HDFF Bi-Weekly Thailand Review 09/11 – 23/11
President Obama at his audience with His Majesty the King Bhumibol Adulyadej. Photo courtesy of the Palace.
Summary
US President Barack Obama visited Thailand last week as his first overseas trip. PM Yingluck Shinawatra confirmed Thailand’s readiness to serve as an ASEAN regional center for emergency rice reserves in case of natural disasters at the ASEAN Summit in Phnom Penh.
The National Economic and Social Development Board warned that growth has slowed by 3% in the last quarter compared to last year despite the 1.2 % increase in GDP. On 20 November, the cabinet approved the proposal to impose a minimum wage of 300 THB per day across the country, starting 1 January. The controversy around the 3G auction continues into mid-November.
The cabinet has made the decision to impose the Internal Security Act (ISA) in three districts in Bangkok this weekend. Violence in the three Southern Border Provinces continues, including a bomb attack on a local train. The Police arrested seven suspects in the assassination of Songkhla municipality mayor Peera Tantiserane.
Politics
Coming back from an overseas trip where she met with Queen Elizabeth II of the United Kingdom, Prime Minister Yingluck Shinawatra welcomed re-elected US President Barack Obama in Thailand on Sunday the 18th of November, his first overseas visit after the elections. Although many media stories focused on the US security preparations and afterwards on the flirtatious body language of Obama and Yingluck, Obama’s four day tour of Southeast Asia was part of the US government’s strategic pivot to Asia with both business and security in mind. While the official tour in Thailand led Barack Obama to a visit of Wat Pho and an audience with HM the King Bhumibol Adulyadej analysts concluded that Obama’s main goal in Thailand would be to persuade the long time ally to join the US led Trans-Pacific Partnership (TPP). The free trade agreement currently has 4 members and 7 others in negotiation to join and is highly controversial due to its scope and secrecy. With only a few people allowed reading the agreement – mainly corporate lobbyists, while even US Senators did not gain access – leaked information points towards the agreement going beyond any other free trade agreements so far. Activists state it would be a document “by and for the 1%” as corporations like Pfizer, Cargill, Nike and WalMart are the actual brains behind the agreement. Thai Academics warn that signing the agreement would result in higher drug prices due to the patent rules included in it thus effectively ending Thailand’s ability to produce life-saving medicines at an affordable price. Further controversial parts of the TPP include strengthening US control over the internet and deal with labor and environmental standards as well as the testing of agricultural products. Furthermore the TPP apparently seeks to establish “a parallel system of justice where companies can sue countries in a tribunal of judges composed of unaccountable international trade lawyers with little to no process for appeal.” Academics and activists warn therefore that this would lead to a loss in national sovereignty in setting domestic development policies. Prime Minister Yingluck Shinawatra announced beforehand that she will not sign any agreement or make promises that Thailand will join the TPP but confirmed Thailand’s intention to join the negotiations at a joint press conference with the US President.
Barack Obama then made a historic visit to Myanmar, as the first sitting US President, before joining the 21st ASEAN Summit in Cambodia. (Bangkok Post) (The Nation) (AlertNet) (New York Times)
The ASEAN Summit, taking place between 18-20 November 2012, resulted in the signing of the ASEAN Human Rights Declaration and served as a farewell to Dr. Surin Pitsuwan, whose five year term as Secretary General will end in November. PM Yingluck announced Thailand’s support for Le Luong Minh, Vietnam’s current vice-foreign minister to succeed Mr. Pitsuwan. She furthermore confirmed Thailand’s readiness to serve as an ASEAN regional center for emergency rice reserves in case of natural disasters, in a way a continuation of the ASEAN plus Three Emergency Rice Reserve Agreement which was signed in October 2011. Commerce Minister Boonsong Teriyapirom has meanwhile proposed a “rice pool”, including major rice producers such as India, Vietnam, Cambodia and Myanmar, to help stabilize both supply and prices on the world market. The idea has already received criticism as being unrealistic claiming that Vietnam would never buy the idea as it has historically always set its prices lower than Thailand, argued a major rice exporter.
ASEAN leaders at the Summit finally announced that 31 December 2015 would be the starting date for the ASEAN Community. (Thailand Business News) (The Nation)
With the term of current Bangkok governor MR Sukhumbhand Paribatra ending on January 10 both major parties have yet to officially announce a candidate although Sukhumbhand already announced that he would seek re-election. The Democrat Party though has yet to announce its support for Sukhumbhand. The Pheu Thai Party too has yet to announce its candidate with Sudarat Keyuraphan and Pongsapat Pongcharoen currently being tipped as possible candidates. Both parties are evidently playing a waiting game, holding off its announcement until the other one makes its move. The Bangkok governor election is scheduled for 17 February 2013. (Bangkok Post)
Economics
November has seen extensive evaluation of last quarter’s economic development coupled with forecasts for 2013. The National Economic and Social Development Board warned that growth has slowed by 3% in the last quarter compared to last year despite the 1.2 % increase in GDP. The decrease is mainly attributed to the widespread damage caused by last year’s flooding. Thai exports also fell by over 2 % in the last 12 months compared to the previous 12 months. Thailand’s heavy dependence on exports was addressed by Finance Minister Kittiratt on 20 November as he noted the pressure that the euro zone crisis puts on exports. The country’s economy has largely followed the global economic development and some economists worry about the impact that the looming “fiscal cliff” in the United States will have on the country. Forecasts for next year’s growth range from 4.1-4.5 % according to the University of the Thai Chamber of Commerce to 5% according to the World Bank, who have also estimated a growth in exports by 8% in 2013, although the global economy is expected to have flat growth. (The Nation, Bangkok Post, Press TV)
On 20 November, the cabinet approved the proposal to impose a minimum wage of 300 THB per day across the country, starting 1 January. This was done despite protests from small and medium enterprises that claim they need more time to adjust. The Government has also introduced a 15-year strategy, aiming to make Thailand a “high-income country”, defined by the World Bank as a gross national income (GNI) per capita of US$12,476 or more. Thailand’s GNI per capita was $4,420 last year, although income disparity leaves the richest group of Thais with an income of up to 23 times higher than the poorest group. Furthermore, the consultancy agency Grant Thornton warns that Government schemes to raise income, such as the rice-pledging scheme, have contributed to excessive spending and a worrying increase of household debt in the country, which now amounts to around 45-50% of income (to be compared with the safe level of 28 %). (Bangkok Post, The Nation)
Exports and investment were the main subjects of discussion in this month’s meeting between Prime Minister Yingluck Shinawatra and the Chinese Premier Wen Jiabao. China has planned to expand investments in Thailand by 15 % per year and have signed a memorandum pledging to increase the import of Thai rice. The export of rice to China has decreased by 57.8 % in the first 10 months of this year, as compared to last year. Thailand’s PM would also like to see Chinese investment in infrastructure, such as the Dawei deep-sea port in Myanmar as well as in the high-speed train network project in Thailand. Furthermore, South Korea has signed an agreement to double trade with Thailand to $US 30 billion over the next five years, something that is likely to boost Thai exports of rice, fruit and frozen chicken. (AFP, Bangkok Post)
PM Yingluck Shinawatra also met with US President Obama after which she announced the Thai Government’s intent to join the Trans Pacific Partnership (TPP). Opposition has claimed that joining the TPP will decrease Thailand’s control over its economy but ministers stress that this is only a first step of discussion that may lead to membership in the TPP. (Businessweek.com, Bangkok Post)
On another note, the controversy around the 3G auction continues into mid-November. Three separate investigations are under way to investigate accusations of price collusion and violation of the procurement law. Simultaneously, the National Broadcasting and Telecommunications Commission (NBTC) is under pressure to grant the 3G licenses within 90 days of approving the bid outcome or risk being sued by bidders. On 14 November, the Office of the Ombudsman told the Administrative Court that the 3G auction breached the charter since it did not allow for fair competition and maximum benefit to the country. This has however been criticized by academics who question their mandate on the question. An internal NBTC investigation has come to the conclusion that the auction was in fact lawful and the Department of Special Investigation (DSI) has not found evidence of price collusion in their investigation of the auction. A final verdict on the question is expected soon. (Bangkok Post)
Security
The cabinet has made the decision to impose the Internal Security Act (ISA) in the three districts Phra Nakhon, Pom Prab Sattru Phai and Dusit, in Bangkok, from 22 November until the 30 November. The reason for this is the big Pitak Siam rally, which is due this Saturday, 24 November, and might last until Sunday, 25 November. Intelligence reports by security agencies regarding concerns about the public safety and the police claiming that there might be a plot by protestors to kidnap PM Yingluck Shinawatra, led the National Security Council (NSC) to the proposal of invoking the ISA. The Act might be lifted before 30 November, if the situation will stay orderly and peaceful. If the police will fail to control and stop any violence that might occur during the rally, the ISA would allow the government to call for military reinforcements. As a result of the ISA, the British Embassy in Bangkok has released a travel advisory, concerning the areas under ISA, for Bangkok visitors this weekend. (Bangkok Post, The Nation)
In the Deep South of Thailand, the daily violence continues. On 18th November, a bomb hit a local train in Rueso district in Narathiwat. Three people were killed and 36 were wounded, many of them severe. As the bomb went off just several hours before US President Obama’s arrival in Thailand, some observers believe it was meant to embarrass Thailand in the eyes of the international community. Deputy national police chief Pol Gen Worapong Chiewpreecha rejects this view by saying that attacks of this kind would occur almost every day. The people killed in the explosion were two defence volunteers and one passenger. One railway police officer and two train ticket inspectors were among the injured passengers. Furthermore, in another deadly attack in Narathiwat’s Rangae district a mother was killed and her son seriously wounded. The assault was carried out by two men riding a motorbike, shooting at their victims with an AK-47 rifle. On 22nd November a school director was killed on her way to a funeral in Nong Chick district, Pattani. The 51 year old woman was shot in the face and torso by two men, hiding near a fence. It was the 154th school employee that fell victim to violence in the Deep South. In Yaha district of Yala province an Imam was shot dead on Wednesday, 14th November. The 50 year old chairman of religious leaders and member of the Yala Islamic Committee, driving in a pick-up truck from Ban Patae to Yaha town, was attacked by two men riding a motorbike. (Bangkok Post, The Nation)
In the case of the assassination of Songkhla municipality mayor Peera Tantiserane, Police revealed on 15th November that seven people have been linked to his murder. Six of these seven men belong to a hitman team and the seventh one is the person who hired them. As for now police officers are collecting evidence to arrest all of the suspects in the case. Also the mastermind behind Peera’s assassination has still to be identified. (Bangkok Post)
In Bangkok, on Friday night, 9th November, a man was killed and two wounded in, what is by police believed to be, another incident related to deadly vocational school rivalry. The shooting took place on Pahonyothin Road in front of Chatuchak Market. The shots were fired by four men, riding on two motorbikes. A witness said they were dressed like vocational students. It was not clear if the dead man was also a student. (Bangkok Post)
From 12 to 20th November the Bangkok Metropolitan Police Bureau arrested 1,812 suspects and seized 144 firearms in a big crackdown. Most of the arrested were drug suspects. The bureau is focusing on getting as many firearms off the streets because of the rise in gun-related crimes in Thailand in general, and Bangkok especially. (Bangkok Post)
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