HDFF Bi-Weekly Thailand Review 01/4 – 14/4
Thailand is getting ready for the upcoming Songkran Festival and celebrates the Thai New Year with a lot of water. (Source: Vtourist.com)
The HDFF team wishes you a happy Songkran Festival!
Summary
In politics, the Pheu Thai infrastructure financing bill including a loan of 2 billion baht passed parliament with relative ease. During the debate Prime Minister Yingluck Shinawatra was criticized for her comment on infrastructure development and their benefits for farmers. In the week following the infrastructure debate, the Constitutional amendments to Article 68, Article 190 and Article 237 were fiercely debated by government and opposition Members of Parliament (MPs). In Chiang Mai were elections take place on April 21 the Democrat Party presented Kingkarn na Chiang Mai as candidate. Ms. Kingkarn, will contest the election against Pheu Thai candidate Yaowapa Wongsawat. Prime Minister (PM) Yingluck Shinawatra was cleared of false assets declaration charges by the National Anti-Corruption Commission (NACC) which emerged after inconstancies appeared in her balance sheet of 2006.
In economics, the Songkran holidays will give a welcome boost to tourism as over 2.71 million domestic and international tourists are expected to join in the celebrations. The tourism sector and small and medium enterprises (SMEs) have however been voicing concerns over the recent rapid appreciation of the baht, which has now gained over 6 % in value compared to last year. The rising currency value is affecting prices for tourists and making Thai exports less competitive in the international market.
In security, violent incidents are continuing despite the government and the Barisan Revolusi Nasional (BRN) movement’s recent dialogue in Malaysia, which seeks to restore peace to the region. April starts with many disturbances and incidents caused by insurgents whereby many people were injured or killed. Related to a current report of the US Federal Bureau of Investigation (FBI), Thailand’s likelihood of being hit by a terrorist attack is first in Asia and fifth worldwide. In face of the upcoming Songkran festival, police will set up special precautions on main and secondary roads to reduce casualties in road accidents. Seeing the tenses between North and South Korea the Thai Foreign Ministry pointed out, that Thais who live in South Korea, will be evacuated if the situation between North and South Korea gets more tense.
Politics
Parliament debates heated up again as the Pheu Thai government introduced three bills seeking to amend provisions of the constitution. A week earlier Pheu Thai’s infrastructure financing bill, which includes the borrowing of 2 trillion baht, passed with relative ease. During the debate PM Yingluck Shinawatra was criticized for her comment that high-speed trains would benefit farmers. She responded with a Facebook posting saying, “This is not a fantasy. It is happening in several countries. Farmers can export their high-quality farm produce.” PM Yingluck Shinawatra elaborated that the Euro Carex express cargo system was being developed specifically to transport goods by high-speed trains in Europe. Criticism was thus solely made for political reasons instead of thinking about possible benefits for the people. As in Europe, PM Yingluck Shinawatra added, the high-speed trains will connect production areas in provinces to countries in the region, in this case ASEAN.
Constitutional amendments to Article 68, Article 190 and Article 237 were fiercely debated by government and opposition MPs in the week following the infrastructure debate. While Pheu Thai argues that these changes will make the constitution more democratic, opposition Democrats view all proposed changes as an attempt to bring back Thaksin Shinawatra. Regarding Article 237 an ad-hoc parliamentary committee has agreed to remove the penalty of political party dissolution. They did not agree though whether the penalty against party executives found to be involved in or abetting electoral fraud should then be increased as consequence. No common ground could be found between government and opposition regarding Article 68, where Pheu Thai wants to prevent the public from directly asking the Constitution Court to examine moves deemed detrimental to the constitutional monarchy and instead have to be vetted by the Attorney-General’s Department first. With the amendment to Article 190 Pheu Thai seeks to remove the requirement to conduct Parliament before signing contracts with foreign governments and could thus sign free trade agreements without parliamentary consultations. The Pheu Thai party additionally wants to change sections 111-114 to get rid of appointed senators and have all 200 senators elected. During parliamentary debates Democrat Party members forced Senate Speaker and chairman of the meeting Nikhom Wairatpanich to vacate his chair temporarily when they raised questions regarding his impartiality because he had previously declared to be in favor of the bills. When Mr. Nikhom returned as chairman the Democrat MPs walked out of the chamber out of protest. (Bangkok Post) (The Nation)
With the Chiang Mai by-election set for April 21 the Democrat Party presented Kingkarn na Chiang Mai as candidate. Ms. Kingkarn, a former MP for the New Aspiration Party and wife of former MP and minister Thawatwong na Chiang Mai, will contest the election against Pheu Thai heavyweight Yaowapa Wongsawat, elder sister of PM Yingluck Shinawatra. The Chiang Mai by-election is thus set to be a race between two of the most important families of Chiang Mai with considerable support. Analysts do not believe though that Ms. Kingkarn will be able to beat Ms. Yaowapa but should be able to mount a real challenge. Ms. Kingkarn proved to be quick in taking up Democrat party rhetoric in saying that Kasem Nimolrat’s resignation, which forced the by-election, was to help a particular person, obviously meaning Thaksin Shinawatra.
In related news, PM Yingluck Shinawatra was cleared of false assets declaration charges by the NACC. It was previously speculated that her sister, Yaowapa Wongsawat, could take over as PM after an election victory in the Chiang Mai by-election in case Yingluck was not cleared. Investigators were particularly interested in her 20 million baht loan to AD Index in 2006 which did not appear in the company’s 2006 balance sheet. Suspicions were dispelled though when investigators found out that the company’s fiscal year is from May to April. (Reuters) (Bangkok Post) (The Nation)
Economy
With the Songkran holiday just around the corner, Thailand’s airports are preparing for a surge in passenger traffic over the coming days. Suvarnabhumi airport expects more than 1.6 million passengers over the holiday, a 6 % increase compared to last year, and Don Mueang, Phuket and Chiang Mai airports also plan to significantly increase their passenger throughput and the number of daily aircraft movements. The Tourism Authority of Thailand (TAT) expects 10 % more domestic and foreign tourists to join celebrations compared to last year. The estimated 2.71 million tourists are also expected to spend more; their estimation is that 11.12 billion baht will be spent on tourism business operators alone (20 % increase from last year). Kasikorn Research Centre has also made estimations for the holidays, and according to their calculations Bangkokians alone will spend at least 31.5 billion baht, a 10.5 % increase from last year. Higher spending is partly explained by rising prices but also because many plan to arrange and participate in a larger amount of activities this year. Hotels in major destinations are now largely booked. (Bangkok Post, The Nation)
Although the holidays are likely to give the tourism sector a break, many actors in the industry have been worried lately of the ongoing rapid appreciation of the baht. The baht reached a level of slightly below 29 baht to the US dollar for the first time, leading authorities to look for measures to cool down the rapidly rising currency. The already strong baht has gained further value since the latest measures by the Bank of Japan to pump in new liquidity to increase their competitiveness. The US Federal Reserve and the European Central Bank are also likely to continue in the same way in the future. The high cost of the baht is affecting businesses, the Thai National Shippers Council has predicted it will need to lower its export-growth target from 7.5 to 5.5 per cent, criticizing the lack of action from the Government to help Thailand’s export sector. Representatives for the tourism sector have also voiced concerns about their regional competitiveness as prices of Thai tours will be steeper for international tourists than earlier and tourists are likely to spend less money while inside the country as they get less baht for their buck. Although the Association of Domestic Travel said some Thai tour operators had been troubled since they earn income in US Dollar, the Tourism Authority of Thailand said there are not yet any direct signs of a negative impact on business from the appreciating baht.
The Bank of Thailand (BOT) has so far been reluctant to intervene. The BOT recently issued a statement that they may provide relief SMEs in affected sectors, but they have rejected proposals to reduce the policy interest rate from 2.75 % or to increase maturity terms of the short-term bonds that they issue. Nevertheless, the BOT states that it is monitoring capital inflows closely to keep track of currency trade patterns while encouraging state agencies to avoid any external borrowing, made increasingly expensive by the currency appreciation. The BOT does not as of yet think that foreign capital inflow is problematic as it has mainly been invested in government bonds. BOT representatives therefore call for calm in face of the bath’s appreciation as triggering panic in the market by overly enthusiastic interventions would be worse than the current rise in currency value, which still remains within normal standards. The baht has risen 6 % on a year-on-year basis. (The Nation, Thai News Links, Bangkok News)
In 2019, Thailand’s first high-speed train should be operational if everything goes according to the government’s plan. The Office of Transport Policy and Planning have announced that it aims to call for civil work bidding on the four planned high-speed trains in the beginning of next year. A study is currently under way to designate the routes; the first to be planned is the northern route from Bangkok to Phitsanulok, followed by the northeastern route to Nakhon Ratchasima, southern route to Hua Hin and the eastern route to Pattaya. Foreign investors have shown interest in supplying trains for the projects while the government will take in charge all civil work costs. In the 2 trillion baht mega-programme dedicated to infrastructure developments during the next seven years, the government has planned to allocate around 40% to high-speed trains, running at 250 km per hour. (Bangkok Post)
Security
April started with continuing disturbances and incidents in the South, whereby a lot of people were killed or injured. On April 1 a soldier was abducted by eight armed men wearing military-style uniforms from his home in Narathiwat. Two days later he was found shot dead. The killed marine private, who had allegedly been a member of an insurgent group in the past, was suspected by insurgents to have tipped off authorities about an attack in February on a marine output, whereby 16 of the insurgents were killed. The police believe that the men, who abducted and killed the soldier, were militants with intent on revenge. (Bangkok Post/ The Nation)
Several bombs exploded or were found in the southern provinces in the past two weeks and caused many casualties. A lot of persons were injured or killed. Most of them were part of the security forces, but also civilians were among the casualties.
One of the bomb explosions caused the death of two high-ranking officials. On April 5, Yala deputy governor Issara Thongthawat and an assistant governor were killed and the driver of the vehicle critically injured in a roadside bomb attack in Bannang Sata district. The two casualties are among the highest ranking officials which have been killed in the conflict in the South. Issara and the assistant governor were travelling in a Sedan, which was being escorted by six defense volunteers. The car was sent to Yala only one week ago and it’s not clear yet how the insurgents targeted the vehicle the victims were travelling in. The police suspect other state officials have been involved in this incident in providing the insurgents with information about the victims’ schedule, because the trips of high-ranking officials are usually kept secret. (Bangkok Post/ The Nation)
On April 8, there was also another attack on the house of Najmuddin Uma, one of the Deputy Prime Minister Chalerm Yubamrung’s advisers on the deep South. His house was hit by two grenades which was the second attack on his house in just over a year. Najmuddin Uma wasn’t injured but one of the grenades hit his neighbor’s house and injured the owner. (Bangkok Post/ The Nation)
In face of the increasing violence in the South, the failure of the peace talks gets into discussion, in particular because of the death of the two government officials in the South. Lt Gen Paradorn said that the second round of peace talks between the NSC-led delegation and representatives of the Barisan Revolusi Nasional (BRN) insurgency movement will proceed as planned. Lt Gen Paradorn urged the authorities to work more carefully because insurgents are now turning on high-ranking officials obviously. Related to latest news the peace talks will likely be postponed because of the coming general election in Malaysia, which must be held by June 27. The new date is expected to be announced this week. Gen Paradorn emphasized, that proponing the peace talks has nothing to do with the violent incidents in the South and calls it as the BRN’s duty to talk with other insurgent groups to reduce the level of violence in the region. (Bangkok Post/ The Nation)
After PM Yingluck Shinawatra travelled to the South last weekend, also Deputy Prime Minister Chalerm Yoobamrung will head the south after Songkran festival. Chalerm was criticized for not visiting the southernmost provinces despite being in charge of southern security. His visit after Songkran festival is aimed at following up the situation and exchanging information. (Bangkok Post/ The Nation)
Related to a current publication of the US Federal Bureau of Investigation (FBI), Thailand’s likelihood of being hit by a terrorist attack is first in Asia and fifth worldwide. Department of Special Investigation (DSI) chief Tarit Pengdit points out the DSI needs to set up a new command centre to deal with violent crimes and with international terrorism threats in particular. Army chief Gen Prayuth Chan-ocha claims that the ranking of Thailand as one of the most likely terrorist targets worldwide and first in Asia doesn’t picture the real situation. The research for this ranking is based largely on the number of violent incidents and casualties in the South of Thailand, whereby Thailand appears to be a more violent country in comparison to others. Also others like Manasvi Srisodapol, director-general of the Information Department at the Foreign Ministry, rejected the report of the FBI. Gen Prayuth said he contacted the US military attaché at the US embassy in Bangkok, who had apologized for the “misunderstanding” of the list. (Bangkok Post, The Nation)
In face of the upcoming Songkran Festival, police is ready to provide assistance to travelers and maintain law and order during the period of April 11-17, national police chief Adul Saengsingkaew said this week. Police will set up checkpoints and pit stops on main and secondary roads and provide first-aid units on roadside to reduce casualties in road accidents. During Songkran every year several road accidents take place, mostly caused by drunk driving and failure to wear helmets and seatbelts. (The Nation)
In face of the current developments between South and North Korea the Thai Foreign Ministry declares its preparedness to evacuate Thai citizens in South Korea. At present, there are about 44,000 Thais who live in South Korea, most of them in Seoul, who will be evacuated if the situation between North and South Korea gets more tense. (The Nation)
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