HDFF Bi-Weekly Thailand Review 11/6-21/6/2013
The government will change the national rice pledging scheme and lower the original price since the actual scheme caused high economical losses in the past two years. (Source: Bangkok Post)
Summary
In politics, Democrat Party candidate Tankhun Chitt-issara has won the by-election in Don Mueang constituency while losing candidate Yuranant Pamornmontri from the Pheu Thai party was appointed adviser to Interior Minister Charupong Ruangsuwan. The We Preserve Phuket Club called on Prime Minister (PM) Yingluck Shinawatra to release Deputy Prime Minister Plodprasop Suraswadi of his position after Plodprasop stated that he would only allow a convention hall to be built in Phuket if they vote for the Pheu Thai party. The white masked movement continues to spread and PM Yingluck decided to appeal the Central Administrative Court’s order to reinstate Thawil Pliensri as secretary-general of the National Security Council.
In economics, changes in the rice pledging scheme are the big news in Thailand’s economic sector over the past fortnight. The original price of 15,000 baht / ton will be lowered to 12,000 baht / ton starting from the end of this month. The important losses, (estimated at 130 billion), incurred by the government due to the pledging scheme are thought to have pushed the government to review the scheme. PM Yingluck Shinawatra has however promised farmers that they will receive support to adapt to the low price of rice in the international market, for example by changing into growing cassava or sugar cane.
In security, the Police has recently arrested two suspects in connection with the bombing in Ramkhamhaeng Road on May 26. Although some sources insist on links to southern insurgency groups, police officials recently denied it in a statement. Meanwhile BRN (Barisan Revolusi Nasional) and the Thai government made an agreement to reduce the violence in the South during the month of Ramadan in their last round of peace talks in Kuala Lumpur on June 13. Both sides show themselves confident about the progress of the dialogue. Thailand and especially the capital have currently a very high risk of dengue fever. Over 50 people in Thailand died because of this disease this year alone. Therefore various measures in order to avoid its diffusion have been implemented.
Politics
Democrat Party candidate Tankhun Chitt-issara has won the by-election in Don Mueang constituency, winning the seat for the Democrat Party for the first time in 37 years. Pheu Thai party candidate Yuranant Pamornmontri lost by more than 2,000 votes and in a first reaction attributed his loss to the fact that he only had 18 days to campaign while Tankhun worked for Don Mueang people since his election loss in 2011. PM Yingluck Shinawatra and Pheu Thai leaders tried to downplay the loss arguing that there was not enough time for Yuranant and that a by-election would be different than a general election.
The by-election, which was called after Pheu Thai MP Karun Hosakul was disqualified from politics for five years for defaming Tankhun, is expected to initiate a reaction from Pheu Thai. Somchai Srisutthiyakorn, a political scientist at Sripatum University, said Pheu Thai might feel tempted to dissolve the Lower House in September or October before its popularity fades away even further. Democrat party deputy leader Korn Chatikavanij on the other hand considers it very unlikely that Pheu Thai would call a snap election, arguing that they would be short of accomplishments making it more likely that PM Yingluck will reshuffle her cabinet in the near future. The English-language daily The Nation meanwhile advised both parties to rethink their top-down decisions and start a primary voting system to allow voters to propose their candidate of choice. The Don Mueang election would serve as prime example as the Pheu Thai banner was not enough to win a by-election although it was considered a stronghold for the party. Consequently it has to be assumed that the individual candidate is more important for voters than the party logo and the former Pheu Thai MP Karun Hosakul’s strong base support would support this assumption. Karun’s waning popularity due to his involvement in a series of scandals has additionally led to an increase in sympathy for his opponent Thankun, who was remember by Don Mueang voters for his hard work during the 2011 flood. Pheu Thai candidate Yuranant has meanwhile been appointed as adviser to Interior Minister Charupong Ruangsuwan. (Thailand Business News) (Bangkok Post) (The Nation)
Deputy Prime Minister Plodprasop Suraswadi has become the latest government minister being criticized for his public statements indicating an abuse of power. Plodprasop has previously called environmental activists critical of the government’s 350 billion baht water-management project “garbage” and has now made it back into the headlines again for stating that “Phuket is next on the list for a convention hall [International Convention and Exhibition Center (ICEC)]….” “But I will not allow it to be built. We might build it if Phuket people vote for the Pheu Thai party, but if they don’t, that building project is not going anywhere.” Phuket Democrat MP Raywat Areerob led a group called ”We Preserve Phuket Club” in an appeal towards PM Yingluck to relieve Deputy Prime Minister Plodprasop of his position. Mr. Raywat commented that “We need a government that will move Thailand forward, not just look after the members of their own party.“ The “We Preserve Phuket Club” argued that Phuket contributes a lot of money to the national economy thus Plodprasop’s statement would be disgraceful and deems him unfit for a government position. Vice Governor Sommai Prijasilpa received a letter of protest composed by the intiative. In a related story, the opposition Democrat party will file a petition to remove the Yingluck Cabinet on suspicion that the government colluded with four large companies in the bidding of the Bt350-billion water-management scheme. (Phuket Gazette) (The Nation)
The white masked protest movement continued to spread with demonstrations in Chiang Mai, Udon Thani, Nakhon Ratchasima, Buri Ram, Tak, Songkhla, and Nakhon Si Thammarat. Apart from a clash with red shirts in Chiang Mai, no violent incidents were reported. There is still a shadow of doubt over the group’s leaders and intentions as some demonstrators were already seen calling for a military coup. (Wall Street Journal) (Bangkok Post)
In the ongoing case regarding Thawil Pliensri reinstatement as secretary-general of the National Security Council (NSC) PM Yingluck decided to appeal against the Central Administrative Court’s order, after a suggestion from a working committee chaired by the PM’s Office permanent secretary Tongthong Chandrangsu. Mr. Thongthong stated that “The appeal is not political persecution, but the use of the exclusive right of the prime minister to establish a legal precedent for further practice in the country’s administration.” Mr. Thawil meanwhile announced that he considers suing the Prime Minister for abuse of power. (Bangkok Post)
Economy
The rice pledging scheme is the top topic of debate in Thailand’s economic sector for the last fortnight. For the first time since its start in 2011, the much criticized scheme is undergoing a general review. Since 2011, Thailand’s government has guaranteed a minimum price of 15,000 baht per ton of rice to farmers. Although the factors behind global crop market prices are complex, the set pledging price soon proved to be unreasonably high in comparison to other countries. In 2012, Thailand lost its edge in international rice trade and the competitiveness of Thai rice in the market was gravely undermined. Nevertheless, Thailand’s government did not flinch and they continued to buy rice at 15,000 baht/ton without being able to sell it onwards. The stockpiling of rice led to a doubly sensitive situation as global rice prices do not allow for selling of the stock without incurring important losses while releasing crops in the market would press prices further downwards.
As of 2013, the rice pledging scheme is reported to have caused over 130 billion baht of losses according to the PM’s Office Minister Varathep Rattanakorn. Increasing pressure and criticism led to a long meeting between the National Rice Policy Committee and the cabinet. Although the committee’s chairman, (and equally Thailand’s Minister of Commerce), Bonsoong Teriyapirom has repeatedly claimed that the losses incurred are not the fault of the scheme but rather due to global market mechanisms beyond the control of Thailand’s government, the policy committee urged the cabinet to make important changes to the pledging scheme. Notably, the committee recommended to reduce the pledging price from 15,000 baht to between 12,000 and 13,500 baht per ton. In the end, the cabinet accepted to lower the price to 12,000 baht per ton, starting at the end of this month (June 30). The Prime Minister furthermore affirmed that the pledging scheme will continue until 2017 and that the pledging price may be readjusted again if market prices fluctuate.
The decision has caused a sizeable stir in Thailand’s economic and political landscape. The oppositional Democrat party spoke out against the new decision, denouncing the broken promises of the government. Despite their long-held criticism against the rice-pledging scheme, they believe that the decision will negatively affect farmers and that combating corruption within the scheme should be the first priority. Farmers were naturally upset, threatening with rallies against the lowered prices since they claim to have already invested in the current crop and that the hasty decision will inflict direct losses to farmers. The Board of Trade of Thailand and the Thai Chamber of Commerce also reviewed the new changes to the rice pledging scheme, but instead found them to be insufficient. They said that the government needs to urgently change its policies in order to transparently sell off their huge rice stockpiles to avoid a downgrading of the credit rating as well as promote high quality rice by delineating appropriate zones for rice growing.
To minimize impact on farmers, PM Yingluck Shinawatra promised that the Ministry of Agriculture and Commerce would support farmers in adjusting their selection of crops to the price levels in the market. Growing cassava and sugar cane as replacement crops for rice was presented as an option for rice farmers. (Irin News, The Nation, Bangkok Post, National News Bureau of Thailand)
Other news include continued baht volatility. Foreign investors have continued to pull out of emerging markets after the Fed’s decision to scale down its investments. Although the Bank of Thailand decided to reduce the policy rate by 25 basis points on May 29, a move that did reduce currency volatility, the currency experienced its most important drop since May 10 on June 20 as it fell by 1.2 per cent. The baht was then 31.08 per US dollar. Deputy prime minister and finance minister, Kittiratt Na-Ranong urged the Bank of Thailand to be ready to move in case capital movement continues although he emphasized that Thailand’s economy is equipped to deal with this type of market fluctuations. (The Nation)
Security
On June 13 Barisan Revolusi Nasional (BRN) and the Thai government held their third round of peace talks in Kuala Lumpur, Malaysia. The Thai negotiators called the outcomes of the talks “satisfying”. The BRN and the Thai government made an agreement to reduce the violence in the South during the month of Ramadan. The next round of peace talks will take place after the 30 days of Ramadan. Few days after the meeting, BRN negotiator Hassan Taib gave an interview and pointed out that he is satisfied with the progress of the peace dialogue. He emphasized he wanted the peace talks to continue and all sides should consider it to be a national agenda. Hassan Taib felt convinced about the success of the peace talks but he also conceded there are other groups which oppose an agreement. (Bangkok Post)
Referring to the latest investigations regarding the bomb blast in Ramkhamhaeng Soi 43/1 in Bangkok on 26 of May a police source said the national security forces have stepped up measures to closely monitor teenagers from the South living in this area. Police have recently arrested a 24-old man from Narathiwat who admitted to have been a lookout for the bomb attack and might also have connections to members of southern insurgency groups. However, police chief Adul Saengsingkaew denied links between the arrested young man and southern insurgents this week. On Wednesday night, police arrested another suspect in connection with the bombing. Both suspects were apprehended in Narathiwat. (The Nation)
The Royal Thai Police recently pointed out Songkhla is ranked fourth in terms of the number of areas most at risk of human-trafficking crimes at 642 locations. Songkhla served as a core supplier of women and children to prostitution rings in Malaysia and Singapore, but there are also many people who are being forced to work in the fishery business. One of the most urgent issues with regards to human trafficking is the exposure of Rohingya people, refugees from Myanmar coming to Thailand to live there permanently. Currently there are 2000 registered Rohingya people in Thailand while the actual number could be higher though. (The Nation)
As of June 11, 43609 people in Thailand have contracted dengue fever which is a 3,1 times higher number compared with the same period last year. Over 50 people died because of this disease this year alone. In Bangkok 4374 residents contracting this disease and one life was lost caused by dengue fever during the past six months. The Bangkok Metropolitan Administration has implemented a variety of measures, for example spraying of chemicals, in order to obviate the diffusion of the disease. (The Nation/ Bangkok Post)
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