Source: thailand-business-news.com
Summary
In politics, Prime Minister Yingluck Shinawatra presided over the first meeting of the political reform forum and set a seven-point framework for future meetings. The Pheu Thai government meanwhile attempts to reform the Senate in order to replace the selected with publicly elected senators, which the opposition fears could result in a Senate consisting of the politicians’ family members. The leadership of the yellow-shirt People’s Alliance for Democracy (PAD) resigns, while the Democrat Party resorts to street politics.
In economy, analysts are debating about the outcome of Thailand’s economic growth for 2013, the Finance Ministry has slashed their projection from 4.5 % to 3.7 % while Bangkok Bank keeps theirs on 4% although acknowledging that the expected rebound of domestic consumption has not taken place. In other news, Chinese tourists flock to Thailand for cheap shopping while the daily minimum wage reform is making it difficult for Thai industries to operate on a competitive basis.
In security, multiple attacks occurred in the South and marked the founding anniversaries of two insurgent groups. With the next round of peace talks, the Thai delegation has prepared counter-proposals and BRN is considering making changes to their peace talks team.
Politics
Despite the opposition’s call on Prime Minister Yingluck Shinawatra to delay sending the charter amendment bill for royal approval as it was pending a judicial review by the Constitutional Court, the PM went ahead and submitted the bill. The bill, designed to change the makeup of the Senate and have all senators elected democratically instead of half being appointed, previously passed the final third reading by a vote of 358 – 2 after Democrat Party MP’s boycotted the vote and walked out of Parliament. The opposition considers this transformation unconstitutional and fears the effects it will have on the power structure between the legislative, executive and judicial branches, arguing the senate would then be filled by family members of MP’s. PM Yingluck’s confidence in the bill turned out to be warranted after the Constitutional Court decided not the veto the bill. The court now has to decide on another bill, the 2014 Budget Bill, which will cut budgets for independent organisations such as the Administrative Court, the Court of Justice, and the Office of the National Anti-Corruption Commission. Meanwhile, a petition sponsored by the red-shirt Love Democracy Club will be seeking a judicial review of the Constitutional Court’s mandate. Sangiem Samranrat, a member of the red-shirt movement and political appointee attached to Government House, argues that the Court does not have the jurisdiction to launch a judicial review into the 2014 Budget Bill. (Bangkok Post, The Nation)
The Thai flood of 2013 has so far affected 33 provinces and nearly three million residents, claiming 30 lives, according to the Disaster Prevention and Mitigation Department. While all authorities remain adamant that the flood situation is far less critical than two years ago Bangkok Governor Sukhumbhand Paribatra announced that about 850 households in 25 communities in Bangkok could be affected by flooding in the upcoming weeks due to water run-off from the North as the Chao Phraya river water level is expected to rise by two meters above sea level. (Bangkok Post)
Media mogul Sondhi Limthongkul, the leader of the royalist yellow shirt movement, has been found guilty of lese majeste for repeating offensive comments made by a political opponent, Daranee Charnchoengsilpakul, who was sentenced to 15 years in prison in 2011. Sondhi Limthongkul was in turn sentenced to two years in jail. In an interview with his own media outlet, the Manager Online news website, Sondhi said that he only brought up the remarks to alert authorities and that he will appeal the case to the Supreme Court. Noppawan Tangudomsuk, nicknamed Bento, was meanwhile sentenced to five years in jail for lese majeste after she was found guilty of posting messages in 2008 on the web board of news website Prachatai that were deemed offensive to the monarchy. The ruling overturned a criminal court’s dismissal of the case in 2011 on the grounds there was insufficient evidence to show Noppawan posted the comments herself. On a more positive note, Surachai Danwattananusorn, who was sentenced to 12 years and six months in 2010 for lese majeste, received a royal pardon after serving nearly three years. (Associated Press, Reuters, Bangkok Post)
Economy
The past fortnight has seen various analysts quibbling about the growth forecast of Thailand for this year. While some claim it could reach 5 % others are confident that it will remain under 4 %. The Bangkok Bank has said that they will not revise their projection (4 %) for the coming months of the year but also acknowledged that there is no indication that domestic consumption (main driver of growth in Thailand) will rebound over the last quarter. Thailand’s Finance Ministry made a somewhat more grim estimation as they cut the economic growth projection from 4.5% to 3.7% on September 27. (Nasdaq, MENAFN.COM, National News Bureau of Thailand)
Despite a rather more lackluster economic progression than expected this year, the Finance Minister Kittiratt Na-Ranong, has adamantly insisted that there is no reason to worry about the significant spending plans laid out by the government. The 2 trillion baht infrastructure programme is, for example, being kicked off with a road show that promotes the investment. Despite the important size of the loan required by the Thai government, the Finance Minister has held fast that the public debt ratio to GDP will be held under 50 % and that Thailand is in no risk of liquidity shortage as 40 % of the funds will be raised abroad. (Bangkok Post, The Nation)
On a related topic, the spending schemes introduced by the government such as rice and cassava pledging or the first-car buyer programme have now led corn and rubber farmers to want in. Over the past month, rubber farmers have blocked roads and clashed with police seeking a minimum price for their harvest and corn farmers are now also joining the struggle. The current corn subsidy allows farmers to sell up to 25 tons for 8-10 baht/kg despite falling price levels globally. The pledging schemes are already having noticeable effects on the Thai economy as foreign investment trust has suffered and private household debt is up – a side effect of farmers calculating loan repayments on the promise of future government pledging. (Wall Street Journal, Bangkok Post, data.worldbank.org)
In tourism, Chinese tourists are expected to exceed 4 million in this year – with many tours going to Pattaya, Phuket and Chiang Mai. The Tourism Authority of Thailand says they are especially focused on high-end markets in China and Russia that are interested in not only visiting but also shopping for cheap Thai products. Cheap produce has however been in the spotlight over the past two weeks as reports show that the increase in minimum daily wage has forced a large number of industries to close. Earlier, the system would allow regions to set their own minimum wages and rural or remote areas would therefore be cheaper and could compete with larger industries in urban areas. The new reform has erased this differentiation and migrant workers who previously stayed in the countryside are moving towards the cities. To stay competitive, reports show that some companies have simply shifted activities into the illegal sphere, operating on the same terms as before and surviving because the laborers prefer a smaller wage to being unemployed. Unemployment is very low in Thailand due to the expansive economic growth and exports, but these two factors are largely based on migrants coming to Thailand to perform menial jobs for small wages. Shrimp is for example one of the critical industries in Thailand but it is completely reliant on migrant workers as 90 % of the seafood processing industry employs migrants. The next big question for Thailand is how to continue growing with regionally uncompetitive wage levels, an increasing level of unregistered companies that could take advantage of migrants and stricter policies for incoming migrant workers. (Want China Times, Quartz – qz.com, The Asahi Shimbun)
Security
Multiple bombings, arsons and shooting incidents occurred in Narathiwat, Yala, Pattani and Songkhla, marking the founding anniversaries of Barisan Revolusi Nasional (BRN) on October 10 and Patani United Liberation Organization (Pulo) on October 11. Most of the incidents involved ATM bombing, a technique new to the South in which Improvised Explosive Devices (IED) are placed in ATM booths. A teacher and two rangers were killed in this wave of violence. Eleven attacks were reported in five districts of Narathiwat, including ATM bombings, arson and oil tanker theft. In Yala, 11 ATM bombings were reported. There was a spate of 15 violent incidents in six districts of Pattani, mostly ATM bombings. There were three incidents of ATM arson in three districts of Songkhla. (The Nation, Bangkok Post)
Two or three counter-proposals have been prepared by the Thai delegation for the next round of talks with the BRN. The delegation emphasizes that BRN’s demands should adhere to the Thai constitution. Moreover, there will be no talks on land separation. A big concern has been placed on BRN’s demand to be acknowledged as representative of “Melayu Patani” and to the right of the people to land. There have been reports that the BRN may change its peace talk representatives. Appointing a new BRN team leader for the peace talks may indicate their sincerity in working towards peace in the south and to upgrade peace talks to formal negotiations. A team from the Southern Border Provinces Administration Center also entered into peace talks with a number of Pulo leaders in Sweden. The National Security Council is open to initiating peace talks with other rebel groups. (Bangkok Post)
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