Summary
In Politics, the military announced martial law on May 20 and a full-scale military coup two days later on May 22 – Thailand’s 12th successful coup since 1932. Government agencies were dissolved and the military put in full control of the entire country. General Prayuth was royally endorsed as the Head of the National Council for Peace and Order (NCPO) and the 2007 constitution abrogated. Protests have been banned, nation-wide curfew imposed, and national TV and radio stations put under military control.
In security, insurgency-related attacks continue to plague the Deep South and school administrations have voiced their concern over teachers’ safety. Pattani and Narathiwat have been particularly badly affected these past two weeks. The United States suspended military cooperation with Thailand and voiced concern over the coup and its threat to democratic principles.
The continual political turmoil along with the declared martial law and military coup, has had its toll on Thailand’s production and tourism sector. Both sectors have seen a decline, leading to concerns raised by related businesses and agencies. The political situation has also impacted foreign investor’s confidence, leading to a withdrawal of $2 billion from Thailand’s stock and bonds. The IMD survey indicated a drop in Thailand’s competitiveness due to the unstable political situation. In response to the negative economic outlook, seven private organisations have devised a reform roadmap to revive the declining economy and reboot consumer and investor’s confidence. The Commerce Ministry under the NCPO have been tasked with tackling the increasing living costs and find measures to promote good governance among related ministries and agencies.
Politics
(Image source: Bangkok Post. Military disband protests)
On May 15, at around 2:45am, grenades and M16 rifles were fired at Khok Wua protest site, Democracy Monument, killing three, and injuring twenty-two. This led Army Commander in Chief Prayath Chan-ocha to issue his strongest statement yet regarding the use of troops to quell the political conflict, warning that if the violence does not cease, soldiers may come out ‘in full force’. He claimed that the army was acting cautiously to encourage negotiations, but would intervene militarily if necessary. (Bangkok Post)
Following these attacks, and the increasing threat of civil war, martial law was imposed across the entire country in the early hours of Tuesday, May 20, taking many observers by surprise, including the caretaker government who were not informed beforehand. The military statement cited a 1914 law which allows it to intervene during a time of crisis, claiming that with ongoing protests, political deadlock, twenty-eight people being killed, and hundreds wounded, the military was acting to restore peace and order from all sides. The martial law, which was stressed by the military not to be a step towards a coup, gave the army complete power over all security matters, but left the government in control over all other tasks. General Prayuth stressed that the move aimed to create space for all sides to talk. (Bangkok Post)
The government-run Centre for Administration of Peace and Order (CAPO) was quickly dissolved and replaced with a newly set up military-run Peace-Keeping Command Centre (PKCC), with General Prayuth as director. The PKCC announced that it was taking over all security operations across the country, including the Royal Thai Police Force, navy, air force, army, interior ministry, and the Internal Security Operations Command (Isoc). (Bangkok Post)
The PKCC paused all TV and radio programs, both government and privately-run, replacing them with military-run broadcasts. Social network users were also warned about the content they post regarding martial law and the political situation. The military’s justification was that it was to ensure that unbiased and accurate information was being relayed to the public. Reaction to the martial law was mixed, with anti-government protestors welcoming it, whilst many academics and journalists condemned the move which they claimed put General Prayuth in charge of the country’s fate. (Bangkok Post)
On Thursday 22 May, 2014, the military went a step further and Thailand witnessed its 12th successful coup since 1932, coming just two days after General Prayuth announced that the country was under martial law, but that it was definitely “not a coup”. The general claims that he declared the coup to restore order, prevent further loss of life, and stop the conflict from escalating. The army immediately disbanded the UDD’s and the PDRC’s protest sites, taking some key leaders into custody. Military control over all radio and television stations continued, and foreign television stations were blocked from air. The 2007 constitution was abrogated, the caretaker government dissolved, and a curfew between 10pm and 5am imposed, which has now been extended from 12am to 4am. The military set up the National Peace and Order Maintaining Council (NPOMC) to take care of the country’s affairs, led by General Prayuth. (Bangkok Post)
The move came after the supposed failure of the seven-party crisis-talks with representatives from all sides. Gen Prayuth ordered the immediate detention of all key players present at the meeting, including PDRC leader Suthep Thaugsuban, and UDD leader Jatuporn Prompan. Over 250 people have been ordered to report to the NPOMC, including politicians, academics, writers, journalists, businessmen with links to the Shinawatras, Pheu Thai Party members, and PDRC supporters, resulting in arrest for failing to show up. General Prayuth has been royally endorsed as Head of NCPO, and has dissolved the senate, leaving all authority in his hands. Despite the ban on political gatherings over five people, anti-coup protesters have been rallying daily at Victory Monument, where confrontations with the military are ongoing. On May 29, the military closed all roads around Victory Monument and deployed 1,300 troops to the area to prevent further protests, threatening the use of tear gas if deemed necessary. The move resulted in just a handful of demonstrators showing up. (Bangkok Post)
In the latest news, the National Council for Peace and Order (NCPO) – previously the National Peace and Order Maintaining Council – has transferred 13 provincial governors, 16 senior police officers, and top state officials to new posts, all thought to have ties with the Shinawatra family, Pheu Thai Party, and the ousted government. This move appears to consolidate further the power of the NCPO over national administration, allowing the imposition of officials sympathetic to the military government. (Bangkok Post)
Security
(Image source: Bangkok Post)
As the new school term began, Adul Phromsaeng, a local primary school administration director in Yala province, warned that not enough troops are deployed to protect teachers and schools in areas vulnerable to ongoing insurgency-related attacks. Teachers have been targeted since the conflict began, believed to be ‘symbols’ of the Thai state, and reports show that most fear for their safety in the conflict regions. Talks were held between soldiers, police and school administrations on how to improve the protection for teachers, and the military were urged to introduce more stringent measures. 24-hour patrols are to be introduced in hotspot areas to limit the movement of possible attackers. (Bangkok Post)
On May 19, two soldiers and three defense volunteers were injured following several attacks in Pattani and Narathiwat provinces. In Narathiwat, a bomb exploded when rangers were providing protection for teachers at school, at 8:40am. In Pattani, a security officer was shot in the neck as he and his unit went to investigate gunshots near a Muslim school, by suspected insurgents. The Chairman of the Confederation of Teachers in Narathiwat subsequently called for peace talks with the Barisan Revolusi Nasional to resume. (Bangkok Post)
On Saturday, May 24, southern Thailand witnessed more devastating attacks by suspected insurgents. Explosions and shootings were carried out in at least fifteen different locations of Pattani and three in Narathiwat, killing three and injuring seventy-three, as reported by the Public Health Ministry. The attacks happened at around 19:30, with gunshots heard until midnight in some areas, and resulted in complete blackout of Pattani municipality. Tor 229 patrol boat was hit by an explosive device, and as a result navy officers were ordered to be on their highest alert, along with all military installations, and airports. In a separate attack in Pattani, a bomb exploded in the car park of Khok Pho hospital on Wednesday 28 May, wounding ten people, including one soldier, three defense volunteers, and six civilians. More than fifty vehicles were also damaged in the attack. The ongoing insurgency is taking its toll on soldiers in the region, with the second incident in recent months involving a soldier opening fire and fatally shooting fellow soldiers. He is believed to have been suffering from stress due to the conflict, and not being able to take a break to visit his family. (Bangkok Post)
In light of Thailand’s military coup since May 22, the US Defense Department announced that it was cancelling all military exercises with Thailand, its long term ally, due to the coup’s threat to democratic principles. Previous to the coup, 700 US troops were participating in annual naval exercises. In addition to this they cancelled the US sponsored firearms training program for the Royal Thai Police that was meant to begin on Monday, May 26. They also said they were withdrawing the invitation of the Supreme Commander of the Royal Thai Armed Forces to the US in June. (Bangkok Post)
In other news, General Prayuth has ordered the military to crack down on illegal logging after the extent of deforestation by gangs was revealed. Two major forests, Salawin in Mae Hong Son, and a watershed forest in Nan, have been badly affected. Leaders of gangs and investors of the illegal timber trade are to be targeted in the crackdown, which will involve cooperation between law enforcement agencies and the military. Wood-processing and furniture companies will be more carefully monitored to ensure their sources are legal. The Siamese Rosewood tree is particularly affected, and at a critical point. (Bangkok Post)
Economics
Reform Road map by seven organizations to be proposed to the Junta by the end of June.
The declaration of martial law, and subsequently the military coup, on top of the months long political insecurity has had a negative impact on the several economic sectors in Thailand. According to the World’s Competitiveness survey by a top business school in Switzerland, Thailand’s competitiveness has dropped by two rankings, from 27 in 2013 to 29 in 2014. The survey rates countries by using indicators such as economic performance, government efficiency, business efficiency, and infrastructure. Thailand’s score has declined in all indicators, except for infrastructure which remains unchanged. (Bangkok Post)
The Tourism Council of Thailand (TCT) had stated that fifty foreign governments have issued medium-level travel warnings, except the Philippines, Hong Kong, and South Korean who have issued the highest level warnings to its travelers. Up to a 5% drop in visitors was forecasted this year. The current political situation has impacted the rate of both short and long-haul tourists. The TCT has revised its initial arrivals estimate from 28.04 million, down to 26.2 million. The Bank of Thailand have recorded that three-months advanced bookings for hotels this year was at 26 percent in March this year, in comparison to the 32 percent recorded last year. Additionally, last year’s occupancy rate was recorded at 72 percent, however this year’s stands at 58%. The TCT, and other tourism agencies calls for a relaxation or an exemption from the coup for tourist areas. This could to restore confidence in foreign travelers. The TCT asserts that if a new government was established quickly, Thailand’s tourism sector can regain growth for the year. (The Nation)
The Information and Communications Technology (ICT) sector has also been impacted, as the political instability has disrupted investments in the sector. The International Data Corporation (IDC) reported that the ICT industry has had a loss of up to $750 million (24.4 million baht) over the past six months. The ICT sector was forecasted to be the highest in the region however growth has been cut by 5.5 percent, where the largest impact came from government projects which were postponed or cancelled. (The Nation)
Automobile manufacturers, Honda automobile, Suzuki Motors and Volvo Group, have also forecasted a drop in sales due to the gloomy economic outlook from the continual political turmoil. The Federation of Thai Industries stated that the domestic car market is likely to stay below one million units this year. Automotive production has declined in recent months, with a production dropping by 25.6 per cent in the last month, and sales falling by 33.2 per cent. Chief Operating Officer of Honda Automobile have raised concern over the domestic situation as it has seen a decline since early 2014. (Bangkok Post)
The affected production and tourism sector had shrunk Thailand’s economy. Goldman Sachs forecasted 0.5 per cent contraction for the whole year, whereas Morgan Stanley estimated zero growth. The declined confidence from global investors has led them to pull out $2 billion from Thailand’s stocks and bonds. (Bangkok Post)
In response to the economic impact of the political turmoil, a reform roadmap was proposed by the Thai Chamber of Commerce/Board of Trade, Tourism Council of Thailand, Thai Bankers’ Association, Federation of Thai Industries (FTI), Federation of Thai Capital Market Organisations, Stock Exchange of Thailand and Thai Listed Companies Association. The organizations came up with seven frameworks, of both short-term and long-term economic plans to rebuild consumer and investor confidence. Mr. Supant Mongkolsuthree, Chairman of the Federation of Thai Industries, stated the seven frameworks aimed to increase the country’s competitiveness, enhance public and private investment, promote education and innovation, lessen social and economic inequality, fix corruption, reform regulations, and create a new economic structure. The plans of each organization will be presented at their meeting next week before they are compiled and submitted to the National Council for Peace and Order (NCPO), which should happen before the end of June. (Bangkok Post)
The NCPO have asked the Commerce Ministry to begin measures to tackle living costs and promote transparency and good governance. commerce permanent secretary, Ms. Srirat Rastapana, said the focus of the Commerce Ministry under the NCPO is to enhance cooperation between related agencies and how to tackle the rising living costs. According to Ms. Rastapana, new rice auctions and sales through the Agricultural Futures Exchange of Thailand are also expected to be stalled, no new free trade agreements or government-to-government rice deals were likely to be made, and the fate of the rice pledging scheme remains undetermined. (Bangkok Post)
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