Summary
Drama builds as politicians are shifted out of their roles and replaced by Thaksin Shinawtra loyalists. Red shirts have also submitted a petition to impose a royal pardon for Thaksin. Fractions between varying political opinions continue to add to the uncertainty of the political sector. Despite building international economic quandaries, Thailand’s stocks have increased and remains attractive to overseas investors. The government is moving forward to implement its new fiscal and monetary policies as promised despite critic’s belief that the policies will negatively affect security in the future. Banking reform is also in the works. A number of human security issues take precedence this week as impacts of the violence in the South are analyzed in the context of enforced disappearances and prisons. Crime, population and stable housing may also seriously impact the future of Thailand.
Politics
Two seemingly political-motivated “promotions” made the headlines this week. Police General Priewpan Damapong will become the new National Police Chief, and according to Deputy Prime Minister Chalerm Yubamrung, Priewpan deserved the position for a quite some time. As the brother of Thaksin Shinawatra’s ex wife, Priewpan has stated that his association with the Shinawatra family was the reason he suffered in politics the last years. (Bangkok Post) Additionally, National Security Chief Thawil Pleansri will be transferred to become advisor to the Prime Minister, agreed upon by the Cabinet on September 6th. This will pave the way for former Police Chief General Wichean Potphosri to take over as National Security Chief. (The Nation) Mr. Thawil announced he will appeal against the transfer because it has no legal basis, stating, “I’ve been removed for a reason which has nothing to do with my ability or any shortcomings. The Prime Minister even said I did nothing wrong.” Deputy Prime Minister Chalerm Yubamrung meanwhile commented that he felt Mr. Thawil was unfit to work with the Pheu Thai-led administration and that “…when a political change occurs, it must be a change.” (Bangkok Post) As the Bangkok Pundit points out in his column in the Asian Correspondent, all of the last four governments made changes to the position of National Security Chief, therefore it’s “politics as usual”. (Asiancorrespondent.com)
In Thaksin-related news, the possibilities of a royal pardon for the former PM are being discussed after red shirt supporters gathered 3.5 million signatures for a petition to His Majesty the King. Deputy Prime Minister Chalerm Yubamrung stated that convicted criminals can seek a royal pardon even if they didn’t serve any jail time. The petition has been verified by the corrections department and has been handed over to Justice Minister Pracha Promnok. Mr. Pracha meanwhile has formed a committee to help him handle the petition, after a key coalition partner warned about the seriousness of the issue which could split the Thai society. (Bangkok Post) Thaksin’s sister and new PM Yingluck Shinawatra remained somewhat quiet on the issue, commenting that people should pay more attention to the work of the government and let the related agencies handle the issue according to law. Deputy Prime Minister Chalerm stated, “Don’t ask the Prime Minister about this, as she has assigned me to take care of [Thaksin’s royal pardon]. We are not supposed to talk about it. The issue lies within the mandate of the King.” (The Nation)
PM Yingluck Shinawatra will start traveling diplomatically as Prime Minister on September 10, when she will visit Brunei to meet the Sultan Hassanal Bolkiah. Officials at the ministry confirmed that an expression of gratitude for Brunei’s support in international Islamic organizations as well as plans for the PM to discuss cooperations in agriculture, the halal food industry, energy and education. Following Brunei, she will proceed on an ASEAN tour to visit Indonesia and Cambodia on September 15, where improving bilateral ties will be on the top of the agenda. (The Nation) (CRIEnglish.com)
12 provinces are struggling with flooding, with up to 450 000 people affected. Particularly affected regions are the central provinces surrounding the Chao Phraya River, which is expected to swell by 10 – 15 centimeters a day until the middle of September. (The Nation)
Economics
Thailand’s Cabinet approved the government’s plan to spend 11.3 trillion baht (1.39 trillion USD) (15.2 trillion baht including salaries) over the next four years to fund the varying upcoming projects geared to boost growth and reducing vulnerability from Thailand’s 70% export rate. The finance ministry’s challenge will be finding adequate funding, remaining within the budget and maintaining fiscal responsibility. (Financial Times)
Critics have scorned the upcoming investments, specifically the rice mortgage plan, as economists warn Thailand will lose tens of billions of baht in taxpayer money annually to maintain the promised funding in addition to distorting local market prices. Commerce Minister Kittiratt Na-Ranong recently stated that the mortgage programs could be reduced or encouraging a shift in crops can be institutionalized if the supply increased in excess. TDRI economist Ammar Siamwalla has specifically spoken out stating “I would like to ask which amat (elite) will tell farmers to stop growing rice,” he said. It’s their inalienable right. Obviously, the [election] promises were poorly thought out”. Additionally adding that losses were almost impossible to avoid. Rice prices have already begun to increase with estimated at 25%, or 40-50 baht. (Gulf News) (Bangkok Post)
Foreign investment in bank stocks was relatively active this week after the increase in ratings of Bangkok Bank and Siam Commercial Bank helped lift outlook. Board of Investment Secretary-general Atchaka Sibunruang announced that according to a recent survey foreign investors with businesses in Thailand generally have no plans to reduce production or relocate, with a 46.8% target to expand.
Analysts expect the main index to move in a range of 1,065 to 1,075. Economists are predicting the Bank of Thailand raises its benchmark interest rate by 25 basis points to 3.75% in October after inflation accelerated to 4.29% in August. Economic stability and credit ratings are also still weighing on political stabilization and the future of the implemented monetary and fiscal policies are factors. Although local currency ratings have been raised from negative to stable, policy will deeply affect the future of the ratings. Inflation remains Thailand’s biggest risk as the government prepares to introduce an influx of currency despite international conditions. Consumer confidence also reduced in August as The Consumer Confidence Index (CCI) dropped to 83.4 points from 84.1. The lower confidence stemmed from potential higher costs of living, unclear government policy for future growth, potential economic slowdown, falls of the Stock Exchange of Thailand Index and higher interest rates. (Reuters) (The Nation) (Bloomberg)
New policies to focus on regional banking and the expansion of business will be implemented in line with the forming of the 2015 ASEAN Economic Community. Thailand plans to encourage regional banks to open branches throughout the country to accommodate the expansion of business once the ASEAN Economic Community (AEC) is formed in 2015. Liberalizing the banking sector depends on international banking investment in Thailand to ideally facilitate local business, multinational company’s investment and encourage competition in the banking industry. In preparation, corporate income tax is being reduced to 23% in 2012 and 20% in 2013 from the current 30% and incentives with be offered. The World Bank has been asked to help in the restructure. (Bangkok Post) (Thailand Business News)
Security
Problems from the south have deeper repercussions for Thailand as a nation state than the “standard” killings and bombings. Following last week’s reporting on human rights abuses, enforced disappearances are being scrutinized as a significant problem, as discussed at the Justice for Peace commemoration on this year’s International Day of the Disappeared. Human rights lawyer Somchai Neelapaijit disappeared in 2004 after defending five Muslims arrested after southern militants raided an army gun depot reigniting separatist rebellion in the South. Suspects (local police) from the southern militant case have all been acquitted or dismissed and witness and their families were killed. As reported in last week’s case pertaining to Mr. Suderueman Malae, abuse victims and surviving family members have to live with threats, a lack of security and no sense of justice or compensation. There are currently limited legal repercussions, no systematic documentation on enforced disappearances, no significant attempt by the government to create change and Thailand does not uphold the United Nations Convention Protection of All Persons from Enforced Disappearance. Convention ratification is in demand.
Also pertaining to the South, a prison riot in Pattani this week lead to the death of two inmates and injured several others. The fighting originated from disagreements between Buddhist and Muslims inmates over unfair treatment, a lack of halal food and overcrowding. This riot was the third one in the last month following two incidents at Narathiwat prison. Issues of cultural insensitivity and lack of acceptance between the two religions continue to add fire to the flames. (Alert Net) (Straits Times)
Criminals are also being analyzed from an international standpoint. A study has shown 1,000 foreign criminals reside in Thailand, most of who are a part of organized crime gangs such as the Japanese Yakuza and the Russian mafia. Despite their presence, most of these gangs act within their limits and do not get charged. So far this year there have only been 35 for crimes reported related to money, 19 for threats and bodily harm and 8 for sex crimes. Criminals are given leeway when they do not possess a criminal record and due to Thailand’s lack of extradition treaties. Last month, one India’s most-wanted criminals, Santosh Shetty, was forced out of Thailand who ran a regional crime network from Bangkok for over 12 years and is suspected of murder in Thailand. (Bangkok Post)
Population is also being discussed this week in several arenas. Thailand’s population has reached nearly 70 million people and continues to rise, in line with Asian trends, as Asia is predicted to hold 63% of the world’s urban population by 2050. Majority of Thais live or are moving to urban areas, spurred by the desire to grow economically. Natural disasters are more prevalent than ever and decent housing has becoming a key issue in security concerns to reduce the cycle of poverty. More than 700 delegates met for the 3rd Asia-Pacific Housing Forum and Exhibition organized by Habitat for Humanity and the International Federation of Red Cross this week. Most prominently discussed was the need to reduce inferior housing and how to build sustainable homes and encourage resilience within the changing global environment. (Bangkok Post) (Property Report)
This week, a Thai court sentenced three men found guilty of spying on the Thai-Cambodian border with maps marked by military bases. Including a Thai national, a Cambodian and a Vietnamese, the men were sentenced with two years in jail for spying and drug charges. In related news, ministers from the Thaksin Shinawatra administration and Abhisit Vejjajiva administration are publically debating the origin of the conflict in response to a press statement reaffirming that Koh Kut is under Thai sovereignty. According to a statement issued by Mr Chavanond, former secretary to Ahbisit’s foreign minister, the former Thaksin administration acted unconstitutionally when signing the 2011 Thai-Cambodia Memorandum of Understanding as talks between the two governments had been ongoing for more than 25 years. (Bangkok Post)
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