangkok on February 14^th, Surin Pitsuwan, the secretary-general of the Association of Southeast Asian Nations (ASEAN ), speaking to the Defense Technology Institute at the Army Club in Bangkok, warned that Thailand must improve its intelligence operations and the capacity of security forces to keep up with terrorist movements and changing situations. “The armed forces must adjust their missions appropriately, understand new situations and factors, and consider not only national security but also human security,” Mr Surin said. In a similar vein, Privy Councilor Surayud Chulanont opined to the audience that the armed forces need to develop its personnel and their English capabilities. Both men’s comments were given in the context of preparing the military establishment for the integration of the ASEAN Economic Community in 2015. (Bangkok Post)

This week Thailand held its annual Defense and Security exhibition, a four-day event in Bangkok organized under the aegis of the Thai government and the Ministry of Defense. Over 250 companies from 30 countries took part to show off the latest in weapons and equipment for land forces, optical and electrical equipment, and special operations hardware. The event, which was attended by defense and security officials and contractors, provided Thailand with opportunities for increased cooperation with other countries in defense and security issues. (Voice of Russia) (Kyiv Post) (Associated Press of Pakistan)

A hotel fire broke out in Bangkok’s tourist district, killing two foreigners and injuring 21 tourists and two Thai nationals. It occurred at the Grand Park Avenue Hotel in Sukhumvhit 22. Rescue teams treated hotel guests with resuscitators and cranes were used to evacuate guests in the upper floors. It took fire crews around 30 minutes to bring the flames under control. Authorities say the fire started in an unused conference room on the hotel’s fourth floor around 10pm at night, leading to speculation that a short circuit was the cause. However, experts from the Office of Forensic Science are still investigating to determine the cause of the fire. (MCOT) (The Australian) (The Nation)

In Chiang Rai, authorities arrested two men in Mae Chan district connection with the discovery of four million methamphetamine pills in an abandoned pickup truck.  Following a chase, which occurred after the pickup truck and two accompanying motorcycles failed to stop for a search, authorities found the vehicles –abandoned by their drivers – on a road with no sign. Inside, there were 60 bags containing the methamphetamine pills. In a similar development, police arrested three men in Mae Sai district in possession of 200,000 methamphetamine pills. These arrests came after authorities were tipped off that drug smugglers were planning to move large shipments from Myanmar into Thailand via Mae Fa Luang and Mae Chan districts. (UPI) (Thailand Business News)

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Summary

This week  came two court rulings which shook Thailand’s political scene. One involved the sentencing of a red shirt leader to jail for lese majesty, and the other was the guilty conviction of media mogul and PAD core leader, Sondhi  Limthongkul, for falsifying documents to secure loans for his business empire in the 1990s. In economic news, positive domestic factors have been cited as contributing to the strong performance shown at Thailand’s stock exchange this week.  Additionally, the National Economic and Social Development Board (NESDB) projected GDP growth of 5.5% to 6.5% this year. In security, Thai authorities have arrested three more suspects in connection to the bombing in Bangkok on February 14, and the government has decided to integrate all intelligence operations under the National Security Council (NSC).

Politics

In political headlines this week, there were two major judicial rulings and the assault on a Thammasat law professor who leads a controversial group advocating the reform of Thailand’s lese majeste law. Also, Prime Minister Yingluck Shinawatra had an audience with His Majesty The King to discuss forest rehabilitation and announced an upcoming diplomatic trip to Japan.

Surachai Danwattananusorn, a core member of a splinter group of the red shirt movement called “Red Siam”, was sentenced t 7 1/2 imprisonment for lese majeste. His sentence was  halved from the maximum 15 years due to his confession to the crime. Mr. Surachai accepted his verdict regarding three speeches he gave in 2010 but announced that he will seek a royal pardon. Additionally, he criticized the Pheu Thai Party for  failing to protect its supporters and party warriors, as he alleged they haven’t done enough to free jailed red shirt members. (Bangkok Post)

In related lese majeste news, Nitirat leader and Thammasat law Professor, Worajet Pakeerat, was assaulted on the university’s Tha Pra Chan campus. After media outlets aired pictures of the attackers, they surrendered to police the following day. Supot and Supat Silarat, two 30-year-old twin brothers from Pathum Thani province, confessed to attacking the law professor because of his support towards amending article 112. Concurrently, they declared to be members of an anti-Nitirat group and were not been hired for the attack. Dr. Worajet suffered bruises to his face and filed a complaint to police, but insisted that he and the Nitirat group would continue their campaign unchanged. Supot and Supat have been charged with physical assault, which is punishable by up to three years in prison. (Mcot) (Bangkok Post)

The main headlines in media outlets this week belonged to Sondhi Limthongkul though, who received a 20 years jail sentence for falsifying financial documents to secure a $32 million government bank loan for his media empire. Although he still awaits trial on terrorism charges for his role in the occupation of Bangkok’s two airports in 2008, he was released on 10 million baht ($328,000) bail the very same day and is appealing the court decision. As leader of the People’s Alliance for Democracy (PAD), or Yellow Shirts, Sondhi was a key person in the movement opposed to Thaksin Shinawtra’s government, accusing him of being disrespectful to King Bhumibol Adulyadej as well as, ironically, corruption (a crime which Sondhi himself has now been convicted). Both Sondhi and Thaksin rose to fame and riches during the 1980s and 90s, taking advantage of loose regulations, which fostered speculation in the stock and property markets. Whilst initially supporting Thaksin as prime minister in 2001, their fallout has been attributed to Thaksin’s decision not to reappoint a close associate of Sondhi as president of the state-owned Krung Thai Bank. Relations soured when some of Mr. Sondhi’s businesses no longer enjoyed favorable loans. The Wall Street Journal argues that Sondhi’s influence is waning fast and that he is not likely to avoid serving some time behind bars. His downfall coincides with the rapidly diminishing influence of his PAD movement, although analysts point out that the PAD could be revitalized if Thaksin is allowed to come back to Thailand without serving his jail time.

(The Washington Post) (The Wall Street Journal) (The Sydney Morning Herald) (Bloomberg)

Prime Minister Yingluck Shinawatra and members of the Strategic Formulation Committee for Reconstruction and Future Development (SCRF) and the Strategic Formulation Committee for Water Resource Management were granted an audience with His Majesty the King at Siriraj hospital. Afterwards PM Yingluck announced that she will follow His Majesty the King’s advice and put forest rehabilitation and preservation on the national agenda because His Majesty the King blamed deforestation as a major contributing factor towards last year’s severe flooding. Additionally, he argued for harsher punishments for greedy civil servants who allow illegal logging. (Bangkok Post)

To restore Japanese investor confidence, PM Yingluck and a high profile list of economic ministers will visit Japan from March 6-9. Ms. Yingluck will be granted an audience with Emperor Akihito and is expected to visit the city of Sendai in northeastern Japan, which was nearly wiped out after the earthquake and tsunami disaster last March. There, she will offer moral support to Thai workers at a factory in Sendai. Her brother, meanwhile, will visit South Korea but instantly denied that his visit is related to PM Yingluck’s visit to South Korea, scheduled for March 24-26. (AsiaOne)

Economics

On the economic front, Thailand’s stock market closed on a strong note, projections indicate a strong recovery for Thailand’s economy after last year’s floods, confidence among foreign businesses is expected to improve, and representatives at ASEAN’s 18^th Annual Economic Ministers Retreat met to discuss increasing trade liberalization.

The Stock Exchange of Thailand (SET) main index increased 4.08 points or 0.35% to close at 1,164.98 points on Thursday 1 March 2012. The trade value was 33.04 billion baht, with 4.75 billion shares traded. Asian stocks mostly fell on Thursday after US Federal Reserve Chairman Ben Bernanke stopped a recent rally by not signaling any further monetary easing to stimulate growth. According to Rakpong Chaisuparakul, Economic and Strategy Research Manager of KGI securities (Thailand), Thailand’s stock market was stronger than its neighbors’ markets on that day due to the positive response in domestic factors. Thai economy has shown recovery since January, such as in the manufacturing and industrial sectors. Good prospects for economic recovery, together with recent dividend payment announcements from big companies, kept overall market outlook positive. (Bangkok Post) (Reuters) (Infoquest)

Thailand’s central bank governor, Prasarn Trairatvorakul, stated that the Thai economy is poised to make a strong recovery from the flood that disrupted supply chains around the world last year, and he anticipated that foreign investment would improve as more flood prevention measures are in place. The recovery of foreign investment in the manufacturing sector, which is expected to recover to pre-flood levels by the third quarter this year, along with government stimulus measures, could contribute to a recovery that would prompt the central bank to raise the 2012 economic growth target beyond the present estimation of 4.9%. Thailand’s deputy prime minister and finance minister, Kittiratt Na-Ranong foresaw growth of up to 7% this year, partly due to populist policies under Prime Minister Yingluck Shinawatra’s administration that pushed a series of minimum-wage increases and rice price-support programs to help boost consumer spending. However, some economists say the stimulus program could complicate the central bank’s economic stabilization by potentially inducing more inflation. According to Bank of Thailand’s governor, the policy rate, which was recently cut to 3%, will likely remain in place until the third quarter, and inflation which was recently at 3.38% on year in January is still under control. Another inflation concern that the central bank needs to keep a close eye on is oil price escalation, due to economic recovery in key economies like the US and Japan and tightening sanctions against Iran, which raised tensions over commodity prices, as it may affect the Thailand’s economic expansion. (Reuters) (The Nation)

The National Economic and Social Development Board (NESDB) projected GDP growth of 5.5% to 6.5% this year. Increase foreign investment inflows resulting from the kingdom’s optimistic rebound has strengthened the Thai baht. The currency reached a five-month high of 30.22 per dollar on February 24. It appreciated 1.8 % in February which showed the best performance among Asia’s 11 most-actively-traded currencies. Hence, the Bank of Thailand will potentially intervene in baht value to support exporters those are recovering from last year’s floods. Commerce Minister, Boonsong Teriyapirom, said Thailand’s target for export growth of 15% this year is achievable as companies start to operate at full capacity after resuming from flood disruption. (Bloomberg)

A survey of the Japanese Chamber of Commerce Bangkok (JCCB) found that business sentiment among Japanese firms operating in Thailand is expected to rebound in the second half of this year as production capacity returns. However, 8% of firms surveyed plan to relocate outside Thailand after last year’s devastating floods. Setsuo Iuchi, chairman of the JCCB’s economic research committee and president of the Japan External Trade Organization’s Thailand office, said a quarter of companies surveyed have resumed either partial or full capacity since December, 21% expect to resume in April or May, while the rest of the companies need more time to restart. Flood-affected firms requested the Thai government to provide quick and accurate information and formulate clear flood-prevention plans to be implemented immediately. (Bangkok Post)

The 18th ASEAN Economic Minister Retreat took place last week in the Myanmar capital of Nay Pyi Taw to discuss the issues related to ASEAN Economic Community (AEC). One result of this event was the ASEAN Comprehensive Investment Agreement (ACIA), which aims to increase both intra-and non-ASEAN investment, going into effect on March 1. The agreement is part of the process of moving towards the AEC in 2015.The economic ministers agreed to focus more on eliminating non-tariff barriers in order to increase trade liberalization in the region. China, Japan and South Korea are also negotiating to have expanded free trade agreements (FTAs) with ASEAN and each other. The representatives agreed to set up three working groups to study the scope of liberalization on goods, services and investment under the Framework on Regional Comprehensive Economic Partnership (ASEAN ++, an FTA between ASEAN and China, Japan, South Korea, India, Australia and New Zealand). A conclusion on these topics will be submitted to the ASEAN Summit at the year’s end.  The Thai deputy prime minister and finance minister, Kittirat Na Ranong, has suggested Thailand’s local private sector to prepare for the formation of the AEC in 2015. He encouraged public and private sectors to work collaboratively together in preparations for the single economic community of the 10-member ASEAN to ensure Thailand’s strong competitiveness, amid fierce business competition with higher non-tariff barriers in the zero-tariff ASEAN bloc. (Bangkok Post) (Bernama) (Philstar)

Security

Thailand continues to grapple with the case of the failed bomb plot on Valentine’s Day that blew off the legs of an Iranian suspect and destroyed a taxi, while some are questioning the relatively lax approach towards international visitors.

On Sunday, three more suspects in connection to the February 14^th bombing were arrested in Thailand – all were identified as Iranian nationals. This brings the total number detained to eight. The revelation that two were legal immigrants and productive members of the foreign community in Thailand have provoked concerns over the depth of the plot and whether there may be long-term terrorist cells. (Bangkok Post)

Following the initial incident, Thailand’s government sought to downplay the bombing, saying what happened was not a terrorist attack. Foreign Minister Surapong Tovichakchaikul maintained that the bombers were only using Thailand as a base for operations to be carried out in other countries. However, images of broken glass and the blackened shell of a taxi cab in Sukhumvhit 71 have had a chilling effect on outsiders’ perceptions. (Bangkok Post)

Some in the media and academia are criticizing the government for attempting to whitewash situation in fear of damaging Thailand’s image as a tourism destination. Indeed, there has long been pressure among Thailand’s leaders not to admit that a terrorist attack could occur in the kingdom, according to Panitan Wattanayagorn, a security analyst at Chulalongkorn University.  ”Previous governments also downplayed issues like this. If they admitted a terrorist attack, it will have consequences for Thailand,” he said. (Bangkok Post)

Israel was swift to point the finger at Iran as being the one pulling the strings.  Speaking about the bombings in Thailand and India, Israeli Prime Minister Benjamin Netanyahu sharply affirmed that, “Nations of the world must condemn these incidents and draw red lines against this Iranian aggression.” Iran has denied any role in the bombings and Thailand is cautiously navigating the argument between Iran and its primary accuser. (Bangkok Post)

Against this backdrop, Thailand’s government has decided to integrate all intelligence operations under a single command headed by Pol. Gen. Wichean Potephosoree, currently serving as the secretary-general of the National Security Council (NSC). The purpose of the move is to focus on groups and individuals considered a threat to national security, according to Deputy Prime Minister Chalerm Yubamrung. The main agencies involved in the integration of intelligence operations are the NSC, the National Intelligence Agency, the Interior Ministry, the Special Branch Police, and the Foreign Ministry. Agencies that will support intelligence operations are the Internal Security Operations Command (ISOC), the Commerce Ministry, the Science and Technology Ministry, the Labor Ministry, the Agriculture and Cooperatives Ministry, the Justice Ministry, and the Bank of Thailand.  (Thailand Business News)(Bangkok Post)

While the move is well-received as a prudent step towards closing gaps in national security, critics note that the Immigration Bureau is conspicuously absent. Because foreign terrorists presumably enter through immigration checkpoints, the logical conclusion would be that immigration needs to also be under the new improved NSC. Also, there needs to be more intelligence sharing in the southern provinces, as this region has much conflict that leads to social and economic problems which pose a threat to national security. (Bangkok Post)

Prime Minister Yingluck Shinawatra and her Malaysian counterpart, Premier Najib Razak, have pledged to find a long-term and lasting solution to the conflict in Thailand’s south. Echoing the cooperative tone of their one-day meeting in Kuala Lumpur, Premier Najib declared, “Malaysia stands ready to assist Thailand on request in whatever way possible so there will be a long-term solution for the South.”  (Asia One News)