Thailand 20240426: Revamp, Crucible, Outreach
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:
Senate Overhaul to Clip Military's Wings
Central Bank in the Hot Seat
SET Chairman to Take Finance Minister Reins
Opium, Magic Mushrooms Get Medical Green Light
Digital Ad Spend Soars, Sector Growth Coming
Japan Leads Foreign Investment Charge
ESG and Global Dreams Shape Property Scene
SE Asia Startup Funding Hits Five-Year Low
Database to Filter Bad Apple Insurance Agents
Fifteen New Power Plants Get the Green Light
Car Sales Skid 30% Despite Auto Show Hype
Diplomatic Blitz to Boost Clout, Economic Ties
Tourist Trends: Budgets, Brits, and Chinese
School Bigwigs Jailed for Admissions Bribery
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Senate Overhaul to Clip Military's Wings
The government just gave the green light to a game-changing overhaul of the Senate, a big shift in the political landscape. The new system will put an end to the Senate's role in picking the prime minister, effectively clipping the military's wings after decades of political meddling. The reform comes after years of the Senate flexing its muscle to block non-military leaders from power. Under the new setup, senators will be selected through professional groups, but they'll be hands-off when it comes to choosing the PM.
Read more: Malay Mail (Announcement), The Straits Times (Senate Power Reduction)
Central Bank in the Hot Seat
The central bank has been burning the midnight oil to keep the baht steady, holding the line despite volatility. The government is turning up the heat, pushing for rate cuts to ease the burden of consumer debt, but the Bank of Thailand still isn't budging, warning of potential long-term economic fallout. As the digital wallet scheme still hasn’t been put aside, concerns about fiscal stability and inflation are bubbling up, sparking chatter about monetary tweaks if economic forecasts and structural challenges go south.
Read more: Bangkok Post (Currency Stabilization), Thai PBS World (Digital Wallet), Nikkei Asia (Rate Adjustment)
SET Chairman to Take Finance Minister Reins
Thailand is gearing up to name Pichai Chunhavajira, a former energy bigwig, as the new Finance Minister in a cabinet shakeup aimed at jump-starting the economy. The change comes after some intense back-and-forth between PM Srettha and influential political players, as Stretta looks for a laser focus on economic recovery despite sky-high debt and sluggish growth. The reshuffle involves some key roles, lining up with the government's plan to rev up economic activity and steer fiscal policies while debate rages over the direction of monetary policy.
Read more: Bangkok Post (FM Appointment), Thai PBS World (Negotiations), The Star (New FM Insights)
Opium, Magic Mushrooms Get Medical Green Light
The thumbs up has officially been given to using opium and psilocybin mushrooms for medical and research purposes. The directive, effective immediately, will to grease the wheels for medical treatment and scientific studies, adding to the growing list of narcotics that can be used legally. The country has already eased up on regulations for substances like kratom, marijuana, and hemp.
Read more: Asia News Network
Digital Ad Spend Soars, Sector Growth Coming
There has been great growth in digital advertising spending, fueled by cutthroat competition among local and niche e-commerce brands. Marketing strategies like affiliate marketing are fanning the flames. The sector as a whole is set for growth, with digital ad spending expected to climb 8% this year, even as economic headwinds and a flood of imported products make domestic sales challenging.
Read more: Bangkok Post (Digital Ad Trends), Bangkok Post (Growth Forecast)
Japan Leads Foreign Investment Charge
In Q1 2024, Thailand saw an influx of foreign investments to the tune of 35.9 billion baht, with Japanese firms leading the pack, zeroing in on high-tech and sustainable industries. This was a modest uptick in total investment from the previous year, even as some of these same firms slashed Thai employment. The investments covered a wide range of industries, from engineering to electronics to software development, showing that global players are still keen on Thailand's economic potential.
Read more: Khaosod English
ESG and Global Dreams Shape Property Scene
Bangkok's office market hit a rough patch in Q1 2024, with a shift towards green and compact spaces seen as reflective of changing business preferences and a focus on sustainability. Residential prices in Greater Bangkok are expected to climb in the second half of the year, thanks to government stimulus measures aimed at clearing out older inventory. In a major development, Thailand is courting international investors, including a big-name Dubai-based developer, to potentially build the world's tallest tower in Bangkok, a move that could be a boon for investment and tourism.
Read more: Bangkok Post (Office Market), Bangkok Post (Residential Prices), The Edge Malaysia (World's Tallest Tower)
SE Asia Startup Funding Hits Five-Year Low
Southeast Asia's startup scene hit a five-year low in Q1 2024, raking in just $1 billion—a 41% drop from the previous year. Despite more deals being inked, the region saw a sharp decline in big-ticket investments, especially in late-stage funding rounds, as a global liquidity crunch and jittery investors took their toll. This downturn comes along with broader economic pressures and a shift towards more sustainable financial practices in the startup world. The article finishes with a pitch to sell a more comprehensive report, but the summary is interesting as a standalone report.
Read more: DealStreetAsia
Database to Filter Bad Apple Insurance Agents
The Insurance Commission has rolled out a new database to keep tabs on misbehaving insurance agents and brokers, hoping for a boost in transparency and an increase in public trust in the industry. Set to go live in May 2024, the system will sort intermediaries into four categories based on their track record, making it easier for insurance companies to vet potential hires.
Read more: Asia Insurance Review
Fifteen New Power Plants Get the Green Light
In a nod to sustainable energy, four Thai companies have joined forces to pour money into 15 new power generation projects, including a dozen waste-to-energy plants and three refuse-derived fuel facilities. The projects, set to be up and running within two years, are part of a concerted effort to cut reliance on fossil fuels and curb climate impacts. Along those same lines, Thailand is doubling down on renewable energy, spurred by major investments from multiple companies in power generation. The country is also feeling the heat to surpass its 50% renewable energy target to hit carbon neutrality goals.
Read more: Bangkok Post (Investments), The Thaiger (Renewables)
Car Sales Skid 30% Despite Auto Show Hype
In March, Thailand's domestic car sales slammed the brakes, plunging nearly 30% year-over-year to 56,099 units, despite high hopes from the Bangkok International Motor Show. The Federation of Thai Industries blamed the slump on tighter auto loan rules, a sputtering economy, and delayed government budget spending. The downturn reflects broader headaches in the auto sector, although there's hope for a rebound later in the year, buoyed by ramped-up state spending and tourism.
Read more: Bangkok Post
Diplomatic Blitz to Boost Clout, Economic Ties
Thailand is going all-in on diplomacy across Asia, looking to strengthen economic and security partnerships. High-stakes talks with China are zeroing in on wrapping up major infrastructure projects, while tighter security cooperation with Malaysia aims to crack down on cross-border crime. Ties with Bangladesh are set to deepen through trade deals and regional connectivity programs, including bilateral agreements during a high-level visit. Mongolia is also angling for stronger ties, looking for improved economic cooperation and cultural exchanges.
Read more: Bangkok Post (China), The Star (Malaysia), Nation Thailand (Bangladesh), Bangkok Post (Mongolia), BSS News (Bangladesh)
Tourist Trends: Budgets, Brits, and Chinese
As travel costs climb, Asian tourists, especially Gen Z and millennials, are increasingly opting for regional getaways, a trend fueled by soaring intra-regional travel demand. British tourist numbers are dwindling, chalked up to stiff competition from other destinations and red tape headaches. In contrast, Thailand is rolling out the red carpet for Russians with extended visa exemptions, and it's betting big on a major influx of Chinese tourists through targeted promotions in several Chinese cities.
Read more: Bangkok Post (Regional Travel Preference), Pattaya Mail (British Decline), Thaiger (British Decline), VnExpress (Russian Visa Exemption), Bangkok Post (Chinese Tourism Target)
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.
This article was surprising for the length of sentences handed out for something that we believe most observers think is a fairly regular practice in the local education system. Interesting to see how heavy-handed the court was in this case:
School Bigwigs Jailed for Admissions Bribery
The former director and deputy director of Samsenwittayalai School have been slapped with 20-year prison sentences each for pocketing bribes, known locally as "tea money", to enroll students. The Central Criminal Court for Corruption and Misconduct Cases also ordered the educators to cough up 700,000 baht, finding them guilty of malfeasance and bribery.
Read more: Bangkok Post
That’s it for this week, thanks for reading!
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