By Research Fellows Inès Boufaden, Alva Lange, Nicholas Jones
This is HDFF’s bi-weekly newsletter on the latest political, economic, and security issues in Thailand. The purpose of this newsletter is to inform international personnel based in Thailand, and those working with Thai partners, on the relevant issues that may have an impact on their operations.
Security
To celebrate their 50th anniversary of diplomatic relations, Thailand and the People’s Republic of China (PRC) have declared 2025 to be the “Golden Year of their friendship”. The agenda establishes several areas for cooperation, among which is security. Thailand reaffirmed its commitment to working with the PRC to combat transnational crime, call center scams, and the “gray economy”. They further deepened their partnership by agreeing to co-host the Mekong-Lancang Cooperation Leaders’ Meeting in 2025.1
Bangkok and the U.S. Indo-Pacific Command hosted the 2024 Capabilities Development & Exercises (CAPEX) from October 21 to 25. It gathered participants from across the Indo-Pacific region and aimed to align security cooperation priorities, develop capabilities, and ensure regional readiness.2
The police’s Anti-Trafficking in Persons Division will participate in the rescue of about 110 trafficking victims in Myanmar. Beginning on January 1, 2025, Thailand will have a seat at the United Nations Human Rights Council for 2025-2027. This joint rescue mission is thus an opportunity for the Thai government to actively support humanitarian rescue operations.3
Politics
The Palang Pracharath Party (PPRP) requested that the Thai government revoke the controversial 2001 Memorandum of Understanding between Thailand and Cambodia, regarding the joint development in the Gulf of Thailand.4 The request was denied by the Thai Defense Minister, and the Thai government reaffirmed the decision. It stated that the protection of the nation’s sovereignty was their responsibility and that Thailand would not lose Koh Kut to Cambodia, instead the focus should be on the possibility of finding oil.5 The issue was put into the spotlight when key PPRP figures opposed any discussions on the joint development of oil and gas resources in the Gulf under the 2001 MoU framework in a press conference on October 30.
Three Southeast Asian countries, Thailand, Laos, and Myanmar, just launched a concrete action plan to tackle the problems of cross-border smoke and haze pollution, called “Clear Sky Strategy 2024-2030”.6 ASEAN member states have already signed the Asean Agreement on Transboundary Haze Pollution in 2002, but the three countries have now decided to take further steps for sustainable cooperation.7
The Transport Ministry has proposed to introduce charges on motorists using busy roads in Bangkok.8 The aim is to raise money for a flat 20-baht fare policy for all electric rail lines in Greater Bangkok. To reach this goal, the plan is to charge motorists 40-50 baht when entering inner Bangkok streets, and buy back concessions from companies in the private sector that have invested in the rail system.9
Thailand will implement a 300 THB tourist tax that will affect 70% of international tourists. The tax will first affect tourists arriving by plane, and is expected to be expanded to other ports of arrival later on. The goal is to generate revenue to support tourism infrastructure and provide insurance coverage for international travelers, as done before by other countries such as Italy, Spain and Japan. 60 THB of the tax will go to an insurance that covers tourists for a period of 30 days. Tourists will be able to pay tax online before arrival, and the transaction system is facilitated by Krungthai Bank. Following governmental approval, the tax system will be set up in roughly six months.10
Economics
In its October 16th meeting, the Bank of Thailand made an unexpected decision to cut policy rates by 0.25 percentage points. This decision followed a series of debates between the government and the central bank on cutting rates to better align with other foreign governments, such as the United States and Japan.11 The government and central bank hope to bring inflation up from its current low level, 0.2%, to 1-3% in 2025, to increase production, ease household debt burdens, and foster economic growth.12 This was a significant move by the Bank of Thailand, as it has consistently advocated for stability in monetary policy. With a 10% rise in inflation, Thailand’s GDP growth is forecasted at 2.7% in 2024 and 2.9% in 2025, which is up from 1.9% in 2023.13
The Japanese Yen reached a 38-year low against the dollar and declined against the Thai baht. The Yen currently sits at ¥4.39 to ฿1. This has led to an increase in forex transactions in Thailand, with more Thais purchasing Yen as the high season for tourism approaches. Japan is one of the most popular travel destinations for Thai tourists14.
Upcoming elections in the United States have led analysts to make predictions about its effects on Southeast Asian economies. Former-President Trump proposed a 10% tariff on all goods imported into the US, which would negatively impact Southeast Asian exporters. Analysts have predicted that a Trump victory could lead to further depreciation of the Thai Baht, which has caused many investors to move from riskier assets, such as Thailand’s stock and bond markets, to more stable assets, such as the USD and gold.15
3:https://www.bangkokpost.com/thailand/general/2892408/atpd-targets-110-victims-in-myanmar-for-rescue
4:https://www.bangkokpost.com/thailand/general/2859496/court-rejects-thai-cambodian-mou-petition
7:https://www.bangkokpost.com/thailand/general/2892332/asean-trio-agree-on-clean-air-initiative
10:https://www.travelandtourworld.com/news/article/like-venice-spain-and-japan-thailand-collects-300-thb-tourist-tax-from-70-per-cent-of-international-tourists/
11: https://tradingeconomics.com/thailand/interest-rate
13: https://www.bangkokpost.com/business/general/2893292/ministry-pegs-growth-goal-at-3-5-
15: https://www.bangkokpost.com/business/general/2892067/the-us-election-and-southeast-asia
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