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Summary
Heads clashed for another week as debate over Thailand’s reconciliation continued. In a move that has drawn fierce criticism, the Democrat Party representatives withdrew from the reconciliation committee, calling the committee’s support for a general amnesty an attempt to exonerate former Prime Minister Thaksin Shinawatra. Meanwhile, the King Prajadhipok’s Institute (KPI) is playing damage control after it claims that its report to the reconciliation committee is being distorted for political gain on all sides. On the economic beat, the Bank of Thailand (BOT) Governor Prasarn Trairatvorakul and Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong disagreed over measures to weaken the Thai baht and further lowering the Kingdom’s policy rate. At the same time the Thailand Board of Investment (BOI) is offering tax exemptions and waivers to companies in flood-hit Ayutthaya and Pathumi provinces to prevent factories from relocating. In security, the South was hit by the deadliest wave of bomb attacks in the past few years, killing 14 and injuring hundreds. The explosions occurred in crowded areas and were clearly targeting shoppers and tourists. Police are looking for an insurgent gang, led by Sahudin Tohjemah, who they suspect is responsible for carrying out the bombings.
Politics
Prime Minister Yingluck Shinawatra joined other heads of state in Seoul for the 2012 Nuclear Security Summit this week while also using her stay in South Korea to boost investor confidence. At a luncheon with executives of large companies such as Samsung, LG Electronics, Hyundai, Korea Water Resources Corp, SM Entertainment, and Korea Railroad Corp, the prime minister reminded them of Thailand’s investments into infrastructure and flood protection and mitigation measures as well as the government’s business-friendly policies, such as the decline of the corporate tax rate to 23% this year and 20% next year. Thailand and South Korea agreed to exchange technical support on water management and increase trade and investment. South Korean investors plan to pour 12 billion baht into Thailand over the next two years, while South Korea’s government plans to set up a cultural and studies center in Thailand in the next year. Before leaving to Seoul Prime Minister Yingluck also agreed to launch “exploratory talks” on a free trade accord with visiting Canadian Prime Minister Stephen Harper. (AFP) (Bangkok Post) (The Nation)
As controversy from the reconciliation debate continued to dominate news headlines, the King Prajadhipok’s Institute (KPI) threatened to withdraw its study, fearing it was being misused by political forces that are cherry-picking parts of the study. A majority of the reconciliation committee agreed on an amnesty for all cases related to political protest and all crimes that stemmed from political motives as well as dropping all cases probed by the now-defunct Assets Examination Committee. The KPI sent a letter to media outlets stating that they actually proposed nationwide dialogues to be held and that a majority vote would only lead to “justice for the winner.” The reconciliation committee nonetheless submitted its report to a joint meeting of the House and Senate. Although reconciliation committee Chairmen Gen. Sonthi Boonyaratkalin, ironically also the leader of the 2006 coup, agreed to drop the majority vote out of the report to Parliament, the opposition Democrats quit the committee.
The Democrat Party fears a general amnesty was intended to whitewash the misdeeds of former Prime Minister Thaksin Shinawatra and thus facilitate his return. To block any attempts of enacting an amnesty law based on the KPI’s report, the opposition Democrats announced they would seek a Constitutional Court ruling first. Opposition leader Abhisit Vejjajiva expressed his concern that amnesty would severely damage the country’s justice system which prompted an open letter response by former Prime Minister Chavalit Yongchaiyudh, arguing it would actually help improve its image as the justice system would then not be used to solve political problems. The Democrats’ resignation from the committee was heavily criticized by Pheu Thai MP and red shirt leader Jatuporn Promphan, accusing them of narrow mindedness and wanting “to return to power through military help again.” Deputy Agriculture Minister Nattawut Saikuar accused the Democratic Party of trying to derail the reconciliation process by misleading the public through claims it would all just be about Thaksin. Opposition leader Abhisit Vejjajiva claimed in the parliamentary debate that, “They are citing reconciliation in order to whitewash the wrongdoing of corruption. This is worrying and will finally lead to renewed violence.” Constitution Court President Wasant Soipisut expressed his frustration over the reconciliation issue by stating that “maybe this generation of political rivals has to die first” before true reconciliation can be achieved.
KPI’s report received additional criticism from Human Rights Watch for its recommendation to remove the names of those responsible for violence from the report of the government-appointed Truth for Reconciliation Commission (TRCT). Human Rights Watch stated that Thailand has to overcome its history of impunity for political violence, and handing out amnesty and blocking the release of names would only further block accountability. Brad Adams, Asia Director at Human Rights Watch, stated, “Thai people should no longer suffer in silence, while generals and politicians make peace with each other in the interests of escaping accountability for criminal conduct.” The KPI will have a high-level meeting on Monday, April 2, to consider if the report should be pulled back at all, after voicing their frustration over the alleged misuse of the researchers’ work. The Pheu Thai Party and its coalition parties voted to forward the report on the parliamentary agenda for urgent consideration on April 4 and 5. (Reuters) (Human Rights Watch) (Bangkok Post) (The Nation)
Thaksin Shinawatra meanwhile reminded his supporters to be patient and that his return would take some more time claiming he wanted to “return in style”. Phoning in to a red shirt party, he additionally indicated that he would be in discussion with judges regarding bail arrangements for jailed red shirt members. The Courts of Justice’s spokesman Sitthisak Wanachakit instantly denied those claims stating, “He might have said this to impress his people but the truth is that there has never been a discussion.” (Bangkok Post) (The Nation)
Economics
On Friday March 30, the SET index closed at 1,196.77, down 7.14 points, or 0.59 percent with the trade volume of 28.42 billion baht from 3.16 billion shares traded. Thailand’s stock market started off negatively at the beginning of last week before it picked up on Tuesday, following the US Federal Reserve Chairman Ben Bernanke’s comments on implementing a third round of quantitative easing (QE3), then slightly declined at the end of the week from the pressure of weakening oil prices and the drop in the energy sector. Kasikorn Security and Kasikorn Research Center expect the SET index to move up this week during 2-5 April in accordance with projections about the Fed’s economic stimulus and the results from EU Summit on March 30. (Reuters) (Thairath) (The Nation)
The Bank of Thailand (BOT) Governor Prasarn Trairatvorakul expressed confidence on post-flood economic recovery. He mentioned the BOT’s growth rate expectation of 4.9 percent for the year 2012 projected in January is likely to be revised upward, but may not reach 7 percent, as stated by the government. He added there is no need for further monetary easing since the 3 percent policy rate is quite accommodating already. Furthermore, both headline and core inflation figures are still within the target range in spite of the rising oil prices. Meanwhile, the Fiscal Policy Office (FPO) Director-General, Somchai Sujjapongse, has also revised upward Thailand’s economic projection to 5.5 percent, driven by both public and private investment as well as domestic consumption. High investment would lead to the current account deficit of 0.9 percent of the GDP but it should put no harm to the economy, Mr. Somchai assured. The FPO also expected the headline inflation will be 3.6 percent this year.(The Nation)
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said on Wednesday, March 28, that he wanted to see a weaker baht ranging between 32-34 baht per US dollar to help exporters and boost the economy. Also, he said the BOT should lower its key policy rate, which is currently at 3 percent. The BOT Governor Prasarn Trairatvorakul, as well as many experts, opposed this measure to devalue the Thai baht while insisting that the current baht value, under the managed floating regime, is in line with the market mechanism. The governor said using a current account deficit to weaken the baht was not a tool for monetary policy and stated his support for the current account surplus because it reflects the country’s prosperity, and added that the government should take the advantage by encouraging local businesses to make more investments abroad. On the policy interest rate of 3 percent, the BOT governor believed it is suitable and sufficient to support economic revival. Over the past two months, there had been signs of economic recovery in the consumption, tourism and industrial sectors. He also forecasted that the Thai economy would gradually resume to the full level by the third quarter of this year; however, high oil price, increasing minimum wage and government spending would continue to put upward pressure on inflation.
Thammasat University economist Praipol Khumsap also agreed that Mr Kittirat should not set the baht at a particular value because it might trigger another economic crisis like in 1997. He also questioned the real reason behind this policy to weaken the baht. He added that the problems of Thai exporters do not arise only from the strong currency value, but largely from international economic conditions. Moreover, Mr. Thanavath Phonvichai, the Economics dean at the University of the Thai Chamber of Commerce, said Mr. Kittiratt’s comments could lead to short-term speculation against the baht and could be interpreted as interference in the independence of the central bank’s operations. (Bangkok Post) (The Thai Financial Post)
The Thailand Board of Investment (BOI) is offering incentives to help companies investing in Pathum Thani and Ayutthaya provinces to prevent factories’ relocation from flood-hit zones. Call for applications will be open until the end of the year. New or existing projects in industrial estates in Pathum Thani province will receive an eight-year tax exemption at a rate of 150% of new investment value. Projects in Ayutthaya will be given the same incentives plus another 50% tax waiver for three years afterward. Import taxes for machinery will also be exempted for the machinery less than then years. (Bangkok Post)
Thailand’s Ministry of Commerce postponed the release of Consumer Price Index (CPI) data for March to April 3. The delay is due to an official visit accompanying Prime Minister Yingluck Shinawatra to Cambodia by Commerce Ministry Permanent Secretary Yanyong Phuangrach, who normally presides over the news conference to release the monthly data. (Nasdaq)
Thousands of pineapple farmers blocked Petchkasem highway in Prachuap Khiri Khan’s Muang district on Friday March 30 blocking the main route to Bangkok from the South, demanding the government buy their surplus crop to reduce supply and raise depressed prices. Prachuap Khiri Khan’s governor, Veera Sriwattanatrakul, met with the farmers to inform them an urgent meeting of the National Pineapple Committee had agreed to allocate an 800 million baht budget to buy 200,000 tons of surplus pineapples from the market, as they demanded. The protesters reopened the highway in the afternoon after their demand was met. (Bangkok Post)
Security
On Saturday, there was a coordinated series of deadly bomb attacks in Thailand’s restive South. The first bomb, loaded in a pickup truck, tore through a busy shopping area in Yala’s commercial district, scorching shop houses and ripping apart nearby vehicles. As onlookers descended onto the sign, a second explosion occurred from another parked car about twenty minutes later. The blast killed eight people immediately and wounded 113. Of the wounded, three more died in the hospital later. Col. Pramote Promin, deputy spokesman of the Regional Security Agency, remarked that the incident is “the worst attack in the past few years”. (International Herald Tribune) (Dawn.com)
Another explosion occurred mid-day Saturday at the 405-room Lee Plaza Gardens Hotel in Hat Yai. Experts believe a car bomb was set off in the hotel’s basement, tearing through gas lines which subsequently fueled a massive fire that spiraled upward and trapped many of the hotel’s guests in their rooms. Rescue operations were hindered by insufficient equipment, as the Hat Yai municipality fire truck’s platform could not reach high enough to be fully effective. However, by the late afternoon, the fire was brought under control. In total, 3 people in the hotel were killed, including one Malaysian national, and 336 were reported injured. Regional Police Chief Lt. Gen. Jakthip Chaijinda said the Hat Yai incident “is likely related to what happened in Yala and might have been plotted by the same group of insurgents.” (Bangkok Post) (New Straits Times) (Adelaide Now)
Following the bombings, security authorities in Hat Yai have been on high alert searching for four more vehicles, all stolen, that they believe could be used for further attacks. Police say they have identified an insurgent gang who they allege planted the bombs in Yala and Hat Yai over the weekend. The gang is led by suspected mastermind Sahudin Tohjemah, and is feared to be planning more attacks in Hat Yai. Police claim to have security camera footage that shows the suspects leaving the scenes in Yala and Hat Yai in stolen vehicles, one of which had belonged to a policeman who was shot and killed by militants in Narathiwat last October. Fourth Army Commander Lt. Gen. Udomchai Thamsarot said on Sunday that authorities expect to make arrests soon. (Bangkok Post)
The effect that Saturday’s bombings will have on the local tourism industry will be devastating, as hotelier, Somchart Pimthanapoonporn estimates that the violence will cause at least 1 billion baht in damage to the tourism sector. Mr. Somchart, who is chairman of the Songkla Tourism Business Council and president of Hat Yai-Songkla Hoteliers Association, said that 60 percent of the city’s rooms that were booked have already been cancelled. However, despite the attacks, he insists that Hat Yai’s Songkran festivals will proceed as planned and this will help restore tourists’ confidence. At Hat Yai’s main airport, no flights have been canceled but the security level has been elevated to level 4, the highest level. Across Thailand, security at all airports has been raised after the bombings in Hat Yai and Yala. (Bangkok Post)
The news of deadly bomb attacks in Yala and Hat Yai overshadowed other troubling acts of violence in Thailand’s South, such as the bomb attack in Pattani’s Mae Lan district that occurred 50 meters from a police station on Saturday, which injured one police officer. Also, there was an M79 grenade attack on the home of Muslim provincial MP Najmudeen Uma on Friday. There were no casualties but the explosion left some property damage. The incident took place in Ra Ngae district and coincided with a bomb attack on a squad of Army paramilitary rangers. (Lubbock Online) (The Nation)
In Seoul, South Korea, Prime Minister Yingluck Shinawatra participated in a two-day summit on combating nuclear terrorism, which was attended by 53 world leaders. Prime Minister Yingluck affirmed her government’s intention to prevent Thailand from being used as a transit point for nuclear weapons and reiterated that Thailand is interested in improving its capacities in nuclear and hazardous materials detection. In the final session of the summit, all the participants agreed to the “Seoul Communiqué” which consisted of 13 points outlining general pledges of participating nations to voluntarily improve protection against loose nuclear materials. (The Nation)
At a recent seminar in Bangkok, Thairt Pengdit, Chief of the Department of Special Investigation (DSI), revealed that 17 percent of the pseudoephedrine medicine, a common decongestant, used in Thailand’s methamphetamines was taken from the public health system while the remaining 83 percent was smuggled through Suvarnabhumi Airport and the southern border. As such, he contended that authorities must focus more attention on the smuggling operations through these channels, not just the siphoning from hospitals. Prapon Angtrakul, the Chief of FDA Narcotics Control Division, said the Public Health Ministry, in consultation with his office and leading doctors, has agreed that Thailand does not need pseudoephedrine. Therefore, current stocks will be distributed for one year and the rest will be destroyed. Its future imports will be discontinued and the drug will be replaced with phenlyephrine. (The Nation)
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