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Summary

The atmosphere was tense as key players in Thailand’s political milieu discussed and debated reconciliation at a conference this week. In response to controversial recommendations that were to be considered during the meeting, protests formed outside the hotel where the conference was held in what one local newspaper described as a “furious, if not explosive” scene. On the economic beat, policymakers at Thailand’s central bank unanimously voted to keep the country’s policy rate unchanged at 3 percent, which they deemed as appropriate for supporting recovery as well as in keeping with inflation. To combat rising costs of living, Thailand’s government approved funding for “One Shop One Community”, a project to distribute cheaply-priced goods to Thai consumers nationwide. In security, Thailand’s military admitted its troops killed four civilians in Thailand’s deep South in January. Also, Thai authorities seized another multimillion cache of methamphetamine pills in the North, and Thailand’s military, in a surprise move, revealed that 5,000 Rohingya boat people have been arrested or intercepted off of Thailand’s Andaman coast since last November.

Politics

Reconciliation was on everybody’s mind this week as two studies presented differing views at a conference attended by Thailand’s key political players on the Kingdom’s political situation and possible ways moving forward.  Thirayuth Boonmi, formerly secretary-general of the National Students Centre of Thailand (NSCT), which played an important role leading to the Oct 14, 1973 student uprising, and currently serving as director of the Sanya Dharmasakti Institute for Democracy and Sociologist at Thammasat University, presented his analysis at a press conference, arguing that the root of the current political rifts are due to political centralization and political and socio-economic inequality between urban and rural areas. His prediction of another possible coup if the political conflict is not solved was vehemently rejected by Deputy Prime Minister and Interior Minister Yongyuth Wichaidit, as well as representatives from the Army. Mr. Yongyuth concluded that the Army was now democracy-minded and thus no coup would happen this time around. Noppadon Pattama, Thaksin’s legal adviser and close aide, criticized Mr. Thirayuth’s analysis as biased against Thaksin Shinawatra as it does not include, what Noppadon considers to be the root cause of the problem – namely the military coup of 2006 and the destruction of the rule of law by the military.

Incidentally, criticism for glossing over the true causes of the current political conflict was also heaped upon the second study on reconciliation that was debated this week. The King Prachadipok’s Institute (KPI), an independent think tank, examined the causes of political conflicts in a study sanctioned by the House Special Committee on Reconciliation, but received heavy criticism from opposition leader Abhisit Vejjajiva as being biased in favor of the government. While the study did explore the history of political conflicts in Thailand and all the major theories on reconciliation building as well as how to settle political conflicts, the report received criticism for avoiding what had caused the current conflict. Wuthisarn Tanchai, KPI’s deputy secretary-general, defended the study arguing that the goal was to find ways to rebuild harmony and foster national reconciliation, for which an analysis of the conflict would not be necessary. KPI’s research team concluded that all sides must be forgiven to achieve reconciliation, but admitted that the goal was still a long way off. Natchapat Oontrongjit, a member of the research team, said that the team’s interviews revealed that there was still no change in attitude among the key players, adding, “I don’t think the atmosphere is conducive to national reconciliation. There is a long way to go.”

It was not only the KPI’s study that received criticism, but also the chairman of the House Committee on National Reconciliation, Gen Sonthi Boonyaratkalin, who commissioned the study. Gen Sonthi, being the former coup leader in 2006, was in an awkward position to convince the public that he is the right person to work towards reconciliation. Nonetheless, he argued that people need to “forget the past [and] think about today and build the future.” Maj Gen Sanan Kachornprasart, advisory chairman of the Chartthaipattana Party, was not convinced and tried to steer the debate more intensely towards what caused the coup and Gen Sonthi’s own potential culpability by asking:

“Who was behind that coup? Was it you or did you have [outside] motivation? Unless the truth is spoken, Thais nationwide will remain in doubt, especially Thaksin and the red shirts who support him and still think that aristocrats and powerful people beyond the reach of the constitution backed the coup.”

Gen Sonthi refused to answer the crux of Maj Gen Sanan’s  inquisition by stating:

“These questions should not be posed to me. I cannot answer them. Some questions cannot be answered, even after death. Some matters will reveal themselves at the right time. If they are revealed today, I wonder if it will do any good.”

As key players in the reconciliation process discussed the KPI’s proposals, which includes the recommendation to grant an amnesty to people involved in past political protests, at the Miracle Grand Hotel in Bangkok the atmosphere soon turned – according to The Nation – “furious, if not explosive”, therewith bolstering Natchapat Oontrongjit’s skepticism on Thailand’s readiness for reconciliation. (Bangkok Post) (The Nation)

In what can only be called a  public relations disaster, the government approved the purchase of 900,000 tablet computers to supply to school students, a previous Pheu Thai election promise, signing an MoU with the little known Chinese company, Shenzhen Scope, which offered the lowest-bid price of $81 for each seven-inch touch screen computer. Concurrently all 650 MPs and Senators in Thailand will receive a free iPad, costing the administration US$1.6 million. As Thailand’s MPs include some of the wealthiest citizens of the country, the addition of free iPads in addition to free domestic air travel, a laptop and five assistants caused an understandable uproar on social networking sites. (Channelnewsasia) (Businessweek) (Bangkok Post)

Economics

The Thai stock market finished sharply lower on Thursday March 23, after gaining almost 20 points or 1.9 percent the day before, following heavy fall among the financial shares and energy producers. On Thursday, the SET index fell 16.67 points or 1.38 percent to finish at the daily low of 1,191.00 with the trade volume of 7.853 billion shares worth 40.149 billion baht.  According to Markit Economics, China’s manufacturing sector still contracted for the fifth consecutive month and Eurozone private sector activities still fell more sharply than expected in March. The European and U.S. markets finished lower and the Asian bourses are expected to follow the lead. (RTTNews)

On Wednesday, March 21, policymakers at Thailand’s central bank unanimously voted to keep the country’s policy rate unchanged at 3 percent. The Monetary Policy Committee (MPC) decided that the current level of the policy rate is appropriate in supporting economic recovery as well as being consistent in keeping the inflation target. Still, the MPC observed upside risks to inflation persisting from rising global oil prices and the expected minimum wage increase. Also recovery in private demand and heavy government spending could put upward pressure on inflation. In February, headline inflation remained at 3.35 percent and core inflation, excluding fresh food and energy, was 2.72 percent. The BOT will continue to use its core inflation target of between 0.5 – 3 percent this year and will reconsider the plan next year to see whether a change to headline inflation is required.

The central bank is issuing longer term bonds to reduce local market volatility caused by changes in energy prices and foreign investment inflows. According to the Assistant Governor of the bank’s Financial Markets Operations Group, Pongpen Ruengvirayudh, a gradual appreciation of the baht is good for the economy when energy prices are rising. Also the central bank does not believe that short-term investment inflows are excessively speculative. Meanwhile, the BOT will potentially start investing in China’s exchange and interbank bond market with the permission to invest up to 300 million dollars in China’s exchange and 1 billion dollars in China’s interbank bond market. This plan has the purpose of diversifying foreign exchange reserves in a currency that has acceptable level of stability and is expected to play important role in the future, instead of reserving heavily in US dollar. (The Nation) (Bangkok Post) (RTTNews)

Delloitte, the major professional service firm, stated Thai banks are the best prepared for the ASEAN Economic Community (AEC) due to the Kingdom’s financial strength and competitiveness. Of all industries in Thailand, banking seems to be the most ready for the opening of regional market under the AEC in 2015, resulting from years of building capital in compliance with the Bank for International Settlement’s Basel lll requirements. Besides the banks, Thai companies in the food, construction material, energy, and consumer product industries also show potential to prosper by looking for joint ventures or mergers and acquisitions with partners in other countries. (The Nation)

Finance Minister, Kittiratt Na-Ranong, reversed the policy on market liberalization. He suggested that the commission fees and broker licenses liberalization, in place since January, need to be reviewed. Local brokers immediately offered support to the policy change, saying they would propose to go back to the sliding fee structure used before liberalization took place. Meanwhile, The Securities and Exchange Commission (SEC), under former secretary-general Thirachai Phuvanatnaranubala, had argued that fee liberalization would help improve competition within the capital market and lead to lower transaction costs for investors. However, brokers have long argued that heavy competition would decline in key services, such as investor education and research and could result in the detriment of the overall market. Mr. Kittiratt stressed that capital market should be ready for competition before the ASEAN Economic Community take place in 2015.(Bangkok Post)

The Ministry of Commerce aims to use the 25th Asian Trade Promotion Forum (ATPF) CEO Meeting which Thailand will host during April 18-20, to publicize its potential in export growth in order to generate growth of the country’s international trade activity. Furthermore, Prime Minister Yingluck Shinawatra will hold a road show in the Republic of Korea to rebuild investor’s confidence during her official visit on March 26-27. (The Thai Financial Post)

Attempting to curb rising cost of living, on Tuesday March 20, the mobile Cabinet approved 1.62 billion baht budget for the “One Shop One Community” project to distribute cheaply-priced goods to the consumer nationwide as well as for other aspects of the populist “Blue Flag” scheme. The Commerce Ministry will spend 1.32 billion baht from the total budget to form alliance with groceries shops to implement its brand “Raan Thook Jai” (satisfied shop), which will be under the “One Shop One Community” project, and the remaining budget will focus on Blue Flag measures such as cheaply-priced food shops and 878 cheaply-priced fairs. Goods in the Raan Thook Jai will have 20 percent lower prices than those in the market and will be delivered to all designated locations by the service of Thailand Post.  Nevertheless, some consumer-goods producers are concerned that the project will distort market mechanisms and suggested the government should focus more on the problem of rising wages and raw material costs. Meanwhile, some critics, including the Democrat Party, blamed the rising cost of living on the government’s mishandling of policies, such as the reduction of contributions by refineries to the State Oil Fund and huge pay rises which pushing production costs higher.  (The Nation) (Bangkok Post)

Security

Thailand’s military admitted that Thai troops had shot dead four Muslim villagers who were traveling to a funeral ceremony in late January. The incident occurred in Nongchick district of Pattani province when troops were pursuing militants who had attacked a ranger outpost.  The troops fired on a pickup trick, killing four and wounding four others. In a statement from Southern Region Army Command, the mishap was blamed on a “misunderstanding resulting from the surrounding circumstances”. The statement went on to say that the soldiers involved will enter the justice process. (Channel News Asia) (The Phuket News)

A proposal in Thailand’s House of Representatives to give Thailand’s violence-plagued three southern provinces – Pattani, Yala, and Narathiwat – designation as a special administered region is being considered. In an attempt to placate secessionist fury, the proposal would set up a “Pattani Maha Nakorn”, or a mega city of Pattani, as the center of administration for the three southern border provinces, led by a directly-elected mayor. So far, the proposal has the support of the ruling Phuea Thai Party, but critics and skeptics allege that the proposed bill would not go far enough in actually devolving power. Despite the provision of a directly-elected mayor, critics like Munso Salae, deputy chairman of the Southern Islamic Culture Foundation, contend that the proposal fails to push for public participation in administration, citing that the proposal does not setup a local council made up of southerners who would manage their own affairs. (Bangkok Post)

In a recent development, a Thai joint military-police force seized a large cache of methamphetamine pills in, totaling 2.5 million. The cache, along with 50 kilograms of crystal meth, was found in a house in Chiang Rai province. This is the second major haul of drugs confiscated by authorities in Chiang Rai in recent weeks and puts the total number of methamphetamine pills seized this year at 12 million. Three Thai nationals, one man and two women, were arrested in connection to this incident. (Seattle Times)

Activists from the Alliance to Protect the Land in the Lower Isan and the East claim they’ve surveyed several sections around the disputed 4.6 square-kilometer-area between Thailand and Cambodia and have found Cambodian troops and civilians occupying some of them. As a result, the network has submitted a petition to the Second Army not to remove Thai troops from the disputed territory, as ordered by the International Court Justice. The activists’ leader, Dr. Pratheep Talapthong, said they’ll give the Army two weeks to respond to their petition. (Bangkok Post)

In an unexpected gesture, Thailand’s commander of Internal Security Operations Command, Fourth Region, Colonel Manat Kongpan, disclosed in an interview that 5,000 Rohingya boatpeople have been arrested or moved to other destinations outside the Phuket-Andaman coast of Thailand since last November. Prior to the interview, the number of intercepted Rohingya boatpeople had been unknown. According to Colonel Manat, there were 32 arrest incidents, taking in 2,490 men and boys, and 25 cases in which the Rohingya boatpeople were forcibly moved onto other destinations, totaling 2,522 Rohingyas. The Colonel said that when intercepted at sea, the Rohingyas were interviewed and told if they proceed further inland, they would be arrested. When necessary, Thai authorities gave the Rohingyas fuel, medical support, and food to last for 15 days. If the figure of 5,000 is correct, then it is the largest number of Rohingya’s arrested or intercepted since 2007. (Phuket Wan)