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Here is your Mekong Memo Thailand for the week of February 2, 2024.
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Move Forward Struggles to Move Forward
The Move Forward Party, despite winning the most seats in the 2023 general elections, continues to face headwinds. The Constitutional Court ruled against the party's campaign to amend the lese majeste law this week, branding it unconstitutional. The ruling has sparked criticism from student unions and concerns about unfair political litigation. The situation really is a good illustration of the complexities of Thailand's political landscape, where efforts for reform are often met with institutional resistance.
Where Does Thailand Sit in the US-China Story?
Thailand has emerged as a diplomatic player in the US-China rivalry, hosting a high-level meeting between US National Security Advisor Jake Sullivan and China's Foreign Minister Wang Yi in Bangkok recently. This event is being celebrated as being a result of a balanced foreign policy and the country’s ability to serve as a neutral ground for superpower dialogues. The talks covered several geopolitical issues, including regional disputes and global security concerns. Thailand's ability to bring together high-level discussions of this nature without taking sides is seen as a diplomatic victory, burnishing its international standing.
Read more: DW
PTTEP Shares Big Investment Plans
Thailand's national energy company, PTT Exploration and Production Public Co. Ltd. (PTTEP), plans to invest $6.7 billion in 2024, focusing on both fossil fuels and clean energy. The company reported a net income of $2.2 billion for 2023, a rise from a hair under $2 billion in 2022. Projects planned include a ramp-up of production in several oil fields and an acceleration of petroleum exploration. PTTEP has also allocated a provisional budget for advancing clean energy forms, perhaps seeing the writing on the wall for hydrocarbons.
Read more: Rigzone
Bangkok Land Prices Reach New Heights
Bangkok land prices are set to hit a record high, with a plot on Ploenchit Road (the parking lot beside Central Chidlom) expected to fetch a price in excess of 4 million baht per square wah. The sale at this time seems to be influenced by the land and building tax, which began full-rate collection in 2023. The tax, along with new appraisal prices, is prompting landlords to sell their properties. Despite the pandemic's impact, land transactions in prime locations like Sathon and Sukhumvit continue to attract developers, with prices showing a steady annual increase of up to 10%.
Read more: Bangkok Post
Air Force Seeks $19 Billion for New Fighter Jets
The Thai Air Force is requesting a 19 billion baht budget for the next fiscal year to secure new fighter jets. Potential options include the US F-35 or Sweden's Gripen E/F. The request follows Thailand's new policy requiring economic reciprocity in military hardware deals. The Air Force has formed a selection committee to determine the best supplier and claims that the decision will be influenced by Thailand's policy of neutrality and existing familiarity with certain jet types.
Read more: Bangkok Post
DFM Says Economy in Recession, Calls for Fix
The economy is currently in a state of recession, primarily due to high household debt levels, claims a Deputy Finance Minister who says that the central bank needs to cut interest rates to alleviate the burden on the public. The government remains committed to their 500 billion baht handout plan to support 50 million Thais, despite a recent NIDA poll showing that 1 in 3 people want the project scrapped. Despite slower growth, the Bank of Thailand Governor maintains that the economy is not in crisis, but in any event, lower rates can’t simply fix the economy in the absence of structural reform. The government has revised its 2024 growth projections downward and plans to issue overseas bonds to support economic recovery.
Swiss Offer Carbon Scheme to SEA
Several Southeast Asian countries are exploring a carbon credit scheme modeled on a Swiss-Thai deal involving the sale of Internationally Transferable Mitigation Outcomes (ITMOs). The project, in line with the Paris Agreement's Article 6.2, allows countries to trade carbon emission reductions. Energy Absolute (EA) in Thailand has launched the Bangkok E-Bus program, replacing diesel buses with electric models and generating carbon credits. Essentially, the Swiss company replaces polluting busses and replaces them with emission free busses and claims credit for the reduction in carbon output. Despite the elegance of the scheme in principle, in practice it is complex, lacks regulatory clarity, and leaves many concerned over the viability of the effectiveness of market-based solutions in climate action. The deal's financial details are undisclosed, but it sets a precedent in the region, with nine other Southeast Asian countries at some stage of signing similar agreements.
Read more: Radio Free Asia
Netizens Rage, Politicians Pay Lip-service: PM2.5
The government claims to be actively addressing its severe PM2.5 pollution, ranked among the world's worst, but netizens’ emotions are running high and doubts are everywhere on social media. Claimed government measures include a dialogue with Cambodia over transboundary pollution and the introduction of new air-quality laws to curb the smog. Some have urged a declaration of a national health emergency over the foul air, as PM2.5 levels in Bangkok and northern regions like Chiang Mai breach safe limits on a regular basis.
Read more: Thai PBS World (Transboundary Talks), Thai PBS World (Air-Quality Laws), Thai Enquirer (Call for Health Emergency), Thai PBS World (International Conference), Asia News Network (Global Ranking)
Thaksin's Daughter Calls for Political Unity
Paetongtarn Shinawatra, leader of Thailand's ruling Pheu Thai Party and daughter of former Prime Minister Thaksin Shinawatra, called for political unity this week. Despite speculation of a cabinet reshuffle, she claims full support Prime Minister Srettha Thavisin, touting his suitability for the country's current needs. Paetongtarn's entry into politics and her apparent stance against political drama seem to be an indication of a desire to move beyond a recent history of military coups and political unrest, but her true motives can only be guessed at.
Read more: Nikkei Asia
Green Light for Transport Infrastructure Plans
The Transport Ministry has announced a huge investment totalling 652 billion baht in approximately 150 transport projects over the next two years. In 2024 alone, 64 projects are expected to be launched with a budget of 389 billion baht, and 57 new projects worth 263 billion baht will follow in 2025. Plans include 18 motorway projects, the 5th Thai-Lao Friendship Bridge, and the expansion of existing motorways. The Ministry is also keen to improve rail routes, maritime transport, and the promotion of electric buses, in an attempt to kickstart economic growth and upgrade the country's transport infrastructure.
Read more: Bangkok Post
Japanese EV Truck Hopes Are High
Japanese automakers Isuzu Motors and Mitsubishi Fuso are set to expand their presence in Southeast Asia's electric vehicle (EV) market with electric trucks. Mitsubishi Fuso will export its eCanter small electric trucks to Hong Kong and Singapore, its first commercial EV venture in Asia outside Japan. Isuzu plans to invest 120 billion yen (~$817M) over five years to produce electric pickup trucks in Thailand, eyeing local sales by 2025 and exports to other countries.
Thailand Tops in Social Media Consumption
Thailand stands out globally for its high social media usage and adoption of digital services. The country ranks 17th worldwide in average daily social media use, with users
wasting spending 2.31 hours per day. It's fifth in monthly social media use and ninth in TikTok advertising reach, with 44.3 million users. Bangkok features prominently as a top city for Facebook advertising audiences, and Thais are avid online shoppers, with 70% engaging in weekly online shopping, and 44% purchasing groceries online each week. The growth of meal ordering services is also noteworthy, with about a third of internet users ordering meals online at least once a month. Ride-hailing services and mobile payments are increasingly popular, with Thailand ranking 23rd and 12th globally in these sectors, respectively.
Read more: Bangkok Post
Growth Slows, Trails Vietnam
Thailand currently ranks 51st globally and 7th in Asia in the 2024 Global Growth Quality Report, trailing behind Vietnam. Economic growth projections for 2024 have been downgraded to 2.8%, with the Bank of Thailand likely to cut its GDP outlook due to weaker-than-expected growth in the last quarter of 2023. The nation recorded a current account surplus in December, but overall economic growth remains sluggish with a 6.27% year-on-year drop in manufacturing production in December, largely due to declining car production and worryingly high household debt.
CRISPR Coming for Agriculture
The Ministry of Agriculture and Cooperatives is pushing forward with gene-editing technology to improve agricultural productivity and address climate change challenges. The technology is hoped to improve crop yields and increase resilience against climate impacts on crops. The technology, first introduced in 2013, uses the CRISPR system for precise genetic modifications, focusing initially on locally popular crops like rice, cassava, and rubber. Unlike genetically modified organisms (GMOs), gene editing involves non-foreign DNA, potentially offering a safer and more efficient pathway to improved crops. The ministry plans to amend regulations to allow expanded use of the technology.
Read more: Bangkok Post
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 big story on social media this week was about the BASE jumper in Pattaya who didn’t make it, but that’s a downer. Then there’s the (much more entertaining) story about the 48 (!) year old man who tried to trick his relatives into sending him money by claiming he had been kidnapped in Pattaya. But we leave you with this short tale of GPS use gone wrong - it’s easy to make fun, but don’t think it couldn’t ever happen to you:
GPS Faux Pas Leaves Woman Hamstrung
A Thai driver, relying on GPS navigation, found herself in a precarious situation when her car became stuck on a pedestrian suspension bridge over the Yom River this week. The driver, unfamiliar with the area, followed GPS instructions to cross the Wiang Thong Bridge, not realizing it was meant only for foot traffic. Her adventure came to an end with the help of local police and rescue teams, who were able to round up some tractors to pull the car back off the bridge. Keep your heads up out there…
That’s it for this week, thanks for reading!
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