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Summary
This week came two court rulings which shook Thailand’s political scene. One involved the sentencing of a red shirt leader to jail for lese majesty, and the other was the guilty conviction of media mogul and PAD core leader, Sondhi Limthongkul, for falsifying documents to secure loans for his business empire in the 1990s. In economic news, positive domestic factors have been cited as contributing to the strong performance shown at Thailand’s stock exchange this week. Additionally, the National Economic and Social Development Board (NESDB) projected GDP growth of 5.5% to 6.5% this year. In security, Thai authorities have arrested three more suspects in connection to the bombing in Bangkok on February 14, and the government has decided to integrate all intelligence operations under the National Security Council (NSC).
Politics
In political headlines this week, there were two major judicial rulings and the assault on a Thammasat law professor who leads a controversial group advocating the reform of Thailand’s lese majeste law. Also, Prime Minister Yingluck Shinawatra had an audience with His Majesty The King to discuss forest rehabilitation and announced an upcoming diplomatic trip to Japan.
Surachai Danwattananusorn, a core member of a splinter group of the red shirt movement called “Red Siam”, was sentenced t 7 1/2 imprisonment for lese majeste. His sentence was halved from the maximum 15 years due to his confession to the crime. Mr. Surachai accepted his verdict regarding three speeches he gave in 2010 but announced that he will seek a royal pardon. Additionally, he criticized the Pheu Thai Party for failing to protect its supporters and party warriors, as he alleged they haven’t done enough to free jailed red shirt members. (Bangkok Post)
In related lese majeste news, Nitirat leader and Thammasat law Professor, Worajet Pakeerat, was assaulted on the university’s Tha Pra Chan campus. After media outlets aired pictures of the attackers, they surrendered to police the following day. Supot and Supat Silarat, two 30-year-old twin brothers from Pathum Thani province, confessed to attacking the law professor because of his support towards amending article 112. Concurrently, they declared to be members of an anti-Nitirat group and were not been hired for the attack. Dr. Worajet suffered bruises to his face and filed a complaint to police, but insisted that he and the Nitirat group would continue their campaign unchanged. Supot and Supat have been charged with physical assault, which is punishable by up to three years in prison. (Mcot) (Bangkok Post)
The main headlines in media outlets this week belonged to Sondhi Limthongkul though, who received a 20 years jail sentence for falsifying financial documents to secure a $32 million government bank loan for his media empire. Although he still awaits trial on terrorism charges for his role in the occupation of Bangkok’s two airports in 2008, he was released on 10 million baht ($328,000) bail the very same day and is appealing the court decision. As leader of the People’s Alliance for Democracy (PAD), or Yellow Shirts, Sondhi was a key person in the movement opposed to Thaksin Shinawtra’s government, accusing him of being disrespectful to King Bhumibol Adulyadej as well as, ironically, corruption (a crime which Sondhi himself has now been convicted). Both Sondhi and Thaksin rose to fame and riches during the 1980s and 90s, taking advantage of loose regulations, which fostered speculation in the stock and property markets. Whilst initially supporting Thaksin as prime minister in 2001, their fallout has been attributed to Thaksin’s decision not to reappoint a close associate of Sondhi as president of the state-owned Krung Thai Bank. Relations soured when some of Mr. Sondhi’s businesses no longer enjoyed favorable loans. The Wall Street Journal argues that Sondhi’s influence is waning fast and that he is not likely to avoid serving some time behind bars. His downfall coincides with the rapidly diminishing influence of his PAD movement, although analysts point out that the PAD could be revitalized if Thaksin is allowed to come back to Thailand without serving his jail time.
(The Washington Post) (The Wall Street Journal) (The Sydney Morning Herald) (Bloomberg)
Prime Minister Yingluck Shinawatra and members of the Strategic Formulation Committee for Reconstruction and Future Development (SCRF) and the Strategic Formulation Committee for Water Resource Management were granted an audience with His Majesty the King at Siriraj hospital. Afterwards PM Yingluck announced that she will follow His Majesty the King’s advice and put forest rehabilitation and preservation on the national agenda because His Majesty the King blamed deforestation as a major contributing factor towards last year’s severe flooding. Additionally, he argued for harsher punishments for greedy civil servants who allow illegal logging. (Bangkok Post)
To restore Japanese investor confidence, PM Yingluck and a high profile list of economic ministers will visit Japan from March 6-9. Ms. Yingluck will be granted an audience with Emperor Akihito and is expected to visit the city of Sendai in northeastern Japan, which was nearly wiped out after the earthquake and tsunami disaster last March. There, she will offer moral support to Thai workers at a factory in Sendai. Her brother, meanwhile, will visit South Korea but instantly denied that his visit is related to PM Yingluck’s visit to South Korea, scheduled for March 24-26. (AsiaOne)
Economics
On the economic front, Thailand’s stock market closed on a strong note, projections indicate a strong recovery for Thailand’s economy after last year’s floods, confidence among foreign businesses is expected to improve, and representatives at ASEAN’s 18th Annual Economic Ministers Retreat met to discuss increasing trade liberalization.
The Stock Exchange of Thailand (SET) main index increased 4.08 points or 0.35% to close at 1,164.98 points on Thursday 1 March 2012. The trade value was 33.04 billion baht, with 4.75 billion shares traded. Asian stocks mostly fell on Thursday after US Federal Reserve Chairman Ben Bernanke stopped a recent rally by not signaling any further monetary easing to stimulate growth. According to Rakpong Chaisuparakul, Economic and Strategy Research Manager of KGI securities (Thailand), Thailand’s stock market was stronger than its neighbors’ markets on that day due to the positive response in domestic factors. Thai economy has shown recovery since January, such as in the manufacturing and industrial sectors. Good prospects for economic recovery, together with recent dividend payment announcements from big companies, kept overall market outlook positive. (Bangkok Post) (Reuters) (Infoquest)
Thailand’s central bank governor, Prasarn Trairatvorakul, stated that the Thai economy is poised to make a strong recovery from the flood that disrupted supply chains around the world last year, and he anticipated that foreign investment would improve as more flood prevention measures are in place. The recovery of foreign investment in the manufacturing sector, which is expected to recover to pre-flood levels by the third quarter this year, along with government stimulus measures, could contribute to a recovery that would prompt the central bank to raise the 2012 economic growth target beyond the present estimation of 4.9%. Thailand’s deputy prime minister and finance minister, Kittiratt Na-Ranong foresaw growth of up to 7% this year, partly due to populist policies under Prime Minister Yingluck Shinawatra’s administration that pushed a series of minimum-wage increases and rice price-support programs to help boost consumer spending. However, some economists say the stimulus program could complicate the central bank’s economic stabilization by potentially inducing more inflation. According to Bank of Thailand’s governor, the policy rate, which was recently cut to 3%, will likely remain in place until the third quarter, and inflation which was recently at 3.38% on year in January is still under control. Another inflation concern that the central bank needs to keep a close eye on is oil price escalation, due to economic recovery in key economies like the US and Japan and tightening sanctions against Iran, which raised tensions over commodity prices, as it may affect the Thailand’s economic expansion. (Reuters) (The Nation)
The National Economic and Social Development Board (NESDB) projected GDP growth of 5.5% to 6.5% this year. Increase foreign investment inflows resulting from the kingdom’s optimistic rebound has strengthened the Thai baht. The currency reached a five-month high of 30.22 per dollar on February 24. It appreciated 1.8 % in February which showed the best performance among Asia’s 11 most-actively-traded currencies. Hence, the Bank of Thailand will potentially intervene in baht value to support exporters those are recovering from last year’s floods. Commerce Minister, Boonsong Teriyapirom, said Thailand’s target for export growth of 15% this year is achievable as companies start to operate at full capacity after resuming from flood disruption. (Bloomberg)
A survey of the Japanese Chamber of Commerce Bangkok (JCCB) found that business sentiment among Japanese firms operating in Thailand is expected to rebound in the second half of this year as production capacity returns. However, 8% of firms surveyed plan to relocate outside Thailand after last year’s devastating floods. Setsuo Iuchi, chairman of the JCCB’s economic research committee and president of the Japan External Trade Organization’s Thailand office, said a quarter of companies surveyed have resumed either partial or full capacity since December, 21% expect to resume in April or May, while the rest of the companies need more time to restart. Flood-affected firms requested the Thai government to provide quick and accurate information and formulate clear flood-prevention plans to be implemented immediately. (Bangkok Post)
The 18th ASEAN Economic Minister Retreat took place last week in the Myanmar capital of Nay Pyi Taw to discuss the issues related to ASEAN Economic Community (AEC). One result of this event was the ASEAN Comprehensive Investment Agreement (ACIA), which aims to increase both intra-and non-ASEAN investment, going into effect on March 1. The agreement is part of the process of moving towards the AEC in 2015.The economic ministers agreed to focus more on eliminating non-tariff barriers in order to increase trade liberalization in the region. China, Japan and South Korea are also negotiating to have expanded free trade agreements (FTAs) with ASEAN and each other. The representatives agreed to set up three working groups to study the scope of liberalization on goods, services and investment under the Framework on Regional Comprehensive Economic Partnership (ASEAN ++, an FTA between ASEAN and China, Japan, South Korea, India, Australia and New Zealand). A conclusion on these topics will be submitted to the ASEAN Summit at the year’s end. The Thai deputy prime minister and finance minister, Kittirat Na Ranong, has suggested Thailand’s local private sector to prepare for the formation of the AEC in 2015. He encouraged public and private sectors to work collaboratively together in preparations for the single economic community of the 10-member ASEAN to ensure Thailand’s strong competitiveness, amid fierce business competition with higher non-tariff barriers in the zero-tariff ASEAN bloc. (Bangkok Post) (Bernama) (Philstar)
Security
Thailand continues to grapple with the case of the failed bomb plot on Valentine’s Day that blew off the legs of an Iranian suspect and destroyed a taxi, while some are questioning the relatively lax approach towards international visitors.
On Sunday, three more suspects in connection to the February 14th bombing were arrested in Thailand – all were identified as Iranian nationals. This brings the total number detained to eight. The revelation that two were legal immigrants and productive members of the foreign community in Thailand have provoked concerns over the depth of the plot and whether there may be long-term terrorist cells. (Bangkok Post)
Following the initial incident, Thailand’s government sought to downplay the bombing, saying what happened was not a terrorist attack. Foreign Minister Surapong Tovichakchaikul maintained that the bombers were only using Thailand as a base for operations to be carried out in other countries. However, images of broken glass and the blackened shell of a taxi cab in Sukhumvhit 71 have had a chilling effect on outsiders’ perceptions. (Bangkok Post)
Some in the media and academia are criticizing the government for attempting to whitewash situation in fear of damaging Thailand’s image as a tourism destination. Indeed, there has long been pressure among Thailand’s leaders not to admit that a terrorist attack could occur in the kingdom, according to Panitan Wattanayagorn, a security analyst at Chulalongkorn University. “Previous governments also downplayed issues like this. If they admitted a terrorist attack, it will have consequences for Thailand,” he said. (Bangkok Post)
Israel was swift to point the finger at Iran as being the one pulling the strings. Speaking about the bombings in Thailand and India, Israeli Prime Minister Benjamin Netanyahu sharply affirmed that, “Nations of the world must condemn these incidents and draw red lines against this Iranian aggression.” Iran has denied any role in the bombings and Thailand is cautiously navigating the argument between Iran and its primary accuser. (Bangkok Post)
Against this backdrop, Thailand’s government has decided to integrate all intelligence operations under a single command headed by Pol. Gen. Wichean Potephosoree, currently serving as the secretary-general of the National Security Council (NSC). The purpose of the move is to focus on groups and individuals considered a threat to national security, according to Deputy Prime Minister Chalerm Yubamrung. The main agencies involved in the integration of intelligence operations are the NSC, the National Intelligence Agency, the Interior Ministry, the Special Branch Police, and the Foreign Ministry. Agencies that will support intelligence operations are the Internal Security Operations Command (ISOC), the Commerce Ministry, the Science and Technology Ministry, the Labor Ministry, the Agriculture and Cooperatives Ministry, the Justice Ministry, and the Bank of Thailand. (Thailand Business News)(Bangkok Post)
While the move is well-received as a prudent step towards closing gaps in national security, critics note that the Immigration Bureau is conspicuously absent. Because foreign terrorists presumably enter through immigration checkpoints, the logical conclusion would be that immigration needs to also be under the new improved NSC. Also, there needs to be more intelligence sharing in the southern provinces, as this region has much conflict that leads to social and economic problems which pose a threat to national security. (Bangkok Post)
Prime Minister Yingluck Shinawatra and her Malaysian counterpart, Premier Najib Razak, have pledged to find a long-term and lasting solution to the conflict in Thailand’s south. Echoing the cooperative tone of their one-day meeting in Kuala Lumpur, Premier Najib declared, “Malaysia stands ready to assist Thailand on request in whatever way possible so there will be a long-term solution for the South.” (Asia One News)
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