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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:
Thai-Cambodia War Erupts, Border Crisis Explodes
Bank Chief Pick Signals Policy Shift
PM Suspended Over Cambodia Call Leak
Time Running Out for U.S. Trade Deal
Digital Crackdown Shows Quick Results
Property Market Has a Split Personality
EV Sales Press Ahead
Cannabis Dreams Go Up in Smoke
Labor Market Under Pressure
Bangkok Tops Global Digital Nomad Rankings
Corruption: State Audit Office, Solar Panel Fraud
Foreign Business Rules Get a Rejig
New Rules Target Financial Access and Safety
Train Fares Split for Locals and Tourists
Pesticides Poison Edible Flowers
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Thai-Cambodia War Erupts, Border Crisis Explodes
More physical conflict has erupted between Thailand and Cambodia, with Cambodia launching attacks using rockets that hit civilian areas in four Thai provinces. The attacks killed 11 Thai civilians and injured nearly 30 more. Thailand answered with F-16 fighter jet strikes on Cambodian military command centers. Thailand has downgraded diplomatic relations, recalled its ambassador, closed border checkpoints, and shut access to several ancient temples. The Thai National Cyber Security Agency raised its alert level from Yellow to Red in response to threats from Cambodia-based hacker groups and AI-generated deepfake campaigns. Cambodian PM Hun Manet is asking for an urgent UN Security Council meeting, Thai leaders are vocally condemning Cambodian "aggression." Against this backdrop, the baht has taken a step back from its strongest level since 2022.
Read more: Bangkok Post (Military conflict), Khao Sod English (Diplomatic downgrade), Bangkok Post (Cyber threats), Modern Diplomacy (ASEAN stability), Bangkok Post (Economic impact)
Bank Chief Pick Signals Policy Shift
The Thai cabinet has chosen Vitai Ratanakorn, the 54-year-old head of the Government Savings Bank, as the next Bank of Thailand Governor, effective October 1. He faces a handful of economic challenges, including weak consumption, and high household debt (89% of GDP). Coming from outside the bank, Vitai is expected to bring a fresh perspective to monetary policy, possibly favoring interest rate cuts to stimulate growth. The business community is expecting adjustments to loan interest rates and more proactive exchange rate management to protect export competitiveness.
Read more: Reuters (Appointment details), Bangkok Post (Policy direction), Bangkok Post (Economic challenges), AInvest (Investment impact)
PM Suspended Over Cambodia Call Leak
Prime Minister Paetongtarn Shinawatra is staring down possible disqualification by the Constitutional Court over a leaked phone conversation with Cambodia's Hun Sen. The Central Investigation Bureau forwarded the case to the National Anti-Corruption Commission, investigating what it calls “national security violations.” The court has suspended Paetongtarn from duties pending a final decision. Deputy PM Phumtham Wechayachai is the current leading candidate to be her successor. An Ipsos survey shows 77% of Thais believe the country faces a crisis, saying corruption (45%), poverty (37%), and unemployment (31%) are the biggest problems. The same percentage says they want a strong leader to challenge “wealthy elites.”
Read more: Thai Enquirer (Investigation details), ISEAS (Political impact), Thai Enquirer (Public sentiment), Asian News Network (Democratic erosion)
Time Running Out for U.S. Trade Deal
Thailand still hasn’t been able to get a favorable trade agreement with the United States, even as an August deadline draws closer. The negotiations are an attempt to reduce Thailand's current 36% tariff rate, with hopes for a final rate around 20% - a number similar to Vietnam's arrangement. Finance Minister Pichai Chunhavajira says his team has resolved 90% of US concerns, though the Bhumjaithai Party is demanding more parliamentary oversight. The stakes are high:" IMF projections suggest Thailand could drop to 5th place in Southeast Asian GDP rankings if punitive tariffs come into play.
Read more: Thai Examiner (Deadline pressure), Thai Examiner (US stance), Thai Enquirer (Parliamentary debate), Thai Examiner (Political aspects)
Digital Crackdown Shows Quick Results
Technology crime prevention efforts have shown quick results, with the Ministry of Digital Economy reporting prevention of nearly 6 billion baht in online fraud losses in three months. Authorities blocked more than 19,600 gambling websites, 14,100 scam platforms, and froze 181,989 bank accounts. AI-improved URL blocking has apparently dramatically improved efficiency.
Read more: Thai Enquirer (Fraud prevention), Thai Enquirer (Satellite market), Vietnam Economic Times (Ride-hailing rules), Modern Diplomacy (Digital government)
Property Market Has a Split Personality
Real estate has some positive momentum with residential sales up 3.7% and property prices rising 3.49% earlier this year. Regional performance is a mixed bag. The biggest macro problem for the sector is probably still related to household debt, which stands at 90% of GDP. Housing loans make up 37.9% of total debt at 6 trillion baht, and non-performing loans stand at 200 billion baht. Foreign investment interest is reportedly still healthy.
Read more: Modern Diplomacy (Market overview), Asian News Network (Debt crisis)
EV Sales Press Ahead
Susco Plc says it will double its EV sales to 4,000 units in 2025 as a BYD sales agent. Asia Green Energy (distributing Zeekr, Omoda & Jaecoo, and Mitsubishi EVs) says it’s going to hit 10 billion baht in revenue by 2030. Both companies say that the biggest driver for sales will be high domestic oil prices, but also acknowledge the challenges buyers face from household debt and tightening auto loan policies. The Finance Ministry is weighing an increased excise tax on imported electric vehicles with low local content, especially electric pickup trucks to offset the inflow of Chinese EVs that are currently benefiting from zero import tariffs.
Read more: Bangkok Post (Company strategies), Bangkok Post (Tax policy)
Cannabis Dreams Go Up in Smoke
Thailand, the first Asian country to decriminalize cannabis in 2022, is now limiting marijuana use to medical purposes only, and use will require a doctor's prescription. The policy change is creating whiplash in a $1 billion industry with 11,000 registered dispensaries. Public opinion is generally supportive of the change: 60% say they're happy with tighter rules. The reversal will force the closure of many small cannabis businesses and have a significant impact on cannabis tourism. The policy shift comes after the pro-cannabis Bhumjaithai Party exited the ruling coalition.
Read more: The Week
Labor Market Under Pressure
The cabinet approved a six-month visa extension for 47,348 Cambodian migrant workers in border provinces, great relief for many of them who were impacted by the border checkpoint closures. Pattaya has a labor shortage as tourism continues to pick up. Reportedly the situation is causing many businesses to resort to hiring undocumented workers. Community organizations are asking the government to allow work permits for approximately 100,000 refugees in nine border camps along the Thailand-Myanmar border, as international humanitarian aid is going to dry up at the end of this month.
Read more: Bangkok Post (Visa extension), Travel and Tour World (Pattaya shortage), BNI Online (Refugee workers)
Bangkok Tops Global Digital Nomad Rankings
Bangkok is in the top spot globally for digital nomads in 2025, scoring 91/100 points based on factors of cost, safety, internet infrastructure, and lifestyle. Several other Thai cities, including Nakhon Ratchasima, Koh Phangan, Chiang Mai, Koh Lanta, Phuket, and Krabi, are also ranked in the top 100 digital nomad destinations worldwide. The average living cost for digital nomads in Thailand is about $1,537 per month for single travelers. The trend is shifting tourism patterns from short-term visits to longer stays, helping contribute to local economic growth through higher demand for accommodation, working spaces, and other services.
Read more: Travel and Tour World
Corruption: State Audit Office, Solar Panel Fraud
Police have wrapped up their investigation into the March 28 State Audit Office building collapse that resulted in more than 90 deaths and are recommending indictments for 23 people, including Premchai Karnasuta, former president of Italian-Thai Development. The Thai Industrial Standards Institute has announced findings of solar panel fraud where Chinese panels purchased at 1,000 baht were resold to government contractors at up to 7,000 baht using counterfeit certification stickers.
Read more: Bangkok Post (Building collapse), Thai Enquirer (Solar panel fraud)
Foreign Business Rules Get a Rejig
Big reforms are underway to the 25-year-old Foreign Business Act, in an important change that changes the act’s main purpose from protecting local industries to improving economic competitiveness. The proposed changes will bring the rules up to date, particularly for technology, startups, and service sectors, and may even remove many of the current foreign ownership restrictions. Foreign investors have been active buyers of Thai equities in July, with net purchases hitting 6.64 billion baht in the first three weeks.
Read more: Law Asia (Reform details), Thai Enquirer (Market impact)
New Rules Target Financial Access and Safety
In an effort to improve financial inclusion for small-scale borrowers and bring informal lenders into the regulated financial system, the Finance Ministry is loosening pico-finance business regulations to allow some operators to extend services beyond their licensed province into adjacent regions. The businesses are allowed to provide loans up to 100,000 baht per borrower. Separately, the Ministry of Digital Economy is now able to block unlicensed cross-border digital asset operators; authorities can cut off internet access to platforms that don’t have Thai SEC licenses.
Read more: Bangkok Post (Pico finance), Tilleke & Gibbins (Digital assets), CryptoRank (ICO rules)
Train Fares Split for Locals and Tourists
Bangkok plans a new public transport pricing system from October 1st that will create a two-tier fare structure. Thai nationals will get flat-rate train fares of 20 baht (US$0.60), while foreigners will continue to pay regular distance-based fares. The government expects annual user savings of USD 310 million, but needs to compensate the transit operators USD 250 million in the deal. Many residents see no problem with the plan, but others (especially vocally, online) say it is going to further hurt Thailand's tourism reputation and is unfair to foreign resident taxpayers.
Read more: TravelMole
Pesticides Poison Edible Flowers
Two recent studies show widespread pesticide contamination in Thailand's edible flower market. The first study analyzed 192 samples and found the majority contaminated with 33 different pesticides. Affected flowers included jasmine, rose, vegetable hummingbird, wild ramose herb, and cowslip creeper. A second study looked at 18 samples for 132 pesticide types, and showed contamination in the quarters of rose samples and a third of vegetable hummingbird samples. The main pesticides identified were chlorfenapyr, carbendazim, and carbaryl.
Read more: Asian News Network
That’s it for this week, thanks for reading!
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