Thailand 20241206: Expedient, Eminent, Aberrant
Mekong Memo Thailand Weekly: Business, politics, finance, trade & legal news.
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Here is your Mekong Memo Thailand for this week.
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Headlines:
Political Delays Slow Reform Progress
PM2.5 Crisis Hits Bangkok
Regional Partnerships: VN, CN, PH
Tourism Recovery Remains Healthy
AI Hub Ambitions Take Shape
EV Industry Powers Up
Economic Outlook Mixed
Aviation Hub Ambitions, New India Route
Luxury Retail Rebounds
1,014 Arrests in Proxy Business Crackdown
Tax Policy for Overseas Remittances Murky
TAT Push for Direct US-Thailand Flights
Monkey City Hero's Bravery in iPhone Rescue
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Political Delays Slow Reform Progress
The National Anti-Corruption Commission is investigating alleged land encroachment in Saraburi involving an Army lieutenant-colonel with TV career ties. A mandatory cooling-off period is going to delay the referendum bill amendment, making charter rewrite impossible during the current government's term. The joint panel maintained the double-majority rule for referendums, requiring 50% voter participation and majority approval, against the House's preference for a single majority system.
Read more: Nation Thailand (Land Case), Bangkok Post (Referendum Bill)
PM2.5 Crisis Hits Bangkok
All 50 Bangkok districts are facing severe PM2.5 pollution again this year, much to the dismay of residents. Royal Forest Department data shows 306 nationwide hotspots from Dec 1-3, with 93% in agricultural areas across central, lower northern, and northeastern regions. Wind patterns are concentrating agricultural dust particles in Bangkok, with poor ventilation expected through the weekend. Remedies apparently remain elusive.
Read more: Bangkok Post
Regional Partnerships: VN, CN, PH
Thailand and Vietnam plan to elevate their relationship to a Comprehensive Strategic Partnership. Two-way trade reached $18.9 billion in 2023, with Thailand being Vietnam's 9th largest foreign investor. China and Thailand expect increased cultural exchanges in 2024, marking 50 years of diplomatic relations. China remains Thailand's largest trading partner, with Belt and Road Initiative accelerating regional cooperation. Thailand and the Philippines are exploring a “two countries, one destination” framework to promote diving in the region.
Read more: Nation Thailand (Vietnam Partnership), Nation Thailand (China Relations), Manila Times (Dive Partnership)
Tourism Recovery Remains Healthy
TAT is projecting 40 million foreign tourists in 2025, with tourism revenue expected to rise 7.5% over this year’s haul. The forecast includes 29 million short-haul and 11 million long-haul visitors. Thailand's health and wellness tourism market is expecting 9% annual growth through 2027, thanks to high-quality medical services and competitive prices.
Read more: Nation Thailand (Tourism Numbers), Travel and Tour World (Medical Tourism)
AI Hub Ambitions Take Shape
Thailand wants to become an AI learning hub with a collaboration with UNESCO. The government says that it will develop 30,000 AI-skilled workers at the engineering level within three years, expecting a hundred AI innovations worth 40 billion baht. How the math was done is not explained in the article. AI adoption in Thai organizations has apparently reached nearly three-quarters so far in 2024 - up nearly 20% over last year. Thailand will host the 3rd UNESCO Global Forum on the Ethics of AI 2025 in Bangkok - the first event of its kind in Southeast Asia.
Read more: Bangkok Post
EV Industry Powers Up
The National Electric Vehicle Policy Committee has approved new tax structures for hybrid and mild hybrid electric vehicles. Manufacturers are investing 3 billion baht between 2024-2027, using local parts. The incorporation of advanced driver-assistance systems will result in manufacturers being subject to reduced excise taxes. The policy is in aid of government objectives to place Thailand as Southeast Asia's EV production hub.
Read more: Bangkok Post
Economic Outlook Mixed
The Thai Chamber of Commerce is looking for 2.8% GDP growth in 2025. Energy advocates are surprisingly requesting reduced electricity demand forecasts in the 2024 power development plan to prevent (what they call) “unnecessary” capacity additions. The Finance Ministry has looked at raising the VAT rate from 7% while mulling over a corporate tax reduction from 20% to 15% in an attempt to pull in more foreign investment.
Read more: Reuters (GDP Growth), Bangkok Post (Power Plants), Nation Thailand (Tax Reform)
Aviation Hub Ambitions, New India Route
Thailand's Transport Ministry has hooked up with Airbus to develop aviation infrastructure and improve safety standards in the region. The government is targeting 250 million annual passengers at AOT airports by 2032. Separately, VietJet Thailand has introduced new daily Mumbai-Bangkok flights to boost Indian tourism. The direct flights are especially expected benefit the Indian-wedding-in-Thailand business.
Read more: Nation Thailand (Airbus Partnership), Travel and Tour World (VietJet Route)
Luxury Retail Rebounds
Central Department Store Group expects 30% sales growth in 2024 following Central Chidlom's 4-billion-baht renovation. The upgraded mall now features 150 premium beauty brands and 500 fashion brands. Daily customer traffic is expected to increase from 25,000 to 30,000.
Read more: Bangkok Post
1,014 Arrests in Proxy Business Crackdown
Thai authorities working with the Commerce Ministry, detained 1,014 people for using Thai nominees to run foreign businesses, involving more than 3.6 billion baht in operations. The suspects include Thai and foreign nationals linked to 442 companies, with some businesses allegedly serving as money-laundering fronts. Assets worth 254 million baht were seized, including some prohibited goods. Authorities have told proxies to cooperate for leniency, emphasizing the economic and national security risks posed by their behavior.
Read more: Bangkok Post
Tax Policy for Overseas Remittances Murky
In a recent forum, Finance Minister Pichai Chunhavajira promoted tax reforms intended to reducing corporate and personal income taxes while increasing VAT to bring Thailand’s practices into alignment with other jurisdictions. The topic that remained conspicuously absent, however, was the contentious Thai Revenue Department's reinterpretation of taxing overseas remittances starting January 2024. The lack of government clarity has left expats and tax specialists befuddled. While Thailand offers tax-friendly visas for skilled workers and retirees, ambiguity on remittance taxation affects both resident Thais and expats, making clearer policy direction urgent.
Read more: Pattaya Mail
TAT Push for Direct US-Thailand Flights
The Tourism Authority of Thailand (TAT) is advocating for US airlines to bring direct flights to Thailand, following an expected upgrade in Thailand's aviation safety rating by the US Federal Aviation Administration (FAA). The TAT wants to capture the growing US tourist market, expected to grow beyond 1.1 million visitors in 2025. Thai Airways, constrained by financial rehabilitation, is unlikely to resume long-haul routes this year, leaving openings for Delta, United, and others to explore direct services.
Read more: Bangkok Post
And now for something completely different.
While the focus of The Memo is on news for business, we often wrap up with a less business-focused article.
Travel + Leisure Magazine has announced that Thailand will be the Destination of the Year for 2025. The article provides a short introduction from our friend Jeninne Lee-St. John and then provides links to many other relevant and interesting articles about beaches, restaurants, destinations, activities, and more. Thailand’s famous Tom Yum Kung soup has been granted UNESCO Heritage status, and there were varying reports of a Shark or “Large Fish” attack off Khao Lak Beach this week. We suspect the incident is being downplayed in the Thai media for obvious reasons.
We love monkeys (from a distance), so we will close with this story of a local hero in Lopburi:
Monkey City Hero's Bravery in iPhone Rescue
A local Lopburi volunteer, Mr. Yut, earned admiration as the “Monkey City Hero” after scaling a 7-meter ancient prang to retrieve a French tourist’s iPhone that had been snatched by a monkey. The daring rescue turned tense when Mr. Yut, gripped by a fear of heights, became stranded for an hour in strong winds atop the temple. Rescue teams used a ladder to help him get down. The French family rewarded Mr. Yut with 1,200 baht, praising his dedication to tourists’ welfare and courage in challenging circumstances.
Read more: Khaosod English
That’s it for this week, thanks for reading!
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