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Summary
After the Queen’s birthday celebrations on Sunday which united the country in celebration, the two major factions in Thai politics returned to their day-to-day tussle in the work of running the country. Pheu Thai saw their candidate for Speaker of the Senate succeed against the man favoured by a group of senators critical of the current government on Tuesday, and on Wednesday the three-day 2013 budget bill debate began with the oppositional Democrats slamming the government’s tax breaks for corporate businesses as well as their scheme to buy rice at inflated prices from farmers.
Exports to and imports from ASEAN increased in the first half of the year, with Malaysia, Indonesia and Singapore being the top trading partners in the region. At the same time, concerns about market liberalization ahead of the planned ASEAN Economic Corporation are growing in some sectors of agriculture.
Announcements that government agencies were conducting informal peace talks with some militant groups and that victims of violence could expect substantially increased compensation payments were overshadowed by the continuing insurgency in Thailand’s Deep South that between Monday and Friday claimed at least seven more lives. Officials issued further warnings on top of the already raised security level against violence at the end of Ramadan this weekend.
Politics
The week in Thailand started under lasting impressions of the celebrations of Queen Sirikit’s 80th birthday on Sunday. Thousands of people attended the ceremony headed by Prime Minister Yingluck Shinawatra on Bangkok’s central Sanam Luang square that was also broadcast live. In recent weeks, both the Queen and the King of Thailand have experienced health problems that required hospital treatment. (Bangkok Post) (The Nation)
On Tuesday elected senator Nikom Wairatpanich won the election for Speaker of the Senate against the appointed senator Pichet Sunthornphipit. The election had raised attention in advance, as a narrow race between the two was expected, and the result may have a lasting impact on the politics of the senate. The winner, Mr. Nikom, drew most of his votes from Pheu Thai-aligned elected senators while Mr. Pichet was supported by those who were appointed, among which is the so-called “Group of 40 Senators” who are highly critical of the current government. The senate has a total of 150 members, of which 76 are elected and 74 appointed. The latter group fears that Mr. Nikom may push for amendments that call for elimination of the appointed posts. However, upon his election he stressed that he would resort to compromise and that the public should not divide the senators into two camps. (Bangkok Post)
The three-day debate for next year’s budget bill started on Wednesday, which – as expected – immediately heated up when the opposition attacked the government’s tax breaks for corporate businesses from originally 30% to 23% this year and 20% in 2013, which will cost about 150 billion baht. The Democrat’s deputy leader and former finance minister Korn Chatikavanij said that while large corporations would be relieved, the general public will have to shoulder the burden. He also questioned the government’s off-budget loans that are supposed to pay for flood rehabilitation and water management projects. Another major point of contention was the government’s rice-pledging scheme, which was criticized as running at a major loss and creating debt while also lending itself to corruption. (Bangkok Post)
After several tourist resorts illegally encroaching on territory of national parks and forest reserves were destroyed some weeks ago, a move that was met with praise by environmentalists and harsh criticism by owners and public officials, more hotels and resorts were found to have illegally obtained title deeds for construction on protected land. Damrong Pidech, the Director General of the Department of National Parks, Wildlife and Plant Conservation on Wednesday said these cases would be taken to court. Meanwhile, five state anti-corruption and environmental watch agencies are working together to review public officials who are suspected to be involved in the violation of national park and reserves territory. They have found that officials at the Natural Resources and Environment Ministry and the Land Department have issued illegal documents of land-ownership, as well as politicians and celebrities using their influence to obtain such deeds. One of the involved agencies has stated that the government has declared absolute backing of their investigations, even if high-level politicians are implicated. (Bangkok Post) (The Nation)
Economics
In the first half of this year, Thailand’s exports to ASEAN increased by 8% to a total value of US$ 28.625 billion (900 billion baht). Top trading partners are Malaysia, Indonesia and Singapore. However, exports to the latter slowed as a result of economic policy adjustments and the negative impact of the European Debt Crisis on the trading nation. The most important export products to other ASEAN-countries included refined oil, automobiles and parts, machinery, sugar, chemicals, computers and parts, plastic pellets, steel, electrical circuits and rubber. Products with potential are beverages, cosmetics, soap and skin products, tapioca products and passenger cars. The import in the first half from ASEAN members amounted to 19.847 billion dollars, which is an increase of 3.4 % compared to the first half of the last year. The top ten import products comprised of electrical machines, crude oil, chemicals, natural gas, computers, iron ore, electrical circuits, electrical appliances, coal and electricity products. (Bangkok Post)
According to the non-profit Biothai Foundation, the discussed liberalization of three farming sectors in 2014 ahead of the ASEAN Economic Community (AEC) could threaten Thai farmers seriously. Affected are the areas of reforestation, aquaculture and seed reproduction. Witoon Lianchamroon, the director of Biothai, argues that opening up these areas would strengthen the position to foreign investors at the expense of small-scale farmers who are unable to invest abroad. Instead, the three areas should remain reserved for Thais alone. His arguments are assured by the government’s committee on international economic policy, which earlier recommended to thoroughly studying the issue since the three areas are related to food security. Ananta Dalodom, who is president of the Horticultural Society of Thailand, fears that Thailand will lose farmland since poor farmers sell their land to foreign investors. He especially thinks of countries such as Singapore and Brunei, which lack land but are rich in capital. The former farmers could eventually become unskilled labourers, he assumes. (Bangkok Post)
The Thai government has started cutting the corporate income tax (CIT). The former 30% of net profit have been reduced to 23% and is planned to be further lowered to 20% for 2013 and 2014. It is estimated that the loss in tax revenue will be compensated by a higher competitiveness within the upcoming ASEAN Economic Community, which will be formed in 2015. The finance minister also legitimizes the reduction with the argument that tax policies should focus more on raising the tax collection ratio than on burdening tax payers further. However, critics argue that the tax cut will raise public debt, which is currently below 50% of GDP. The cabinet also recently decided to keep the value-added tax (VAT) rate at 7% for two more years, intending to boost consumption and to reduce the high cost of living after the floods. (Bangkok Post)
The state-owned Public Warehouse Organisation (PWO) plans to encourage private entrepreneurs to build warehouses for storing unsold rice. With this breakup of its own monopoly, the PWO hopes to get the problem of storage shortage solved. Presently, the PWO has the capacity to hold 4.5 million tons, but with the help of the private sector, it seeks to increase the number to up to 10 million tons. This shall be reached by giving special incentives to traders whose warehouses remain available, e.g. by lowering the placed deposit from 100% of the value of the rise to 70-80%. Owners then receive 52 baht every month for monitoring the quality of the rice. There would also be the option to get a lower amount for just renting a warehouse for storage. Critics, however, fear that the conditions of the planned system favor companies with close ties to the government. The PWO proposal will be discussed by the National Rice Policy Committee next week. (Bangkok Post)
The Thai government decided to give 14 billion baht in additional funding to the state-owned Government Housing Bank (GHB) to help manufacturers affected by last year’s flood. The proposal was set up by the Ministry of Finance to ensure that the given loans are funded after the 9 billion baht fund approved on May turned out to be insufficient. (Bangkok Post)
On Wednesday’s “2012 Thailand Investment Environment: Maximizing the AEC Opportunities” seminar, experts urged Thailand to integrate its service market more into the free trade and warned that the country’s reluctant position concerning the reduction of non-tariff trade barriers in the past will eventually harm the domestic service sector. Laws and regulations hindered free trade though Thailand while other ASEAN members pledged themselves to liberalization. Without the necessary reduction, they continued, there will be no benefits from an integration into the ASEAN Economic Community. (The Nation)
Security
General Yuthasak Sasiprapha, a member of the troika of Deputy Prime Ministers specially tasked with coordinating government agencies in Thailand’s South by Prime Minister Yingluck Shinawatra, on Thursday announced that informal peace talks have been held with a number of militant groups in the region. According to Yuthasak, these were splintered from the Runda Kumpulan Kecil, one of the organizations considered to be involved in recent attacks. While he was quick to point out these talks weren’t actual negotiations, they may still reflect a change of policy in the highly militarized situation.
Meanwhile, a proposal to raise compensation payments for victims of the violence in the South was approved by the cabinet on Tuesday. In both cases of death and disability 500,000 baht will be paid out, a significant increase from the previous rates of 100,000 Baht and 80,000 Baht. The change of policy will also be retroactive to 2004, which is when the latent insurgency fully flared up. According to a government spokesperson the adjusted compensation will apply to 2,739 counts of death and another 303 of disability until now.
This decision comes among warnings that the already increased violence of recent weeks might see another peak this weekend as the holy month of Ramadan is ending. This includes Songkhla province neighbouring the three most affected southern provinces of Pattani, Yala and Narathiwat, where authorities cautioned people against possible car bombings in Hat Yai district. From Monday until the deadline of this newsletter on Friday afternoon, a total of at least seven people have been reported killed and three injured in seven separate incidents in Thailand’s Deep South. There have also been a number of attacks in which people narrowly avoided injury, as well as attacks apparently not primarily aimed at persons, but at causing chaos and damage to infrastructure. (Click here to view HDFF’s South Thailand Incident Map) (Bangkok Post) (The Nation)
According to a study by a team from the International Health Policy Programme Thailand, two of the leading causes of premature death in the country are excess consumption of alcohol and obesity. While alcohol was the leading cause among males, followed by smoking and high blood pressure, obesity claimed the most lives of females, with high blood pressure and unsafe sex ranking behind. In the 15 to 29 years age bracket, road accidents, violence and HIV infections claimed the most lives. Road accidents and unsafe sex also were the leading causes of death among middle-aged people (30 to 59 years), while for the elderly (60 years and above) chronic diseases were the most significant cause. (The Nation)
Provinces in the northeast of Thailand have been put on flood alert after heavy rainfalls have caused the water level of the Mekong to rise quickly to ten meters. The governor of Nakhon Phanom province, Anukul Tangkananukulchai, said that areas along the tributaries of the river would be at risk of flooding if the water were to rise to the critical point of thirteen meters. However, according to the governor and the Royal Irrigation Department the situation was not as bad as last year as major dams in the region were still below 50% of their capacity. (Bangkok Post)
School violence continued this week, with three primary school students setting fire to their school in Udon Thani after being punished for climbing a tree, technical college students from Bangkok throwing small explosives at a rival school, and a teacher in Samut Prakan being beaten up by students from another school after challenging them for attacking his. These incidents follow weeks of violence especially between students of rivaling technical colleges in the capital that neither police nor administration seemed to have found a working formula against yet. (Bangkok Post) (The Nation)
On Tuesday, a taxi driver steered his car into the entrance of the parliament building to protest the lack of government compensation payments for the violence that accompanied political rallies two years ago. He put a knife to his own throat and threatened to drive his taxi into the building. The Deputy House Speaker Chareon Chankomol eased the situation by speaking to him about his complaints. He also stated he would not press charges. (Bangkok Post)
Boonsong Kowawisarat, a senator of Mae Hong Son province, on Sunday night killed his secretary, who was reportedly also his wife, in a widely publicized incident described as an accident. While eating at a restaurant, an Uzi gun he was carrying with him discharged, shooting his aide in the stomach. She was pronounced dead at the hospital. As the senator is currently protected by parliamentary immunity, he was not arrested yet, but according to police will be charged with causing death by negligence, which carries a maximum sentence of ten years. Why the senator was carrying an Uzi, why the gun was loaded and why he handled it at a restaurant as of now remains unexplained. (Bangkok Post) (The Nation)
After a workman was killed by a falling billboard on Sunday, Bangkok City Hall ordered safety checks for the city’s over 900 large advertising fixtures in preparation for future storms. A total of 142 of 945 were found to have been installed illegally. The city administration also called a meeting with local agencies to discuss revision in safety standards for billboards. In related news, city officials are also speeding up the installation of roadside crash cushions after several recent fatal accidents in which motorists fell from road flyovers. (Bangkok Post) (The Nation)
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