Thailand 20240823: Iconoclastic, Estival, Serpentine
Thailand 20240823: Iconoclastic, Estival, Serpentine
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:
Economic Headwinds Test Government Mettle
Shinawatra Dynasty Returns
Court Rulings Spark Push for Political Reform
Youth Political Protest Fatigue Sets In
Baht Set to Strengthen Further
New Flights and Expanded Airport Capacity
Cybersecurity Knowledge Gap is Widespread Risk
Villa Market Bucks Retail Headwinds
Sino-Thai Military Drills Intensify
Thai SELECT Spearheads Soft Power Push
Regional Institutions to Bridge SE and S Asia
Thailand Eyes BRICS as a Hedge
Gov’t Works to Reduce Energy and Import Costs
Python Gets Bangkok Man by the Balls
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Economic Headwinds Test Government Mettle
An export slump and manufacturing woes are dragging growth projections down to 2.7% for 2024, lagging regional peers. While industrial sentiment saw a July uptick, global uncertainties and domestic political turbulence still loom large. The newly minted Shinawatra administration is facing pressure to roll out stimulus measures and accelerate budget disbursement. the central bank has maintained a cautious 2.50% interest rate, eyeing credit quality and waiting for more policy clarity.
Read more: Bangkok Post (Economic Crisis), Bangkok Post (Sentiment Index), Asian News Network (Economic Concerns), Bangkok Post (GDP Forecast), Yahoo News (Economic Outlook), Straits Times (Growth)
Shinawatra Dynasty Returns
Paetongtarn Shinawatra's ascension to premiership is the dynasty's third stint at the helm, this time during a period of economic stagnation and coalition friction. Her party’s flagship digital wallet scheme is going to be delayed (again) and is seeing legal hurdles, and her personal business interests (unsurprisingly) are drawing scrutiny. Navigating conservative forces, implementing effective economic policies, and addressing structural issues to draw foreign investment will be crucial for her political longevity and economic recovery.
Read more: BBC (Political Challenges), Bangkok Post (PM Challenges), Channel News Asia (Political Risks), Nikkei Asia (Economic Challenges)
Court Rulings Spark Push for Political Reform
The Constitutional Court's dissolution of the Move Forward Party and disqualification of PM Srettha Thavisin have set a legislative reform drive in motion, for better or for worse. The opposition People's Party is looking for support to revise laws on party dissolution and ethics violations, with an eye to raising the bar for future party dissolutions and revised lifetime political bans. If they are able to get traction, these proposed changes could redefine domestic political stability and the business landscape.
Read more: Channel News Asia (Political Analysis), Bangkok Post (Legal Reforms)
Youth Political Protest Fatigue Sets In
Move Forward's dissolution has failed to re-ignite widespread youth protests, unlike what we have seen in other recent instances. This muted response is in part due to a changing political calculus, including legal repercussions for past protesters and growing disillusionment. Former PM Thaksin Shinawatra's return has given many pause to see how the landscape has changed, as Taksin appears to align with the establishment while boosting progressive agendas.
Read more: South China Morning Post (Youth reaction), The Diplomat (Political Shift)
Baht Set to Strengthen Further
The baht is eyeing 34 per U.S. dollar, lifted by central bank policy and expected U.S. Fed rate cuts. Recently hitting a 13-month high, the currency’s strength is indicative of healthy market confidence and capital inflows. Analysts are saying further gains are expected if the Fed reduces rates, as Thailand would benefit from a narrowing interest rate gap with the U.S. greenback.
Read more: Bangkok Post
New Flights and Expanded Airport Capacity
Malaysia Airlines has launched direct flights between Kuala Lumpur and Chiang Mai. Thai AirAsia X is will soon begin direct flights from Sydney to Bangkok, catering to the year-end travel rush. Suvarnabhumi Airport’s new runway, opening by year-end, will increase aircraft handling capacity by more than half (94 flights an hour, up from the current 64), supporting an expected rise in air traffic.
Read more: TAT News (Chiang Mai-Kuala Lumpur), Travel and Tour World (Sydney-Bangkok), Bangkok Post (Suvarnabhumi Expansion)
Cybersecurity Knowledge Gap is Widespread Risk
More than half of the population lacks sufficient cybersecurity knowledge, exposing individuals and organizations to significant risks. The Thailand Cyber Wellness Index 2024 has shown critical weaknesses in public understanding ransomware and the dangers of open Wi-Fi. Despite some modest improvements, major gaps still remain and the report makes clear that there is an urgent need for targeted digital literacy programs.
Read more: Bangkok Post
Villa Market Bucks Retail Headwinds
Despite rising household debt and fierce competition, Villa Market says that it remains bullish, targeting high-income consumers. Plans include three new stores, expanding to 41 locations, alongside improvements to online platforms and AI integration. The company says it is looking for a 10% sales increase, banking on its adaptability and success with new customer-centric strategies.
Read more: Bangkok Post
Sino-Thai Military Drills Intensify
The Falcon Strike 2024 exercises have ramped up complexity, incorporating special forces, helicopters, and long-range transport planes. Analysts are saying that the scenarios have all "elements needed for a small-scale war," a notable shift from previous joint training efforts. The drills come at a time when China continues to refine defense ties across all of Southeast Asia, a counterbalance to historical U.S. regional influence.
Read more: South China Morning Post
Thai SELECT Spearheads Soft Power Push
The Commerce Ministry is using its new “Thai SELECT” certification to promote authentic cuisine and Thai culture globally. This certification is intended to make inroads to expanded Thai cultural influence and economic growth, as the country continues pursuing the goal of developing a creative economy rooted in national identity and heritage.
Read more: Bangkok Post
Regional Institutions to Bridge SE and S Asia
Historical trade barriers and limited global supply chain participation are holding back better integration between Southeast and South Asia. While BIMSTEC and SASEC show promise, implementation and coordination challenges remain dogged. BIMSTEC, backed by high-level political support, is at the forefront of integration efforts but must improve execution of projects if its promise is to be realized. Collaboration with SASEC can and should improve institutional efficiency and regional ties, but the devil’s in the details (as always).
Read more: East Asia Forum
Thailand Eyes BRICS as a Hedge
Malaysia and Thailand are chasing membership in BRICS to hedge their economic and political interests between global heavyweights like China, Russia, and the U.S. As the world becomes more polarized, these Southeast Asian nations see BRICS as a potential platform to secure trade deals, pull in investment, and grow ties with major economies like China and India. Joining the bloc, however, which includes U.S. rivals, may require careful diplomatic balancing.
Read more: Fortune Asia
Gov’t Works to Reduce Energy and Import Costs
A 25-year energy strategy to mute prices through joint petroleum production and untapped resource exploration is underway. The plan is to reduce import dependence by developing domestic energy sources in the Andaman Sea and Gulf of Thailand. In the meantime, the central bank is talking a big game about challenges posed by cheap Chinese imports, which have negatively impacted local manufacturing while benefiting consumers through lower inflation.
Read more: Bangkok Post (Energy Strategy), Bangkok Post (Import Challenge)
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. Social media was incensed this week when an MP was caught on film slapping a reporter (video), but we’ll leave you with this tale of a local man who unfortunately this week found his testicles in the grip of the jaws of a python:
Python Gets Bangkok Man by the Balls
A Bangkok resident’s morning routine took a shocking turn as a two-meter-long python latched on to his testicles while he was using his toilet. Despite previous sightings of the snake in his home, Thanat Thangtewanon was caught off guard while sitting on his throne. He managed to remove the reptile (by beating it with a toilet brush) and quickly sought medical attention, where he was found to be in stable condition. Thanat shared his story on social media to warn others about the unexpected danger lurking in household plumbing. Caveat latrina.
Read more: Toronto Sun
That’s it for this week, thanks for reading!
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