Defence Minister Sukumpol Suwanatat & Finance Minister Kittiratt Na-Ranong
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Summary
Politics in Thailand this week were orbiting about an actual reshuffle within the Defence department and rumors about potential cabinet changes ahead of the Prime Minister’s statement to parliament concerning her government’s performance in its first year of office. These talks especially focused on Finance Minister Kittiratt Na-Ranong, who came under fire from opposition members after putting an awkward verbal spin on the fact that his department had previously overestimated GDP growth.
Mr. Kittiratt also made news when he announced the government’s intention to spend 2.27 trillion baht on major infrastructure projects over the next seven years. The plans include an expansion of urban mass-transit and a high-speed train project that would serve as a rapid connection between Thailand and its neighboring countries.
After insurgents in Thailand’s Deep South attacked a passenger train on Tuesday in retaliation against a killing of one of their own, local officials fear trains may remain a target for militants and introduced additional security measures along railroads. Meanwhile, the divisions within Thai politics once again spill into flood protection efforts, raising concerns that national and local officials might again underperform in the event of emergency because they’re unable or unwilling to cooperate.
Politics
Reshuffle rumors and debates dominated the political headlines this week. Jatuporn Promphan renewed his aspiration towards gaining a cabinet seat after a criminal court decision on August 22th acquitted him and 17 other read shirt leaders of all charges brought against them. Yoswarit Chooklom, better known as Jeng Dokjik, on the other hand had his bail revoked and was put under detention as the court ruled that he had every intention to “create disturbance and harm” to the Constitution Court judges and their families after he announced their phone numbers and addresses at a red shirt rally. The other 18 red shirt leaders were merely assumed to have “rude behavior” according to the court ruling and were told to not create any further disturbances and are furthermore not allowed to leave the Kingdom of Thailand. Mr. Jatuporn subsequently claimed he had all necessary qualifications for a cabinet post stating in an interview with The Nation, “Politically, I have proved [my eligibility] in all aspects, all platforms, in or outside the Parliament, in all environments. I don’t know what else I can do better in life as this is the ultimate. That’s all. I don’t know what else I have to prove.” While observers speculate that Prime Minister Yingluck Shinawatra would not place two core red shirt leaders in her cabinet, Jatuporn denied that there would be a “quota” for red shirts or any problems arising out of his call to cabinet. A cabinet reshuffle is expected in October 2012.
The annual reshuffle of senior military officers lead to the transfer of Defence permanent secretary General Sathian Permthongin and two other senior officers to inactive posts due to a dispute over the succession of Sathian. While Defence Minister Sukampol Suwannathat favors Gen. Thanongsak Apirakyotin, Sathian would like to see his deputy Gen. Chatree Tatti take over after him. Thanongsak is a senior from Class 11 of the Armed Forces Academies Preparatory School (AFAPS) while Chatree is a Class 14 graduate and thus considered too young for the job by Defence Minister Sukampol. Equally important, probably, is Thanongsak’s close connection to the Pheu Thai Party and the fact that he is considered to enjoy the support of Thaksin’s sister Yaowapa Wongsawat. Sukampol announced that he had spoken with the supreme commander and the three armed forces chiefs, who were all fine with the appointment of Thanongsak, with Sathian the only one having a problem with the appointment. Sathian lamented that there should be no political interference in the army reshuffle and was – unsuccessfully – seeking a meeting with Prime Minister Yingluck to stop the interference. As The Bangkok Post has rightfully pointed out, by seeking a meeting with the Prime Minister, Sathian was seeking the “government interference” he initially claimed to be illegitimate. Yingluck announced she would not interfere and leave the decision to the defence council and Defence Minister.
Another reshuffle rumor surrounds Finance Minister Kittiratt Na-Ranong after he admitted to what he called a “white lie”. Kittiratt had previously announced an export growth target of 15% but now admitted to have come up with the number to boost investor confidence. His confession came after the National Economic and Social Development Board, the state planning agency, revised its forecast for export growth down to 7.3 per cent this year due to the global economic slump. Prime Minister Yingluck announced that she has not ordered or given permission to any member of her cabinet to tell lies to the public but sided with her Finance Minister stating that she believed he meant well for the country. She furthermore denied any reshuffle rumors claiming that she would “have no [other] people to help me with economic matters.” Thaksin Shinawatra on the other hand is believed to be unhappy with Kittiratt’s performance in dealing with the rising cost of living among other things. Critics and media meanwhile seem to be focused not on the fact that he lied in the first place but that he actually admitted to it. Exemplary thereof, an executive at a local brokerage house said that it was okay for Finance Ministers to set ambitious targets only to revise them later but he simply should not have used the term “white lie”. (The Wall Street Journal) (Bangkok Post) (The Nation)
Investigations by the Department of Special Investigations (DSI) into the use of snipers during the 2010 government crackdown on red shirt protesters was followed up this week by a seven hour interrogation of Sergeants Saringkan Thaweecheep and Kacharat Niamrod, who were deployed near Lumpini Boxing Stadium and Soi Ngamduplee May 15, 2010. In regards to the use of their M16 rifles they testified that they were only firing rubber bullets to deter protesters. Pol Col Prawet, who oversees the case, announced that DSI requested that the army submit the guns for investigations. DSI will furthermore continue its investigation by summoning more witnesses including Thawil Pliensri, former Secretary-General of the National Security Council, and General Anupong Paochinda, former Army commander-in-Chief, who were both part of the Council for Resolution of the Emergency Situation, which was set up at that time to deal with the situation. The New York-based NGO Human Rights Watch (HRW) meanwhile called on the Thai government to order Army Commander-in-Chief Gen. Prayuth Chan-ocha to stop interfering in the DSI investigation. On August 16, 2012, Prayuth told the DSI to stop accusing soldiers of killing demonstrators during the government’s crackdown on the “Red Shirt”-protest in 2010 and not to report publicly on the progress of its investigations. Brad Adams, Asia Director of HRW stated, “Abuses by soldiers took place in full view of the Thai public and the world’s media, yet the Thai army chief is now trying to intimidate investigators and critics into silence.” Contrary to HRW’s wishes though a deputy prime minister ordered the Department of Special Investigation chief to stop talking publicly about the investigations and to apologize to the army chief. HRW furthermore expressed concern that Prime Minister Yingluck seems to side with the military and thus breaks her promise of providing justice to the victims. (Washington Post) (Human Rights Watch) (Bangkok Post) (The Nation)
Economics
Finance Minister Kittiratt Na-Ranong this week announced that the government is planning to invest 2.27 trillion baht in infrastructural measures in the next seven years. According to Mr. Kittiratt, the Securities and Exchange Commission is currently discussing the proposal and is expected to decide on the issue within the next two months. The planned projects include road construction, two high-speed train tracks reaching from China to Singapore and from Vietnam to Myanmar, and the further development of urban mass-transit lines. A public-private partnership approach and a special infrastructure fund are planned to support fiscal budget financing. (Bangkok Post)
Su Sian Lim, an economist at the HSBC Bank, estimates Thailand’s gross domestic product (GDP) to grow by 5.5 per cent and its inflation by 3.4 per cent for 2012. For the next year, she expects a growth rate of 4.5 per cent in GDP and 3.8 per cent in inflation. According to Ms. Su, the potential negative effects caused by the financial crisis, the Eurozone debt crisis and the economic recession in the USA had a much lesser impact on economic growth in Asian countries than first expected since a substantial increase in domestic demand outweighed the declining exports. (Bangkok Post)
In search for compensation for the recently announced tax cut plans, the Revenue Department proposed a plan to recruit 2,300 tax collectors and invest 2 billion baht in improved collecting measures. The costs for the new tax collector staff are estimated to be around 400 million baht a year. If approved, the collected tax amount could increase by 157 billion baht in the first year and up to 200 billion baht after the first three years, according to Deputy Finance Minister Tanusak Lek-uthai. One of the main goals is a better coverage of the e-commerce trade. For that purpose, the expenditures will mainly contain improvements of the department’s IT systems to better monitor online transactions. (The Nation)
With the implementation of the new Thailand Creative Economy Promotion Agency, the Thai government plans to boost the rise of national champions in the small and medium-sized industries. The agency will administer the 300 million baht-comprising creativity economy fund that was set up by the previous government. It will be supervised by the Secretariat to the Prime Minister. Additionally, a national policy committee on creative economy will set policies, develop draft action plans and allocate the fund to the private sector. The long-term goal is to shift the Thai economy away from commodity exports to a creative economy. (Bangkok Post)
A survey conducted by the Board of Investment (BoI) shows a broad confidence in Thailand among foreign investors. Over the next year 65.2 per cent of the asked investors want to stay in Thailand. 31.6 per cent even want to expand this year. This positive outlook is backed by another statistic released by the BoI this week: The applications of foreign direct investments increased by 38 per cent for the first seven months of the year, compared to the same period last year. The combined value of the applications was 332.2 billion baht – an increase of 62 per cent compared to the 205.19 billion baht last year. Around one third of the applications were new project plans. More than a half of the applications with a total value of 210.88 billion baht came from Japanese companies, followed by Singapore, the Netherlands, America and Hong Kong. Metal products, machinery and transportation equipment were the most attractive industries, followed by electronics and services and utilities. (Bangkok Post)
Security
In Thailand’s Deep South, passenger trains are feared to have become a target for insurgents following a shootout at a train station on Sunday in which an army informant and a militant were killed, prompting a retaliation attack against a train on the same line two days later. A group numbering more than ten militants opened fire on a moving train and at a nearby defence volunteer post, killing one and injuring another before escaping the scene. Security measures were increased with soldiers conducting foot patrols along railroad tracks especially on routes considered at risk for targeting. Since the start of the week, at least three people were reported killed and three wounded in no less than five separate attacks. Definite counts of incidents and casualties prove hard, as motives behind violence often are not clear-cut and many attacks go largely unreported.
Meanwhile, Deputy Prime Minister Yutthasak Sasiprapa announced that an additional 1,500 border patrol police forces will be deployed to the South. This, along with the recently proposed plan to send Air Force planes for military reconnaissance, marks an increase of government attention to the violent conflict in the southern provinces following a significant hike of incidents during the Muslim holy month of Ramadan. Prime Minister Yingluck Shinawatra is expected to address the issue in her performance delivery to parliament commemorating her government’s first year in office in September. (link to incident map) (Bangkok Post) (MCOT) (The Nation)
In a massive drug raid in Chiang Rai province, more than one million “yaba” methamphetamine and 50kg of crystal meth, “ya ice”, were seized by police on Wednesday. Four men who reportedly transported the load over the border from Myanmar were also arrested. The street value of the drugs was thought to be more than 300 million baht. The prevalence of drug crime in Thailand has risen in visibility following several similar large scale busts and reports about a major drug ring scandal in Nakhon Si Thammarat Prison. As many as 200 inmates were involved in dealings estimated to amount up to 350 million baht in worth. The Department of Corrections has ordered 27 prisoners declared as “major players” and 25 prison officers to be transferred in a clean-up operation. (Bangkok Post)
Flash floods following continuous rain falls have hit the northern provinces of Uttaradit and Chiang Mai this week after the situation eased in Trang and Phuket, areas in the south which were similarly affected last week. In Uttaradit’s Laplae district water flooded streets up to 50cm, swamping more than 500 houses and forcing schools to be closed as well as residents to move to higher ground. (Bangkok Post) (MCOT) (The Nation)
In Bangkok, meanwhile, concerns among residents over the tactics the government will employ to counter the flood threat in this year’s rainy season were rising. They demanded to know details about the government’s plans in order to be able to prepare. The Water and Flood Resources Management Committee announced plans to test the drainage of Bangkok’s canals in the following week, which requires releasing an increased amount of water into the khlongs. The Committee’s chairman Science and Technology Minister Plodprasop Suraswadi said that the test would not cause any overflow and that there was no reason to panic. However, Bangkok Governor Sukhumband Paribatra declared himself not fully convinced considering unfinished repairs at seven water gates that were damaged last year and considered making own decisions if the test caused problems. The distrust reflects the deep division between the ruling Pheu Thai party and the oppositional Democrats, of which the Governor is a member. The lack of coordination among the entrenched sides is said to have contributed to the impact of last year’s disastrous floods.
On a related note, Governor Sukhumband also said that while the work to heighten and reinforce 77km of flood walls along the Chao Phraya would not be fully finished this year, the city’s administration was focusing on the northern districts, which were facing a more immediate threat by the water run-off from the north of the country. (Bangkok Post) (The Nation)
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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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