Thailand 20250718
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Here is your Mekong Memo Thailand for this week.
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Headlines:
Foreign Business Rules Set for Rethink
Two Visions of the Future for Central Bank
Crushing US Tariffs Still on the Table
PM Suspended
Land Prices Soar in Eastern Economic Zone
Border Fight with Cambodia Simmers
Cops Go After Cross-Border Scam Empire
Thailand Pushes to Become Financial Hub
Nuclear Power by 2037
New Rules Hit Digital Platforms Hard
Tourism Market Flips as China Fades
Cannabis Industry Smoked by New Rules
OECD Says Productivity Boost Needed
National Health Report: “Needs Improvement”
Tech Hub Dreams Meet Skills Gap
Banks, Shops Fight Economic Slowdown
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Foreign Business Rules Set for Rethink
Complex rules on foreign business are getting a re-look. The Foreign Business Act sets a three-tier system: List 1 sectors are totally closed to foreigners, List 2 requires Cabinet approval, and List 3 requires Foreign Business Licenses. Generally, foreign ownership is limited to 49% of a business with minimum capital requirements of 2 million baht, but there are ways around this through Thai-majority partnerships, Foreign Business Licenses, Board of Investment approval, or international agreements like the U.S.-Thailand Treaty of Amity. The government says it knows that reforms are needed and changes should be coming through 2026 as Thailand faces regional competition for foreign direct investment.
Read more: Asean Briefing (FBA Details), Nation Thailand (Investment Competition)
Two Visions of the Future for Central Bank
Thailand's next central bank governor will set the course for its economic future. There are two leading contenders with very different monetary policy approaches. Vitai Ratanakorn, the government's preferred candidate, wants aggressive action: low-cost loans and debt restructuring to stimulate economic growth. The other candidate, incumbent deputy governor Roong Mallikamas, backs independence and a more cautious monetary policy focused on long-term financial stability.
Read more: Ainvest (Policy Approaches), Bangkok Post (Economic Challenges)
Crushing US Tariffs Still on the Table
Bangkok plans to fight the tariff threat with a three-part plan: offering to drop zero tariffs on 90% of U.S. imports (protecting agriculture), pushing Thai companies to invest in America, and improving safeguards for transshipment abuse (companies that try to sneak Chinese goods through Thailand). There's also a 200 billion baht ($6.1 billion) soft loan package at 0.01% interest that’s being floated for businesses that get hit. The stakes are huge - Thailand could lose 900 billion baht in exports, shed up to a million jobs, and see GDP growth fall below 1%. Former PM Thaksin has joined emergency negotiations, but Thailand is walking a tightrope between the U.S. and China.
Read more: Khaosod English (Aid Package), Thai Examiner (Chinese Concerns), Thai Enquirer (Economic Impact)
PM Suspended
The government is in chaos (again). The Constitutional Court has suspended Prime Minister Paetongtarn Shinawatra, who is under investigation by the National Anti-Corruption Commission over a leaked phone call with Cambodia's Hun Sen about border tensions. Former student activist and longtime Thaksin aide Phumtham Wechayachai is running things for now, but the government's grip on power is shaky. Their ruling coalition holds a thin 260-seat majority after the Bhumjaithai Party's exit. Polls show 42.37% are in favor of the PM's resignation and 39.92% would support fresh elections.
Read more: Reuters (Ethics Investigation), Asia Times (Acting PM), Nation Thailand (Public Opinion)
Land Prices Soar in Eastern Economic Zone
Land prices in Thailand's Eastern Economic Corridor shot up again by a quarter in Q1 2025 - the fifth straight quarterly jump. Foreign investment was 47 billion baht, up 31% year-on-year, with Japanese, Chinese, and Singaporean money leading the way. Rayong province saw prices jump 43.5%, Chon Buri 33.6%, and Bang Lamung district went nuts with a 126.5% spike.
Read more: Bangkok Post
Border Fight with Cambodia Simmers
Thailand and Cambodia remain at each other's throats over disputes about the demarcation between them. The normally bustling Ban Hat Lek border market in Trat province is dead after a 20-day shutdown, and there's new trouble brewing over the 4.6-square-kilometer Phu Makua hill near Preah Vihear Temple, where Cambodia has reportedly been building infrastructure. Thailand plans to host the 7th Joint Boundary Commission meeting in Bangkok on September 15 to try and resolve these issues, but Cambodia still wants to get the International Court of Justice involved instead.
Read more: Nation Thailand (Border Closure), Nation Thailand (JBC Meeting), Nation Thailand (ICJ Concerns)
Cops Go After Cross-Border Scam Empire
Thai police say they’re pulling apart a massive scam network, seizing 1.1 billion baht in assets linked to a criminal empire allegedly run by Cambodian tycoon Kok An. They've raided seven properties owned by his children (who've fled Thailand) and issued six arrest warrants. The online fraud operations cause daily losses of 100 million THB and are bleeding Thai victims dry.
Read more: Nation Thailand (Kok An Network), Khaosod English (Asset Seizures), Bangkok Post (Anti-Scam Committee)
Thailand Pushes to Become Financial Hub
The government is moving fast on a new law to turn Thailand into a regional financial center. The Financial Hub Bill - nine chapters and 94 sections - lays out rules for global financial firms and creates a new ecosystem with a central Office of the Regulatory and Promotion Committee and a One-Stop Authority to streamline business services. Deputy Finance Minister Paopoom Rojanasakul is overseeing the initiative. The bill's got everything from licensing, promotion, and supervision of financial institutions to investor incentives, plus administrative penalties to keep everyone honest, while aligning Thai regulatory standards with international practices.
Read more: Bangkok Post
Nuclear Power by 2037
In line with plans by other countries in the region, Thailand appears to be jumping into nuclear power with Small Modular Reactors (SMRs). Corporations like Ratch Group, Global Power Synergy Plc, and Saha Pathanapibul International Plc are reportedly backing the push. The Power Development Plan calls for the deployment of two 300MW SMRs by 2037. Next-generation SMRs aren’t the power plants of yesteryear, as they include safety mechanisms like natural circulation and gravity-driven cooling systems, but watchdog groups aren't sold and they still question the necessity and cost-effectiveness compared to alternatives.
Read more: Bangkok Post (Nuclear Plans), Bangkok Post (Concerns Raised)
New Rules Hit Digital Platforms Hard
Nineteen digital platform players now operate under strict rules requiring mandatory risk assessments and management processes. New safe harbor regulations call for social media sites to remove specified content within 24 hours of notification by the government. Online marketplaces have until December 31, 2025, to get their act together: they'll need Thai-language disclosures, business user information verified against government databases, and three-day notice-and-takedown systems for illegal products.
Read more: Bangkok Post (Platform Controls), Tilleke (Content Takedown), Tilleke (Marketplace Rules)
Tourism Market Flips as China Fades
Malaysia (2.29 million) is now Thailand's biggest tourist source, replacing China (2.26 million) in the top spot. India and Russia remain strong too, with 1.18 million and 1.03 million visitors. The Tourism Authority wants 3 trillion baht in revenue by 2026, expecting 35.5 million foreign visitor arrivals to bring (and leave behind) 1.77 trillion baht.
Read more: Travel and Tour World (Revenue Targets), Travel and Tour World (Market Shifts), Bangkok Post (Investment Needs)
Cannabis Industry Smoked by New Rules
The billion-dollar cannabis industry is in trouble. New rules require a medical prescription for all cannabis purchases, threatening to shut down thousands of dispensaries across the country that have prospered since decriminalization in 2022. Small businesses now must either get their hands on medical licenses or close up shop. The regulatory changes come after the Bhumjaithai Party's exit from the ruling coalition, a big reversal from Thailand's pioneering position as the first Asian nation to decriminalize cannabis. The health minister says the changes are necessary to protect the public, but industry stakeholders say that’s nonsense.
Read more: Indian Express (Industry Impact), Straits Times (Farmer Concerns)
OECD Says Productivity Boost Needed
The OECD has recommended that Thailand set up a National Productivity Council to do something productive (ha!) about declining productivity growth. If something doesn’t change, the goal of getting to high-income status by 2037 will remain a dream. The biggest problems are market concentration, regulatory red tape, trade service restrictions, feeble private investment, and insufficient investment into infrastructure and human capital development. The proposed council would be responsible for data management, policy coordination, and the development of a National Productivity Framework, coordinating between agencies like the NESDC, Bank of Thailand, and the National Statistical Office.
Read more: Nation Thailand
National Health Report: “Needs Improvement”
A National Health report identified two big problems: deteriorating mental health and declining birth rates. The document shows 13.4 million Thais are suffering from mental health issues, with especially worrying trends in those 15-29 and the “pre-elderly” population (45-59). Changing social norms and high living costs are also causing fewer people to have less children, and while fixes aren’t clear, the need for action is clear.
Read more: Nation Thailand
Tech Hub Dreams Meet Skills Gap
Thailand dreams of being a regional digital powerhouse, and while it has world-class digital payment and ID systems, the country ranks just 37th out of 67 countries in global competitiveness. There's also a tech talent shortage - the country has 20,000 fewer computer science and engineering graduates than it needs.
Read more: Bangkok Post (Digital Hub), Bangkok Post (ASEAN Collaboration), Bangkok Post (AIoT Platform)
Banks, Shops Fight Economic Slowdown
Siam Commercial Bank is scaling back its business operations (especially its branch footprint) as the economy stumbles, as they expect GDP growth to continue to slow. The Thai Retailers Association wants fast action: 115 billion baht for community projects, tourism, and infrastructure, as well as tourism support like instant 7% VAT refunds for international tourists and longer visa-free periods. The Retail Sentiment Index recently hit a 42-month low.
Read more: Bangkok Post (SCB Strategy), Bangkok Post (Retail Recovery)
That’s it for this week, thanks for reading!
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