Summary
Post election Thailand is seeing the final formation of the new cabinet and a few contingencies relating to re-counts on voting and unendorsed MPs. In the next two weeks, the new administration will assume duties and hold its first House of Representative meeting. Significant debate in the media has reviewed Thaskin’s recent tell all’s and plans for the future. The PTP economic policies are continuously being analyzed from every angle, some insinuating a crisis will avail and others claiming the benefits that could ensue. Discussion regarding the de-militarization of the Cambodian border continues and choices made in Burma could have a stronghold on Thailand’s future. Thailand is also looking into purchasing several varying new militant equipment.
Politics
Another 94 MPs have been endorsed by the election committee, forming the 95% of endorsements needed and enabling the first meeting of the House of Representatives to convene. 4 of the 500 MPs-elects were not endorsed relating to connections with last year’s rioting. Specific attention has been paid to Jatuporn Promphan whose endorsement is being debated due to terrorism charges. In the upcoming weeks, Thailand will be looking forward to the election of the House Speaker on and election of the Prime Minister. The new cabinet should be formed by August 4th and performing its duties by August 10.
Other related political turmoil this week pertains to Democrat party-list MP Apirak Kosayodhin who despite being charged by the National Anti-Corruption Commission (NACC), along with five others, for the 2004 fire trucks and boats scandal including abuse of authority, price collusion and corruption is adamant about becoming the Democratic Party’s secretary-general. (Bangkok Post)
In the Yala Province, a re-count of the votes has been initiated due to a complaint that the number of votes cast did not match the voter turnout. A bag was found that held about 100 used ballots abandoned in Ban Pong district all voting for the Democrat Party. The opposition Mr Sugarno Matha received 33 votes less than the winning democratic representative Abdulkarim Dengrakeena. The EC is investigated the complaint and a recount will be held on July 31. (Bangkok Post)
There is still much conversation surrounding the upcoming future decisions of the Pheu Thai party and of Thailand politics. Former PM Thaskin has stated in a number of interviews apologies for his past over-use of power and opinions on moving forward including the revision of Thai laws, the need to unify the polarization and the interchangeable attitude toward democracy and tyranny. Much controversy has been surrounding Yingluck’s government in actuality being managed by Thaksin, connoting that his political views will be the forefront of Thailand’s politics. Thaskin has also received much criticism for his hypocritical statements towards “turning over a new leaf” including his public apologies to the South, insinuating he is attempting to re-gain their vote. The PTP has been challenged to follow through on their promises of being democratic including ensuring the freedom of press, reforms in working alongside the military, strategy changes in the South, changing afforded rights to migrant labors, modernizing the lese majeste law, bringing the perpetrators and victims of last year’s riots to justice and true transparency. (The Nation) (Today)
Economics
Looking to the past, there is an obvious pattern of recovery and growth which leads to a misleading sense of confidence about the future. In reference to the 1997 crisis, the following were primary indicators: high trade deficits, a property bubble, a fixed exchange rate and a floating currency. According to Chief financial officer of Hana Microelectronics Plc, Terry Weir, the next crisis is not far away and can be expected to be a combination of lost competitiveness and inflation. The incoming government needs to be prepared for immediate difficulties in attempts to generate sufficient revenue to support its populist policies. Given the rising cost of living and the governments’ ambitious spending plans in the near future; if the new administration undertakes tax restructuring, it may not create sufficient income. Furthermore, if the new government were to borrow more from international financial organizations, this may lead to higher public debt and have a domino effect on the Kingdom’s economy in the future, specifically in regards to an increased budget deficit and increased interest rates.
On July 27th Thailand’s central bank stated that risks to inflation outweighed risks to economic growth and that it would closely monitor the new government’s fiscal policy. There is considerable uncertainty over the potential future fiscal spending. Since July last year, the Bank of Thailand has raised its policy rate eight times, by 25 basis points each time. It started to push rates higher from a record low of 1.25 percent set to help the economy during the global financial crisis. Sources have stated that the government needs to target its measures at specific groups in order to achieve reduced budgetary constraints. Also noted is that private firms should play a greater role in financing infrastructure investment projects to generate future income and the government must also be careful about borrowing and raising the public debt. In many Asian economies, inflationary pressure has intensified and the Monetary Policy Committee (MPC) will be closely monitoring during the global economic recovery progress in resolving euro zone debt problems and fiscal policy as formulated by the new government.
The Pheu Thai Party has pledged to pursue a number of populist policies, including rising the daily minimum wage to a uniform rate of 300 baht nationwide from a region-based range of 159-221 baht now. Experts have claimed that a 40-90% wage increase could potentially destroy Thailand’s export competitiveness. The inflationary effects of such a wage increase are driven by domestic effects. All companies who employ significant numbers of lower-paid employees will have to increase their prices. Many companies (mostly SME’s) will struggle to thrive with the price increases. The central bank will have to increase interest rates and the same companies struggling will suffer more while having to pay higher borrowing rates. Great change is ahead for the Thailand and many look forward to see if the right decisions are made to avoid the next crisis.
Security
ASEAN matters have been the forefront of security this week relating to Cambodia, Myanmar and the international community. Three-party talks with Thailand, Cambodia and Indonesia have been organized to implement the international court ruling in efforts to resolve the border dispute. Cambodia has drafted a pull out agreement and the demarcation of a demilitarized zone. The seven-point plan, which was sent to Thailand, Indonesia, the court and the UN Security Council, also includes reporting progress to the court and plans for Indonesian observers. Thailand has remained reserved and has not noted any changes or plans to move in relation to the negotiations. Dispute was generated on the border as a result of the death of a Cambodian soldier and the injury of another. Cambodian Armed Forces claimed that Thai soldiers had opened fire on the soldiers. Representatives from the Thai Council of Ministers reported the claims were not accurate, the border has remained calm and the subject was being investigated.
On a positive note, it has been reported that since the re-opening of the Chong Sa-ngam border, Thai and Cambodian traders’ activity resumed immediately, both sides eager to buy and sell consumer products from their neighbors. Activities are being monitored by security forces and police. (Voice of America) (Phnom Penh Post) (MCOT)
ASEAN has been commended by the international community for its successful round of talks and attempts at peaceful resolution, particularly by US Secretary of State Hillary Clinton. Indonesia was complimented in its efforts relating to the Thai – Cambodia border and both countries support of continuing Indonesia’s role. ASEAN states are anxiously waiting to see the new PTP’s administrative actions in regards to the border. (The Jakarta Post)
Plans regarding the Thai funded construction of the US $8 billion Dawei port and industrial estate project, a key roadway being built throughout Myanmar and connected to Thailand, has been temporarily stopped by the Karen National Liberation Army. The purpose of the project is to enhance the industrial sector in Myanmar and better integrate the state’s economy and infrastructure with Thailand’s. This is in addition to increasing trade opportunities with other South Asian nations. A significant amount of Karen and Burman media and villagers are fervently opposing the road development due to the affect it will have on the 2,000 families that will have to leave their homes with nowhere to go. (Asia Times)
Also in relation to Burma, three separate helicopters crashed after flying near the Burmese border in the last two weeks killing a total of 17 people. The second and third helicopters were sent as search and rescue missions to recover the Bell helicopter crash on 16 July. Sources have stated different causes including weather and deteriorating equipment. Coincidentally, Thailand’s US Defense Security Cooperation Agency recently bid on three $235 million Sikorsky UH-60M Black Hawk transport helicopters. In addition to buying helicopters, Thailand is looking to align with international trends by buying six former German Navy Type 206 submarines. The Thai Navy has announced its intentions to keep up with international standards (Flight Global).
Significant bombings and killings occurred in the South this week in all three provinces of Narathiwat, Pattani and Yala, including a bomb scare on a railway’s train tracks. An operation has been launched by the Thai army to identify insurgent’s bases and training camps in the Mountains. Complaints of missing people have been filed along with the killing of two policemen. Officials have also identified a potential insurgent head leader, Abdulloh Pulah attempting to prove his abilities in order to take over for recently killed Ma-ae Aphibalbae, provincial terror chief. (Bangkok Post).
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