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Here is your Mekong Memo Thailand for this week.
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Headlines:
Border Standoff Moves From Posts to Protocols
Border Tensions Hit Trade, Logistics, Tourism
Refugee Work Permits to Ease Labor Shortage
Debt Overhang Pressures Banks, Dims Outlook
Markets Eye Policy Support as Politics Weighs
Tariffs Rewrite Trade Strategy and Deals
Auto Slump Meets EV Pivot
Clean Energy Needs Storage, Permits, Capital
Digital Rules, Cloud Buildout, and a Regional Pact
Streaming Boom Meets Censorship Risk
Gripen Deal Ties Defense to Tech Transfer
Ports, Planes, and a New Land Bridge
“G-Token” Bonds Debut
ESG and Net Zero: A Regional, Pragmatic Track
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Border Standoff Moves From Posts to Protocols
Bangkok has taken the border fight to Geneva. The foreign minister briefed UN officials, accused Cambodia of laying new landmines, and pressed the Ottawa Convention committee. Thailand once again confirmed that it isn’t going to scrap the 2000 MoU on demarcation and joint surveys - it says the deal is the only workable framework. Military commanders met and signed 11 cooperation agreements to try to prevent flare-ups and keep demining on the agenda. A new coordinating group for frontline units is in the works. Both sides promised that they’d do their best to avoid provocations and clamp down on misinformation.
Read more: The Nation Thailand (Landmines case), Bangkok Post (MoU stance), The Nation Thailand (Treaty basis), Bangkok Post (Commanders’ pacts), Vietnam News (Ceasefire pledges)
Border Tensions Hit Trade, Logistics, Tourism
Cambodian consumers are boycotting Thai goods, and the movement is starting to bite. July trade with Cambodia fell 13% year-on-year, with Thai imports into Cambodia down 44%. Japanese companies in Thailand are bemoaning higher logistics costs from rerouted shipments, and they want support to bring more domestic demand. Thai tourism operators say confidence could be reduced even further, and hotel occupancy could go even lower if news from the border doesn’t improve soon. Executives with big exposure to Cambodia hope that the dip in sales will be short-lived, but they want quick de-escalation.
Read more: Asian News Network (Boycott impact), Bangkok Post (Logistics costs), Bangkok Post (Tourism risk), Global Voices (Worker safety)
Refugee Work Permits to Ease Labor Shortage
Bangkok has opened a pathway for legal work for long-term Myanmar refugees. The cabinet has approved work rights for about 80,000 people in camps, bringing praise from the UNHCR and other rights groups. The labor minister has also created controlled opportunities for soon-to-be-discharged soldiers and well-behaved inmates to fill labor shortages; in addition to the manpower, he also promised oversight.
Read more: US News (Refugee permits), UCA News (Praise), Khaosod English (Program scope), Bangkok Post(Crackdown), Bangkok Post (Fake certificates)
Debt Overhang Pressures Banks, Dims Outlook
In a surprise to few observers, bad loans are creeping higher. Fitch says impaired loans are on the rise at the big banks, with some DSIBs near or above 4% NPL ratios. The central bank says growth is going to come in below potential next year as exports, tourism, and consumption continue to be soft. NESDC and the Thai Bankers’ Association wants structural fixes like getting more workers into the formal economy, building national data systems, and they even want to consider a negative income tax by 2027. Household debt sits at a very uncomfortable 87.4% of GDP (officially, unofficially, it’s likely higher), and public debt is headed toward 70% as deficits remain.
Read more: Bangkok Post (Bank risks), Bangkok Post (Reform path), Bangkok Post (BNPL concern), Bangkok Post(Growth view), Bangkok Post (Debt trajectory)
Markets Eye Policy Support as Politics Weighs
A new task force from the Finance Ministry, the SET, and the SEC has been set up to support better enforcement and improved liquidity. The task force, starting work on September 15, will have legal teeth to deter misconduct by market gatekeepers. A Fed rate cut, if it materializes, could draw some foreign inflows and lift the baht, but local politics and global risks are expected to keep a lid on gains. Research has blamed a 24% SET drop and $2.3 billion in outflows on protests and general uncertainty, with scope for a rebound if tensions cool and earnings hold. Long-term savings reforms and provident funds remain on the wishlist.
Read more: Bangkok Post (Task force), Bangkok Post (Fed watch), AInvest (Volatility)
Tariffs Rewrite Trade Strategy and Deals
Exports rose 11% in July, but momentum looks shaky. The new US tariffs are cooling export momentum, especially the 19% tariff on electronics and autos, a rules of origin under scrutiny. The Commerce Ministry is trying to steer businesses toward market diversification and faster Thai-EU FTA talks; seven chapters are done with another round due in Brussels. The cabinet has redirected 26 billion baht to try to protect border economies and SMEs.
Read more: Bangkok Post (Export outlook), Bangkok Post (Tariff details), Bangkok Post (EU FTA), Bangkok Post (Trade stance), Travel And Tour World (Funds shift), AInvest (Baht hedging)
Auto Slump Meets EV Pivot
Car production has fallen 5.7% in the first seven months and 11% in July alone. Banks’ tighter auto lending and the aforementioned household debt have punished sales - pickup sales have been down for 30 straight months. EV registrations have increased - July retail sales edged up as prices dropped. BYD shipped its first Thai-made EVs to Europe using its own carrier, a big win for local exports and a little wind in the sails of the domestic auto industry.
Read more: Bangkok Post (Output drop), Khaosod English (EV sales), Xinhua (BYD exports), AInvest (EV outlook)
Clean Energy Needs Storage, Permits, Capital
Rooftop solar interest is high, but installs are below potential because of opaque pricing, low levels of vendor trust, and a lengthy permitting process. Subsidies, tax breaks, and standardization are the fixes the biz needs. EGAT has opened a 280MW floating solar tender at Srinagarind Dam, will be interesting to watch if this type of install becomes more common - there’s plenty of empty “land” in reservoirs nationwide. Policy experts say that storage is a vital missing ingredient from the grid plan until 2032, and they want ESS, smart charging, and V2G integrated sooner. Carbon markets are opening via an Article 6 deal with Singapore.
Read more: The Nation Thailand (Rooftop barriers), PV Tech (FPV tender), The Nation Thailand (Transition study), TDRI (ESS gap), Eco-Business (Carbon deal)
Digital Rules, Cloud Buildout, and a Regional Pact
ASEAN’s Digital Economy Framework Agreement is more than two-thirds finished. Ministers want to lock rules for trade, payments, and data to reach $2 trillion in digital value by 2030. Thailand is a lead negotiator and is working hard to court cloud investments, but readers of The Memo know that Vietnam is also very aggressive in the space. Alibaba has opened a second data center, and Tencent is scaling services as it fortifies its offerings in a rivalry with US hyperscalers. Washington wants Thailand to open Type-3 telecom licenses and assign the upper 6GHz Wi-Fi band, which would require changes to the law. The NBTC says security limits remain in place and MSME support and cross-border data rules are at the center of ongoing talks.
Read more: The Nation Thailand (DEFA talks), WebProNews (Cloud race), Bangkok Post (US asks)
Streaming Boom Meets Censorship Risk
Cash is pouring into the Thailand content machine. Netflix has put more than $200 million into local productions since 2021 and is building a Southeast Asia hub with jobs in writing, directing, and post-production, supported by tax rebates. Tencent’s WeTV is also working on local and international series to grow market share. Artists, however, are maybe less bullish about the future of the industry as some are saying there’s too much censorship pressure tied to foreign politics. One Myanmar national has already fled town after a Bangkok show about authoritarianism was subject to interference. The creative sector is winning global reach and tourism spinoffs, but content rules and political sensitivities still affect what gets made and shown.
Read more: WebProNews (Netflix spend), WebProNews (WeTV growth), Artnet News (Censorship case)
Gripen Deal Ties Defense to Tech Transfer
Thailand signed for four Saab Gripen E/F fighters with deliveries through 2030 and a long-term offset program. The package includes Link-T IP rights, local MRO, and planned investments in cyber ranges and training that could greatly improve supply chain participation for Thai companies. Sweden has given the go-ahead on the export of up to 12 aircraft. Thailand’s foreign minister visited Saab HQ to talk about radar, weapons fit, and ways that Thailand and Sweden can work on engineering exchanges and a better R&D presence.
Read more: Janes (Order details), Aviation Week (Export clearance), AInvest (Offsets), The Nation Thailand (Saab visit)
Ports, Planes, and a New Land Bridge
The southern Land Bridge has passed the hurdle of the first round of detailed studies and phased plans that would require nearly a trillion baht to deliver. It links Ranong and Chumphon with ports, rail, and a motorway to cut shipping days (and piracy!) from the Malacca Strait routes that are mostly used today. Public consultations raised environmental and compensation needs, but operations are now expected to begin in 2030 with a “long” (unspecified, for the moment) concession. In the north, Chiang Rai airport is going to add a new terminal and MRO center by 2032 to increase capacity to 6 million passengers a year.
Read more: Bangkok Post (Land Bridge), Travel And Tour World (Airport plan)
“G-Token” Bonds Debut
Digital assets are making a move into public finance with a plan to issue 5 billion baht of tokenized government bonds (G-token) through licensed exchanges. KuCoin joined as the first international platform partner.
Read more: Bitcoinsensus
ESG and Net Zero: A Regional, Pragmatic Track
Siam Cement Group’s ESG Symposium saw company and financial bigwigs pitch an ASEAN-fit path for decarbonization. SCG was keen to show off its “Saraburi Sandbox” for low-carbon industry development, SME support programs, and excellence as a Net Zero Accelerator. In other ESG news, the central bank is warning against quick fixes and says that players work on low-disruption transitions, rather than shooting for the stars right out of the gate. Their suggested way forward: collaborate, use local solutions, and move ahead with finance access in mind.
Read more: Bangkok Post
That’s it for this week, thanks for reading!
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