Summary
In politics, Thai rubber farmers continue to protest, demanding the government should intervene in the market price of rubber, which has fallen by 50% since February 2011. The cabinet approved a subsidy for rubber farmers guaranteeing them a price of 90 baht per kg instead of the market price of 81 baht per kg as a short-term measure until March 2014. Tony Blair provides his views on reconciliation at the government’s dialogue forum and Vorayuth Yoovidhya fails to meet prosecutors for the sixth time as he suddenly “fell ill” at a business trip in Singapore.
In economy, an Unctad report suggests economies like Thailand pay more attention to domestic demand and rely less on foreign investment. As a step in boosting local production, the cabinet has approved an unpopular reform that will increase the tax rates on imported alcohol. Meanwhile, it is not taxes but corruption that seems to worry foreign investors the most, according to a survey conducted by the Board of Investment.
In security, Southern Thailand has seen an increase in security incidents blamed on a splinter group from the Barisan Revolusi Nasional (BRN). Security forces say the militants intend to disrupt peace talks and force the Thai government to accept their demands. Other news include the plight of Rohingya asylum seekers, as their hope of being resettled in Thailand’s fades and many of them are incarcerated for illegal entry, the refugees from Myanmar are now asking to be sent home. In regional news, ASEAN is divided on the sea threat posed by China when Malaysia differed from fellow claimants in the South China Sea, dismissing concerns about patrols off its coast.
Politics
Thai rice farmers receive subsidies of 250 billion baht a year, nearly 2% of GDP, and now rubber farmers demand a similar deal to be able to cope with the decreased rubber prices, dropping by 50% since February 2011. The government already spent 22 billion baht to build up rubber stocks from October 2012 to May 2013 in a failed attempt to increase global rubber prices. Thailand, the world’s biggest rubber exporter, also cooperated with Malaysia and Indonesia in 2012 to cut rubber exports by 300,000 tons but prices did not rise. A slowdown in demand from China, which accounts for 35 percent of global rubber consumption, and the global economic crisis are partly to be blamed for the falling rubber prices. Additionally though, Lakchai Kittipol of the Thai Rubber Association stated, “the government should explain the situation to planters, that rocketing high prices of rubber in the past were caused by speculation,” and added that rubber prices were the same now as they were in 2008. Mr. Lackchai therefore disagreed with any government intervention as this would only lead to recurring protests as farmers would be used to sell their rubber over market prices. The Cabinet though approved another subsidy for farmers that will cost the government 21.2 billion baht. Prime Minister Yingluck Shinawatra announced during her program “PM Yingluck Meets the People” on the National Broadcasting Services of Thailand (NBT) that the subsidy, which will assure 90 baht per kg instead of the 81 baht per kg market price, is only a short term measure. It will stay in play from September 2013 to March 2014, with the government vowing not to intervene in the rubber price. In addition, the government received a 200,000 tons rubber order by China and is in the process of establishing a central three-country rubber market, in cooperation with Indonesia and Malaysia, to ensure rubber trading prices were realistic rather than speculative. Transport Minister Chadchart Sittipunt announced that he ordered the Highways Department to use more rubber in the construction of roads. The 1,200 tons of rubber per year that are currently being mixed with asphalt are supposed to rise to 10,000 tons a year. According to Mr. Chadchart this will not only contribute to higher market prices for rubber but also increase the durability of roads. Highways Department research office director Montri Dechasakulsom added for consideration that the use of rubber increases the cost of road construction by about 15-18%.
Rubber farmers, who in previous demonstrations had clashed with riot police and threw acid at them, are considering the governments subsidy offer but have not yet cancelled the weekend protests in Surat Thani and Nakhon Si Thammarat as they initially demanded a government price intervention. Rubber farmers add to the partisan mood in Thailand, claiming the government would not help them because they tend to vote for the opposition Democrat Party. (Al Jazeera) (Bangkok Post) (National News Bureau of Thailand)(New York Times) (Reuters) (The Nation) (Wall Street Journal)
The government’s top-level dialogue forum for reconciliation, headed by keynote speaker Tony Blair and other foreign experts was adamant in one crucial thing, namely that only Thais, not outsiders, can solve their internal conflict. Tony Blair, who understandably received the most attention, argued that reconciliation will only happen when both sides feel that “a shared opportunity is greater than the separate sense of grievance”. He added that there will always remain two sides of a narrative, providing the example of the Irish Republican Army (IRA) and their victims, but at some point the past has to be examined in a way that allows both sides to move on. A just and objective framework would be essential as well as an objective analysis of the root cause of the conflict. (The Nation) (Wall street Journal)
“If you are common people like us, I think the case is already finished,” Mr. Pornanand said. Mr. Pornanand is the older brother of Wichean Glanprasert, a police officer who was fatally struck by a gray Ferrari last year and killed. The Ferrari was driven by Vorayuth Yoovidhya, the grandson of the inventor of Red Bull and heir to one of Thailand’s greatest fortunes. This fortune ensures that he is not treated like a common man and is still a free man, currently on a business trip in Singapore. Vorayuth faces charges of causing death through reckless driving and failing to stop and assist the victim. A speeding charge had to be dropped because the statute of limitations on the charge expired after Vorayuth failed to meet with prosecutors, the sixth time he failed to answer summons at the prosecutor’s office. His lawer, Thanit Buakeaw, told reporters that Vorayuth was unable to meet with prosecutors because he suddenly fell ill in Singpaore but pledged that he had no intention to escape. Vorayuth’s family paid the police officer’s family $97,000 in compensation, his Ferrari was worth $ 1 million. (New York Times)
Economy
The UN Conference on Trade and Development (Unctad) has recently published a report that deems ‘unviable’ the export-led strategy for economic growth in developing nations such as Thailand. This was concluded with consideration to the 2008 economic crisis and the continued low demand from European economies. Instead, boosting domestic demand by expanding the middle class was presented as a more sustainable solution. The report also cautioned against a heavy reliance on foreign investment since it has proved an instable and fluctuation source of revenue for developing nations. Thailand’s government authorities nevertheless remain keen on promoting foreign investment, as productivity is not considered high enough to sustain the economy only based on domestic demand. In order to keep up interest of foreign investors the Board of Investment (BoI) recently conducted a survey among foreign companies to investigate the level of investor confidence. The results of the study indicate that corruption is a main concern among investors as well as the accessibility and stability of personnel. (Bangkok Post)
Labour is quickly becoming a main issue of controversy in Thailand, following the announcement of 300 baht minimum daily wages across the country. The government’s minimum wage policy has led to a strong influx of illegal immigrants and foreign workers. Although the shortage of personnel is in many places acute, with close to no official unemployment in Thailand, the illegal immigrants (often minors) need to be monitored and legalized in order to avoid issues such as exploitation of workers. (The Nation)
Expat communities have moaned about it, businessmen have complained that it is unfair, but it would seem that the new alcohol tax is here to stay. The director-general of the Excise Department, Mr. Somchai Pulsawas, has defended the new rates (approved by the cabinet of August 4) as one step to improve the position of local producers against importers. The new measure has also been criticized for not taking in consideration the alcohol content and public safety issues in the calculation of tax rates; with the new rates hard liquor such as white spirits will be charged a higher per-liter tax rate than beer. (Bangkok Post)
Security
According to the summary report by Region 4 Internal Security Operation Command’s (ISOC) forward headquarters, a total of 5,235 people died and 9,704 were injured in violent attacks in the southern border provinces between January 1, 2004 and August 31, 2013. In August 2013 alone, 84 incidents comprising 43 shootings, 36 bombings and five arsons occurred. Of all incidents, 33 took place in Narathiwat, 27 in Pattani, 23 in Yala and one in Songkhla. This week, two soldiers were killed and two others and a student were wounded by a bombing in Yala’s Muang district as well as five police officers, working for an anti-smuggling unit, were killed by gunmen in Pattani’s Thung Yang Daeng district. The attacks were blamed to a splinter group of the BRN movement intent on disrupting the peace talks between Thai authorities and the BRN. Nevertheless, the government insisted that ongoing attacks would not derail fragile peace efforts in the South. According to advocates of a recent peace-building seminar, the main parties involved should be more flexible and explore options such as autonomy or self-managed government (Bangkok Post, The Nation). For more security news from Southern Thailand – don’t miss HDFF’s monthly Security Report.
Many Rohingya migrants from Myanmar (1.700 of them currently incarcerated for illegal entry) are asking to be sent home as their hope of being resettled in a third country fades following nine months in detention in Thailand. State agencies are against the establishment of a refugee camp because it could make the country vulnerable to an influx of illegal Rohingya immigrants, which would be against government policy. On the other hand, about 250 Rohingya men swam ashore in Satun’s Thung Wa district this week after their boat drifted off course due to a monsoon storm. An initial probe found that they left Myanmar on August 26 bound for Malaysia. The migrants were kept at a park, pending further action by ISOC officials (Bangkok Post, The Nation).
The ASEAN split on the sea threat posed by China when Malaysia differed with fellow Southeast Asian claimants in the South China Sea, dismissing concerns about patrols off its coast. According to Ian Storey, a senior fellow at the Institute of Southeast Asian Studies in Singapore, ASEAN is divided on this dispute due to differing interests in the South China Sea and different relationships with China. While Vietnam and the Philippines see the dispute as a major national security concern, Malaysia and Brunei consequently downplay tensions. In contrast to the US concerns expressed at the second ADMM-Plus security summit, China’s Foreign Minister Wang Yi called the situation in the South China Sea “stable”. Furthermore, Defense Minister Hishammuddin said that Malaysia could consider collaborating on the development of oil and gas resources with China in the area. China has agreed to talks on a code of conduct for the area, with discussions due to begin in September.
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