Thailand 20240726: Shrewd, Pithy, Factual
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Here is your Mekong Memo Thailand for this week.
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Headlines:
Former Buriram Governor New Senate President
Uncertainty Looms as PM Faces Court Ruling
EV Industry Pushes Forward
International Relations: TW, JP, UZ
Household Debt Stifles Economic Growth
Digital Wallet Stimulus Program Set to Launch
Pet Industry Fetches Government Support
Visa Waiver to Double China Flights by 2026
Political Shuffles as Chalerm Plans Pheu Thai Exit
Thai-Chinese Railway Project Steams Ahead
Long Weekends to Boost Domestic Tourism Revenue
Power Tariffs Strain as Gas Prices Rise
Banks Eye SME and Taiwanese Loans
Proposal to Repeal Anti-Sex Work Law Gains Traction
Exploring 200 Years of Thai Modern Art
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Former Buriram Governor New Senate President
Mongkol Surasatja, former Buriram Governor, clinched the Senate Presidency with 159 votes, outmaneuvering former Thai Rak Thai MP Premsak Piayura and ex-Dean Nantana Nantavaropas. Gen Kriangkrai Srirak and Boonsong Noisopon secured First and Second Vice President positions, respectively. The election process sparked debate over Senate independence, with observers noting coordinated nominations and potential political alignments. These machinations could significantly influence future legislative decisions, casting a shadow over the upper house's autonomy.
Read more: Prachatai English
Uncertainty Looms as PM Faces Court Ruling
Prime Minister Srettha Thavisin's political future teeters on a knife-edge as the Constitutional Court prepares its August 14 verdict on his cabinet appointments. The ruling, centered on the inclusion of a controversial lawyer, could trigger a governmental upheaval necessitating a new prime ministerial election. Amid this legal tempest, Anutin Charnvirakul is emerging as a front-running potential successor, leveraging his extensive political and military connections. As Thailand's political landscape braces for potential seismic shifts, the corridors of power are full of speculation.
Read more: The Sun (PM’s Fate), Nation Thailand (Anutin Charnvirakul)
EV Industry Pushes Forward
Chinese EV giant BYD's inauguration of a 150,000-vehicle capacity plant in Thailand is a decisive push into Southeast Asia, while Thailand's Industry Ministry is calling on Chinese EV makers source at least 40% of parts locally. The broader automotive sector faces headwinds, with the Federation of Thai Industries downgrading its 2024 car manufacturing target to 1.7 million units due to declining production and tepid domestic sales. Yet, in a twist of market dynamics, EV sales rose by nearly 7%, accounting for 10.8% of total car sales, a sharp turn towards electric mobility.
Read more: Thailand Business News (BYD Expansion), The Investor (Local Content Requirements), Bangkok Post (Manufacturing Target)
International Relations: TW, JP, UZ
Thailand and Taiwan are set to ratify a new bilateral investment agreement, improving protections and dispute resolution mechanisms as trade reaches $16.24 billion. Thailand is chasing circular economy initiatives with Japan, focusing on sustainable practices in the Eastern Economic Corridor. Uzbekistan and Thailand are strengthening trade relations, intent on boost turnover to $500 million annually.
Read more: Taipei Times (Taiwan), The Nation (Japan), AKIpress (Uzbekistan)
Household Debt Stifles Economic Growth
High household debt levels continue to act as a drag on Thailand's economic growth and deter investment, according to a survey by the Association of Investment Management Companies. Fund managers say the Bank of Thailand will keep interest rates at 2.5% throughout 2024 due to persistent worries over domestic political uncertainties and global economic conditions, including inflation and geopolitical conflicts, which continue to cast a long shadow over the financial landscape. Investors are advised to focus on medium to large-cap stocks, sustainable investments, and diversified assets.
Read more: Bangkok Post
Digital Wallet Stimulus Program Set to Launch
A long-delayed 450 billion baht ($12.5 billion) digital wallet stimulus program is about to be brought to life. From August 1 to September 15, up to 2 million vendors and 45 million citizens will register for 10,000 baht ($277) handouts, set for distribution in the fourth quarter. The scheme covers a diverse range of vendors, from major retail chains to local shops and street food vendors. While the program is intended to boost consumer spending, its efficacy remains a topic of heated debate among economic analysts.
Read more: Bangkok Post (Vendor Registration), The Diplomat (Details)
Pet Industry Fetches Government Support
Thailand is capitalizing on the rising trend of pet ownership, promoting Thai pet goods and services globally through participation in international pet shows. In 2023, Thailand's pet product exports to Taiwan alone reached $87.18 million, indicative of the sector's potential. The domestic pet industry, including pet farms, food, toys, and care services, has seen healthy growth and is attracting increased foreign investment.
Read more: Khaosod English
Visa Waiver to Double China Flights by 2026
Aeronautical Radio of Thailand predicts flights between Thailand and China will double to 200,000 annually by 2026, driven by a new permanent visa waiver policy initiated in March. The policy permits visa-free travel for up to 30 days for Chinese and Thai passport holders. Major routes including Macao-Hong Kong and Yunnan-western China are expected to see significant increases. Chengdu leads the pack with flights projected to reach 8,850 this year, a staggering 265% year-on-year increase.
Read more: Nation Thailand
Political Shuffles as Chalerm Plans Pheu Thai Exit
Veteran politician Chalerm Ubumrung and his son Wan Ubumrung are preparing to leave the Pheu Thai Party, with Wan confirming his move to the Palang Pracharath Party (PPRP). Chalerm, currently a Pheu Thai list-MP, has expressed intention to join PPRP once expelled. These announcements follow internal conflicts and accusations of fraternizing with rivals. In a move that threatens to shake the political landscape, Chalerm claims he will reveal secrets about Thaksin Shinawatra if not expelled, promising to act independently against his current party.
Read more: Bangkok Post (Expulsion Demand), Bangkok Post (Party Switch)
Thai-Chinese Railway Project Steams Ahead
The investment plan for Phase 2 of the Thai-Chinese high-speed railway, connecting Nakhon Ratchasima and Nong Khai, is set for Cabinet approval. This 357 km phase, with an investment of 341.35 billion baht, will reduce travel time from Bangkok to Nakhon Ratchasima to 90 minutes. The project includes elevated and ground-level tracks serving five major stations, with completion targeted for 2031. Private sector bidding is expected to start by mid-2026.
Read more: Nation Thailand
Long Weekends to Boost Domestic Tourism Revenue
The Tourism Authority of Thailand says that 5 million Thais will travel domestically during the two long weekends in July, generating around 18 billion baht in revenue. Important travel periods include Buddhist Lent from July 20-22 and the King's birthday celebrations from July 27-29. Bangkok, along with eastern and southern regions, are expected to see the highest income. Popular destinations include big temples and venues with activities celebrating the King's 72nd birthday.
Read more: Nation Thailand
Power Tariffs Strain as Gas Prices Rise
The government says it will maintain electricity tariffs at 4.18 baht per kilowatt-hour for the rest of the year, despite expected increases in gas prices. The Energy Regulatory Commission thinks that a 28 billion baht subsidy may be required to achieve this goal. This move follows prior efforts to curb tariffs, which resulted in big debts to the Electricity Generating Authority of Thailand and PTT Plc. Future tariff adjustments loom on the horizon as global gas prices rise, driven by seasonal demand, presenting an ongoing challenge for energy policy makers.
Read more: Bangkok Post
Banks Eye SME and Taiwanese Loans
LH Bank hopes to double its Taiwanese loan portfolio in the next 3-5 years, spring-boarding from a 31% growth in H1 2024. This gains will be fueled by direct Taiwanese investments and trade finance services. Separately, the Government Savings Bank's soft loan program for SMEs has seen strong demand, attracting 70-80 billion baht out of a 100 billion-baht total.
Read more: Bangkok Post (Taiwanese loans), Bangkok Post (SME loans)
Proposal to Repeal Anti-Sex Work Law Gains Traction
The SWING Foundation has submitted a proposal, backed by over 14,000 voters, to repeal Thailand's 1996 Prevention and Suppression of Prostitution Act. They argue the law pushes sex work underground, leading to discrimination and lack of labor protection. The proposal calls for recognizing sex work as legitimate labor, providing legal protections, and addressing public health and economic concerns. The First Deputy House Speaker remarked on the importance of mature discussions on this issue, calling for a need to separate morality from other aspects of the proposal.
Read more: Prachatai English
And now for something completely different.
While the focus of The Memo is on news for business, we often wrap with a less business-focused article.
As a follow up to last week’s Olympic uniforms story, the uniforms have been tweaked, but people are still panning the new designs. Superstitious Thais are still placing their faith in lucky charms, and a new wave of Thai restaurants is taking New York City by storm. As art lovers, we will finish today with this article about a must-visit exhibition, on now, at the National Gallery...
Exploring 200 Years of Thai Modern Art
The National Gallery in Bangkok is hosting a "200 Years Journey Through Thai Modern Art History" exhibition, featuring more than 100 artworks from the reign of King Rama IV to the present. Curated by collectors Kornkamol and Piriya Vachajitpan, the exhibition includes pieces by Khrua In Khong, Galileo Chini, Thawan Duchanee, and contemporary artists like Alex Face. The display is a grand illustration of Thailand’s artistic evolution and an important retrospective of the local art scene that sheds light on how the field has evolved over recent years.
Read more: Thai PBS World
That’s it for this week, thanks for reading!
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