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After a long – flood related – break, HDFF’s Chairman’s Circle started the year 2012/2555 with a presentation by Police Lt Gen Tritot Ronnaritivichai, currently Commissioner to the Office of National Security Council (NSC), on “Movements of Terrorists inSoutheast Asia– Jemaah Islamiah and Al Qaeda”.  HDFF’s choice of topic for the month of January could have not have had better timing as a terror warning and the capture of a suspected Swedish-Lebanese Hezbollah member has been the talk of the town only a week before.

Due to Gen (ret) Bunchon Chawansin’s absence, HDFF Executive Director Dr. Wilfried A. Herrmann delivered the opening remarks welcoming all participants to the half-day event and subsequently introduced Police Lt Gen Tritot Ronnaritivichai, internationally known for his capture of Al Qaeda (AQ) and Jemaah Islamiah (JI) member Hambali. Gen Tritot used his presentation to give insight into the long line of incidents eventually leading to the capturing of Hambali, real name Riduan Isamuddin, in his apartment inAyutthaya,Thailand.

Before going into specifics, Gen Tritot gave a brief introduction on JI to ease the participants into the topic, followed by a detailed description of previous key JI members inSouth East Asia. Jemaah Islamiah gained international attention after the 2002 Bali bombing but the group was building itself through the 1990s by its leaders Abdullah Sungkar and Abu Bakar Bashir in Indonesia and, for the most part, in Malaysia. Hambali, as well as the two aforementioned members served as Mujahideen in the Taliban war against theSoviet Union, which in turn turned out to be a great networking event for aspiring international terrorists. While Sungkar and Bashir concentrated on building up JI, Hambali later on served as a linkage between AQ and JI as well as a representative for AQ inSoutheast Asia.

The successful arrest of Hambali was a cooperative effort between several agencies from various countries. On the other hand, the Hambali network included support from Iraqis, Pakistanis, Malaysians and Indonesians nationals. As Hambalis goal was to rule as a Caliph over territories covering almost all of Southeast Asia (including parts ofThailand), nationalities played no role in the ideologically shaped world of an Islamic extremist.

Gen Tritot finally captured Hambali on 11 August 2003 inAyutthaya. Of utmost importance to Gen Tritot was to catch Hambali alive to be able to prove that the Bali bomb had not been planned inBangkok, which could be proven.  The Q&A session after the presentation was lively and interesting.

HDFF’s next Chairman’s Circle will most likely take place in the first week of March with the developments in Myanmarenvisioned as topic. We hope to see you there! For any further questions please contact herrmann@hdff.org or gassner@hdff.org

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Summary

The lese majeste debate took over both national and international headlines this week. Thammasat University rector Somkid Lertpaithoon’s banned campaigning regarding the amendment of Article 112 on University campuses as well as Twitters controversial decision to impose its new censorship rules which sparked a series of lese majeste related conflicts. Water management remains a concern as experts report there too much water residing in several dams. The Thai economy continues on a juxtaposing, up-down cycle with varying sources giving different accounts of stability and future growth and Prime Minister Yingluck Shinawatra is pushing for foreign direct investment, making the international rounds to encourage export relationships. The Bank of Thailand is revamping its policies to push for better exchange rate management and the stability of financial institutions while software companies are forming alliances to strengthen their industry. The government has publicly reacted to the killing of four suspected insurgents who are believed to have been attacked undeservingly and the use of children in the insurgency continues to be denounced by international organizations. Energy security plans for the future are discussed and attempts to alleviate the dangers to Thai security from drug use are being enacted. Actions to support citizenship for refugees are also reviewed.

Upcoming HDFF Events:

Stay Safe: Safety and Security Training 2012-1 February 20-24^th  

The training addresses the daily security needs of executives and security focal points of (inter)national non-governmental organization in Southeast Asia. Learn to identify and assess main security risks, improving security awareness, developing risk avoidance behavior and acquire best practice security management tools

Politics

Twitter’s new country specific censorship measures will allow governments to request tweets to be removed due to a law violation and Twitter will comply with the request. While analysts and human rights critics claim this is Twitters way of doing business with authoritarian regimes and gaining market entrance,  Twitter’s Chief Executive Dick Costolo denied such speculations, defending the new policy stating, “There’s been no change in our stance … in respect to content on Twitter.” He further elaborated that tweets will still be shown globally and only be censored in the specific country. (International Business Times) To observers it was no surprise that Thailand was the first country to publicly support Twitters new policy, ahead of the Communist Regime in China, with the country’s information and communication minister Anudith Nakornthap stating, “It’s a good idea that Twitter has this policy to take care and prevent its users from violating the law, because freedom of expression must not violate other people’s rights or the laws in each country.” (The Independent) Thailand itself is already implementing some of the toughest censorship laws, ranking 153^rd out of 178 countries in Reporters Without Borders’ 2011 Press Freedom Index. The Government contacted Facebook last year with a request to remove more than 10,000 pages arguing the pages violated its lese majeste law and was successful in removing 225 Youtube videos. Some members of the opposition Democrat Party supports taking censorship a step further, as last year’s campaign by deputy spokeswoman Mallika Boonmetrakul illustrated, when she asked for an outright ban on all western social media websites, citing the Chinese model as exemplary. Recently Mallika asked for legal action against the Prime Minister, Deputy Prime Minister Chalerm Yoobamrung and Information and Communications Minister Anudit Nakornthap for negligence, due to the fact that 280 websites she reported since December 1, which allegedly insult the monarchy, are still operating. However, analysts are reporting on the ineffective censorship system, as 60,000 websites that were shut down were reopened under different names and networks. (Mcot) (The Next Web) (The Sydney Morning Herald)

Thammasat University’s decision to ban campaigning by the Nitirat Group, a group of law professors at Thammasat University (TU), split opinions within Thailand on both amending article 112 as well as on free speech. TU rector Somkit Lerpaithoon clarified that campaigns from both sides will not be permitted on University premises but academic-oriented events are allowed, saying “The ban only covers campaigns of a political nature about Article 112. If the CCA 112 wants to hold an academic seminar about Article 112, I will give them permission. But I won’t allow them to hold a signature campaign inside the TU compound.” (The Nation) Differing opinions were represented by all types of groups within the University.  A series of journalism students opposed Nitirat and their campaign to amend article 112 while the Students Union called on the University to lift the ban, but also clarifying they would not agree with Nitirat’s amendment plans. Former Chiang Mai University lecturer and member of the Campaign Committee for the Amendment of Article 112 Nidhi Eoseewong even called democracy itself into question. As the TU rector cited violence as one of the reasons for the ban, Mr. Nidhi claimed democracy was at stake if fear of violence was cited to curtail the freedom of expression. Additionally, Mr. Nidhi stated that this ban would also bring up the question of who determines the definition of a dangerous idea. (Bangkok Post)

More than 200 international academics, Thai and foreign, signed an open letter to PM Yingluck in support of Nitirat’s amendment plans for the lese majeste law, with American linguist Noam Chomsky and Princeton University Professor Cornell West as the most prominent signatories. Foreign Minister Surapong Tovichakchaikul commented that there was no need to reply to the international academics letter as the government has made its position clear, having no interest in amending Section 112, subsequently accrediting the academics with a lack of knowledge for the Thai people and their way of life. (Reuters) (The Nation) (Bangkok Post)

As reported in the Review last week, water management experts are warning officials about too much water being held in the Bhumibol and Sirikit dams. PM Yingluck reacted by instructing the Irrigation Department to discharge water in preparation for the rainy season. The amount of water in the aforementioned dams was thus far reduced from 99.4% of capacity earlier this month to 85% at the Bhumibol dam and from 99.8% of capacity to 83% at Sirikit. Science and Technology Minister Plodprasob Surasawadee was put in charge of outlining the natural disaster warning system and Deputy Prime Minister/Interior Minister Yongyuth Vichaidit was assigned to work with the Bangkok governor to dredge canals and ditches. In this instance Mr. Yongyuth already warned the Bangkok administration, saying “Bangkok must understand we have to work things out together. The government isn’t pressuring City Hall. But as a local administration organization, it is under the government’s supervision. It is not an independent state.” (The Jakarta Globe) (Bangkok Post) (Mcot)

Economics

Fiscal Policy Office (FPO) director general Somchai Sujjapongse announced this week that the economy has already risen above its lowest point since the flooding.  Somchai stated many national figures showed signs of improvement including public consumption and value-added tax collection. Additionally, auto sales were less negative, exports and imports expanded well, unemployment is low, the amount of reserves is high, and inflation is projected to decline. Contrastingly, Thai Office of Industrial Economics reported that Thailand’s industrial production fell for the fourth consecutive month last month. The industrial production index fell 25.8% from a year earlier, after a revised 47.2 percent contraction in November. The median of 11 company’s estimates in a Bloomberg News survey reported a 30% decline. The Bank of Thailand also stated this week a recovery in output might be continued to be delayed until the third quarter because the floods had caused more damage to factories and supply chains than previously estimated. Despite the interest rate cut last week, Benjarong Suwankiri, an economist at TMB Bank PCL in Bangkok claimed “There is still room for the central bank to lower the key rate further if the European economy deteriorates.” Overall Asian shares decreased this week as markets waited for confirmation of a likely debt swap deal for Greece to reduce the likelihood of default. Energy shares also weighed down the SET due to the weak oil market. Domestic institutions sold shares worth a net 310 million baht ($9.94 million) but foreign investors bought a net 159 million baht ($5 million). (Taipei Times) (Bangkok Post) (Reuters)

Prime Minister Yingluck Shinawatra attended the World Economic Forum (WEF) in Davos, Switzerland at the end of last week, including a night dedicated as “Thailand Night”, to encourage investors that Thailand has remained a good place for investment and an economic gateway to the region. Yingluck met with several business leaders and CEOs to discuss “Public-Private Interaction on Thailand” to seek ways to develop Thailand’s economic potential, policy on water management and long-term reform measures in Thailand. Yingluck assured the various leaders in attendance that with effective water management, there will be no repeat of last year’s flood crisis. Following the forum, Yingluck warned that Thailand urgently needs to upgrade its investment attractiveness, as the decline in foreign direct investment contrasted with a rise in neighboring countries. According to a study by the Economist Intelligence Unit, Thailand’s share of FDI in the region fell to 6% during the 2010-11 periods, as compared with 17% during 2004-09. In order to achieve the predicted 5% growth rate this year, Thailand needs to focus on exporting to Asian market and encourage domestic consumption after corporate tax cuts and infrastructure upgrades. (Bangkok Post) (MCOT)

The Bank of Thailand is reviewing its policy plans for the upcoming year and has announced its plans to focus on making the economy more resilient and improving the Thai standard of living. The BoT indicated that monetary policy may continue to be eased if moderate inflationary pressure remains including a shift in focus to promote private sector’s growth. The BoT will be pushing to support exchange-rate management which will adhere to principles of flexible movement in line with economic fundamentals. There will continue to be support for the Capital Account Liberalisation Master Plan which will allow Thai entrepreneurs and retail investors more flexibility in managing overseas investment. A public hearing is expected to be held in the near future to discuss overseas investment flexibility more thoroughly. A second goal of the central bank is to increase the competitiveness of financial institutions, improving the financial-system infrastructure, including actions such as developing payment systems to prepare for cross-border transactions involving regional currencies. The BoT is hoping to be a part of the ASEAN system of “Qualified Asean Banks” which allows qualified financial institutions to expand their businesses within the region. BOT Governor Dr Prasarn Trairatvorakul has encouraged both the private and public sectors to make headway towards improving financial strategic frameworks and work to overcome the current transitional period. For the public sector, the BoT is encouraging policies that promote efficient investments related to infrastructure, education, and governance. The private sector is being encouraged to learn more about the complexity and risks of various financial products in relation to costs and competitiveness. (The Nation)

Operators of four software parks have adhered to the principals the BoT is encouraging by aligning to form the Thailand Software Park Alliance. The aim of the alliance is strengthen the local sector to prepare for the ASEAN Economic Community (AEC) in 2015. The alliance currently includes 100 ICT companies plus 500 IT resources which are working to build the local job market and attract foreign investment. Software Park Thailand has now signed a memorandum of understanding with E-Saan Software Park, Software Park Phuket and Korat Software Park to cooperate on technology transfer and business matching. The MOU intends for each park to use its strengths to protect the local software industry, as the AEC will soon allow free flow of ICT workers. Kongkiat Kespechara, the director of Software Park Phuket, said by the second quarter he hopes to collaborate with a SET-listed land development firm to invest 2 billion baht to expand the park from 1,000 square meters to 160 rai (63 acres) by June. (Bangkok Post)

Security

The Southern Insurgency made significant headlines this week after troops killed four suspected insurgents during a gunfight. The four men were killed and three others were wounded on January 29^th when a gun battle broke out during an inspection of a pickup truck a checkpoint in Pattani province.  Following the attack, Yingluck Shinawatra ordered an investigation into the shooting, directing army chief Prayuth Chan-ocha to investigate the incident and report on his findings immediately. Yingluck claimed that if those killed and wounded were found to be innocent villagers, the government would fully take care of them. Gen. Prayuth also stated that if the authorities were found to be at fault, those responsible would be punished through the justice process. Residents reported that the villagers were only on their way to a funeral and were not contributing to unrest. A committee of inquiry is being formed and will fully investigate the incident for the next 30 days. “This shooting will make it more difficult for the government to win the trust of the people. Gen Yutthasak and the Region 4 Internal Security Operations Command must come out and admit a mistake was made, and declare publicly that the culprits will be punished within the justice system. They should not talk only about reparations” stated Angkhana Neelapaijit, chairwoman of the Justice for Peace Foundation. Additional violence this week included a paramilitary ranger being shot to death in a drive-by shooting, a woman was killed, her husband and young son seriously injured and other villager was shot dead in Pattani. A policeman was seriously wounded by two gunmen in Narathiwat

Additionally concerning the South, the delegation of Thailand led by Ministry of Social Development and Human Security (MSDHS) attended a treaty body session to discuss the Optional Protocol on Involvement of Children in Armed Conflict of which Thailand is a party. The Ministry attended together with representatives from governmental agencies concerning child rights protection and promotion. The Cross Cultural Foundation raised the issue about the recruitment of children under 18 years as part of the Village Defense Volunteers (VDVs) under the charge of Ministry of Interior.  The subject of holding children under the age of 18 years in custody together with adults in military barracks was also discussed as a serious concern. CRC claimed that since Thailand states the Southern Border Provinces are only experiencing “acts of criminal violence” and not armed conflict, the martial law and Emergency Decree should be removed. CRC is pushing for officials to become more careful in enforcing the special laws to enhance the protection of children’s rights overall. In conjunction with CRC, Prince of Songkhla University, Pattani Campus, Deep South Watch and partner organizations jointly organized a photo exhibition regarding children and youth and public discussions on “The Rights of Children and Youth in Justice Process and the Enforcement of Security Laws”. (Chanel 6 News) (Reuters) (Cross Cultural Foundation (CrCF)

Energy security continues to be a staple issue pertaining to Thailand’s future. A Thai energy expert has predicted that 10 member countries of the Association of Southeast Asian Nations (ASEAN), including Thailand, will integrate their electricity grids by 2020 for regional power security. A recent seminar on the ASEAN Power Grid was held in Thailand, for the purpose of promoting the use of abundant sources of energy in several ASEAN member countries, namely Myanmar, Vietnam, Laos, Malaysia and Indonesia. One of the main benefits of integrating power grids is reduced need to import fuel from suppliers outside the 10-nation bloc, while maximizing the commercial use of electricity in the region. Power expenses are expected to be cut by as much as US$1.87 billion and the integration would reduce costs of electricity generation, regional investment funds on power development projects and even power reserves. (MCOT) (The Borneo Post)

The use of illegal substances within the prison system was the major security debate this week. Opinion leaders are still supporting Thailand’s investment in the nationwide campaign against drug trafficking run by the Royal Thai Police Office and the Office of the Narcotics Control Board since last October. Despite acquiring a few large quantities of methamphetamine pills and arrest of suspects, drug syndicates have remained active. Efforts are being taken to push for a new law which will authorize the Anti-Money Laundering Office to seize the assets of drug traders retroactively. Additionally, the Corrections Department plans to ask for more than 1 billion baht in the 2013 fiscal year to build the first super-maximum security prison in Thailand. The “supermax” prison will be meant to accommodate the most dangerous and most hardened prisoners which pose a threat to international and national security. Thirachai Wutthitham, secretary to the Justice Ministry and the ministry’s spokesman has announced that prison is part of a four-step plan drawn up to curb drug trafficking in prisons. The department has already planned to relocate the first group of 500 drug convicts from prisons nationwide to Ratchaburi’s Khao Bin Central Prison by the end of this month in an effort to clamp down on drug dealing inside jails. Kobkiat Kasiwiwat, the department’s deputy director-general, has stated that new designated areas would also be established for drug convicts in all prisons to separate them from other inmates, who are frequently paid to act as drug couriers, or to smuggle in mobile phones and other contraband.

In other country related drug news, a non-commissioned Army officer, Sgt-Major Venus Srijai, was in court custody this week after being accused of aiding an Army major in a large drug transfer.  Sgt-Major Venus Srijai reportedly worked closely with Major Piyanat Ketjamras who is currently in custody after crystal methamphetamine and amphetamine tablets worth 1 billion baht were found at his Bangkok home. Separately in Chiang Mai, an Army anti-drug unit killed three foreign drug couriers in a gunfight, before seizing 5 kg of heroin. In this same area two weeks ago, two foreign couriers killed and resulted in the seizure of 100,000 amphetamine tablets and 8 kg of crystal meth.  (Asia One) (Bangkok Post)

Headway for refugees is being made as the Senate finally passed a law to grant the Thai Diaspora citizenship this week. Tens of thousands of stateless refugees within Thailand have previous family ties and documentations to prove they belong in Thailand but have lived without any legal rights their entire lives. Changes in territorial demarcation a century ago lead King Chulalongkorn to relinquish vassal states to British-ruled Burma and to French-ruled Cambodia. Following the territorial changes, some Thais moved to other provinces while many others stayed because they did not want to lose hereditary lands and property. “We are Thai by blood. We speak Thai. We observe Thai customs. How come we are not recognized as Thai? stated Bantom Sommai, who fled to Trat Cambodia during the period of Khmer Rouge control. Without citizenship, the stateless have no access to education or health care nor the freedom to move around as they please. They cannot hold driver’s licenses and do not receive social security. They are also routinely extorted by the police. According to the new law that was passed, the beneficiaries must be Thai by family bloodline and must have been affected by the territorial changes a century ago. They must have been living in Thailand for an extended period of time and they must be already included in state surveys of the Thai Diaspora. However, experts are reticent that the law will actually be implemented. The law will be effective only after the Interior Ministry has issued regulations to carry out the mandate, yet the Interior Ministry is known as one of the most ardent opponents of granting citizenship to the stateless to avoid attracting more illegal immigrants. The future for the Stateless remains unseen. (Bangkok Post)

PM Yingluck is this year’s chief guest at India's Republic Day celebrations

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Summary

Controversy continues to reign throughout politics, with conflict over Thaksin’s overlying power at the helm. Rifts between the various opinion leaders continue to widen, specifically over the appointment of Nalinee Taveesin as a PM’s Office Minister. Water management experts are alerting the authorities that La Nina will continue flooding damage and bilateral relations between Thailand and India and Thailand and Palestine make the headlines. Strife is also arising from the new public debt policy, as analysts believe the estimated borrowed amount will overwhelm the Thai economy. Government plans to sell its majority shares in PTT and Thai Airways add to the rising doubt of sound economic practices.  The policy rate was reduced another quarter of a point and both political and economic sectors continue to evaluate the Dawei economic zone project. Major security news includes a follow up on the arrest of Atris Hussein for possessing bomb making materials in Bangkok and human security issues concerning migration and Thailand’s health care system.

Upcoming HDFF Events:

Stay Safe: Safety and Security Training 2012-1 February 20-24^th

Addresses the daily security needs of executives and security focal points of (inter)national non-governmental organization in Southeast Asia. Learn to identify and assessing main security risks, improving security awareness, developing risk avoidance behavior and acquire best practice security management tools

Politics

A multitude of issues kept Thai politics interesting this week, with the appointment of Nalinee Taveesin as a PM’s Office Minister, gaining the most attention due to Ms. Nalinee being black listed in the United States for doing unethical business deals in Zimbabwe. Prime Minister Yingluck Shinawatra continues to defend the appointment, stating “We have to check the facts about the list…. but at this stage her qualification is constitutional.” In addition to the PM’s backing, Ms. Nalinee also got support from the Thai honorary consul in Zimbabwe, Kriangsak Charoenwongsak, a former Democrat MP, who attested she had all the necessary qualifications for a ministerial post. Apart from being a major shareholder in 25 companies in several business sectors, and serving as a director in eight of them, Ms. Nalinee is knowledgeable in the mining industry and well connected to several African leaders. Ms. Nalinee stunned the international media by claiming her relationship with the Zimbabwean Dictator and his wife was based on friendship and not on business relations. Her statement came after Democrat Party spokesman Chavanond Intarakomalyasut raised the question if Ms. Nalinee’s appointment might be connected with Thaksin’s mining businesses in different African countries. As The Nation points out, honorary consul Kriangsak is the majority shareholder in many of the businesses.

Critics fear that Nalinee in her meetings with foreign leaders will continue to focus on the businesses she is involved in, and the opposition Democrat Party has called for her resignation. Sources close to the Pheu Thai Party on the other hand acknowledged that the appointment has also caused a rift inside the party. Thitinan Pongsudhirak, political scientist of Chulalongkorn University, sees this appointment as well as the whole reshuffle as Thaksin’s salute to the red shirt movement for their help in getting his sister elected, arguing “This is a game of musical chairs that Thaksin is conducting … [which] allows Thaksin to pay back the Red Shirts by appointing Nalinee and their most fiery orator [Nattawut Saikua] to cabinet positions.” (The Guardian) (Bangkok Post) (The Nation)(Mcot)

Only a couple of weeks ago, Bangkok and central Thailand were still suffering from the worst flooding in over 50 years. This week, water management experts heightened alarms, claiming flooding would be worse this year if the government wouldn’t act quickly. The La Nina phenomenon will lead to more storms and earlier rainfall, expected to start between March and Mai, claims Seree Supharatid, director of Rangsit University’s Centre on Climate Change and Disaster. Major dams such as Bhumibol and Sirikit were holding more water than at the same time last year and should therefore release water now. Commenting on the figures that both dams held water at 87% and 86% of their capacity thus substantially more than usual (Bhumibol:  11.8 billion cu/m compared to 7.8 billion cu/m last year; Sirikit:  8.2 billion cu/m compared to 6.9 billion cu/m last year) Sombat Yumuang, director of Geo-Informatics Centre for Thailand (GISThai), Chulalongkorn University, backed a suggestion from the Japan International Cooperation Agency (JICA) to release water from the dams at twice the volume of last year to ensure a repeat of last year’s floods could be averted. (The Nation) (Bangkok Post)

Tight security characterized India’s Republic Day celebrations on January 26 both on ground and in-air. PM Yingluck, who arrived in New Delhi on January 24 for a three day visit, is this year’s chief guest at the celebrations. Yingluck is expected to push ahead with the bilateral Free Trade Agreement, which is expected to be finalized mid-year. Business interests clearly top the agenda of the official meeting with India also curious to join the development in Dawei.  “There are a range of clusters that are going to be developed in Dawei and India has its strength in the steel, petrochemical and other sectors. Even the government of Myanmar has asked us to join this project and therefore we can do it jointly [with Thai interests]. If we can match our strengths then we would be a formidable competitor to anyone,” Indian Ambassador to Thailand Anil Wadhwa commented. (Indiatoday) (Bangkok Post)

After Iceland became the 5th European state to formally recognize the Palestinian state at the end of 2011, Thailand followed, recognizing the Palestinian state officially on Thursday January 19. Both academics as well as the Muslim community welcomed the decision, stating this would make Thailand “a friend” to the Muslim World. Foreign Ministry spokesman Thani Thongphakdi clarified that although Thailand recognizes the State of Palestine, Thailand wants the Peace process to continue and adheres to the two-state solution. The Anti-Defamation League (ADL) on the other hand expressed its disappointment, calling the recognition “counterproductive to peace.” Abraham H. Foxman, ADL’s National Director stated that this would send the wrong signal to Palestinians, such as recognizing and acknowledging the Israeli state wouldn’t be necessary for Peace. (Bangkok Post)(European Jewish Press)

Economics

At the end of last week, the baht advanced 0.8 percent and foreign investors bought Thai shares worth a net 997.55 million baht ($32 million). At the start of this week, trading was slow as several Asian financial markets were closed for the Lunar New Year but reduced oil prices generated extra sales in the energy market. As the week progressed, Thai stocks rose with the rebound of foreign investment. “Foreign investors are expected to continue to buy Thai shares as we can see signs that investment funds are moving into Asian bourses,” said Globlex Securities analyst Chakkrit Charoenmetachai. According to the Thai Bond Market Association, Government bonds gained for a third week after global funds bought $170 million more local notes than they sold in the first four days of this week.  Despite these positive increases, A Nida poll asked Thai citizens to gauge their opinions on ”Today’s Thai Economy”, including 1,274 respondents.  The results showed that 46.15% of the people surveyed said they were satisfied with their standard of living, but one in four (25.43%) were not content. On the economic side, more than half of the respondents (56.51%) claimed they had confidence in commercial banks and other financial institutions but believed the current state of the Thai economy as ”fair”.

The Bank of Thailand reduced its key policy rate, for a second consecutive rate-setting session, by a quarter of a percentage point to 3%. The central bank said that the monetary policy committee (MPC) voted unanimously to reduce the policy rate and the rate cut was predicted by all 15 economists in a Bloomberg News survey. The bank is hoping to spur economic growth, effected by widespread flooding and the overall slowdown in global demand. Though inflationary pressures have declined, there are still many long term recovery goals being formed to encourage domestic demand. Reduced commodity prices will hopefully support economic activity including reconstruction spending and various government stimulus measures. The MPC noted that could without the rate cut, stimulus measures could exert some upward pressure on inflation. (Reuters) (Business Week) (Nasdaq) (Bangkok Post)

Significant concern about the public debt policy was heavily discussed throughout the government and media this week. Controversy began after Thirachai Phuvanatnaranubala, the previous Finance Minister before being dropped from his position last week, accused the government of political motivations and unsound economics. Thirachai also revealed that the finance ministry wants to use an investment fund (the Vayupak Fund) under its control to buy shares in PTT and Thai Airways in order to conceal the real extent of public debt. In addition to concealing debt, the government is hesitant to raise taxes in future to pay for government stimulus measures, so it is trying to understate the overall owed amount. Thirachai announced on his facebook page: “Fiscal discipline should be determined by economic principles, not political convenience. We will all wrongly view ourselves as rich and forget the need to pare down debts”.  If the government is no longer the predominant share holder in PTT and Thai airways, the government will lack the authority to control the local markets. This is especially a concern for energy security as PTT will no longer receive benefits such as government-to-government deals. PTT’s competitors are multinational companies that could buy out the Thai firm which may significant affect consumer prices. This may also include suspending the sales of petroleum products to Thailand during a crisis. Critics are calling on the government to strongly consider the law, benefits and national energy security before committing to the sale. Apsorn Krissanasmit, president of the State Enterprise Employees Union has stated that the Vayupak Fund belongs to the Finance Ministry so after the purchase by the fund, PTT will remain state-owned, however, after the fund comes to an end in 2013, possible PTT future changes remain unknown. (Forbes) (The Nation)

The public debt discussion has raised numerous questions for those re-examining the Pheu Thai Party’s previous stance against debt. One of the party’s’ original campaign platforms was that if elected to office, it would pay off the country’s debt so the present generation would not be burdened. Five months ago when Yingluck Shinawatra took office, public debt was about 4.2 trillion baht, or at 40% of the country’s gross domestic product (GDP). The new fiscal framework will consist of a public debt should not exceed 60% of GDP. It also sets a ceiling for debt servicing at 15% of the annual budget of which the government has stated 11% of the budget may be used to pay the interest burden on the debt. Economists have claimed that the country’s GDP is about 10 trillion baht, which means the government can borrow another 2 trillion baht before the limit is reached. However, the government will take the deficit from 350 billion baht to 400 billion baht. Infrastructure building plans are estimated to 2.27 trillion baht, supported by the private sector which will contribute 1 trillion baht, leaving 1.27 trillion baht to be borrowed. Post Today, a Thai newspaper, has claimed that after evaluating the government’s spending and borrowing plans, public debt may very well exceed the 6 trillion baht, or 60% of GDP, in addition to exceeding the 15% debt servicing ceiling; therefore explaining the government’s actions, in the form of an emergency decree, to transfer the Financial Institutions Development Fund’s (FIDF) debt of 1.14 trillion baht to the Bank of Thailand which is expected to ease the government’s debt by 65 billion baht a year.

Bank of America Merrill Lynch (BAML) has announced that it believes Thai currency and capital controls is a risky investment if the Bank of Thailand is assigned to take total responsibility for the Bt1.14-trillion legacy of debts incurred during bank bail-outs in 1997. If the FIDF is saddled with the burden to pay the principal and roll over the debt that is due this year, that will hurt the currency. BAML believes the baht will weaken to 32-32.50 baht per US dollar by the end of March and to 30.8 baht by year-end. (Bangkok Post)(Asia One)

Despite Naypyidaw’s recent cancellation of a 4,000MW coal-fired power station and the Karen National Union (KNU) stalling a linking highway, the Thai government and the Italian-Thai Development Plc have announced they will continue to back the Dawei (Tavoy) harbor and economic zone project. At a Thailand Board of Investment (BOI) forum in Bangkok, Kittirat Na Ranong, Thailand’s deputy prime minister and newly appointed finance minister, said that he remained hopeful that the US $58 billion project will proceed. TD, Thailand’s largest market value construction company, needs up to US$8 billion (252 billion baht) over the next three years to develop infrastructure such as roads, railways, a port, a telecom network and utilities in Dawei which will be raised in forms of equity, loans and strategic partners. Aside from investors, analysts are still claiming the project is not yet planned out effectively and is packed with risks including country instability and an unpredictable business climate. The halt is predicted to make securing strategic partners even more difficult. (Bangkok Post) (Irrawaddy)

Security

Following up on last week’s terror threat, the arrested suspected Atris Hussein reported to a Swedish newspaper Aftonbladet he’s innocent and is blaming Israel’s Mossad spy agency for his arrest. Hussein told the newspaper that “much of the material the police found in my warehouse had been placed there, probably by the Israeli security service Mossad.” Hussein believes he was interrogated by three men “who obviously were from Mossad” and claimed because he is a Shia Muslim, from an area in Lebanon with strong Hezbollah influence and a supporter of left-leaning Social Democrats in Sweden, it would make him a prime target. He also maintained that he exports a variety of goods from Thailand to other countries, including frozen gel packs used for pain relief which contain ammonium. However, he otherwise contends that the chemicals and fertilizers must have been placed there by someone else. As of January 21^st, China was the only country to reduce its travel warning to Thailand, excluded the 19 other countries which also issued warnings. As of January 26^th, Israel also lowered their threat alert. Thailand is waiting for the other warnings to come down. (Bangkok Post) (ABC News) (The Jerusalem Post)

Human security issues stemming from the floods are still continuing to unravel. Despite promises made by the governments, migrants are continuing to suffer as a result of escaping flooded areas. Those with passports who “legally” returned home are facing inflexible and the costly Immigration Bureau demands for those with overstayed and expired visas. For those with registration sheets to work in a certain area or those without any documents have been extorted by opportunistic “brokers” and officials, as Thai law stipulates that those migrants are not allowed to be anywhere other than those flooded provinces and in registered workplaces. There have been reports of workers being deported simply for being flood victims, with up to 150 people horded into rented six-wheeler trucks travelling to borders at night with a charge of 2,500 to 4,000 baht a person.  For those who did not want to be deported, migrants were placed in unhygienic apartment blocks with little access to aid deliveries. Some migrants without papers were refused entry to flood shelters and some who wanted to leave were confined to buildings with bolted doors. The Labour Ministry maintains that it responded adequately to the migrants’ predicament by setting up shelter housing at all and that government aid was not available so it relied on donations. The Myanmar embassy issued a few hundred documents, but without an official policy, these documents were not recognized by Thai officials. Experts are calling this a perfect example of embedded corruption and abuse of power. With ASEAN approaching, a holistic regional solution to migration challenges is strongly needed.

The World Health Organisation (WHO) has announced it will be encouraging a similar worldwide model to Thailand’s successful universal healthcare scheme. The WHO representative to Thailand, Dr Maureen E Birmingham, claims the WHO will be working with its allies in government, civic and academic sectors to push for the launch of universal healthcare scheme in various different countries.  Only a decade old, the BRAC University’s School of Public Health scheme covered up to 75% of Thai population and the bankruptcy rate relating to medical bills has dropped from 6.8% in 1995 to just 2.8% in 2008. Dr Timothy G Evans from the BRAC University has pointed out that when the scheme was launched, the national income is US$1,900 (60,000 baht) per person, highlighting that that a country does not need to be rich in order to provide healthcare coverage for its people. Evans commented there is still room for improvement such as focusing the prevention of disease and the promotion of good health, providing opportunities for the elderly and coverage to migrant workers as well. Thailand and Vietnam have also signed an agreement to cooperate on health security programs before Vietnam implements a law for health security in the next two years. Both countries will focus on research and monitoring for new diseases. (Bernama) (The Nation)

India and Thailand are working to increase their bilateral ties and have signed six agreements including an expanded version of the two countries’ free trade agreement (FTA). The current FTA covers only 84 items but the new one will include more than 30,000 items. There is an estimated $4 billion dollar growth in the next year and hope for trade to double to $14 billion by 2014 from its 2010 level. The two countries also signed pacts in areas of defense and security and decided to step up their cooperation in combating terrorism and piracy. Manmohan Singh, Prime Minister of India, claimed to have emphasized the need to put in place a bilateral legal framework to deal with non-state actors and subversive elements that pose a common threat to both societies such as terrorists, criminals, arms and drug traffickers. The agreements included a crucial treaty on transfer of sentenced persons and a memorandum of understanding on defense cooperation. Other pacts included people-to-people contacts and innovation partnerships, cooperation in Science & Technology, and a cultural exchange programme. (VOA) (The Nation) (AFP).

In the next six months, Thailand will be asking all passengers at major Thai airports to pay an additional security charge of 90 baht to cover the cost of examining and screening personal information. An advanced passenger information system (APPS) will be put in place at all airports with international flights. Airports of Thailand Plc (AoT) will be able to send out passenger identification details from passports and flight information to all airport authorities to confirm whether passengers should be allowed to leave or enter the country. The system can also check if passengers should be allowed to check-in for flights before departure. (Bangkok Post)

A Lebanese man with alleged ties to Hezbollah is arrested in Bangkok

PDF File

Summary

The reshuffle of the Pheu Thai Party cabinet just six months after the original appointment has caused significant controversy and what experts believe to be another move in supporting Thaksin’s control. Focus is being laid on the new defense minister, deputy minister for agriculture and energy minister due to their notorious roles in the previous government and 2010 riots. First quarter growth remains slow but Thai industries are working to reinvigorate development including The Export Promotion Department which has suggested numerous future plans to capitalize on international markets. HSBCs “The World in 2050″ report published that Thailandwill come in at 23^rdin 2050 with a GDP of $856 billion but analysts are concerned as to how this growth will affect quality of life. The arrest of (potential) Hezbollah member followed by the seizing of bomb-making chemicals near

Bangkok has led the international community to believe terrorism is a threat inThailand. Although the investigation is ongoing, Thai officials are distressed by the United States Embassy’s initial bold and public warnings of the attack. The Chinese led joint patrol along theMekongRiver is attacked for a second time, leading experts to question the patrol’s effectiveness and a potential dispute at the Thai-Cambodian border remains troubling.  Teachers in the South are asking the government for protection again the insurgency while violence continues.

HDFF will newly be including our upcoming events in the Weekly Review. If you would like further information please contact Elana Zygman: Zygman@hdff.org

Upcoming HDFF Events:

Chairman’s Circle 2012 -   January 26^th, 09:00-12:30 (incl. lunch buffet)

Commissioner to the Office of National Security Council, Police Lt Gen Tritot Ronnaritivichai, speaks about “Movements of Terrorists inSoutheast Asia– Jemaah Islamiah and Al Qaeda”

Stay Safe: Safety and Security Training 2012-1 February 20-24^th

Addresses the daily security needs of executives and security focal points of (inter)national non-governmental organization inSoutheast Asia. Learn to identify and assessing main security risks, improving security awareness, developing risk avoidance behavior and acquire best practice security management tools

Politics

The Yingluck Government will be incorporating 10 new ministers into its cabinet while six ministers will be transferred to different posts.  His Majesty the King approved all proposed changes mid-week, and the Yingluck Government is reportedly using the reshuffle as a chance for a new beginning, as the old cabinet has been under tremendous stress due to the flood crisis. Regaining lost confidence is the main objective, as the government infrastructure investments start to be developed, analyses Sriyan Pietersz, head of research at JPMorgan inThailand. (Financial Times) Critics instantly described the reshuffle as a further “Thaksin-isation” of the government, with former Prime Minister Abhisit Vejjajiva additionally asking PM Yingluck for a substantial justification regarding such a major reshuffle after only 6 months in charge. PM Yingluck Shinawatra denied that her brother had any say in the changes in personnel and insisted on it being her choice. Her newly appointed deputy education minister Sakda Khongpetch didn’t do her any favors in this context when he announced to have met Thaksin this week inHong Kongin order to help deliver a message to the newly appointed ministers. “He asked me to tell other ministers to focus. Efficiency has yet to be achieved. Every ministry is expected to show results in six months,” Mr. Sakda stated. (BangkokPost) After those six months another reshuffle is expected to take place as the ban on 111 Thai Rak Thai officials will have run out.

Of all the changes made, three new ministers received the most attention, ACM Sukumpol Suwanatat as defense minister, Natthawut Saikua as deputy minister for agriculture and Arak Chonlatanon as energy minister. Mr. Sukumpol, who has been a close friend of Thaksin since they studied together in Class 10 of the Armed Forces Preparatory School, will replace Yutthasak Sasiprapa, who is seen as being too soft in handling army matters. Army sources are already speculating that this move might contribute to a different working environment, claiming “The armed forces and General Yutthasak are getting along well. They talk like brothers. That could now end, as the new defense minister is likely to target General Prayuth.” Additionally, Sukumpol will try to change the Defense Act as soon as possible, giving the defense minister a say in military appointments – a move that will not be appreciated by some inside the army.   (The Nation) (BangkokPost) The new agriculture minister, senior red shirt leader Natthawut Saikua, who previously held a government spokesman position under a previous Thaksin government, will be returning to the cabinet. Natthawut was an obvious target of criticism due to being charged with terrorism for his role in the 2010 protests. Finally, the Democrat Party announced that incoming energy minister Arak Chonlatanon will receive special observation from the opposition party as Thaksin’s interest in the energy sector of neighboring countries was well known, stated Abhisit Vejjajiva. In addition to these three ministers, Nalinee Taveesin, who is newly appointed as the PM’s Office minister gained attention due to the fact that her name was on theU.S.blacklist. She was added to the list because of financial and real-estate transactions for Grace Mugabe, wife of the Zimbabwean Dictator, as well as other Zimbabweans under similar bans. (WashingtonPost) Regarding those allegations Ms. Nalinee stated in the Krungthep Turakij newspaper, “It was a misunderstanding on the part of theUS. This happened a long time ago. I didn’t do anything as alleged.” (The Nation)

PM Yingluck Shinawatra made an official one-day visit to the Philippineson Thursday, January 19^th. In her meeting with President Aquino, she was expected to discuss trade, particularly agricultural exports, as well as investment policies. Ms Yingluck announced she would use this opportunity to explore opportunities to increase rice, fruit and vegetable exports to thePhilippines. (Mcot)

Suspected murderer and Democrat MP Khanchit Thapsuwan is still not cooperating with Police forces investigating his potential involvement in the murder of Udon Kraiwatnussorn, Democrat Party MP.  Provincial Police Region 7 has decided not to send a letter to the house speaker as previously announced, as they feel to have enough evidence against Mr. Khanchit and no further questioning was necessary. (BangkokPost)

Economics

Thailand’s finance minister, Thirachai Phuvanatnaranubala, has claimed that the economy in the first quarter will slow to 2.6% growth, but is optimistic that 5% growth for the whole year is still feasible. Growth will mainly depend on if post flood rehabilitation thrives, including the distribution of the upcoming 168 billion baht loans which will be used to support reconstruction. The minister attributed the slow first quarter growth to the gradual nature of the recovery in the flooded industrial estates. Thirachai has asked the private sector to keep a substantial amount of cash on hand to lessen the affects of the global downturn. On a positive note, rice production inThailandmay increase 16%, an all-time high as estimated by Apichart Jongskul, secretary-general of the Office of Agricultural Economics. The increase will occur as a result of expanded plantings to offset losses. Total output may surge to 36 million metric tons, split between 25 million tons in the main crop and a second harvest of 11 million tons. At the beginning of the week, banking shares remained weak due to the prospect of reduced earnings. Banking shares fell 0.3 percent to the lowest rate in more than a month. (BangkokPost) (Reuters) (Bloomberg)

HSBCs “The World in 2050″ report was published this week, predicting Thailandto become the world’s 23rd-largest economy in 2050. Thailandis one of several emerging economies that will enter into the “top 30” status. Aside from Thailandwithin ASEAN, the Philippinesis predicted to rise to 16^th, Indonesia is expected to come in at 17^th, Malaysia at 21^st, Vietnam at 41^st and Singapore at 42^nd. The Kingdom’s gross domestic product is expected to more than quadruple from US$187 billion (about 6 trillion baht) in 2010 to $856 billion (about 27 trillion baht) in 2050. The report anticipated that 19 of the top 30 economies will be countries that are currently “emerging”, and thatChina andIndia will become the global powers with the most significant growth.  Other power growth nations varied considerably includingNigeria,Peru and thePhilippines. DespiteThailand’s profitable trajectory, analysts are questioning whether a raise in economic rankings will improve quality of life. Analysts are maintaining that the growth should have well-planned strategy base which responds to the needs of the people. Development should be encouraged not just for the sake of growth but in line with sustainable lifestyles.Thailand has experience a fast paced rate of industrialization and urbanization, a large contributing factor toThailand’s growth predictions. However, some are concerned that growth comes at the expense of traditional lifestyles and environmental security. As demonstrated by the floods, factories and housing projects were significant impediments to the flow of natural waterways. Thais should continue to considering the cost benefit analysis of what citizens will gain from this economic milestone. (The Nation)

In related international ranking news, in spite of Standard & Poor’s decision to cut the credit ratings of nine Euro zone nations (Cyprus, Italy, Portugal and Spain by two notches; Austria, France, Malta, Slovakia and Slovenia by a notch) Bank of Thailand (BoT) governor Prasarn Trairatvorakul has announced that the decreased credit ratings will not starkly impact Thailand. “After the downgrade, the value of the Thai baht today weakened against the US dollar but it is in line with other currencies in the region. The baht has not depreciated to a worrying level” claimed. Thai financial institutions and investors do not have significant investments in any of the nine countries. (BangkokPost)

As Thailandis depending on the success of its international relationships, future export plans are being discussed. The Export Promotion Department has encouraged corporations to focus on producing higher value-added products in all sectors and for further development of small and medium-sized enterprises (SMEs) in order to reap the benefits of free-trade agreements. The Export Promotion Department maintains that Thailandwill no longer be able to utilize low-cost, labor-intensive production as a result of the daily minimum wage raise in April. The goal is to increase export opportunities in emerging markets while also preserving the Kingdom’s segment of traditional markets, highlighting value-creation, innovation and the right markets. The focus of products is also going to be shifted as consumers are becoming increasingly concerned about health and value-added products while also boosting sales in industries such food, jewelry, life-style goods and toys. Industries that are expecting flat growth are garment, furniture and footwear sectors. More than 100 trade activities have been scheduled overseas including trade fairs both abroad and in Thailand, business-matching services between importers and exporters, the launch of Thai exhibitions and the promotion of Thai products and brand names (see an announcement example here).

Thailand’s electronics exports are expected to rapidly decrease in the first quarter due to continued post-flood manufacturing and the economic slowdown recovery.  Despite resuming activity, Sampan Silpanad, president of the Electronics and Computer Employers’ Association believes it will take factories months before resuming to pre flood levels of output. The seven inundated industrial estates contained 60 hard-disk drive (HDD) and components makers. KResearch forecasts that electronics exports will resume positive growth within a range of 4.5-7.5% to $32.9 billion this year after returning 4.5-8.5% last year. Exports of electronic goods and home appliances combined are targeted to grow between 5.9-9.9%, up to $57.7 billion after falling by between 0.3-2.6% last year.  (The Nation) (BangkokPost)

Security

Making international headlines, Thailandinured what was made out to be a shockingly significant security threat this week.  On the evening of Thursday January 12^th, Atris Hussein, a Lebanese man with a (faux?) Swedish passport was arrested at Bangkok’s main airport. The Thai authorities arrested Hussein after Israeli intelligence agents warned that a group potentially connected with Hezbollah was planning to strike tourist sites in Bangkok in mid-January. On Friday January 13^th, The United States Embassy released an emergency message stating terrorists may be planning attacks against “tourist areas in Bangkok in the near future.” Following the warning, Thai officials confirmed the arrests of terrorist suspects and vowed that security in Bangkok was being stepped up. On Monday January 16^th, the Thai police units followed Hussein to a three-story commercial building he had been renting for a year in Samut Sakhon,Bangkok and seized what they claimed was a large stash (8,800 pounds) of two chemicals, ammonium nitrate and urea. Both chemicals can be used as a base for rudimentary bombs as well as fertilizers. Top police officials exclaimed that investigation proved the chemicals were meant to be shipped out of the country and were not intended to release an attack on Thai soil. Hussein had contacted a shipping company inThailand to send the material out of the country in container units. The destination location remained disclosed. Hussein will be charged with possession of prohibited substances in violation of the Arms Control Act.

Following the controversy, Prime Minister Yingluck Shinawatra, claimed, “The situation is under control — no problem. And I can guarantee the safety of our citizens and foreign tourists.” Senior Thai officials scrambled to deny thatThailandwas facing an immediate terrorist threat, following the dramatic warning by the US Embassy. The United States Embassy warning was the first public notice of potential attack, and Defense Minister Yuthasak Sasiprapa claimed that the Thai authorities did not release news of the alleged plot so as not to heighten fears that would hurt the tourist industry and cause panic. Several news sources have pointed out that Thai officials’ statements were ambiguous and confusing, especially as noted in Deputy Prime Minister for security affair Chalerm Yoobamrung’s contradictory statements about how many suspects were arrested. At first Chalerm claimed the police arrested two Lebanese, but later stated in another interview that only one Lebanese was detained for interrogation. Yuthasak later stated that the second suspect had managed to leave the country as the detained suspect had not yet been charged with any offence. Foreign Minister Surapong Tovijakchaikul also released a statement he was “greatly disappointed that theUSand other countries had issued travel warnings to their citizens over terrorism risks without consulting the Foreign Ministry”, which is supposedly normal procedure. “I want theUSto have some manners by talking to the Foreign Ministry first,” Pol General Wichean stated. Foreign Ministry permanent secretary Sihasak Phuangketkaew invited Judith Cefkin, deputy chief of mission at theUSembassy, to discuss theUSwarning about possible terror attacks.  Reported by the Bangkok Post, The US continues to refuse to lift the terror alert because it wants Thailand to allow US authorities to take part in the questioning the suspect. (BangkokPost) (New York Times) (Today Online) (Phil Star) (Reuters)

Bordering bilateral relations also continues to be a source of conflict. Chinese police concluded the second joint patrol along theMekongRiverwith their counterparts fromLaos,MyanmarandThailand. The joint patrol fleet and a commercial vessel arrived atGuanleiPort, located in Xishuangbanna region in southwestChina’sYunnanProvince. After arriving at the port, the vessel, Shengtai-11, was attacked by unidentified gunmen. The attacked boat, which was carrying timber, immediately sought help after the gunfire. Reportedly, none of the five crew members were injured and around 200 Chinese and Laotian police arrived on the scene to handle the crisis. “Police inLaosare still searching for the gunmen,” said an unidentified police officer. “The river has been safer after the joint patrols, but in order to provide a thoroughly safe environment, we’ll increase the number of patrols in the future.”Patrol forces also maintained that they have now acquired more experience in fleet sailing, and recognizing early warning mechanisms and coordinated fight plans, ensuring the success of future patrol missions along theMekongRiver. Dai Peng, dean of the criminal investigation department of the Chinese People’sPublicSecurityUniversity, released a statement that he does not think increasing the frequency of patrols can solve such attacks. Peng also claimed that rescue operations for the attacked ships are likely to be delayed because the number of cargo vessels is much higher than the number of ships used for patrol. (ChinaDaily)

Indonesian Defense Minister Purnomo Yusgiantoro announced that after collaborating with Cambodian foreign minister,Indonesiawill be sending military personnel to the Thailand-Cambodia border as well as an observation team. The troops are being trained at the Indonesian Peace andSecurityCenterin Sentul, West Java which began as soon asThailandapproved the deployment of the peace corps at the border. The troops were originally supposed to be deployed in 2011 but were delayed when a dispute took place andThailandwas going through a change of power. The troops will be deployed by May at the earliest. Early this week, Thai and Cambodian troops “faced off” in Phu Makhua, in the disputed 4.6 square kilometer area around Preah Vihear temple, igniting suspicion that renewed border clashes would occur. About 20 Thai troops were patrolling thePhuMakhuaMountainon the border when they encountered a group of Cambodian soldiers who were surveying the area. Both sides claimed territorial rights to the area and despite negotiations, refused to retreat. It was reported that Colonial Thanasak Mitopanon, commander of the 26 Ranger Regiment, ordered the immediate closure of Pha Mor I Dang cliff, the disputed border area, in case clashes broke out. Colonial Thanasak denied that the closure was related to the confrontation but because tourists had not been warned about the regiment’s exercise.  (Tempo Interactive) (BangkokPost)

Trouble continues in Southern Thailand as teachers called upon the government to provide more security, marking Thailand’s Teachers’ Day, chaired by Fourth Army Region commander Lt-Gen Udomchai Thammasarorat, at YalaRajabhatUniversity. Manop Boontawiroj, president of the Yala Teachers’ Federation, asked the government to be more attentive to security measures and safety of the teachers, as many southern teachers have been killed in the insurgency. The Southern Border Police Operation Centre reported that, as of the end of 2011, 144 teachers and education workers were killed in the southern unrest. Wichan Athikapan, director of BanManangkayiSchoolin Narathiwat, vowed that Narathiwat educators would continue to work within the southernmost provinces and would honor those who had been killed by remaining teachers. The teachers also observed a one-minute silence to honor the teachers who had lost their lives. A police officer and his 14-year-old son were killed in a shooting attack and a father and his daughter were shot dead in their house this week, both in Pattani.

Invitation to Chairman Circle 2012

Dear Friends of HDFF,

Happy New Year to you and your beloved ones, happiness, health and success for your life in   2012 / 2555.

HDFF took a long – flood related – break from the Chairman’s Circle, but I am looking forward to meet known and new faces again.

Therefore I invited  Police Lt Gen Tritot Ronnaritivichai who became know beyond Thailand’s border when he captured Al Queda operative “Hambali” in 2003. He is holding actual the position of Commissioner to the Office of National Security Council (NSC) to present on the topic of

 ”Movements of Terrorists in Southeast Asia – Jemaah Islamiah and Al Qaeda”

 Venue will be this time: Imperial Queenspark Hotel, Soi 22 Sukhumvit

Date/ Time;  26 January 2012  09-12.30    (costs: 2,200 THB incl. lunch buffet)

HDFF’s chairman and his team are looking forward to seeing you at this interesting event. Please register soon !!!!

Contact:  gassner@hdff.org

HDFF 2012-1 Strategic Forum Invitation_26 January 2012

The cabinet approved a massive 2.27 trillion baht spending plan, mostly for infrastructure projects over the next five years

PDF Link

Summary

A number of events that will deeply impact the future of Thai politics occurred this week. The 12 trillion baht budget for 2012 was approved, allowing government officials to begin planning for large investments, including water management.  Compensation for those impacted by the 2010 riots was announced and the Pheu Thai party remains committed to altering the constitution. Ongoing controversies continue including the lese majeste law, the death of Udon Kraiwatnussorn and the increase of energy prices. Economic conditions continue to waver and the policy rate and lending liquidity is reviewed. Deputy Prime Minister and Commerce Minister Kittirat Na Ranong announces his future investment plans while water-resource management experts warn the government of implementing an inappropriate use of funds.  The future of Myanmar in relation to Thailand, both politically and economically, needs to be reconsidered, specifically after the numerous events surrounding the Dawei Special Economic Zone this week.  An Australian child trafficking organization is being investigated and analysts continue to warn of the Southern insurgencies impact.

Politics

The 2012 Budget Bill, in the amount of 12 trillion baht, was approved by the House of Representatives with 272 votes in favor and 155 abstentions. The Yingluck Government transferred 1.14 trillion baht of public debt stemming from the financial crisis of 1997 to the Bank of Thailand drawing heavy criticism from the opposition Democrat Party. Democrats argued that the transfer would undermine the countries credibility and create management problems for the central bank. Prime Minister Yingluck Shinawatra defended the decision as a necessity, as the debt would otherwise sharply increase once the government raised investment funds for flood prevention and infrastructure projects. (The Nation)(Bangkok Post) Ms. Yingluck additionally announced that the government will conduct a feasibility study for a possible re-launch of the 30 baht healthcare scheme which was originally introduced in 2001 by her brother Thaksin which was scrapped after the military coup of 2006. In regards to the aforementioned investments, the government announced the approval of a 2.27 trillion baht plan to be spent on infrastructure projects (new inter-city road links, high-speed train networks, urban mass transit systems, as well as marine, air transport and telecommunication development) in the upcoming 5 years. To restore investor confidence after the latest flood crisis, 400 billion baht will furthermore be spent for water management projects. (Bangkok Post)

As a measure in supporting national reconciliation, and as recommended by the Truth for Reconciliation Commission, the Yingluck administration announced that a total of 2 billion baht in compensation will be paid out to victims of the 2010 unrest. Families of those killed will therefore receive 3 million baht for “psychological trauma caused” and 250,000 baht for funeral expenses. The Democrat Party felt the scheme would be inadequate to bring about reconciliation and a PAD spokesperson expressed discontent that only red-shirts would profit from the compensation payouts, despite the announcement by Government Spokeswoman Thitima Chaisang that all groups affected from 2005 onwards would be included. While those affected by the military crackdown and their family members generally welcomed the compensation they stressed that reconciliation would only be possible if the whole truth about the incident would be made public and those responsible be brought to justice. (BBC) (Bangkok Post) (The Nation)

The Pheu Thai Party remains determined to amend Section 291 and create a constitution draft assembly (CDA). In turn, this would make the 1997 constitution a model for future amendments to the current constitution, as recently praised by Jared Diamond from the Stanford University at a public lecture at Chulalongkorn University. Pheu Thai members insisted that public participation in the charter change would be crucial, recommending politician step aside. The CDA will be made up of 100 members, 77 of whom will be elected from Thailand’s 77 provinces while the remaining 23 will be selected by the elected 77 members. (Bangkok Post)

Frank La Rue, The United Nations Special Rapporteur on the right to freedom of opinion and expression, who recommended an amendment to the lese majeste law back in October of 2011 stated that he continues to stand by his recommendation. La Rue argues that he would not be intervening as “Human rights is a universal issue for all modern, civilized and democratic countries, and only those which want to move backward to an undemocratic regime will reject them. The beauty of human rights is that it’s exactly the same standard for every country – there’s no special treatment because human dignity is the same across the world.” Eight prominent figures with royal lineage meanwhile released a letter urging PM Yingluck to amend the lese majeste law and cited His Majesty King Bhumibol’s address on Dec 4, 2005 quoting him saying he would not like offenders to go to jail. All political parties have so far stated they would not touch the lese majeste law. (The Nation) (Bangkok Post)

The ongoing saga in arresting the suspected killer of Udon Kraiwatnussorn, Democrat Party MP for Samut Sakhon Khanchit Thapsuwan, remains controversial as Thapsuwan still has not turned over his .40 caliber gun and pick-up truck to police for examination. Provincial Police Region 7 sent a letter to the Royal Thai Police Office to request that the House of Representatives allow the Democrat Party MP to meet police investigators as he has not cooperated with police so far due to his immunity protection. Police Major General Prayon clarified that all evidence points towards an amateur killer as the gun used in this incident was not used by hired gunmen and the amount of shots fired suggest the shooter was agitated at the time. (The Nation)

After pressure from industry groups and road blocks by truck and taxi drivers, as well as a meeting at the Government House called by PM Yingluck, Deputy Prime Minister Kittiratt Na-Ranong announced that the price increase (50 satang per kilogram) of compressed natural gas (CNG) and liquefied petroleum gas (LPG) on January 16^th will proceed as planned while all further increases were on hold. Originally, a 50 satang increase every month was planned for 2012 taking the CNG price up to 14.50 baht/kg from the present 8.50 baht/kg, a 70% increase. Mr. Kittirat added that “after a week or two, the government and the transport sector will still have time to meet again to consider whether the price should be increased for a second or third time.” (MCOT) (Bangkok Post)

Economics

Economic conditions continue to vary as the baht approached its weakest level in 16 months after international investors cut holdings of national equities. The central bank plans to put less focus on regulating the exchange rate despite predictions that baht volatility will increase. Emphasis has been laid on the fact that exporters and importers have improved at managing exchange-rate risk. Government bonds have remained steady and the University of the Thai Chamber of Commerce measured the consumer confidence index as increasing to 63.1 from 61.0 in November.  New strategies to positively impact Thailand’s economy include plans to change Thailand’s current global ranking of 17^th, to one of the world’s top 10, largest trading nations by 2020. Thailand’s current trade with ASEAN totaled $75 billion, accounting for 19.8% of the total trade value with the world and new talks are moving ahead with India, Chile and Peru. (Bloomberg) (Bangkok Post)

Banking experts are agreeing that the Bank of Thailand’s policy rate will not be decreased again as inflation rates are expected to remain high due to the increased daily wages, leading to a boost in the price of goods. Analysts are also looking at the impact that the demand for loans will have on liquidity. However, Thanyalak Vacharachaisurapol, head of money and banking at KResearch has claimed the BOT can adapt to tighter liquidity, as numerous bonds valued at 800 billion baht are due to be redeemed.  With cautious lending to balance liquidity, loan growth is expected to decrease to 9-12% in 2012 from 13-15% in 2011. There have also been inquiries as to how the Financial Institutions Development Fund debt will be redeemed. KResearch has suggested banks pass the cost on to account holders by charging a surcharge of up to 1% from .4%, contributing 70 billion baht to 80 billion baht to the 280 billion baht owed each year. (The Nation)

Despite the banking sectors cautionary measures for Thailand’s economic future, Deputy Prime Minister and Commerce Minister Kittirat Na Ranong has re-affirmed  Thailand’s economy has remained strong and that he is confident the Gross Domestic Product (GDP) could expand more than 7% this year. Kittirat took over for Yingluck on this week’s “Yingluck Government Meets the People,” to discuss with the Strategic Committee for Water Resources Management (SCWRM), along with the Strategic Committee for Reconstruction and Future Development chairman Virabongsa Ramangkura, to clarify the water management plan and Thailand’s economic prospects in 2012. Kittirat announced that with the approval of the 2012 budget bill, 29 baht billion will be initially spent on the repair and rehabilitation of water sluice gates and dykes that were damaged by the flood. Additionally, more legislation will be drafted to spend 350 billion baht ($14 billion) on the management of 25 river basins.

Outside commentators, including a group of water-resource management experts, have criticized 350 billion baht as too expensive.  Although SCWRM has approved six urgent and two long-term plans – 300 billion baht for systems to manage water in the Chao Phraya River basin and the remaining 50 billion baht for systems in another 17 areas – there have been hesitations about an inefficient use of the state budgets. Sources from SCWRM have claimed that there may ultimately be failure in solving the problem systematically. However, Virabongsa has stated that the government must put considerate funds into the plans to reassure foreign investors that government is doing everything they can to prevent a repeat of the massive damage.  Virabongsa noted that he has visited many countries including England and Japan to speak with insurance companies, investors and business leaders to increase confidence in regards to Thailand’s rehabilitation plan and future preparations to reduce the impact of flooding. (Asia One) (MCOT)

The Tourism Authority of Thailand (TAT) has announced that it expects 19.6 million tourists to visit Thailand in 2012 generating 766 billion baht in revenue.  Thailand continues to grow as viable tourist destination and has proved to be popular among many International countries. However, the private sector has also expressed concern related to the political instability and corruption and the long term damage done by the floods.  Kongkrit Hiranyakit, the Tourism Council of Thailand’s president for policy and planning has warned the current government against creating more negative factors that could lead to conflict and put tourism at further risk. Economic problems including foreign exchange fluctuations, which affect tourists’ purchasing power have been extremely damaging. Potential new markets this year will be China, India, South Korea, Russia and Australia. New markets will be Indonesia, Vietnam, the Philippines, Iraq, Kuwait, the UAE and Eastern Europe.  (Bangkok Post) (PR)

Security

Myanmar’s security has become one of Thailand’s main concerns this week. Earlier in the week, Myanmar’s army chief held an uncommon meeting with Thailand’s defense minister where the opening of the new border checkpoints close to the planned multi-billion dollar industrial zone in Dawei was discussed. Other concerns include Karen National Union disrupting the Dawei projects. The total project includes a 250 sq km (97 sq mile) Dawei Special Economic Zone — which will include the $8 billion deep sea port, an oil refinery, a coal-fired power plant and a petrochemical factory. Following the meeting, The Dawei Development Association urged the Thai government to stay aware of sustainability and human rights concerns during the development of the Dawei mega project, specifically during the development of a deep sea port and special economic zone in Yebyu Township. The main concern stated, delivered in a letter to senior ministers, would be forcing thousands of local inhabitants to relocate and to start a new life. Other demands included green development, land and property rights for locals, and transparency and accountability in the deep sea port project. The following day, Myanmar’s government abruptly halted the construction of the 4,000 megawatt coal-fired power plant at the Dawei Special Industrial Zone as attributed to domestic pleads over its environmental impact. The government has not yet announced whether it will continue with a smaller 400 megawatt plant. The Italian-Thai Development unit funding the plant with billions of dollars of investment in the industrial zone stated it had not been notified by the government and was confident the power plant would still be built, but with potential changes such as using natural gas instead. Joseph Cheng, a political scientist at Hong Kong University, claimed the suspension of the Dawei plant could reflect disunity in a government as reformers want to reconnect with the outside world but “old fashion” government officials may want to maintain tight control over the country. (Bangkok Post) (Reuters)

In line with these events, analysts are commenting that what transpires next in Myanmar will have huge consequences on Thailand in the medium- and longer-term, despite the lack of interest from Thai leaders both in politics and business arena. Thitinan Pongsudhirak, Director of the Institute of Security and International Studies at Chulalongkorn University, claims in the past it appeared Myanmar would not be changing any time soon, “As the constitution that was promulgated in 2008 and the ensuing elections in 2010 were both deemed illegitimate, it seemed like a bogus government was produced by a bogus election under a bogus constitution”. Although Myanmar has appeared to have made recent reforms, such as supporting Aung San Suu Kyi return to politics and the dissipating threat of nuclear weapons, a significant amount of transformations still needs to take place before Myanmar can be named a genuine democracy. The Dawei Development Project will be severely impacting Thai energy and development and Thailand relies on migrant laborers, especially from Karen and Shan states, although there is no long-term human security plan to reduce social problems from a lack of education and healthcare. Thitinan maintains that Thai’s need to either support Myanmar with its own reforms or influence Thai leaders to secure its own country’s energy and development needs with less dependence on neighbors. (Bangkok Post) (Reuters) (Asian Times)

The Department of Special Investigations in Thailand is investigating the claim that Australian child trafficking organization The Grey Man faked a rescue last year of hill tribe children from sexual slavery.  Investigations by the Thai non-government organization Trafcord and the Ministry of Social Development and Human Security (DSI) have found that the children have never left their homes, continued to attend school and suffered as a result of the publicity advertised by The Grey Man. The Grey Main claims it used special forces comprised of ex-police officers and special services veterans, to rescue 21 Akha hill tribe children from the village of Baan Khun Suay in Chiang Rai last October. Both the Australian Federal Police and Thailand’s Ministry of Foreign Affairs will be running parallel investigations that focus on the “alleged use of false advertising to solicit funds”.  “We have no problem with any authority looking at our operation. Our major concern is for the children, and we stick with everything that we’ve done” says The Grey Man’s president, John Curtis. (The Australian)

Commentators are noting a possibly shift of the insurgency as a whole into higher gear. Multiple series of recent attacks continue to involve notably larger numbers of better-armed, better-trained insurgents with well-organized units. There is no secret that separatists are seeking to increase the pressure on Thai security forces. In addition to staging larger assaults to seize ammunition and weapons, insurgent tactics have also shifted in ways that reflect their growing confidence and boldness. Despite increased violence involving larger guerrilla assaults, analysts do not believe the insurgents pose a real threat to Thai military control. However, escalation of the conflict and more aggressive counter-measures will inevitably undermine Bangkok’s “politics-first” strategy for controlling the situation, impact the potential peace process and call attention to the conflict’s international profile. Analysts are advising the government to wise up to the fact that the southern insurgency no longer remains a fragmented free for all with no coherent command structure. This week, a soldier was seriously injured in a roadside bomb explosion in Yala, an assistant village headman was gunned down in front of his wife, five rubber farmers and one policeman were wounded when a man fired a gun at rubber farmers who had blockaded the main road in protest against falling rubber prices and a security guard at Na Pradoo train station was killed in a drive-by shooting in Pattani. (Bangkok Post) (Asia Times).

As a theme throughout the week, the future of Thailand's energy leaves much to be discussed

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Summary

Flooding spreads to the South of Thailand as Northern citizens finally receive news of upcoming tax breaks. Varying opinions of political power continue to be polarized while a Democrat MP is being charged for murder. Abhisit Vejjajiva is also offering his opinion on what should be political priority. Gains in the market allowedThailandto start the year on a confident economic note but the unknown future of the global economy remains a source of negative pressure. The importance of preparing for the ASEAN Economy Community (AEC) is encouraged as vital to future gains while Thai banks and private companies struggle to find their place in the modern international environment. Officials are calling attention to reducing smuggling as a link to reducing the insurgency as the violence continues.  Violence also arises for the Chinese security patrols in theMekongRiverwhile analysts comment this is only the beginning of backlashes from warlords and drug armies. Future energy cooperation withCambodiais underway and the place of North Korean refugees inThailandis discussed.

Politics

Although it’s the start of a new year, news headlines seem to be all too familiar with the second half of 2011. Floods dominated news coverage as the South of Thailand was hit by flash floods, wreaking havoc and inundating 9 out of the 14 southern provinces. While some communities were faced with up to 2-meter-high floodwaters leading to evacuations, while other parts of the South are already recovering.

In related news, the cabinet this week approved tax breaks for victims of all floods from July 25 to the end of 2011. The breaks allow for deductions of up to 100,000 baht for home repairs and 30,000 baht for car repairs from the personal income tax, with the additional limitation that you have to be a resident of an area that had been declared a disaster zone. (BangkokPost) (The Nation)

Political analysts and observers stated their opinions on what could be the most critical political issues this year including the possible return of former Prime Minister Thaksin Shinawatra. Somchai Srisutthiyakorn, a public administration academic at SripatumUniversity, warned not to underestimate the anti-Thaksin factions, as he believes that a constitutional amendment of Section 309 could easily set them back into action. Additionally Mr. Somchai believes the cabinet reshuffles coming mid-year, when the 5-year ban of 111 executives of the dissolved Thai Rak Thai Party ends, there may be further rifts within the current ruling party.  On the other hand, Chaiwat Khamchu, a political scientist at ChulalongkornUniversity, views the cabinet changes as a possible benefit to the government, claiming that the banned Thai Rak Thai executives are capable technocrats and politicians who may outperform some executives currently in charge. As for the proposed changes to the constitution, Mr. Chaiwat stated that the government could minimize controversy by allowing a national referendum to elect members of the draft committee.  The academic also felt that the government successfully avoided confrontation with royalists by vowing to keep the current lese majeste law as is.

Democrat MP Khanchit Thabsuwan has been charged with premeditated murder of political rival, Udorn Kraiwatnusorn, but is now out on bail after surrendering to police. Investigators are now looking for a woman, named “Kuk”, who, according to statements given to police, may have been the reason behind the shooting. No further details have been given. After two requests from police, Mr. Khanchit has still not turned over his .40-calibre pistol – the same type of weapon used in the murder – for inspection. Yet despite this, authorities said they are ready to indict Mr. Khanchit. The father of Mr. Khanchit and former Democrat MP, Anek Thabsuwan, continues to maintain his son’s innocence and dismisses rumors that his son was a in love-triangle relationship that connected his son to the victim. However, Deputy Prime Minister, Chalerm Yoobamrung, told the press he knew “every little single detail about the motive” behind the killing and indicated the motive was not political, but would rather not speak about the case.

Opposition leader Abhisit Vejjajiva has warned the government to focus on tackling corruption and reviving the economy, rather than amending the lese majeste law or granting amnesty to former prime minister Thaksin Shinawatra. He cited increasing commodity and energy prices and preparations for integrating with ASEAN as issues requiring the government’s attention.

Economics

In line with gains elsewhere inAsia, The New Year began with a positive start as the SET index opened in at 964.10 points and closed at 1,025.32 points. Specifically, there was a rise within oil prices, supporting energy shares. The rise was backed by positiveU.S.and European economic data which boosted shares and commodities worldwide, although analysts remain skeptic as stocks edged lower later in the week. Analysts’ had originally anticipated the SET to be set at around 1,200 points at the beginning of 2012. Recapping on last year, the SET hit the lowest point of 904.06 in September and peaked at 1,144.14 in August. Despite the significant decrease, daily trading remained high at 28.85 billion baht compared with 28.69 billion baht in 2010 and securities borrowing, lending and short selling remained active due to the constant variance between gains and losses. Annual inflation improved more than expected in December as consumer price inflation in December was 3.5%, compared to 4.2% the previous month. Core inflation slowed to 2.7% annually from 2.9% in November. The inflation percentages remained below the 4% consensus forecast.  (Reuters) (BangkokPost) (NASDAQ)

Arguing for the need to boost investment and rebuilding after last year’s flood, the cabinet has agreed to transfer responsibility for a large section of government debt to the central bank. This will allow the government to take out more loans and mitigate limitations set by the requirement that debt service obligations are under 15% of budget expenditure. The current debt is 2.38 trillion baht for fiscal year 2012, but the amount of 1.14 trillion will be transferred. This outstanding debt stems back to the 1997 financial crisis when the Chavalit Yongchaiyudh administration directed the Financial Institutions Development Fund (FIDF) to offer a blanket guarantee on deposits and liabilities of ailing banks and finance companies. Since that time, only 231 billion baht has been paid down. However, under the draft decree the FIDF will gain new powers to charge local banks up to 1% on their deposits to help finance the payments, and the cabinet will be able to direct the Bank of Thailand (BoT) to set up a fund for repaying the debt. Critics of the decision to transfer this debt, such as Democrat MP Sansern Samalapa, contended that the move would force the central bank to print more money, making the currency worthless.

International markets remain a key cause for concern.  Experts are noting thatThailandwill be facing significant difficulties in fulfilling their role within the ASEAN Economic Community (AEC). Specific focus has been laid on the lack of private sector involvement among SMEs outside Thai borders and the government’s lack of investment in supporting innovation.  Additionally, high overhead costs, complicated country rules, and the lack of ASEAN and trade specialists have further exacerbated SME’s lack of initiative.  According to the Franchise & License Association, 80% of franchise businesses will be unprepared for an operating  the “AEC Blueprint” due to the lack of knowledge in trade processes and language skills. Education Minister Woravat Auapinyakul has supported these notions by acknowledging that the system has inadequately prepared the workforce to perform alongside regional competition. Thailandhas been noted by international organizations for its high level of entrepreneurship but numerous inefficient systems; for example physical infrastructure, limiting export-oriented firms.  A stronger public-private partnership, such as giving more power to appropriate institutions and influencing foreign policy, must be assembled. Accordingly, Thailand should focus on creating awareness surrounding industry environments to succeed as the AEC is implemented.  (International Affairs Review)

                Thai banks are noting the upcoming challenge of balancing the increased risks of global volatility and the expanding opportunities in Asia. Analysts are emphasizing that banks need to increase their risk mitigation mechanisms to operate safely while maintaining business growth within the ever-changing global environment. Thai economists, and the rest of the world, are waiting to see if the EU recession leads to a global economic slowdown in 2012 but action still needs to be put in place to prepare banks for the AEC. As both opportunities and threats to business will arise, readiness and adjustment are eminent. (Bangkok Post)

Lack of investment in foreign markets cannot be said about Siam Cement Group (SCG) which announced this week it will strengthen its presence in the United States as the economy begins to show signs of positive growth, including increases in the US stock exchange and last month’s 7% growth in housing sales. In 2006, the US was one of SCG’s biggest export markets, receiving 20% of SCG shipments. That 20% has become 1% to date as demand significantly dropped in recent years. SCG is hoping to promote high-value petrochemical sales and building materials market such as Cotto roofing products to regain that 20% within the next four years. Exports make up 29% of SCG’s revenue, with ASEAN countries the leader purchasers at a combined 40%. In 2012, SCG plans to increase its overall turnover by 11.1% to 400 billion baht despite significant damages done by the flooding. (Bangkok Post) (UPI)

Security

In southern Thailand, security forces are working to reduce the criminal infrastructure sustaining smuggling and its link to the insurgency. Over time, the government has accepted discreet smuggling as part of the local economy and culture. However, officials are claiming that smuggling cannot remain ignored, as insurgents not only receiving support by criminals to create mutually beneficial relationships but both sides are protecting one another in the same secret systems. Undercover enforcement officers have collaborated with NewsStraitsTimes to document how bribing and smuggling operate along the Thai / Malaysia border.  Reporter Rantau Panjang narrates how he and a law officer drove through customs with illegal cargo, and were contentiously permitted to pass through security check points by hanging over sums of money. StraitsTimes reported that these officials make between RM3,000 to RM5,000 a day. Watch here to see the video evidence. (Strategy Page) (NewsStraitsTimes)

At the end of last week, several intense insurgent attacks were carried out. Three separate attacks in the southern border provinces of Yala and Pattani caused one death and three injuries. Seven soldiers and paramilitary rangers were injured in bomb, grenade and gunfire attacks in Yala and Pattani. Two defense volunteers were killed and three others seriously injured in an attack by gunmen in Narathiwat. A defense volunteer was shot in front of his house in Yala. Two soldiers providing security for teachers were seriously injured by a roadside explosion.  (Bangkok Post)

Thailand has agreed to a proposal calling for the establishment of a Combined Operations Centre in Guanlei, Xishuangbanna, China. The center will act as the focal point for intelligence information about cargo ships travelling in and out of river ports along the Mekong, to coordinate patrols. While increased regional cooperation in patrolling the Mekong may yield some security dividends, analysts argue not enough attention is being paid to the activities of warlords and drug armies in Burma’s opium sector along the Golden Triangle. So long as drug-trafficking continues, analysts contend, the Mekong will not be safe, as the true solution lies within addressing the Golden Triangle’s political and security challenges.  Analysts maintain that the death of the 13 Chinese soldiers will only be the beginning as drug armies and opium warlords act out against attempted control. Following this analysis, on January 4^th, four Chinese cargo ships and one Burmese patrol ship were attacked by armed assailants on the Mekong River. The assailants fired M79 rockets at the ships, with the first rocket falling in the river and the second exploding near the patrol ship. The source of the attack remains unseen.  (The Nation) (China.org.cn)

Bilateral relationships with Cambodia continue to be scrutinized, as Thailand’s energy minister Pichai Naripthaphan announced that offshore oil and gas reserves in disputed areas within the Gulf of Thailand could take up to a decade to access, regardless of the political progress between Thailand and Cambodia on joint development.  Pichai will be seeking parliamentary approval to restore the Memorandum of Understanding between the two countries that was canceled by the previous Democrat government run by Abhisit Vejjajiva.  “We want to see this proceed with success because it’s for energy security for both countries … for another 40 or 50 years,” claimed Pichai. Three Japanese firms: Inpex, Marubeni Oil and Gas, a subsidiary of Marubeni Corp, and Mitsui Oil Exploration Co, a unit of trading house Mitsui & Co Ltd, have expressed interest in the reserves. Cooperation between the two countries may include gas separation, power generation and chemical production. There may also be discussion in regards to building a power plant. (Reuters)

Analysts are also reflecting on how the death of Kim Jong Il will affect North Korean refugees entering Thailand. Tomoharu Ebihara, Director of the Association for the Rescue of North Korea Abductees has commented that since 2006, around 10,000 North Korean refugees have come to Thailand. Due to looser border patrols on the South China border, easy crossing conditions in Laos, and Thailand’s lack of interest in sending refugees back to North Korea, Thailand has become a prime escape destination. Tomoharu commented that in the short term, due to stricter Chinese border control and an increase in monitoring soldiers, it will become more difficult for North Koreans to travel in the next 2 or 3 months. However, Tomoharu predicted that if there are political problems concerning the new leader, attempted escape may become more commonplace. Tomoharu is also investigating kidnappings by the North Korean government of thousands of foreigners. In one particular case, he is helping an abducted Thai woman, Anocha Panjoi, by encouraging her family to petition the Thai government to receive answers from North Korean authorities. (VOA News)

 The HDFF Team wishes all of our readers a happy new year!

Summary

This week in Thai politics saw the stunning development of a Democrat MP accused of murder, debates about when to hold a referendum for amending Thailand’s 2007 constitution, and the Foreign Minister Surapong Tovichakchaikul ‘s visits to Cambodia and India. In economic news, Thailand’s Finance Ministry revised expected growth for 2011 downward and the Thai baht dropped to a 15-month low as investors reduced assets within Thailand.  Representatives from northeastern Thailand are cooperating in an effort at establishing a regional zone of economic cooperation between eight provinces in Thailand, Laos, and Cambodia. A ministerial delegation went to Cambodia to revive talks on joint exploration and development of the energy reserves in the Gulf of Thailand. On the security front, ahead of this year’s New Year’s celebrations the police and military are beefing up security in key places nationwide. In Southern Thailand, residents are evacuating areas pounded by 4-meter waves as forecasts predict more large waves; in Phuket, police raided a warehouse of smuggled pirated goods; and in Chonburi a new maritime traffic control and security center opened.

Politics

Will the House of Representatives lift immunity of a Democrat Party MP suspected of murder or will they protect him from just punishment? These questions concerned many as news emerged of Democrat MP Khanchit Thapsuwan being suspected of killing the president of the Samut Sakhon Provincial Administration Organisation, Udon Kraiwatnussorn, last Sunday, December 25^th. Udon, a political rival of Khanchit, was found shot in the head eight times at a petrol station with a .40 pistol. Following the issuance of a warrant for his arrest, Khanchit turned himself in to police two days later. He maintains he is innocent. Though reports indicate Khanchit is in possession of a gun of the same caliber, he has yet to surrender his .40 pistol for examination, ignoring a police request to do so. According to Pol Col Jamraeng, only seven people in Samut Sakhon are registered to be in possession of a pistol of that caliber. Udon’s brother Udom Kraiwatnussorn, a former Pheu Thai lawmaker, filed a request with the Deputy House Speaker Wisut Chainarun to oppose legal immunity for Khanchit. Deputy Prime Minister Chalerm Yubamrung informed the House of the arrest warrant, adding that the evidence was clear-cut, as the murder happened in broad daylight with multiple witnesses. Furthermore, surveillance cameras show Khanchit entering the petrol station shortly before Udon was shot dead. Khanchit’s father, Anek Thapsuwan, a former Democrat Party MP and minister, said he believes in his son’s innocence and was not aware of any rivalry between the families. He also denied rumors of an alleged affair Khanchit had with an ex-wife of Udon.  (The Nation) (Bangkok Post)

Representatives in parliament are considering whether a referendum on amending the 2007 constitution should be held before or after the draft amendments are produced. While Election Commissioner Sodsri Sattayatham was arguing for a referendum to be held beforehand, red-shirt co-leader Natthawut Saikua stated his support to set up a drafting assembly and hold the referendum afterwards on the actual bill up for proposal. He added that, “Pheu Thai has no policy to amend Article 112 of the Criminal Code related to offending the monarchy.” Prime Minister Yingluck Shinawatra showed support to set up a drafting assembly saying, “I only want to make sure that members of the charter drafting panel are really representatives of people of all groups.” Critics still fear that Pheu Thai’s real intention in amending the charter would be to nullify section 309, thus exonerating former PM Thaksin Shinawatra. (Bangkok Post) (The Nation)

Foreign Minister Surapong Tovichakchaikul visited India in preparation for PM Yingluck’s upcoming visit this January 24-26, where she will be chief guest at India’s Republic Day celebrations. During the PM’s visit, Yingluck is expected to sign a protocol for framework agreement on free trade, action programmes for cooperation on science, technology, and culture, as well as a memorandum of understanding on security cooperation. Surapong hinted towards improving air connectivity with India as well as connecting Indian ports with Myanmar’s Dawei Port and Pak Bara in Thailand. Furthermore, Thailand and India agreed on future negotiations to cooperate on transfers of sentenced persons and an extradition treaty. (The Hindu) (Bangkok Post)

Following his trip to India, hopes were high that Foreign Minister Surapong Tovichakchaikul would be able to secure a royal pardon on his official visit to Phnom Penh for Veera Somkhwamkid and his secretary Ratree Pipattanapaibul, Thai yellow shirt activists imprisoned in Cambodia for espionage. Cambodia refused to release the activists, insisting they would have to serve parts of their sentences to be eligible for a royal pardon. Cambodian officials nonetheless hinted towards a possible prisoner swap for Cambodians jailed in Thailand. As this would be the first prisoner swap with another ASEAN country, Foreign Minister Surapong commented, “We have to study the Thai law thoroughly and have to consult with related agencies [on] whether we can do it.” (Bangkok Post) (The Nation)

Short-term as well as long-term measures to mitigate future flooding are slowly taking shape. The cabinet this week approved a master plan for integrated water management which includes reforestation, the building of water retention areas such as dams and ponds, adapted town-planning and improving preparedness for future natural disasters. The long-term plan, budgeted to cost around 350 billion baht, also includes a compensation law for farmers and villagers whose farmland would be used for ad-hoc catchment and floodway projects on both sides of the Chao Phraya River. Commerce Minister Kittirat Na-Ranong , who is also chairman of the Strategic Formulation Committee for Water Resources Management (SCWRM), insisted that measures would not solely focus on Bangkok but benefit other provinces as well. Short-term measures, budgeted at 16.5 billion baht, focused mostly on improved dam management, floodways and improving existing sluice gates. Additionally, a single water management command body would be set up to minimize existing intertwining responsibilities. Thai Government officials and local authorities agreed that climate change will lead to an increase in extreme weather events such as floods. Therefore it was inevitable to invest into mitigation measures now despite the huge costs with Bangkok Governor Sukhumbhand Paribatra stating, “It will cost a lot of money. But I don’t think there is any other way unless we change our conceptual approach and allow some areas to be flooded during the flood season.” Surajit Chirawate, member of the senate environment committee, criticized the government for their use of flood walls as they would only increase the water level. As for Bangkok, Surajit would like to see it being downsized with government buildings moved to higher ground. (The Guardian) (Mcot) (The Nation)(Bangkok Post)

In related news a report by the German news agency dpa uncovered that the tsunami warning system in Thailand is non-functioning. Meteorologist Smith Dharmasaroja stated, “There was a regional tsunami warning system in place six years ago but now it doesn’t work.” PM Yingluck acknowledged that the system needs to be improved. December 26 marked the seventh anniversary of the tsunami disaster that killed more than 5,000 persons. (Bangkok Post) (Pattaya Today)

Economics

Thailand’s Finance Ministry has again revised expected growth figures, predicting just 1.1% GDP growth for the year 2011.  This comes as a deep disappointment to many since previous worse-case flood scenarios, as recent as three weeks ago, had still suggested growth of 1.7%. However, the Fiscal Policy Office (FPO), which calculated these figures, expects Thailand to recover by next year and achieve 5% growth.  Other analysts are not as sanguine, citing the financial crisis in Europe and declining US demand. (Bangkok Post) (MCOT)(The Star)

This week Thailand’s currency weakened .04 percent to 31.56 per dollar, reaching its lowest level since August 2010. This came after global investors sold more local shares than they bought, reducing their assets in Thailand and triggering five days of consecutive decline for the Thai baht. Analysts say there is weak investor interest in the Thai baht at present, and imports of machinery and raw materials will further weaken the Thai currency as flood-hit manufacturers prepare to resume production. But the Thai baht’s downward trend is expected to turn around next year when recovery picks up along with capital inflow from parent companies overseas.  Suchada Kirakul, the deputy governor of the Thai Central Bank, predicted that Thailand may see net capital flows in balance next year, with a smaller trade and current account surplus due to global economic uncertainty, machinery imports, and the delayed effect of floods on the domestic economy. (The Star) (Bloomberg) (The Nation)

The Thai cabinet approved funding for flood recovery and prevention projects. A fund of 350 billion baht will be created by issuing bonds for long-term infrastructure development for water management, as proposed by the Strategic Formation Committee for Reconciliation and Future Development. An additional 50 billion baht insurance fund will be created from the government’s fiscal budget to inspire confidence among industries and insurance companies. A legal amendment was made to allow the Bank of Thailand to make soft loans up to 300 billion baht through state-run and commercial banks to flood-hit businesses.  Additionally, the cabinet approved funding of 16.5 billion baht for short-term projects and 283.5 million for flood-hit provinces to re-hire workers and rehabilitate communities. (Bangkok Post)

Representatives from Thailand, Laos, and Vietnam met at a conference in Kon Tum, Vietnam, this week to begin a process that will establish an axis of economic cooperation between eight contiguous provinces in all three countries. The zone will be comprised of areas in central Vietnam, southern Laos, and northeastern Thailand. The agreement involves pledged cooperation in an array of economic activities, such as producing and refining industrial crops, investing in energy projects and infrastructure, joint mining exploration, and developing tourism. The cooperative documents are expected to be signed at a second conference in Thailand in 2012. (Bernama)

Thailand sent a ministerial delegation to Cambodia to restart talks on a joint development of offshore energy reserves in the Gulf of Thailand. The 27,000-sq-km area of concern falls within territorial claims of both countries and is thought to be rich in oil and gas deposits. The two countries had been close to an agreement on joint exploration in 2006, but this was abandoned following the coup of Thaksin Shinawatra and a deterioration of diplomatic relations thereafter. Now, declared the Thai Energy Minister Pichai Naripthaphan, Thailand will seek parliamentary approval to restore a decades-old Memorandum of Understanding between the two countries.  (Reuters)

Security

In preparation for the New Year’s celebrations, the police and military have cooperated to step up security in a number of crowded and important areas nationwide. One particular area of concern in Bangkok is the Ratchaprasong intersection by Central World, where police have cleared out potential objects that could be used to hide a bomb. Pol Lt Gen Winai Thongsong, commissioner of the Metropolitan Police Bureau, said bomb squads and sniffing dogs will check Central World carefully before the countdown takes place. Afterward, the area will be sealed off and guarded by a 1,000-man security force of police and soldiers. Ten security checkpoints will screen visitors before entering the area, and an additional 250 security checkpoints will be set up across Bangkok. In the South, the PM has ordered increased security in Yala, Pattani, and Narathiwat to obviate any insurgent attacks during New Year’s celebrations. (People’s Daily) (Bernama) (Bangkok Post)

Southern provinces along Thailand’s east coast have been hit by 2-4 meter waves, strong winds, and heavy rains, prompting evacuations and causing serious damage. In the South, eight provinces have been declared disaster zones, and the deputy governor of Prachuap Kiri Khan has declared Hua Hin, Sam Roi Yot, Kui Buri and Thap Sakae districts disaster areas. So far, the extreme weather in the South has killed 10, affected 147,092 households with 472,227 people. More than 100,000 rai of agricultural areas were damaged. In Khuan Khanun district of Phattalung province, 500 homes have been flooded up to 50-60cm deep. The PM has since commented that the disaster warning system is “inefficient”. Meanwhile, local residents along the coast struggle to build barriers where massive erosion has already taken place, and the National Disaster Warning Center predicts more big waves and strong winds will hit the east coast again within days. (Bernama) (Bangkok Post)(WKYC)(MCOT)

Following the trail of an illegal importing network, police confiscated 15 million baht worth of pirated goods in a warehouse in Phuket. Seized were imitation brand-name items such as clothing, luggage, and glasses. Despite the large catch, the smugglers were tipped off before police arrived, and therefore no arrests were made. Prayut Maneechote, director of the Customs Bureau regional head office in Haad Yai, who helped authorities find the warehouse, said the gang involved is part of a large operation smuggling pirated goods into southern Thailand. In light of these events, he has ordered security at border checkpoints to be especially strict in the new year. (Phuket Gazette)

The Vessel Traffic Control and Maritime Security Center (VTS) opened in Thung Sukhla Sriracha of Chonburi province. It will be responsible for the supervision of traffic and security of cargo ships entering and exiting Laem Chabang, Sriracha and Mapaput harbors. The center will provide services to ships all year long and in addition, the harbor departments have collaborated with the Navy to share information by connecting the vessels’ monitoring system along the entire coast of the country. (Pattaya Mail)

This week the HDFF team attended a public lecture by Dr. Larry Diamond titled, “From the Arab Spring to the Thai Crisis: The Spirit of Globalization”. It was held on December 27, 2011, in the Maha Chulalongkorn building at Chulalongkorn University in Bangkok.

Dr. Diamond began his lecture by referring to Samuel Huntington’s “The Third Wave”, which describes a rapid surge of global democratization stretching from the 1970s to the present.  Dr. Diamond asserted that from 1974 to 1999, the number of independent states with democratic political systems had more than doubled. However, he distinguishes democracies by those that are merely electoral and those of high quality, which he describes as “liberal”. Liberal democracies, he contends, are systems with popular sovereignty, civic culture, rule of law, and equal protections for basic rights. Using these criteria with present data, Dr. Diamond determined there are 77 reasonably high-quality democracies in the world (about 2/3rds of all independent states).

The third wave, according to Dr. Diamond, peaked in 2006, beginning a “democratic recession” in which the total number of democratic states declined concurrent with falling freedom scores. He said there were 26 breakdowns or reversals of democracy globally since 1999. Among the key “strategic” countries to experience such a setback was Thailand. The abrogation of the 1997 Thai constitution, he opined, was not just a loss for Thailand but for the world.

Dr. Diamond made an interesting claim with regards to democracy in China. He predicted that with rising income levels, China’s citizens will demand more freedom. And unless the current regime prepares a soft landing for itself in the future – by building more genuine legitimacy – it will disappear. This, he said, could occur in the next 10-15 years.

Following Dr. Diamond’s presentation, the lecture opened to a panel of discussants, Professor Likhit Dhiravegin and Professor Suchit Bonbongkarn, of Thammasart and Chulalongkorn University respectively. The two presented their visions of a future moving towards increasing democratization, citing that the forces propelling it are practically inevitable. On the case of Thailand, the two were hopeful and optimistic.  And in this regard, professor Likihit was especially adamant that society’s institutions need to be flexible and adaptable to the winds of change.

All in all, the lecture was an interesting and intellectually rousing event. The HDFF team intends to make use of said knowledge in future discussions or research.

The HDFF Team wishes all of our reader’s season’s greetings and happy holidays.

All the best from our family to yours!

Summary

Real action continues to be made to bring back former Prime Minister Thaksin Shinawatra to Thailand while opposing political leaders act to repress such actions. Prime Minister Yingluck Shinawatra made what experts are calling a historic visit to Myanmar, and several controversial issues have arisen including flood victims suing Thai courts and Thai politicians speaking out against those who reject lese majeste prosecutions.  The baht strengthened this week as various forms of international influence positively impacted the Thai economy.  Businesses are demanding to receive quicker post flooding reconciliation tools and information regarding long term support. Politicians and bank officials are arguing over economic responsibility to flood victims and how to best stimulate the economy. Multilateral cooperation is supported in both economics and security sectors as Yingluck attends the Greater Mekong Subregion (GMS) Summit 2011 and the U.S. Navy offers sophisticated nuclear technology to Thailand. Thai Defense officials also met with the General Border Committee (GBC) in Cambodia and agreed upon troop withdrawal as mandated by the International Court of Justice while the Southern insurgency continues on a rampage.

Politics

Former Prime Minister Thaksin has received an ordinary Thai passport again, issued on October 26^th, despite previously being stripped of passport privileges by the former Democrat-led government. Kasit Piromya, Foreign Minister within the Abhisit government, revoked Thaksin’s passport in 2008, citing ministry regulation 23(7), which allows the ministry to recall a passport if that person causes damage to the country. Current Foreign Minister Surapong Tovichakchaikul has used the same regulation to re-issue the passport to Thaksin arguing, “I don’t see Thaksin threatening the country, therefore I lifted the passport ban.” A legal adviser to Thaksin Shinawatra, Noppadon Pattama, stated in a letter publicized by the Pheu Thai Party that revoking the passport had been originally illegitimate and was influenced by political bias. To bolster his argument, Noppadon cited the cases of Somchai Khunploem and Vatana Asavahame, both fugitives who received longer jail sentences than Thaksin (25 years for murder and 10 years for waste water treatment corruption) but did not have their passports revoked. The Democrat legal team is looking into suing Surapong. A petition is also being filed with the National Anti-Corruption Commission (NACC) in an attempt to remove both Prime Minister Yingluck Shinawatra and Foreign Minister Surapong Tovichakchaikul from office due to the passport re-issue.  Democrat MP Virut Kalayasiri has accused the Department of Special Investigation (DSI) of removing information about a terrorism warrant for Thaksin from its databases, despite DSI chief Tharit Pengdit denial. (Bangkok Post) (The Nation)

Prime Minister Yingluck Shinawatra made an official visit to Myanmar this week with energy policy as a primary focus. PM Yingluck was the first head of state from the region to meet with Aung San Suu Kyi since her release from house arrest. In the half hour meeting, Suu Kyi spoke of her hope to win the next “by-election”; Yingluck offered her support. Yingluck’s visit to Myanmar was once again overshadowed by her older brother Thaksin, who confirmed to have visited Myanmar beforehand to pave the way for Yingluck’s visit. Critics suspect that future business deals between Thailand and Myanmar could favor Thaksin-related companies. (The Irrawaddy) (Bangkok Post) (The Nation) (Mcot)

As an aftermath to this year’s flooding, a mass lawsuit will be brought to court against 11 authorities and officials on ground. The Stop Global Warming Association (SGWA) will represent about 350 flood victims who have decided to take legal action. They considered the 5,000 baht government compensation as insufficient and were hoping for a six-digit amount. (The Nation)

On his three-day visit to Thailand, Chinese Vice-President Xi Jinping signed a 70-billion-yuan (US$11 billion) currency swap agreement. Thai exporters and their Chinese counterparts can now settle trade deals in their local currency without having to rely on the US dollar. Experts believe this to be the Chinese reaction to the US announced strategic shift towards Asia. Besides other business deals, a MoU was signed to develop a high speed rail link, developed by China, between Bangkok and Chiang Mai, with other routes to be added in the future. (Bangkok Post) (AsiaOne)

Army chief Prayuth Chano-cha and Deputy Prime Minister Chalerm Yubamrung are both urging the public to refrain from the continuous discussions regarding the lese majeste law. Chalerm stated, “Personally, I feel we should not talk about this and I don’t want it to go overboard. If people think Thai law is unjust or too harsh, they can go live abroad,” “Why change Section 112 since it’s good already? Don’t they [people who want Section 112 amended] have jobs to go to?” It remains to be seen how national and global actors will respond. (Bangkok Post)

Economics

Although the economy remained comparable to last week, the baht strengthened as international insurance claims came in. The Bank of Thailand Governor Prasarn Trairatvorakul announced $2 billion USD of inflows from overseas insurance. Ideally, demand for locally currency will continue to increase. Throughout the week, the baht gained 0.2% to 31.23 per dollar, the strongest level since December 14^th. The Asia-Pacific Index of shares also gained 1.5% after U.S. housing increased more than economists forecasted. (Bloomberg)

Foreign firms whose plants have been impacted by flooding are continually asking for the government to make short-term improvements and long-term solutions more clear.  Thus far, only two foreign companies have informed The Board of Investment (BoI) that they will relocate out of Thailand.”Short-term remedies such as building a five-meter-high dyke around the industrial estates should be done immediately. This is not so expensive,” said Aapico Hitech president and chief executive Yeap Swee Chuan. Aapico also remarked “We are ready to get up and running. Don’t hold us back with any unclear [government] strategies.” Companies are still calling for the government to extend tax holidays exemptions, specifically to import and replace damaged machinery and provide insurance compensation for business interruption. The BoI will be meeting on December 29^th to discuss tax incentives. Despite the fact that Thailand’s fiscal budget has doubled over the last decade, government investments have remained unchanged at 240 billion baht.

Government officials continue to urge The Bank of Thailand to cut interest rates.  Politicians are arguing that the last cut was ineffective and further rate cuts would help businesses manage the minimum wage rise to 300 baht per day. Economists are responding by suggesting policy-makers be responsible for change and cut populist measures to make post-flood recovery and rehabilitation a priority. Many are arguing that the rice-pledging scheme will support the few rich farmers while the rest suffer as many plantations were destroyed in the floods and most no longer have rice to sell to the government. As economists expect inflationary pressure to decrease, experts predict the BOT would further cut the policy rate next year regardless.  Economists also continue to warn that sharp wage hikes could lead to high unemployment, in which case the government’s expectation of high consumption will not be reached. Public debt will also be increasing 40%of gross domestic product (GDP) to 60% by 2014. Other suggestions include urging the government to cancel tax breaks for first-time buyers of homes and cars. (Bangkok Post) (Bloomberg) (The Nation)

Prime Minister Yingluck Shinawatra attended the 4th Greater Mekong Subregion (GMS) Summit 2011 in Naypyidaw, Myanmar this week, with a focus on expanding economic cooperation within Mekong Subregion countries. Yingluck emphasized to GMS member countries including China, Cambodia, Laos, Burma, Thailand and Vietnam, that economic development in the region could support growth worldwide and contribute to reaching ASEAN 2015 goals. New economic cooperation can include projects on the Thai-Burmese border such as the deep-sea port project in Kanchanaburi-Dawei (Tavoy), Mae Sot-Myawaddy and also in Nakhon Phanom-Khammouane. Yingluck claimed emphasis will be made on supporting the new 2012-2022 GMS Strategy Framework including the proposed regional cooperation to improve water management and to organize a water summit in the Asia-Pacific region next year.  Yingluck also pledged to utilize Burma’s exports of gas and oil to Thailand. Regional actors hope to all sign the Joint Declaration of the 4th GMS Summit, a Memorandum of Understanding (MoU) to further accelerate the establishment of a highly intensive information network and a GMS Freight Transporters Association (FRETA). (The Nation)

Security

The United States and Thai navy are working to build collaboration efforts. Thailand’s largest port, Laem Chabang, began using new equipment to detect and prevent the illegal transport of nuclear and radioactive materials. The technology operates by accurately identifying radioactive isotopes. The $1 million “Spectroscopic Portal Monitor” was given to Thailand through the U.S. Megaports Initiative and 22 sets of primary radiation detection equipment have been installed. Judith B. Cefkin, deputy chief of mission at U.S. embassy in Bangkok stated “This latest advanced technology demonstrates our continued commitment to the safety, security and economic development of Thailand. This partnership is critical for Thailand and the U.S. because it is improving security, economic wellbeing and helping to ensure smooth operation and security in the international maritime shipping system”. There are only 41 ports worldwide and five ports in Asia outfitted with the new monitors including Kaohsiung in Taiwan, Colombo in Sri Lanka and Klang and Tanjung Pelepas in Malaysia. The ultimate goal is to prevent the increase of nuclear proliferation and terrorism by equipping 100 seaports with radiation detection systems by 2018. In addition to the monitors, The U.S. Navy has asked Thailand to consider stationing some American warships, specifically to reduce Chinese naval power. The U.S. is actively pursuing redeploying naval forces through the Southeast Asian region to determine joint defense plans against China, if needed. (Strategy Page) (Mainichi)

Despite last week’s shooting incident involving Cambodian border patrol and a Thai military helicopter, Thai Defense Minister General Yuthasak Sasiprapha, Army Chief General Prayuth Chan-ocha and other Thai senior defense officials visited Cambodia for the 8th Cambodia-Thailand General Border Committee (GBC) meeting. Cambodian counterpart General Tea Banh chaired the meeting, focusing on general security cooperation along the border and a time frame for both sides’ redeployment from the newly defined demilitarized zone.  Both Thai and Cambodian military authorities have agreed to withdraw their troops and let Indonesian observers supervise the area. Despite Cambodia’s initial request for both sides to comply with the ICJ orders by January 20^th, the Thai side proposed creating a joint working group to hash out the details of the troop withdrawal; Cambodia agreed.  Immediately following the establishment of the demilitarized zone, more than 1,000 border patrol police of the two countries will replace troops and Indonesian observers will be welcomed. A joint working group will meet in Bangkok next month to specifically determine troop withdrawal, the use of observers and the relocation of Cambodian markets and communities located in the DMZ area. Other issues the Joint Boundary Commission (JBC) and the GBC hope to promote are marine security and elimination of illicit businesses including drug trafficking, the trade of ancient artifacts, vehicle theft, illegal logging and illegal immigration.

In additional Cambodian news, on Friday December 23, 2011, an unexplainable loud “bang”, comparable to an artillery round was heard near a border village in Si Sa Ket province. Metal debris was later found spread over the area including a piece of metal about 1 meter long and half a meter wide at Phumsarol Witthaya School, a school attacked with artillery fire earlier this year. There are suspicions that the debris could be parts of a satellite but that remains unconfirmed until the military further investigates the incident.  (Xinhuanet) (Bangkok Post)

Violence continues in the three Southern insurgent provinces. After raiding a house in Narathiwat, a suspected militant was killed and another surrendered to a government force. Thirty officials including combined police and military forces followed a tip that two houses were the hideouts of a number of RKK insurgents. The captured insurgent later revealed the location of a shack in a rubber plantation, where police recovered various types of weapons and ammunition.  This included four M16 rifles, one HK33 rifle, one carbine, more than 200 rounds of assorted ammunition, two bullet-proof vests, and 94 firecrackers. The stolen weapons originated from four soldiers who were killed in a clash on September 28^th.  Additionally, 2 security volunteers were killed and 11 people injured in an epidemic of shooting, grenade and bomb attacks in Pattani and Yala this week.