A Thai bomb-squad member inspects the scene of the grenade attack in Bangkok
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Summary
Ongoing lese majeste reform debates are not only continuing but escalating as more opinion leaders’ way in on the discussion. Threats from both sides, including an army coup and limitations on constitutional rights, are rising and it does not appear that either side is backing down. Additionally, problems are expected to build between the “red shirts” and “yellow shirts” after the approval of the Constitution Drafting Assembly (CDA) to amend the constitution. Flood management continues on track as PM Yingluck surveys the provinces, but analysts suspect the tour is more of a show than to an effort to implement reform. The SET remains strong although inflationary pressure is an active concern but not as concerning as the decree to transfer the Financial Institutions Development Fund (FIDF)’s debt responsibility from the government to the Bank of Thailand. Trade and development are being maintained as top priorities. A series of bomb explosions occurred in Bangkok, ending in one of the assailant destroying a taxi and injuring himself while another assailant was caught attempting to flee to Malaysia. The story has not been fully developed and the suspects’ nationalities are still unknown. Military training with the United States continues to be developed and significant violence occurred in the Southern provinces.
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Politics
The debate surrounding the Nitirat group’s proposal to amend article 112 escalated into a war of words last week after the army chief joined the debate. Gen Boonlert Kaeoprasit, chairman of the Armed Forces Academies Preparatory School Foundation and leader of Class 1, was one of the first army voices to openly oppose the Nitirat group, warning of a possible coup if the monarchy was not respected as the highest institution in the country. Shortly afterwards army chief Gen Prayuth Chan-ocha advised those who want to change the lese majeste law to “go and live abroad” and additionally questioning their Thai-ness asking them, “Were you born in Thailand?” Deputy prime ministers Chalerm Yubamrung and Yutthasak Sasiprapa supported the army chief and asked the Nitirat group to call off their movement. Navy chief Admiral Surasak Roonruangwong also weighed in on the debate arguing that he and the majority of the citizens have not be able to identify a purpose in the Nitirat campaign and thus should be stopped. Puangthong Rungswasdisab, a political scientist at Chulalongkorn University and member of the Campaign Committee for the Amendment of Article 112, which collected 10,000 signatures in a petition to seek an amendment to Article 112, stated that the campaign will continue until May 2, after 112 days, and reach out to the provinces too. Concurrently she accused Gen Chan-ocha of not actually having read the proposed amendments while she argued for the constitutional right for civic groups to collect signatures to petition for legislative change and challenging then General’s authority on the issue saying, “What authority will the army chief invoke to stop us? Does the army think its major duty is to stage a coup to protect the institution [of the monarchy]? The army no longer has legitimacy to stage coups.” (Bangkok Post) (The Straits Times)
In related news, Pheu Thai MP Sanguan Pongmane criticized Thammasat University rector Somkid Lertpaithoon for banning the Nitirat group from using the campus for their campaign, as this forced the group to mobilize outside of University premises, which could lead to greater unrest. Additionally he accused Mr. Somkid of being an influential figure in drafting the post-coup 2007 constitution and being the servant of dictators. Thai Academics also expressed their opposition against the ban as this would be an abandonment of social responsibility. In response Mr. Somkid announced that the decision will be reconsidered at a meeting of University executives in the following week. (Bangkok Post) (The Nation)
The Cabinet officially approved the government’s draft charter amendment to Article 291 to establish a 99-member Constitution Drafting Assembly (CDA). The Assembly will consist of 77 members elected by voters in each of the provinces and 22 academics and experts which will be selected by Parliament. Once finalized, the proposed draft will be put to a referendum to secure public support for the new Constitution. Michael Montesano, a visiting research fellow at the Institute of Southeast Asian Studies in Singapore, argues that both military forces and the anti-Thaksin camp will certainly feel upset. The last attempt to change the constitution in 2008 led to public demonstrations by the anti-Thaksin yellow shirts and occupation of the Bangkok Airport. Mr. Montesano accredited the current government the confidence to see the constitutional change through this time arguing that, “I’d be very surprised if the Yellow Shirts can bring out the numbers they were able to bring out several years ago.” Prime minister Yingluck Shinawatra, to pre-empt fears of opposing parties, assured the public already that the constitutional amendment will not benefit her brother. (Bloomberg) (Thailand Business News) (Mcot)
Recognizing 2012’s economic success as crucial, Prime Minister Yingluck Shinawatra promised to speed up flood protection measures. During her weekly national address PM Yingluck announced that she will visit several vital and significantly affected provinces from February 13-17 to review progress in water-management and flood-prevention plans. Additionally she will both talk to affected communities and survey potential water retention areas. Critics argue her tour would be merely an attempt to boost the government’s popularity, reminiscent of her brother’s upcountry tours to promote his poverty eradication measures. While Deputy Prime Minister Yongyuth Wichaidit was responsible for working with the Bangkok Metropolitan Administration to coordinate projects, the armed forces will be responsible for dredging about 300 canals so flood water can flow more efficiently during the rainy season. The Prime Minister herself will be heading a new agency, the National Water Resources and Flood Policy Committee, assigned to formulate national water management policies to secure unity in tackling flood-related problems. To minimize flood damage, the government is looking to secure about two million rai (790,737 acres) of land usable as water detention areas. Seree Supharatid, member of the Strategic Committee for Water Resources Management, announced that, “The government may not expropriate the areas, but may pay compensation [for rent] to their owners. The areas may be rented for about three months each year.” (AsiaOne) PM Yingluck stated that a rough plan of possible zones had already been drawn up but needed to be compared to provincial authorities’ proposals first, while talks with locals in the proposed zones also needs to occur before a decision can be made. Along the Chao Phraya River from Uthai Thani down to Ayutthaya, more than 300km in length, the height of the reinforced-concrete embankment will be increased from 7.5 meters to 10m above mean sea level. (Bangkok Post) (The Nation)
Recent discharges of water from the Bhumibol and Sirikit dams led to flash floods in riverside communities in Sena district, Ayutthaya residents reported. Kitti Tancharoen, assistant governor of the Electricity Generating Authority of Thailand, on the other hand argued that days of heavy rainfall were to be made responsible for the floods rather than water discharges from the dams. (Bangkok Post)
Economics
The Thai stock market remained bullish last week due to strong fundamentals of listed firms and domestic economy support. On Thursday February 9th, The Stock Exchange of Thailand (SET) finished modestly higher following solid gains from the energy producers and the financial shares. The Thai stock market had moved higher from the previous three consecutive trading days. The SET index rose 0.7% on February 9th to 1,101.12 which was the highest level since August 4th last year, with trade worth 30.4 billion baht. The global forecast for the Asian markets is mixed with a tough of upside ahead of key payroll data from the United States. Most Asian exchanges continued rising driven by the effect of foreign fund flows. Year-to-date, the SET is risen 7.39%, placing it in the middle among Asean stock markets, with Vietnam the leader at a 14.1% increase and the Bursa Malaysia increased only 0.53%. (Nasdaq) (Bangkok Post)
According to SCB Securities Co, Thailand’s benchmark stock index may climb 16% further this year from a rebound in spending after its worst flood in the almost 70 years. The benchmark SET index may increase to 1,300 by the end of the year driven by shares of oil companies and food producers as demand increases causing the rise in prices. Sukit Udomsirikul, an investment strategist at SCB Securities, gave a remark that Thai equities are very attractive to overseas investors because their valuations are still at discount comparing to other Southeast Asian markets; in addition, corporate earnings growth will rebound substantially from higher spending on flood reconstruction and domestic consumption recovery. (Businessweek)
The Bank of Thailand (BOT) said the economy may grow 4.9 percent this year, from an estimated 1 percent in 2011 which was revised downward from the underestimate flood impact. According to BOT’s Assistant governor Paiboon Kittisrikangwan, inflationary pressure should ease in the first half of the year before increasing the second half. The Monetary Policy Committee (MPC) accessed that the downside risks to economic growth has increased due to weak global economy as well as a post-flood recovery process. Meanwhile, the upside risks to inflation, originating from the possibility of higher energy and oil prices resulting from unrests in the Middle East, as well as an changes in the excise tax on oil and a higher contribution to the oil fund. Additionally, higher minimum wages and government’s stimulus measures would add to upward inflationary pressure as economic activities returns to normal in the second half of the year. In BOT’s latest Inflationary Report, the economic growth of 2013 is predicted to be 5.6 percent, driven by continued growth momentum and improvement in the global economy. (Nasdaq) (Bangkok Post)
Continuing as one of the top economic concerns is the decree to transfer the Financial Institutions Development Fund (FIDF)’s debt responsibility from the government to the FDIF itself, which pushed the debt obligation to the BOT (controller of the FIDF). Initially, the government was responsible for the interest payments as a budgetary expense, while the central bank was responsible for paying down the principal from its annual profit. However, over the past 10 years, the BOT has posted continual losses from its monetary stabilizing operations. As a result, the BOT cannot cut off the principal amount, while the interest’s burden on the government budget continues. The decree has pushed all the responsibility to the BOT’s management and put considerable pressure on its balance sheet with negative gaps between assets and liabilities, a highly vulnerable state by most standards. Moreover, the decree also allows central bank to charge commercial banks an additional Deposit Protection Agency (DPA) fee up to 1%; therefore, it undermines the competitiveness of commercial banks against specialized financial institutions (SFIs) that automatically receive blanket deposit coverage by the government with no surcharge. Recently, the BOT announced the reduction in policy rate to stimulate the economy after the flood. Nevertheless, because of the higher DPA fee imposed, commercial banks cannot utilize effect of interest rate reduction to the economy. Conversely, as expected by the MPC, the lending rates of commercial banks will not decrease. Furthermore, the cut-throat deposit competition provides very little incentive to lower customer’s deposit rates. Hence, borrowers are not benefiting from the rate reductions that were designed to ease the pain of flood reconstruction. (Bangkok Post)
Commerce Minister, Boonsong Teriyaphirom, met with 65 overseas Thai trade representatives on February 10th to finalize a plan to boost export growth to 15% this year amid uncertain global economic growth. According to Nuntawan Sakuntanaga, director-general of the International Trade Promotion Department, the minister would set an export target for each market with the plan emphasizing not only trade, but also investment and specific goods to capture more opportunities and ensure total export growth. The minister would focus on the emerging market as well as traditional markets such as the United States, whose economy is assumed to recover this year. (The Nation)
Despite factors including political and flooding uncertainty, property developer Narai Property Co Ltd, is confident about Thailand’s economic fundamentals and will launch four new projects worth a combined 5 billion baht in the second half of the year. The company will launch two condominium projects and two low-rise projects. The high-rise projects will be a joint venture with the Hong Kong-based Ayala fund, whose major shareholders are Filipinos. Demand for single houses and town houses will pick up after last year sluggish period. However, in general, developers are being more careful about launching new projects; hence, it will ensure that an industry bubble does not occur. (Bangkok Post)
Security
Anxious to quicken the process of removing travel warnings to Thailand, permanent secretary for foreign affairs, Sihasak Puangketkaw, met with diplomats from 40 countries to brief them on the security situation in Thailand. He assured them that security measures have been stepped up following the arrest of suspected terrorist, Atris Hussein, in January and contended that current travel advisories warning against travel to Thailand do not reflect the current situation. The nine countries that still have travel warnings cautioning against travel to Thailand are the United Kingdom, Australia, Austria, Taiwan, South Korea, Italy, Japan, Romania, and Canada. Ironically, soon after the meeting, bombs exploded in Bangkok on Valentine’s Day. The incident occurred around 2:20 pm on soi 71 of Sukhumvit road. There was a loud explosion that destroyed the roof of house, purportedly rented by three foreign men. A search of the house later by bomb experts revealed C4 explosives and bomb making materials. Following the blast, two men were seen fleeing the house. The third emerged moments later, appearing badly injured. He threw grenade at a taxi after it did not stop for him, destroying half of the taxi. As he fled away from the residence into the main street, a police vehicle pursued him. In response, he lobbed a box of explosives towards the vehicle but it ricocheted off a passing truck and bounced back towards the assailant. The explosion blew off both of the assailant’s legs. Police have identified the man as Saci Marabi, an Iranian passport-holder, and he is currently being treated at Kluaynamthai Hospital. Another suspect was arrested later at Suvarnaphumi Airport as he was trying to board a flight to Malaysia. He is identified as Mohummad Hazaei, also carrying an Iranian passport. Thai authorities are not speculating yet on why the three men were storing explosives, but officials from Israel and the United States have already made strong statements indicating Iran bears responsibility. (The Nation)
This week Thailand began its 31st annual Cobra Gold, with 13,000 participants from as many as 17 countries. This year, full participants in the exercise came from Thailand, the United States, Singapore, Indonesia, Malaysia, Japan, and South Korea. Many more countries in Europe and Asia were invited to participate in the multinational planning and augmentation team. Over the ten-day event, troops from participating countries will participate in field training exercises, ranging from military to humanitarian operations, such a live-firing and non-combatant evacuation. The purpose of Cobra Gold is to promote regional security through building military interoperability and friendly relations between nations. As multinational responses to regional problems will likely become more common, participating countries see it as being in their interests to train together and increase cooperation on security issues. (Stars & Stripes) (Defense Video & Imagery Distributions System)
Previous to the Cobra Gold exercises, 600 US troops had been participating in humanitarian and civic assistance operations to support flood relief efforts in Thailand. In an interview, lead planner of Cobra Gold 2012 humanitarian and civic assistance, Marine Maj. Richard Graham, said of the relief efforts involving US servicemen, “Schools are open and everything is back on track. There is one area with more damage, but other than that area, life continues and people are back to their daily routine”. Though despite improvement, military and government officials continue to say more work is needed. (Stars & Stripes)
Thailand’s Secretary-General of the Office of the Narcotics Control Board (ONCB), Police Gen. Adul Sangsingkaew, visited Myanmar to discuss increasing cooperation in efforts to stop narcotics trafficking. The two countries, he believes, need to share more information because government figures indicate roughly 70% of narcotics entering Thailand comes from Myanmar. His visit came after two meetings held in Bangkok intended to increase awareness of drug types, drug control and treatment, and prevention among youth. (MCOT)
A pickup truck bomb exploded in Pattani’s main city, killing a 50-year-old local and injuring 11 others. The truck had been parked between the fences separating the residences of Pattani’s permanent secretary and public health chief. Police say it had sat there for two days without causing suspicion. Inside the pickup truck were 30 kilos of explosives, which upon detonation caused the truck to split in half and spread shrapnel over a 300 meter radius. The blast also shattered windows and doors in nearby buildings. After recovering the license plate, authorities determined it was a fake. Police are currently reviewing security camera recordings to find those responsible. In a related situation, another bomb went off that same day in Narathiwat’s Bacho district. It occurred as soldiers were escorting teachers to school. The explosion injured two soldiers and left a crater 40 centimeters deep and 60 centimeters wide. Despite these developments, the secretary general of the National Security Council, Police Gen. Wichean Photephosri, said after a meeting with Prime Minister Yingluck Shinawatra that Thailand’s government will focus on exploring peaceful solutions and boosting mutual trust and understanding between the state and locals for the administration of the southern border provinces from this year until 2014. (Jakarta Post)
The government appointed committee has been set up to pay up to 7.5 million baht ($243,300) as compensation to victims and those affected by violence in southern Thailand since 2004. This includes family of those killed by state security forces in incidents that have fueled the insurgency in the South. Analysts say this compensation plan came as a result of pressure after the government agreed in January to pay compensation to victims of political violence since 2005. While this is the highest acknowledgement of victims of state security, Sunai Phasuk, a researcher with Human Rights Watch, argues there still needs to be investigations and accountability. An additional committee will be set up later to determine compensation for family members of state security officials killed in incidents in the South.
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