HD Research Institute

Bi-weekly Newsletter 20 March – 2 April, 2014

April 2, 2014 | By HS | Category: HD Research Institute

In politics, the Constitutional Court nullified the February 2 elections, creating a reason to celebrate for PDRC followers and to mourn for UDD supporters. Monk Issara continues to fight for the unpaid rice farmers. Yingluck and Suthep are urged to hold televised discussion. Senate elections, which went undisturbed, may hold the fate of Yingluck’s possible impeachment.

In economics, the political situation in Bangkok has continued to have lasting effects on the country. Thai economy and its growth rest on a timely process of installing a new government. Many worry about Thailand’s involvement and advancement in the upcoming ASEAN community due to economic setbacks. Salaries are expected to rise and unemployment along with it. Rice farmers are to receive 20 billion THB by the month of April.

In security, as anti-government protests continue, and the Constitutional Court rules the February 2 elections to be invalid, numerous violent attacks occur around the country, in Bangkok, Chiang Mai and Chon Buri. In other news, Thawil Pliensri resumes his post as Chief of the National Security Council and vows to focus on illegal cross-border smuggling. In the south, conflict and violence continues, with increased fears raised over teachers’ safety following the fatal shooting of a teacher in Narathiwat, and former Chief of the Border Coordinating Centre, General Aekkanit Muensawat, provides advice on finding a solution to the political crisis.

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(Picture: The Nation)

Politics

On March 21, the Constitutional Court ruled (6:3) to nullify the February 2 elections. During the elections 28 Southern constituencies within 8 provinces had no candidates, thus inhibiting a complete nation-wide vote, held on the same day. This violated Article 108 (2) of the constitution, which states that elections must be held throughout the nation on the same date. The People’s Democratic Reform Committee (PDRC) was extremely pleased when the verdict was announced in Lumpini Park by PDRC leader Satit Wongnongtaey. The PDRC’s ultimate goal is reform before election as PDRC leader Thaworn Senneam stated. As reform goals didn’t happen before the last election, this verdict gives the PDRC another chance to achieve national reform before the next election and remove the current Caretaker Prime Minister, Yingluck Shinawatra, and her Cabinet, removing what the PDRC sees as the Thaksin regime. It may be a while until new elections are held. The caretaker government has agreed to work with the Election Committee (EC) to establish a date submitted for HM the King’s approval. But, as Caretaker Education Minister Chaturon Chaisang made point, the PDRC could again obstruct voting and elections will continue to be nullified. (The Nation, National News Bureau of Thailand)

Monk Luangpu Buddha Issara led farmers from the Chaeng Wattana rally site to the Government Lottery Office (GLO) on Friday, March 21. He demanded that GLO use lottery funds to buy the rice and when no answer was received, proceeded to dump the 100 tonnes of rice in front of the office, vowing to continue with his demands. (The Nation, National News Bureau of Thailand)

On the PDRC front, another massive rally was held on Saturday, March 29. The rally was led by Suthep Thaugsuban and began at Lumpini Park and proceeded to the Royal Plaza and Parliament. His various speeches made to the people throughout the procession focused on his vow to eliminate the Thaksin regime, reform based on democratic principle, prevention of Parliament from reopening before reformation and the return of now monopolized power to the people. (The Nation, National News Bureau of Thailand)

The United Front for Democracy against Dictatorship’s (UDD) new leader Jatuporn Promphan announced that a massive rally of “red shirts” would take place on Saturday, April 5. Location was recently named to likely be Aksa Road in Phuthamonthon area of the Thawi Wattana district of Bangkok. This announcement came after a previous mass rally in Pattaya where followers were asked to wear black in a sign of mourning the Constitutional Court ruling, which nullified the February 2 elections. PDRC leader Suthep Thaugsuban has called for a meeting of his co-leaders to decide on a date for a “decisive war” against the caretaker government on April 5th also. Caretaker deputy premier, Surapong Tovichakchaikul warned this could cause risk of a confrontation. (Bangkok Post, The Nation, National News Bureau of Thailand)

Recently, former prime minister and Democrat Party leader, Abhisit Vejjajiva, who is currently being charged with murder during the 2010 crack down on red shirt protesters, has urged Yingluck and Suthep to come together for discussion. It is unknown whether Democrats will run in upcoming elections, however Abhisit stated the party would run, given it was fair and “acceptable to all sides”. He has agreed that some methods to reform cannot be arranged before elections due to the fact that they would require amendment changes. However, he stressed the importance of a televised talk between Yingluck and Suthep to clarify information each side disputes and establish a greater level of confidence and awareness among people. (The Nation, National News Bureau of Thailand)

The National Anti-Corruption Committee refused to extend caretaker Prime Minister Yingluck Shinawatra’s time to prepare her case against allegations of malfeasance and dereliction of duty, which could lead to indictment. She had requested to be treated fairly, as another politician would be, the National Anti-Corruption Commission (NACC) had sent 280 pages of trial material to her, but gave her only three days time to study the information before she had to defend herself on Monday, March 31. Yingluck along with her lawyers met with NACC commissioners Monday, April 31 to defend herself against charges. If the case is pursued, it would be likely that she would face Senate impeachment processes. (The Nation, National News Bureau of Thailand)

Senate elections, opened on Sunday, March 30, ran undisturbed. These election results could determine the fate of caretaker Prime Minister, with a possible impeachment on the line. According to unofficial results, expected results were obtained, with very few elected senators (officially supposed to be politically neutral, but are not) conflicting with the political views of the regions they represent. Jaruwan Mainthaka has taken the senatorial seat of Bangkok by wide margins according to the unofficial results. Results must be endorsed by the EC in 30 days, but during this time they may be called upon to vote on the Prime Minister’s potential impeachment. (The Nation, National News Bureau of Thailand)

(Picture: Bangkok Post)

Economics

The political deadlock has continued to affect the Thai economy. The recent verdict that nullified the February elections was seen by the private sector as a positive indicator that a new government would be established and fully authorized to manage economic areas that the caretaker government cannot. Director of the Thai Chamber of Commerce’s Economic Forecasting Centre, Thanavath Phonvichai, believes that should a new government be installed by the third quarter after elections, the economy in Thailand could grow 2-3%. However, many research firms expect lower than 3% GDP growth due to the resulting decrease in tourism, consumerism and investment caused by the political deadlock. Up to 120 billion THB are estimated to have been lost in opportunities due to the political situation according to the Joint Standing Committee on Commerce, Industries and Banking. (The Nation, National News Bureau of Thailand)

The Ministry of Finance, for the third time in three months, has decreased economic growth forecasts due to the lack of a new government with full, financial administrating power. Somchai Sujjapongse, head of the Ministry of Finance’s Fiscal Policy Office (FPO), stated that due to the government having no budget this year, the public sector has become a pull on economy. The 2 trillion THB infrastructure bill rejected by the Constitutional Court last month further limited national economic stimulation. Decreased growth rates and inflation could cause consumer confidence and investment to drop in Thailand. Food prices showed a 2.11% inflation on the consumer price index (CPI) from March of last year to March of this year. Asian Development Bank (ADB) has warned that if a new administration is not in office by October 1, which is the fiscal year’s beginning, growth rates will be less than 2.9%. However, the upcoming Songkran holiday is expected to reboot manufacturing production levels which have been on the decline for 11 months. (Bangkok Post)

Other worries surrounding Thailand’s economic competiveness in the upcoming 2015 ASEAN Community and even potential suspension have been brought up by various coalition parties. Chart Thai Pattana Party member, Somsak Prissanananthakul feels that the political conflict could prohibit Thailand from becoming an ASEAN economic hub as hoped for or even suspension from the community. Additionally, Ath Pisalvanich, the director of the University of Thai Commerce’s International Trade Studies Centre estimated that 480 of 4,000 small/medium sized Thai enterprises would seek to invest elsewhere such as Indonesia, Myanmar and Laos. That would account for 77 billion THB in investment lost. Other Thai industries, around 1,440, may move production to neighboring countries due to political unrest and low economic growth. Relocation could account for another 46 billion THB investment opportunity lost. (The Nation, National News Bureau of Thailand)

On Friday, April 4, seven ASEAN stock markets are set to launch a joint ASEAN/FTSE Index. Made up of 180 constituents, its hopes are of attracting ASEAN and global investors therefore raising exposure in ASEAN markets. Among various stock exchanges based in Indonesia, Vietnam, Singapore, the Philippines and Malaysia, the Stock Exchange of Thailand (SET) will also sign on Friday. The 30 largest market cap stocks from the SET50 will be included in the new ASEAN/FTSE Index. The launch will create new investment opportunities and marks the first collaboration of ASEAN stock giving comprehensive information to attract global investment. (Bangkok Post)

The Federation of Thai Industries (FTI) has forecasted a potential rise in unemployment to between 1.2% and 1.5% among the total workforce in comparison to 2014’s forecast of 1%. Unemployment averaged 0.7% in 2013. The industrial sector being hit is also an effect of the current political situation. Many of those affected are recent graduates and educated workers. Also, in connection to the political unrest and economic slowdown, salaries are expected to rise due to the rising cost of living and organizations delaying employment. The survey conducted by Towers Watson, a global professional services company, estimated the salary rise at 6%. Within the survey they also found that many companies are ill-prepared for the upcoming ASEAN Economic Community, lacking key skills in internal language training and leadership development. (Bangkok Post)

Rice farmers have been promised by the caretaker government 20 billion baht by April. Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong did not say where the funds would come from. The caretaker government bought the rice at over 40% the market price, and has failed to sell large stocks. Mr. Kittiratt vowed that one-fifth of the 96 billion THB owed would be paid in the coming month. (Bangkok Post)

(Picture: Bangkok Post)

Security

On 21 March, the day after Thailand’s Constitutional Court ruled that the 2 February election was invalid, bomb blasts occurred in Bangkok, Chiang Mai and Chon Buri. In Bangkok and Chon Buri, the attacks occurred near anti-government protest sites in Chaeng Watthana and Tambon Bang Sai respectively, but no injuries were reported. In Chiang Mai, however, three men and a woman were wounded when a bomb exploded at a PTT petrol station in Muang district. A second attack occurred in Chiang Mai just an hour later when 2 grenades were thrown into the office of Broon Rawd Brewery Co., which belongs to the family of Chitpas Kridakorn, a high profile leader of the People’s Democratic Reform Committee (PDRC). The PDRC’s co-leader, Thavorn Seniam, warned that the United Front for Democracy against Dictatorship (UDD) would try to encourage a violent response from the opposition by inciting such violence, but urged the continuation of peaceful protests. No suspects have been found in relation to these attacks, and fears of political violence continue. (Bangkok Post)

Thawil Pliensri is due to resume his post as the National Security Council Chief. The caretaker Cabinet revoked the 7 September 2011 decision of the Prime Minister’s Office to transfer him to PM’s advisor, after he won a legal battle ordering that his removal was unlawful. Upon his reinstatement, he declared that his first move will be to address the problem of people and arms smuggling as currently, he says, the government turns a blind eye, allowing this illegal cross-border activity. His statement came after police uncovered six gas cylinders, five pipe bombs, a five litre container of fuel, and two motorcycles at a house in Min Buri district. (Bangkok Post)

It has been revealed that that the fatal shooting on Sunday of Sgt Wanchana Konsin of Yala Task Force 16, in Muang district, southern Thailand, was not carried out by southern insurgents as the media has been reporting, but was in fact carried out by a colleague for reasons that have been linked to work-related stress. In response to this the Commander has created measures to reduce the likelihood of such incidents, including extra time-off and welfare support. The army’s medical centre will also carry out monthly assessments on the well-being of soldiers. (Bangkok Post)

Also in the south, the Narathiwat Teachers’ Federation has urged authorities to increase security for teachers, after the murder of Somsri Thanyaluck at Bankhok Mueba Mittraphap 223 School, in Narathiwat’s Tak Bai. The female teacher was shot on Thursday 20March, on her way home from school, and seven suspects have been arrested. Attacks on teachers are becoming more frequent, threatening the stability of the education system in the south. Amongst rising tensions and the lack of effective solutions, more teachers are asking to leave and fewer parents want to send their children to school. In Pattani’s Muang district, the Federation of Teachers of Three Southern Border Provinces met to discuss proposals to the government for more assistance. (Bangkok Post)

With the historic signing of the peace deal between the Philippine government and the southern rebels, some have found new hope for solving the crisis in the south. The former Chief of the Border Coordinating Centre, General Aekkanit Muensawat, has provided some lessons on the past year of the peace dialogue with the southern provinces. These lessons include issues such as:

  • Lack of coordination between the Security Council and other national security agencies such as the Foreign Affairs Ministry and the National Intelligence Agency, leading to a lack of participation amongst them.
  • Thailand’s lack of sufficient knowledge, peace-dialogue making experience, and preparedness.
  • Not enough meaningful dialogue within the Thai Security Council.
  • Lack of channels to inform the public about the process, and hence lacking public support.

General Aekkanit Muensawat suggested possible solutions, such as further including Malaysia as peace facilitator or mediator, and creating a new agency specifically for the peace dialogue. (The Nation, National News Bureau of Thailand)




Bi-weekly Newsletter 3 March – 19 March 2014

March 20, 2014 | By SF | Category: HD Research Institute

(Image source: Bangkok Post)

Summary

In politics, Mr. Jatuporn Promphan has been appointed as a new red shirt leader. As Suthep vows to continue protesting all year, his house has been targeted for a third time. PDRC is waiting for UDD party strategies often involving violence to come to their aid. Possibilities of peace talks among government and PDRC have been rejected.

In economics, concerns have been raised by many foreign investors and businesses as the political situation has caused further delay to Thailand’s economic strategies. The EU-Thailand FTA fourth round of negotiations set in March or April were delayed as Thailand lacked a head for its negotiating team. Moreover, the Constitutional court ruling on the 2 trillion baht borrowing bill has hampered the government’s plan for the high-speed train. These circumstances may have a negative impact on Thailand competitive advantage and its bid to become the region’s center for business and manufacturing. The Finance ministry is ready to release 20 billion baht from the National Budget to repay the farmers in the Rice Pledging scheme. Overall, the government owes a total of 119.5 billion baht to 1.527 million farmers participating in the Rice Pledging scheme. The rice auction that was set on March 26th was postponed to a later a date due to little attendance from bidders.

In security, the protest stages were condensed to a single area in Lumpini Park which had a couple rare cases of violent threats.  As protesters commit to an extended campaign, the army continues to issue warnings to political groups to avoid encouraging public disorder.  In the South of Bangkok, an environmental disaster is occurring as toxic fumes from a burning garbage dump forces communities to evacuate.  In Southern Thailand, fatal incidents continue with no sign of resuming peace talks.

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Politics

Ms. Tida Tawornseth, former leader of the United Front for Democracy against Dictatorship (UDD), announced her resignation last Saturday in Ayutthaya. Newly elected leader, Mr. Jatuporn Promphan has been received very well among the UDD party. Other UDD officials report he was accepted by all UDD branches, is a suitable opponent for the People’s Democratic Reform Committee (PDRC) leader Suthep Thaugsuban and will lead a more aggressive political strategy that would not turn violent. Mr. Jatuporn is a past Pheu Thai Party MP and continues to face charges of terrorism for his leadership in the 2010 red-shirt protests. The new UDD leader has been quoted saying, “The next battle will be big.” However, he has vowed that no weapons will be used in new strategies. He has made his belief that the PDRC will not succeed clear, and that the UDD’s primary rival is not Suthep but the amart system that is using him as their puppet. The amart system is seen by the UDD as an elite connection of old patronage, having some control of six independent organizations, such as the National Anti-Corruption Commission, founded under the 2007 constitution. For the past 4 months the UDD has taken a defensive stance. Mr. Jatuporn hasn’t given a timeframe, but has said to expect a more aggressive fight from the UDD.  (Bangkok Post)

In recent news, Suthep Thaugsuban’s house in Thawi Watthana district was targeted by a bomb for the 3rd time. His wife was home at the time, but no one was injured in the incident. According to Suthep’s stepson, the latest grenade was fired last Saturday around 7pm. The first two occurred on March 10th. In none of the incidents did he contact police to investigate. (Bangkok Post)

PDRC has no plan to back down. In fact, they are hopeful that the more aggressive tactics the UDD has said it will take will end up helping the PDRC’s goals. If violence ensues, as the red shirts have a past history of, military would have to intervene. This could lead to a favorable outcome for the PDRC. UDD strategists among others are sure the PDRC see military involvement as a potential means for a coup. Regardless of UDD steps and the Thai military, Suthep have vowed to continue protesting indefinitely in Lumpini until caretaker Prime Minister Yingluck Shinawatra steps down and the nation begins to take steps towards reform. He has said there is no other means for reform than a neutral government, made up of individuals with no ties to any political party including the Democrat Party.   (Bangkok Post)

On Monday, peace talks between government and PDRC were proposed by six independent organizations: the Election Commission, the National Human Rights Commission, the Office of the Ombudsman, the State Audit Commission, the National Anti-Corruption Commission and the National Economic and Social Advisory Council. Peace plans suggested having both parties create a list of ten politically neutral individuals that could mediate peace talks. From the lists, five people would need to be listed in common by both groups and these would be the chosen mediators. However, both parties rejected the proposal. Ms Yingluck said she would wait for PDRC to make the first step, however Suthep said the PDRC will make no list of names.  (Bangkok Post)

Economic

ASEAN plans to resume free-trade talks with the EU free trade agreement (FTA), as ASEAN member countries is readying themselves for market liberalization with developed countries. Thailand’s political situation has hampered negotiations between Thailand and the EU.  The EU-FTA agreement with Thailand was targeted for 2014, but the house dissolution has delayed the process further. The fourth round of negotiations between Thailand and the European Union was set around March or April, however was postponed as “Thailand lacked a head for its negotiating team” said Rolf-Dieter Daniel, President of the EABC. The EU has had further negotiation progress with neighboring countries, where Singapore has completed an FTA deal, will close an agreement with Malaysia by the end of the year. Vietnam has already negotiated six rounds of talks. Without an FTA or a Generalized System of Preference (GSP), Thailand will have higher tariff rates than its trade rivals. This on top of trade barriers such as out-dated or overly strict regulations can impact Thailand’s bid for its role as the regional centre for manufacturing and business. Concerns regarding Thailand’s competitiveness were raised as the drawn-out political conflict is affecting investor’s confidence and may cause Thailand to fall behind its regional competitors.  (NATION)

FDI investments from Japan still consider Thailand as its top destination, and will continue to focus on Thailand as its regional headquarters. Nevertheless, Thailand needs to expand its measures to enhance human resources. Skilled-labor shortage in the management level is a concern for many Japanese companies as they look for local managers to run their regional headquarters. (Bangkok Post)

The Constitutional Court ruled that the 2 trillion baht borrowing bill was unconstitutional, delaying the government’s high-speed train plan.  The verdict may have a negative impact to Thailand’s competitive advantage as infrastructure investments are needed for the development of the country. However many foreign companies have stated confidence may increase since “the country is doing things on the right track”. The Committee on Economic Development of the Northern Region of the Thai Chamber of Commerce has stated the ruling will impact the property market, but will not have drastic impact on businesses in the North due to urbanization and cross-border trade. The government should still invest in infrastructural developments, and was urged to prioritize the development of a dual-track rail which is the cheaper alternative to the high-speed train. (The Nation)

Finance Minister Kittiratt Na-Ranong has set to release 20 billion baht for the National budget so payments to the farmers can be made.  A total of 581,000 farmers (out of 1.527 million farmers) have received money. The Ministry of Commerce said it approved the sale of 180,000 tonners of rice to winning bidders. The overall money earned was around 8.5 million to 9 million baht. Further auction was postponed will March 26th due to little attendance from bidders.  The BAAC reported that they had raised 846.29 million baht through the Farmer’s  Assistance Fund. The government had owed 119.5 billion baht to almost million farmers in the rice pledging scheme that ended on February 28th. Farmers in the South, pledging period was extended to July 31st. (Bangkok Post, The Nation)

Security

Since the protest stages have been dismantled to concentrate at Lumpini Park, the worries of violent tensions have declined.  However, a few cases still continue.  Earlier this month, two soldiers were arrest at Lumpini during a late night for possession of weapons and ammunition in a vehicle without permission.  They refused to provide any statement, but the weapons did not belong to their unit.  Additionally, two grenades were discovered near Suthep’s home in Thawi Watthana district.  It is suspected the grenades were shot from a distance.  More recently, the army claims they are examining an audio clip of red-shirt leader Wutthipong “Ko Tee” Kachathamkhun” which is a recording of his phone interview with a radio host.  The man claims to give details and justification for accumulating weapons in preparation for a fight with soldiers.  The army accuses the clip for encouraging public disorder and will attempt to pursue legal action with the police.  Moreover, the army cautioned groups of people from using court decisions to fuel their political conflicts.  Army spokesperson Winthai Suwari asked for respect for the justice process after the Constitution Court ruled the 2-trillion baht borrowing bill for infrastructure development projects as unconstitutional. (Bangkok Post)

This week, a burning garbage dump in Samut Prakan has been declared a disaster area as toxic fumes have forced thousands to evacuate.  The fumes started on Sunday, March 16th, and have spread to areas near Bangkok such as Bang Na, Saphan Sung, and Prawet.  The substances involved sulphur dioxide, carbon monoxide, and some carcinogenic chemicals which are harmful to the respiratory system.  At least 5,000 masks wer e handed to protect citizens.  Teams from 9 firefighting stations were able to contain the fire, but they were unable to extinguish it, claiming it would take three days.  However, there have been no reports of serious cases caused by the toxic fumes.  (The Nation, National News Bureau of Thailand)

In Southern Thailand, the fatal incident involving three young children was revealed to be a separate incident from the violent unrest which has escalated since 2004.  The crime against a family of five, killing three children and injuring the parents, was related to a family feud in which the attacker claimed revenge for his brother.  However, other attacks have been related in revenge for the three children.  In the last two weeks, 14 people have been killed and 10 injured.  Most of the incidents were gunfire attacks (22 of the 24 incidents), but two civilians were victims of being set on fire.  Additionally, bombs were detonated in a public school area, but nobody was injured.  While the peace talks are still suspended, the emergency decree in Southern Thailand has been approved for a three-month extension ending in mid-June. (Bangkok Post)




South Thailand Security Report – January

February 10, 2014 | By EK | Category: HD Research Institute

Read the report

Least casualties in one year

The first month of 2014 experienced lower casualties than over the entire past year. 22 persons were killed and as many were injured in violence related to the conflict in the three Southern Border Provinces (SBP) over the past month. The casualties were evenly spread over the three provinces Pattani (14 casualties), Yala (15) and Narathiwat (15). Nevertheless, lower casualties during the past month do not necessarily signify that violence decreased, as there were numerous attacks with Improvised Explosive Devices (IEDs) that caused no injuries. Most of the victims were injured or killed by IED attacks or in shootings.

Attacks spreading across provinces

In 2013, casualties have been less concentrated than in 2012 when the five most dangerous districts accounted for almost 60 % of all total casualties. In 2013, the five top districts had around 35 % of all casualties in the Deep South. The table below shows the ten districts in the Deep South with the highest number of casualties in 2013 and 2012. The greatest changes are the drop of Yala’s Muang district and Pattani’s Sai Buri district while casualties have drastically increased in Yala’s Krong Pinang district (from 6 in 2012 to 46 in 2013) as well as in Pattani’s Mayo district (from 13 in 2012 to 38 in 2013). The large number of casualties in Hat Yai, Songkla province in 2012, is almost exclusively attributable to a single bomb attack there in March 2012. Another noteworthy change over the past year is that a second district from Yala province has entered the top ten most dangerous districts.

2013

2012

Province District Casualties Province District Casualties
Narathiwat Rueso

82

Songkla Hat Yai

309

Yala Muang

73

Yala Muang

131

Pattani Muang

64

Pattani Sai Buri

102

Narathiwat Rangae

46

Narathiwat Rueso

90

Yala Krong Pinang

46

Narathiwat Bacho

48

Pattani Sai Buri

45

Narathiwat Rangae

44

Narathiwat Bacho

45

Pattani Muang

41

Pattani Mayo

38

Narathiwat Tak Bai

38

Pattani Yarang

32

Pattani Yarang

31

Narathiwat Cho-airong

31

Pattani Khok Pho

29




Bi-weekly newsletter – 24 January to 09 February 2014

February 10, 2014 | By EK | Category: HD Research Institute

Image source: Bangkok Post

 

Summary

In politics, Thailand’s snap election were held without any major outbreaks of violence on 2 February but protesters were successful in blocking enough polling stations and thus increased the likeliness that the election might be annulled by the constitutional court. The Democrat party has already petitioned the court to annul the national election despite successful polling at 83,669 out of 93,952 stations.

In economy, the stalemate situation caused by the political unrest in Thailand’s capital continues and reports reverberate on the negative effects and bleak outlook for national growth in 2014. Despite the political instability, the Bank of Thailand (BoT) decided to keep the policy interest rate level while closely monitoring any new developments. Increasingly however, outside observers worry that the Thai economy might find it difficult to repeat its usual act of ‘bouncing back’ again to economic growth and investor interest.

In security, security incidents surrounding the anti-government protests in Bangkok have been highly mediatised and have drawn international attention. The protests have led 40 countries to issue travel warnings to Thailand although during protests, a resident of Bangkok would still have been far more likely to get injured in a traffic accident than in an incident related to protests. The conflict in Southern Thailand has continued but as a month, January 2014 had less casualties than in a year.

Read the entire newsletter

Politics

Thailand’s snap election were held without any major outbreaks of violence on 2 February but protesters were successful in blocking enough polling stations and thus increased the likeliness that the election might be annulled by the constitutional court. The Democrat party has already petitioned the court to annul the national election despite successful polling at 83,669 out of 93,952 stations. In Bangkok and some southern districts, traditionally Democrat party strongholds, protesters prevented the delivery of ballot papers, pressured officials not to report to duty or physically prevented people from voting. Chuvit Kamolvisit, a charismatic independent candidate and former massage parlor owner previously accused Suthep and his supporters of falsely characterizing their struggle as an anti-corruption fight arguing it was nothing more than “a game of power”, got into a brawl with protestors trying to prevent him from voting. He commented afterwards that “Thai society has to learn that to get rights, freedom, liberty, you need to fight. But the fight should take place within the democratic system, not on the street.”  Paul Chamber, director of research at the Institute of Southeast Asian Affairs at Chiang Mai University, expects the constitutional court to annul the result which will “see Thailand descend into more distrust and conflict” as Pheu Thai supporters might come out to protest the court’s decision.

Protest leader Suthep Thaugsuban announced right after the elections that two protest sites will be closed to consolidate the crowds at the remaining five locations. As has been predicted by analysts such as the New York-based Eurasia Group, a political risk consultancy company, before the election, a “judicial intervention” remains the most likely way the government will be removed from power but Pichit Tamool, a red shirt leader from Chiang Mai, has already announced that “If we find that the elites are taking the law into their own hands, we will take the law into our hands … the situation in Bangkok would be pretty dire.” It thus comes as no surprise that the International Crisis Group (ICG) stated in a recent report that “There is no clear way out,” as both sides of the conflict remain adamant to counter any development with street protests.

Prime Minister Yingluck Shinawatra meanwhile faces additional pressure from the National Anti-Corruption Commission (NACC), which will investigate corruption charges related to the rice subsidy program. Vicha Mahakhun of the National Anti-Corruption Commission said at a news conference, “Those who oversaw the scheme knew there were losses but did not put a stop to it.” These charges could theoretically lead to Yingluck’s impeachment.

(Associated Press, Bangkok Post, Bloomberg, Reuters, Sydney Morning Herald, The Guardian, The Wall Street Journal, Washington Post)

Economy

The stalemate situation caused by the political unrest in Thailand’s capital continues and reports reverberate on the negative effects and bleak outlook for national growth in 2014. Despite the political instability, the Bank of Thailand (BoT) decided to keep the policy interest rate level while closely monitoring any new developments. Increasingly however, outside observers worry that the Thai economy might find it difficult to repeat its usual act of ‘bouncing back’ again to economic growth and investor interest – several prominent analysts are warning Thai businesses that neighbouring economies, such as Malaysia, have proven more stable and suited to foreign investment.  Nevertheless the Thai stock market – the Stock Exchange of Thailand (SET) – went against the flow following the national elections last Sunday and gave he stock index the best performance in Asia on Monday. The lack of violence surrounding the elections, as compared to expectations, led investors to buy Thai stocks and push the SET forward by 1.1 %. This does not however change the view of private groups, such as the Joint Standing Committee on Commerce, Industry and Banking, to expect a large loss in gross domestic product (GDP) in 2014 – setting their estimate at a 240 billion baht loss. The rating agency Moody’s has also lowered their forecast for the Thai economy from a 5.2 per cent growth in 2014 to a meager 3.2 per cent. (Thailand National News Bureau, New York Times, Washington Post, The Wall Street Journal, The Nation)

Most affected by the crisis are perhaps the actors in the important tourism sector, who have suffered harsh losses from reduced visitors – notably over the Chinese New Year festivities. China issued warnings to citizens to reconsider non-essential trips to Thailand – something that has led between 500,000 to 1 million tourists to cancel their trips. Hotels in popular areas in Bangkok, Pattaya and Hua Hin have reported only 30 per cent occupancy although February is still considered the high season for tourists in Thailand. The Tourism Council stated that tourist arrivals would report a decline by 7.3 per cent in the first quarter of 2014 compared to previous years.  The caretaker government has been urged to remove the Emergency Decee in order to restore confidence among tourism agencies. (Bloomberg Businessweek, Bernama.com)

Instead of focusing on the negative situation within Thailand, Thai businesses have instead been urged to expand their investments in Myanmar – a country whose economy is expanding rapidly since the removal of blockades from the United States and the European Union. Key sectors for Thai investment is recommended as service, health, beauty, insurance, infrastructure and construction according to the Thai Ambassdor to Myanmar, H.E. Pisanu Suvanajata. (Bangkok Post, Thailand Business News)

Security

At Laksi intersection near Ladprao on Saturday afternoon, crossfire was encountered between pro-election groups and anti-government protestors, injuring six people.  Three of the 21 suspects have been identified, and police continue to search for a cash delivery van that was captured on video and assumed to have carried weapons to the scene.  At the Laksi clash, 71-year-old Ar-kaew Saelew was visiting his daughter when he was shot and paralyzed from the neck down.  An image of his body in the streets when viral, stirring accusations from both sides of the shooting and spreading rumors he might have been a hired mercenary.  His family strongly argues he was an innocent civilian without any tie to the political situation.

The rumor of mercenaries stem from anti-government protestors (including protest leader Suthep Thaugsuban) who claimed hired men from Cambodia were bearing arms against them or arriving at polling stations without IDs, but the Internal Security Operations Command rejected this rumor.  Army Chief Gen Prayuth Chan-ocha did not deny armed foreigners could easily sneak across the border, but he stated the military has checked for movements at the border areas for the past few months and found no evidence to support the claim.  Cambodian Foreign Ministry has also argued that Cambodians were in Thailand for work and business.

The spats of violence during the protests have shown confrontation the safety of Yingluck Shinawatra.  Caretaker Deputy Prime Minister Surapong Tovichakchaikul demanded better protection for Ms. Shinawatra, which the military found to be an offensive statement.  The army argued they were working closely with other security units and she was already assigned soldiers to protect her.  The army showed strong disapproval of Mr. Surapong for making demands of them through the media.

Protesters are also coming from the western provinces.  One group of rice farmers established a blockade at the Wang Manao instersection in Ratchaburi’s Pak Tho district to demand for their long overdue payments from the rice-pledging scheme.  Another group of 500 camped on Asian Highway 117 in Phichit’s Bung Narang district.  Protest leader of Tambon Tai Nam Administration Organization, Prakasit Jamjumrus, alongside a group of 200 farmers are submitting a royal petition in Bangkok with a list of 1,000 names.  They state they are not politically-motivated, but continue to send demonstrators to the Commerce Ministry.  Frustration stems from farmers unable to pay for their farming costs without their due payments from the caretaker government.  They also demand help with creditors who may threaten to take away their equipment.

The past two weeks in Southern Thailand has witnessed 22 deaths and 10 injuries.  There were 14 casualties from bombings, and 13 casualties from gunshots, including 4 children.  One of the most recent attacks involved a family of five who returned home from prayer at their local mosque.  In front of their home, four gunmen emerged from the nearby trees and opened fire.  The parents were injured but the three young boys of ages 9, 5, and 3, were pronounced dead at the hospital.  This incident has raised a lot of concern in local communities about the safety of innocent children and elderly in the deep South.

January Security Report for Southern Thailand  – Read it here!




January 23, 2014 | By EK | Category: HD Research Institute

Picture from manipalworldnews.com

Summary

In politics, the scheduled snap election on 2 February is coming closer and while a small group of candidates are erecting election posters, analysts warn that protest leader Suthep Thaugsuban will use every means available to him to derail the election. While groups associated with the People’s Democratic Reform Committee (PDRC) have threatened to shut down the country’s stock exchange and the company handling communications for Thailand’s air traffic controllers, Suthep himself threatened to abduct Prime Minister Yingluck Shinawtra.

The Thai economy has slowed down since the start of political turmoil in Bangkok and the mediatised ‘Bangkok Shutdown’ has led to further worries among investors and tourists. 4 billion baht has left the Thai market since November as investors are selling Thai assets and currency, but the Bank of Thailand nevertheless decided to keep the interest rate unchanged.

In security, a special feature from HDFF’s statistical team who has compiled the data from the South Thailand Security statistics for 2013. A two-page visual guide gives you insight into the developments in the conflict in the three Southern Border Provinces over the past year.

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Politics
The basic stance of conflict resolution theory is that conflicts may be resolved when all involved parties are willing to talk and compromise. When one involved party categorically opposes all conflict mitigation, then the conflict could continue indefinitely. It is therefore not surprising that a recent International Crisis Group (ICG) report concluded that “there is no clear way out” of the current conflict in Thailand. The ICG now warns of increasing risk of violence.

With the scheduled snap election on 2 February coming closer and a small group of candidates erecting election posters, analysts warn that protest leader Suthep Thaugsuban will use every means available to him to derail the election. While groups associated with the People’s Democratic Reform Committee (PDRC) have threatened to shut down the country’s stock exchange and the company handling communications for Thailand’s air traffic controllers, Suthep himself threatened to abduct Prime Minister Yingluck Shinawtra. The New York based Eurasia group recently warned that tension in Bangkok will worsen before a solution to the crisis can be found. The Eurasia Group’s report concluded though that the most likely scenario would be for the election to go ahead as planned only to later be ruled invalid by Thai court. Thailand’s constitution forbids the House of Representatives to sit unless there is a representative from at least 95 % of the constituencies. Since Suthep’s supporters successfully blocked candidate registration in southern districts with a large Democrat Party following, it is unlikely that the elections on 2 February will reach the 95 % limit.

Two minor explosions on 17 and 19 February at anti-government demonstration sites have killed one man and injured about 50 demonstrators in the bitter fight between the Bangkok protesters and the Pheu Thai government. No culprits have yet been officially apprehended while supporters from both sides of the conflict blame each other for the attacks. The Yingluck administration invoked the emergence decree on 22 January in their push for the 2 February election. Red shirt supporters have kept their distance from Bangkok and the protest sites but one of their leaders from Chiang Mai, Pichit Tamool has warned that “If we find that the elites are taking the law into their own hands, we will take the law into our hands … the situation in Bangkok would be pretty dire.” A white shirt, candle-lighting movement has meanwhile sprung up advocating an end to the PDRC protests arguing for holding the elections as they want their democratic right to voting to be respected.

Prime Minister Yingluck Shinawatra faces additional pressure from the National Anti-Corruption Commission (NACC) which is investigating her role in the rice subsidy programme. As head of the rice committee she might have to face corruption charges. Hundreds of farmers participating in the rice scheme have threatened to join the protests as some of them have not been paid since October 2013. According to the Election Commission, the caretaker government cannot enact long-term contracts which would commit any new government and is thus unable to supply rice to buyers in long-term contracts, such as in the deal struck with China last November where one million tons of rice was purchased. (Reuters, Sydney Morning Herald, The Guardian, The Wall street Journal)

Economy
As most other news from the past fortnight, economic analysts are focused on the effects of the Bangkok shutdown on the Thai economy. So far, there have been several strong reactions from both academic scholars and private business. More than 40 countries have so far issued travel advisories to Thailand and among them is one of the country’s main sources for foreign tourism, China. The number of Chinese tourists who are in Thailand before the Chinese New Year has dropped significantly in comparison with previous years and if the instability continues it could seriously affect Thailand’s tourism industry. The Chinese New Year is a main highpoint of the tourism agenda in Thailand and if Chinese tourists chose to avoid Thailand, this could be a major blow to the tourism industry. (CCTV.com)

The car manufacturer Toyota also made the headlines with their warning that they might reconsider their planned 20 billion baht investment if the political turmoil in the capital continues. A representative of the group commented that major companies such as Toyota are unlikely to draw out of the country but that they would rather rethink any further investments. This position acts largely to the profit of similar economies in the region that benefit from a more stable political situation. (Reuters)

Stanley Klang, the Chairman of the Joint Foreign Chambers of Commerce in Thailand, also commented on the shutdown by telling media that the political instability of the past years has had serious consequences for Thailand’s integration into the ASEAN Economic Community for 2015. All ASEAN member states have had to make changes to their legislation in order to streamline the institutions that are headed towards economic integration. Thailand has however lagged behind in the reform process due to repeated changes of government and it is not unlikely that foreign investors will prefer investing in countries where they know that legislation is in line with the larger ASEAN market. A recent survey among economists showed that confidence in the Thai economy was at its lowest point in three years. (The Nation, Bangkok Post)

The Bangkok shutdown has been calculated to cost between 20 and 40 billion baht if it continues until the end of the month. 4 billion baht has already left the country since November 2013 as investors have sold Thai assets and currency. On the somewhat positive side, the credit rating agency Moody’s declared on 16 January that the political unrest did not yet warrant a downgrade of Thailand’s credit rating. To offset the slowing of the Thai economy that is already taking place, the Bank of Thailand (BoT) was expected to cut the interest rate further, after the previous decrease by 0.25 percentage points in November to 2.25 %. It therefore came as a surprise to many analysts when the BoT kept the interest rate unchanged in the face of emergency decree and increased violence in the capital. (The Nation, Channel News Asia, RT.com, The Wall Street Journal)

Security

See the latest update from the South Thailand Incident Statistics and read the Annual Security Update from HDFF’s research institute.

Annual South Thailand Security Report




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