Thailand 20240419: Reckoning, Stimulus, Exodus
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Here is your Mekong Memo Thailand for this week.
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Headlines:
'Big Joke' Suspended Over Gambling Scandal
Developers Push for Higher Foreign Condo Quotas
Property Tax Laws to Be Tightened
Phuket Looking for a Special Status
Creditors Rally to Support ITD
Property Stimulus Expected to Lift Bourse
Thai Banks Eye Regional Expansion
JPMorgan Sees 2024 as the Comeback Year
Thailand Applies to Join OECD
Bangkok to Host Money20/20 Asia
Banks Brace for Rising NPLs in Q1
Rail the Future of Thai Logistics
Chiang Mai Lures Chinese Seeking Freedom
Clean Air Rooms to ‘Combat’ Severe Pollution
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'Big Joke' Suspended Over Gambling Scandal
Pol Gen Surachate Hakparn, known as 'Big Joke', has been suspended over alleged links to an online gambling scandal. Surachate's rollercoaster career in the Thai Police has seen rapid promotions and abrupt reassignments, and this latest twist is just another dramatic turn in a career filled with them. The last article link is an older one (from 2021), that gives a bit more background on the man himself.
Read more: Thai PBS World (Suspension ), Thai PBS World (Career), Bangkok Post (Investigation), Thai PBS World (Career)
Developers Push for Higher Foreign Condo Quotas
Top developers want the foreign ownership quota for condos raised from 49% to 60% to boost the economy. They say the change is especially needed in places like Phuket and Pattaya, where foreign demand drives the market, and there aren’t enough Thai buyers to take up the available supply. The push comes as condo sales to foreigners, especially from China, Russia, and the USA, are growing fast.
Read more: Bangkok Post
Property Tax Laws to Be Tightened
The Revenue Department is revamping the property tax system to plug revenue leaks and close loopholes. The reform targets urban landowners misusing agricultural tax rates (inner-city lime farms, anyone?) and proposes stricter rules to classify land use and prevent tax dodging by tying tax bills directly to how land is used.
Read more: Bangkok Post
Phuket Looking for a Special Status
Phuket, a top tourist spot, wants to become a "special city" to get around national rules that hinder local development. With tourism as its economic engine, Phuket says it needs to tackle infrastructure strains made worse by a huge transient population and more than 10 million visitors a year. The plan, still waiting for the PM's review, suggests Phuket could adopt more autonomous governance, like the Eastern Special Economic Zone, or Bangkok itself, to improve competitiveness and urban management.
Read more: Khaosod English
Creditors Rally to Support ITD
Major creditors, including Bangkok Bank, have pledged to back Italian-Thai Development (ITD) by injecting fresh cash, helping it avoid a formal rehab plan. It is hoped that the backing will steady ITD's operations by allowing for some debt restructuring and providing working capital, while management works to secure long-term financial deals. As mentioned in previous editions of The Memo, this is one to watch because ITD’s default is big enough to be a danger to systemic risk in the banking system.
Read more: Bangkok Post
Property Stimulus Expected to Lift Bourse
Recent government measures to stimulate the property sector, like cutting transfer and mortgage fees for homes up to 7 million baht, are expected to give the Thai stock market a big lift. The steps are expected to boost sales for listed property firms and reinvigorate the market by lowering purchase costs, hopefully driving economic activity and investor confidence.
Read more: Bangkok Post
Thai Banks Eye Regional Expansion
Fitch Ratings says Thai banks are looking to make regional moves, lured by strong growth opportunities in other ASEAN economies. Banks like Bangkok Bank and Siam Commercial Bank have grown their overseas loan books through strategic buys, especially in Vietnam, Indonesia, and the Philippines. The goal of any expansion would be to diversify revenue and tap local expertise in similar markets.
Read more: Bangkok Post
JPMorgan Sees 2024 as the Comeback Year
JPMorgan predicts 2024 will be the year of recovery for Thailand's economy, fueled by strong tourism and government stimulus. Despite a global slowdown hitting exports and competitiveness, Thailand is well positioned for a return to growth with plans to attract foreign investment and tourism through better visa policies. Structural reforms and digital economic integration are also expected to give the economy an extra jolt.
Read more: Asia News Network
Thailand Applies to Join OECD
Thailand has formally applied to join the OECD to in a bid to grow the economy and improve global cooperation. Foreign Affairs Minister Parnpree Bahiddha-Nukara submitted the application, apparently sincerely claiming that Thailand's commitment to OECD values like democracy and open markets make it an ideal candidate for membership. Membership could help Thailand escape the middle-income trap, lift GDP by as much as 1.6%, (potentially adding around 270 billion baht in economic value), and lure foreign investment.
Read more: Bangkok Post
Bangkok to Host Money20/20 Asia
Bangkok will host Money20/20 Asia at the Queen Sirikit National Convention Center, cementing its status as a rising fintech hub in Asia. The event, known for its wide-ranging coverage of fintech innovations, will feature more than 250 speakers.
Read more: Khaosod English
Banks Brace for Rising NPLs in Q1
Brokerages predict an uptick in non-performing loans (NPLs) for Thai banks in Q1, mainly due to stress in retail and SME segments. The end of the Bank of Thailand's debt relief measures has put pressure on asset quality, with expected NPL ratios climbing to 3.11%. Overall net profit in the banking sector is expected to grow, backed by stable net interest income and modest loan growth.
Read more: Bangkok Post
Rail the Future of Thai Logistics
Experts are saying that rail is the way forward for Thai logistics, thanks to its green credentials and cost efficiency. Trials show rail transport cuts carbon emissions by 13 times (it is absurd to talk about a reduction in terms of a multiplier, so we guess that they mean that the new emissions output is 100/13 ≈ 7.7% of the original) compared to air freight and slashes costs from 14 baht/kg by road to 4 baht/kg by train.
Read more: Bangkok Post
Chiang Mai Lures Chinese Seeking Freedom
Many Chinese citizens are flocking to Chiang Mai, drawn by the promise of a freer, simpler life away from China's intense social pressures and tight control over personal liberties. The northern Thai city offers a community where taboo topics like Tiananmen Square can be discussed openly, and life unfolds at a slower pace in tune with Buddhist values. The migration wave is being especially driven by China's strict policies, economic woes, and the aftermath of its zero-Covid approach.
Read more: The Guardian
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.
The twittersphere was abuzz with this unfortunate young man’s antics, and Toyota has unveiled an electric “Songtaew,” but this story takes the cake this week for its utter absurdity:
Clean Air Rooms to 'Combat' Severe Pollution
In response to the severe air pollution crisis, Chiang Mai has launched 'clean air rooms' to provide residents with safe havens from hazardous air quality levels. Every district in Chiang Mai will have three “safe havens,” according to the “plan.” This initiative includes the deployment of air purifiers, particularly where vulnerable groups such as children and the elderly congregate. The announcement comes as Chiang Mai faces some of the worst air quality globally, exacerbated by agricultural fires and increasing urbanization, issues that apparently will not be addressed by this edict.
Read more: The Telegraph
That’s it for this week, thanks for reading!
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