9Country ProfileA wide range of natural resources keeps exports upRecent political developments bring back democracyEconom...
10     COUNTRY PROFILE SNAPSHOT     By 2025, Thailand is expected to have a population of over 70m     Life in colour     ...
COUNTRY PROFILE SNAPSHOT                                                                      11rapidly throughout the reg...
12                            COUNTRY PROFILE OVERVIEW                            The country’s first female prime ministe...
COUNTRY PROFILE OVERVIEW                                                                                13POPULIST AWAKENI...
COUNTRY PROFILE OVERVIEW                                                                     15The current senate presiden...
16                              COUNTRY PROFILE OVERVIEWIn the 2011 election          in 2011 highlighted the depth of the...
COUNTRY PROFILE OVERVIEW                                                                        17   Facing unshakeable op...
18                               COUNTRY PROFILE ANALYIS                               Prime Minister Yingluck met with Pr...
COUNTRY PROFILE VIEWPOINT                                       19                                                        ...
20     COUNTRY PROFILE INTERVIEW     Yingluck Shinawatra, Prime Minister     Heal and grow     OBG talks to Prime Minister...
COUNTRY PROFILE INTERVIEW                                      21What are the challenges to fostering unity and rec-      ...
22     COUNTRY PROFILE INTERVIEW     Surin Pitsuwan, Secretary-General, ASEAN     Pulling together     OBG talks to Surin ...
COUNTRY PROFILE ANALYSIS                                                                    23                            ...
24                                    COUNTRY PROFILE ANALYSIS                                                            ...
COUNTRY PROFILE INTERVIEW                                         25                                                      ...
26     COUNTRY PROFILE VIEWPOINT     William Hague, UK Secretary of State for Foreign and     Commonwealth Affairs     Bou...
28      COUNTRY PROFILE VIEWPOINT     Tony Blair, former Prime Minister of the UK     Key components for success     Tony ...
Oxford Business Group - Thailand 2012
Oxford Business Group - Thailand 2012
Oxford Business Group - Thailand 2012
Oxford Business Group - Thailand 2012
Oxford Business Group - Thailand 2012
Oxford Business Group - Thailand 2012
Oxford Business Group - Thailand 2012
Oxford Business Group - Thailand 2012
Oxford Business Group - Thailand 2012
Oxford Business Group - Thailand 2012
Oxford Business Group - Thailand 2012
Upcoming SlideShare
Loading in …5

Oxford Business Group - Thailand 2012


Published on

Published in: Travel, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Oxford Business Group - Thailand 2012

  2. 2. 9Country ProfileA wide range of natural resources keeps exports upRecent political developments bring back democracyEconomy resurgent following devastating floodsRejecting violence and building international credentialsNegotiations with neighbours to bolster regional trade
  3. 3. 10 COUNTRY PROFILE SNAPSHOT By 2025, Thailand is expected to have a population of over 70m Life in colour A diverse ecosystem and population help the country thrive The Kingdom of Thailand, formerly known as Siam, neighbouring countries like Cambodia and Vietnam is situated in the heart of South-east Asia. Thailand had rippling effects for the region. The US remained lies between the Lao People’s Democratic Republic a close ally during this period, and Thailand receiv- to its north-east, Myanmar to its north-west and ing approximately $2bn in economic and military aid western, Cambodia to the south-east, and Malaysia and permitted US military bases on its territory. on the southern border. Following the conclusion of the Vietnam War in GEOGRAPHY: Thailand comprises 76 provinces, 1975, Thailand reformed its diplomatic policies and which are divided into districts, sub-districts and vil- asked US forces to remove their military outposts. lages. Covering an area of approximately 514,000 sq The 1970s were also marked by domestic political km, the country can be broadly divided into four unrest, with periods of military rule and civil demon- geographic regions. The central region includes the strations upending stability throughout the nation. Bangkok metropolitan area and the basin of the In 1973, student demonstrations against the mili- Chao Phraya River, which runs from north to south tary junta were so severe that after violence began and flows into the Gulf of Thailand. Next, the north- King Bhumibol Adulyadej gave sanctuary to the stu- ern region, which is heavily forested and mountain- dents in the Chitralada Palace. He then expelled the ous makes up roughly one-third of Thailand’s total prime minister and removed the reigning junta. land mass. It encompasses the Khorat Plateau and ECONOMY: Stability and economic progress char- is boarded on the north and the east by the Mekong acterised the mid- to late-1980s, as booming mar- River. The southern region extends roughly from kets and political stability allowed the economy to Chumphon, 460 km south of Bangkok, through the move forward. Growth remained strong at roughly Kra Isthmus along to the Thai-Malaysian border, 6% and increased to above 8% in 1986, a level it which is framed by the Gulf of Thailand to the east. maintained for 10 years. Growth rates hit their peak HISTORY: The Kingdom of Thailand was formally between 1988 and 1990, averaging 12% per year. erected in the mid 14th century, although Thais first However, the rapid economic expansion did not began settling in their present territory as early as last, and years of soaring market growth were abrupt- the sixth century. By the end of the 13th century, ly halted by the Asian economic crisis in 1997-98. they ruled most of the western region. Known as Siam The Thai economy became mired in a deep reces- (land of the white elephant) until 1939, Thailand is sion resulting from the severe financial problems the only country in South-east Asia to have never that faced many Thai companies, banks and finan- been colonised. Although an Anglo-French accord cial institutions. Exports, which were a significant driv- signed in 1896 guaranteed Thailand’s independence er of growth, collapsed in 1996 and raised doubts as buffer between the two powers, Great Britain about the Bank of Thailand’s ability to maintain the had held a colonial foothold in the region since in baht’s peg against the dollar. A variety of interna- 1824. In 1932, a coup established a constitutional tional investors that had previously been investing monarchy in Thailand, with a representative govern- heavily in the state removed or lost their capital, ment based on universal suffrage. Thailand’s sover- leaving many sectors of the economy exposed, most eignty was not seriously challenged until the Sec- notably in the real estate sector where foreign invest- ond World War when Japan invaded the country. ment had been particularly high. International events continued to influence Thai- Like the recent global financial crisis that emerged land throughout the 1960s as conflicts arising in out of the US sub-prime market, the recession spread
  4. 4. COUNTRY PROFILE SNAPSHOT 11rapidly throughout the region. The crisis that had firstmaterialised in Thailand quickly spread to Indone-sia, Malaysia and later South Korea as well.CLIMATE: Under the Koppen Climate classificationsystem, Thailand is described as having a tropicalmonsoon climate, characterised by warm tempera-tures and high humidity levels. However, variationsare found between the north and south.The south has both a rainy and a dry season. The rainyseason differs between the west and the east coasts:the south-west monsoons generally bring heavystorms from April to October, while the east coastrains begin in September and end in December. The north has a savannah climate with three dif-ferent seasons. The first is a mild and sunny winterwith temperatures ranging in the mid-20°C rangefrom November through February. A hot summerseason follows extending roughly from Marchthrough May, with temperatures hovering between28°C and 37°C and lasting until the monsoon arrives. Buddhism is the religion of 94% of Thais, and as such, plays a part in many aspects of societyThe rainy season typically begins in late June and con-tinues through until October. reach a stable population of 70.2m by 2025. TheRELIGION & CULTURE: The dominant religion in capital city Bangkok alone is home to anywhereThailand is Hinayana Buddhism or Theravada Bud- between 8m and 10m people, and it is by far thedhism, similar to that practised by other countries biggest city in the the region including Sri Lanka, Myanmar, Cambo- Of the population, 78% are ethnically Thai, butdia and Laos. Buddhists make up roughly 94% of the within this group a significant range of dialects andtotal population, while Muslims represent 3.9%, Con- diversity of customs exists. The largest minority groupfucians 1.7% and Christians some 0.65%. is the ethnic Chinese, which comprises 11% of the Naturally, Buddhism forms an integral part of Thai population and is mainly centred in Bangkok, espe-culture, acting not only as the dominant religious cially in the thriving Chinatown district of the, but also comprising the base of many of the Other prominent ethnic groups include Malays, Cam-country’s rituals, its monarchy and the national iden- bodians, Indians and Vietnamese.tity. The country’s tri-colour flag emphasises this LANGUAGE: The majority of the local populationinfluence with the two white stripes representing speaks Thai. The language can be traced to the TaiBuddhism. The white runs alongside red bands sym- language family that has its roots in the Austric lan-bolising the colour of the nation, and blue stripe guage group. Four main Tai languages are spokenrepresents the monarchy. Religion also influences the across the country, the most common being Centralcountry’s art, literature and architecture. Buddhist Thai or Bangkok Thai. The others include Southerntemples, shrines and intricate statues decorated in Thai, Northern Thai and Laotian, commonly referredgold are a ubiquitous feature of the Thai landscape. to as North-eastern Thai. The Thai language is Many Buddhist males above the age of 21 are believed to have originated in the region now bor-ordained for a period between five days and three dering Vietnam and China.months at least once during their lifetimes. This rit- NATURAL RESOURCES: Thailand is home to anual often takes place during the rainy season when abundance of natural resources. Metallic resourcesmonks stop their travels and remain in their monas- include lead, tin, tungsten, tantalum, zinc, iron, andteries. To this day, the custom is supported by the silver. Gold deposits are located in Phichit, Loei,Thai government and forms an important part of a Narathiwat, Phetchabun and Prachinburi.young adult male’s life. As a result, even male civil In terms of energy resources, Thailand has bothservants are allowed to leave their positions for up onshore and offshore gas and oil fields. The coun-to three months to complete their monastic duties. try’s proven oil reserves stood at roughly 659m bar-Each day of the week is associated with a Buddhist rels by the end of 2011. Reserves have increased incolour: yellow for Monday, pink for Tuesday, green recent years after standing at 100m barrels in 1987for Wednesday, orange for Thursday, blue for Friday, and 300m barrels in 1997, however the reserve ratepurple for Saturday and red for Sunday. It is there- has remained relatively constant since 2006 as newfore a sign of respect for visitors to adopt this colour discoveries have balanced out the depletion of oldcoordination in their dress. reserves. Nevertheless, Thailand is the region’s sec-POPULATION: Thailand is the 20th-most populat- ond-largest net oil importer after Singapore. Othered country in the world with a population of about natural resources include natural gas, fluorite,65.7m. The average annual population growth rate gypsium, lignite, rubber, timber and a multitude ofis estimated to be around 0.7%, and is projected to locally harvested food products and fish from the sea. THE REPORT Thailand 2012
  5. 5. 12 COUNTRY PROFILE OVERVIEW The country’s first female prime minister was elected in 2011 Rising tides A democratic ethos and populist politics carry the nation forward Today, Thailand is undergoing its most profound trans- by a military coup d’état in 1947, military govern- formation of the last 30 years. The military coup d’é- ments soon became the custodians of democracy in tat of September 19, 2006 that deposed the populist Thailand with US support as a pivotal ally in the fight prime minister, Thaksin Shinawatra, radically altered against communism in South-east Asia. Consolidat- the nation’s political dynamic, launching the country ing their role over the next three decades, the mili- into five protracted years of domestic strife and weak- tary restored the monarchy’s standing after its descent ened international standing. into relative obscurity and self-imposed exile post- However, last year’s peaceful landslide election win 1932. Civilian prime ministers held office for just 12 by Yingluck Shinawatra, Thaksin’s younger sister, has months between 1947 and 1972. Following the suc- restored much confidence in the country’s demo- cessful assimilation of several waves of Chinese immi- cratic process. Thailand’s first female prime minister grants during the 1950s (and overcoming fears of a is now taking pragmatic steps to engage all parties in “red wave”), US economic and military support to a concerted dialogue of national reconciliation and Thailand as the war in Vietnam escalated became the to rebuild the nation’s international credentials. At the catalyst for a fledgling middle class in the 1960s. The same time, the kingdom continues to enjoy sustained rise of this socioeconomic group ignited demands for economic growth largely inviolate from political cir- accountable, representative democracy in the 1970s. cumstance, as it has done since the introduction of DEMOCRATIC DEMANDS: Student-led demonstra- a constitutional monarchy in 1932 and throughout tions in 1973 brought about the expulsion of then- 80 years of democratisation. prime minister, Field Marshal Thanom Kittikachorn. SIAM RESOLUTE: Emerging from the virtual col- This was followed by a brief interlude of civilian gov- lapse of the Siamese empire following the Burmese ernment until a violent military assault on Thammasat pillaging of its historic capital Ayuthuya in 1767 only University and a subsequent coup saw a return to mil- to then fend off British and French colonial overtures itary rule from 1976 to 1988. Middle class demands in the 19th century, the Thai nation remains distinct- rose again at the turn of the decade, rejecting mili- ly patriotic and independent. tary rule and precipitating a military crackdown in At the centre of its contemporary political system 1992 that was only ended by King Bhumipol Adulyadej lies the monarchy, due in part to the astute diplomat- summoning protagonists to the palace for a televised ic policies of reform and modernisation pursued by lecture on the need for unity. King Chulalongkorn (King Rama V, 1853 − 1910), which Although taking place 16 years apart, 1976 and preserved the then Kingdom of Siam’s sovereignty 1992 were formative years for many of Thailand’s from European influence. The ceding of some terri- leading political figures and activists. This cadre of lead- tories to the European powers remains a bitter chap- ers flourished in a new era of heightened democrat- ter that still punctuates fringe elements of Thailand’s ic participation and economic prosperity during the contemporary political dialogue. 1990s. The rising tide came to a head with the 1997The first military coup MILITARY CUSTODIANS: Aspirations to reclaim the “people’s” constitution, which brought ballot votingd’état occurred in 1947, ceded territories motivated Thailand’s alignment with to both upper and lower houses of parliament for thefollowing which the Japan during the Second World War. This was opposed first time. Yet until the emergence of telecoms mag-armed forces alignedthemselves with the US in by the Free Thai Movement, the group that later nate Thaksin Shinawatra’s Thai Rak Thai (Thais lovethe fight against became the foundation for the principally pro-Amer- Thais) (TRT) party in 1998, political movements hadcommunism. ican governments following the war’s end. Overthrown been catering primarily to their urban constituencies.
  6. 6. COUNTRY PROFILE OVERVIEW 13POPULIST AWAKENING: TRT was the first party toactively canvass and engage Thailand’s rural majori-ty as its election platform. Grounded in mainstreampopulist strategies that particularly appealed to indebt-ed farmers following the Asian financial crisis, Thaksinoffered universal access to health care, education,debt alleviation and rural development funds. His sub-sequent landslide election wins in 2001, 2005 and2006 continue to set the Thai political agenda today. By 2005, Thaksin was the first Thai prime ministerin the country’s history to serve his full mandatedterm in office, during which time Thailand, labelled asa “darling of democracy” in South-east Asia, saw con-tinued economic recovery and an expanded role onthe global stage. It was tempered, however, by the sys-tematic subverting of activities meant to safeguarddemocracy and allegations of abuse of power, cor-ruption, human rights violations and even suspicionsof plots to usurp the monarchy. Opposition manifest-ed en masse in the yellow-shirted People’s Alliance The prime minister is limited to two four-year terms and leads the largest political party in parliamentfor Democracy (PAD) movement that took to thestreets on the back of largely urban and middle-class peaceful solution, expressed in the open and trans- The Thai Rak Thai Partypopular support. Led by Thaksin’s erstwhile business parent election results of July 2011. ushered in a new era of populist politics in 2011partner, Sonthi Limthongkul, the PAD’s obstruction of GOVERNMENT: Thailand is a constitutional monar- and was the first majorgovernment contributed to Thaksin’s decision to call chy and a parliamentary democracy, as stipulated in political movement toa snap election in 2006, just three months into his sec- the 2007 constitution drafted by the military-appoint- emphasise the demands ofond term. The PAD led opposition parties boycotting ed Constitution Drafting Assembly. It replaces the the rural masses.the vote, and Thaksin secured 60% of the electoral roll. 1997 constitution, which was abrogated in 2006.However, hounded by continued street demonstra- Approved by public referendum in 2007, executivetions, one-party rule lasted just four months. The power is vested in the government with King Bhumipolnation’s 18th military coup d’état took place on Sep- Adulyadej as the reigning monarch and head of state.tember 19, 2006. As part of its actions, the coup The prime minister is the leader of the largest partyremoved Thaksin, who remains in self-imposed exile. or coalition in parliament and is limited to two four-INTERVENTION & STREET POLITICS: The 2006 year terms. The leader of the ruling party is requiredcoup was a response to the political evolutions in Thai to hold a seat in the lower chamber of parliament,society, most notably to the demands for accountable and representatives must relinquish any holdings ingovernment and accelerating the transition of polit- major companies prior to assuming a role in office.ical control from Bangkok to the masses. The Cabinet, or Council of Ministers, is restricted In May 2010 Thailand’s political landscape was to 35 ministerial positions, of which 20 are head min-punctuated by confrontations between the govern- isters and 15 are without portfolio, including thement, the PAD, the pro-Thaksin red-shirt movement, deputy prime minister and several other deputy min-the United Front for Democracy Against Dictatorship isters. Members must receive royal approval. The Cab-(UDD), which emerged in 2006, and the military. The inet is authorised to submit bills to the House of Rep-grievances that arose out of the events between 2005 resentatives, the decisions of which are in turn subjectand May 2010 remain fundamental to the dialogue to the non-partisan upper house, the Senate.of reconciliation now under way (see analysis). The lower house is composed of 500 members, of However, by December 2008 the power of street which 375 are elected through single constituencypolitics was already waning. The PAD struggled for rel- elections and 125 are appointed according to party-evance as a Democrat Party-led coalition took pow- list proportional representation. The current speakerer following the Constitutional Court’s dissolution of of the house is PT’s vice-chairman and former minis-TRT’s successor, the People’s Power Party (PPP). Mar- ter of culture and justice, Somsak Kiatsuranont.ginalised by its occupation of national airports and The senate is mad up of 150 members who arean increasingly far-right-wing message, it never fully restricted to one six-year term each. It comprises ofrecovered its popular base, despite branching into 76 senators that are directly elected, one from eachmainstream politics via the New Politics Party (NPP). province and one from Bangkok. The remaining 74 rep- The 2006 military coup Military confrontations in Bangkok with red-shirts resentatives are appointed by the Senate Selection sparked a wave of conflictsin 2009 and 2010 brought an end to the street poli- Committee, composed of the heads of the Constitu- and angry street politics. The consequences of thesetics uprisings. The protracted confrontation and deaths tional Court, Election Commission, National Counter altercations left Thaisof 92 protesters and soldiers in April and May 2010 Corruption Commission (NCCC), State Audit Commis- demanding greater stabilitydeeply affected public opinion. At the brink of an sion, Chief Ombudsman, and one judge from both the and a peaceful politicalopen conflict, these events sparked demand for a Supreme Court and the Supreme Administrative Court. process. THE REPORT Thailand 2012
  7. 7. COUNTRY PROFILE OVERVIEW 15The current senate president is General TeeradejMeepien, formerly permanent secretary of the Min-istry of Defence and chief ombudsman. Thailand’s government and bureaucracy remainhighly centralised despite calls for increased auton-omy and for powers to be handed to local government.Grouped into six regions, broadly defined by histori-cal and ethnic identities, the 76 provincial (changwat)governors are all appointed by the Ministry of Interi-or, while Bangkok, technically considered Thailand’s77th province, and Pattaya have elected mayors. Thethree southern border provinces of Yala, Songkhlaand Narathiwat remain under special state-of-emer-gency decrees enacted in 2004 following the resur-gence of a violent Islamist insurgency amongst themajority ethnic Malay population.LEGAL FRAMEWORK: Three tiers of courts make upThailand’s judiciary system. The Courts of Justice, com-posed of the Court of First Instance, the Court ofAppeals and the Supreme Court of Justice, or Dika, The Pheu Thai Party leads the parliament with a six-party coalitionwhich is the final level of appeal in matters of crimi-nal law. The Dika is also the forum for prosecutions economic performance, the party suffered from unco- The current constitutionalof politicians, which has placed it at the centre of operative coalition partners and was confronted by court saw its powers expanded in 2007 followingseveral anti-corruption cases brought against elect- protracted pro-Thaksin street protests in 2010. The the 2006 militaryed officials in the last six years. subsequent military crackdown on protesters hurt intervention, alongside Established by the 1997 constitution, the Consti- the party, reinforced by an anti-Thaksin election plat- constitutional amendmentstutional Court is the highest authority on constitution- form, yet it secured 31.8% of votes cast (159 seats). brought in that matters. Strengthened in 2007 as part of the con- Led by Newin Chidchob, the Bhumjaithai Party mir-stitutional amendments, its rulings are at the centre rors TRT’s populist platform. Once favoured by theof perceived establishment bias following the disso- PPP administration, it was later ostracised for “betray-lution of the TRT and PPP parties, while dismissing sim- ing” the pro-Thaksin parties by joining the Democratilar cases against the Democrats in 2010. coalition in 2008. PT recriminations deliberately cam- Other judicial tiers include: the administrative courts paigned heavily in Bhumjaithai-held seats during thewith jurisdiction over conflicts between the state, 2011 election, a move which helped halve the par-state organs and private citizens; the courts of trade, ty’s expected election yield. While it took 6.8% of thetax and labour; and the military courts. votes (34 seats), it has been kept out in the cold byPOLITICAL PARTIES: The Pheu Thai (“for Thais”) the PT-led government.Party (PT) was founded in 2008 as the successor to The Chartthaipattana Party replaced the Chart Thaiboth the TRT and pro-Thaksin PPP. Both were dis- Party that was also banned in 2008. Led by Chumpolsolved and their executives banned from politics for Silpa-archa, the party has crossed the parliamentaryfive years by the Constitutional Court in 2007 and floor several times in the last decade. First allied with2008, respectively. Led by incumbent Prime Minister, TRT and PPP, it joined the 2008 Democrat coalitionYingluck Shinawatra, PT has continued TRT and PPP’s before siding with Bhumjaithai in the 2011 elections,populist platform and took 53% of the vote (265 seats) only to break ranks and join the PT coalition in Julyin the 2011 general election. As the dominant force that year. It holds 3.8% of the votes (19 seats).in Thai politics, its electoral base is concentrated With just 1.4% of the vote (7 seats) each, Chart Pat-among the rural and urban poor, particularly in north tana Puea Pandin (CPPP) and Phalang Chon, an off-and north-east Thailand, as well as Bangkok. shoot of Bhumjaithai, are minor coalition partners in The Democrat Party, led by former prime minister the PT government. CPPP includes both former TRTAbhisit Vejjajiva, makes up the current opposition and members and opponents, following a merger withThailand’s oldest political party, although it has not the Puea Pandin Party in 2011. CPPP is led by Wan-won an electoral plurality in any election since 1992. narat Channukul, who served as minister of energy inMaintaining a conservative political position with the Democrat coalition and briefly as minister of indus-strong links to the establishment, the Democrats’ try in the current administration.electoral support base is concentrated throughout 2011 ELECTION: Since 1992, Thailand has main-Bangkok and southern Thailand in the middle to upper tained a plurality of political parties that has con- The Pheu Thai (PT) Partysocioeconomic classes. The Democrats formed a six- tributed to a succession of coalition governments. has picked up the mantle of the disbanded TRT. PT’sparty coalition government in 2008 with the alleged While PT’s 2011 election win constituted a parlia- 2011 parliamentary victorytacit backing of the military, replacing the dissolved mentary majority, its six-party coalition is less indica- has seen it continuePPP coalition parties and serving in office until its tive of election platform compatibilities than old populist politics that focuselection defeat in July 2011. Despite a very strong alliances renewed. However, the election campaign on urban and rural masses. THE REPORT Thailand 2012
  8. 8. 16 COUNTRY PROFILE OVERVIEWIn the 2011 election in 2011 highlighted the depth of the Thai political spec- these continue to influence the popular platform oncampaign, candidates and trum, with 40 competing parties and an estimated which PT relies, tying them to an unpredictable, butcompeting parties spent spend of BT39bn ($1.24bn), according to the Kasiko- necessary ally in the UDD.$1.24bn, significantly morethan expected, and rn Research Centre; an 85% rise on the 2007 estimate The election also highlighted the question over thevote-buying was markedly of BT21bn ($670m). Whereas vote-buying was a com- moral authority of elected officials. The previous sixreduced. mon and all-too-apparent stain on the previous elec- years brought growing public disenchantment with toral process, appearing in charges levelled against politicians and leaders across the spectrum. The Rak TRT and PPP, observers have noted Thailand’s improved Thailand Party of former massage parlour king pin, performance in terms of monitoring and transparen- Chuwit Kamolvisit, was the unlikely beneficiary of pub- cy over the past six years. lic ire. Campaigning on an independent, anti-corrup- NEWCOMERS: The 2011 election was also notable tion platform, he attracted substantial support from for the emergence of three political parties and move- young adults, first-time voters and notable figures ments that defied traditional norms. The New Politics among Thailand’s intelligentsia, winning four seats. Party (NPP), the PAD’s vehicle to mainstream politics, While a small player, support for the party’s platform, was founded in 2009, espousing a hard-line nation- despite its leader’s unconventional background, alistic and royalist ideology, provoking military con- betrays a growing public unease with Thailand’s polit- frontations with Cambodia. Although wracked by a ical leadership among the new generation of voters. schism in 2011 over demands by PAD leader Sonthi THAILAND TODAY: PT’s six-party coalition govern- Limthongkul that it boycott the election, its short-lived ment faced an unforgiving set of circumstances and political aspirations illustrated the rejection of hard- events in the months immediately after taking pow- line nationalism by the general Thai electorate. er. Foremost amongst its opponents’ concerns and alle- Diametrically opposed to the NPP, the red-shirt gations is the belief that Yingluck is a placeholder for movement also made a point to distance itself from her brother. Whilst this claim has been strenuously the hard-line and confrontational tactics of 2009 and denied, Thaksin’s frequent consultations with PT advi- 2010. With the movement’s UDD leaders abroad or sors and government members in neighbouring coun- in jail, the movement re-emerged in the form of grass- tries, openly and documented by local media, roots “red shirt villages” that espoused demands for have added fuel to the speculations. The real extent socio-economic equality and justice independent of of Thaksin’s influence, however, remains unclear, their calls for Thaksin’s return. Whilst distinct from PT, and Yingluck insists that she governs with impartiality.
  9. 9. COUNTRY PROFILE OVERVIEW 17 Facing unshakeable opposition from the privateand public sectors to increase the minimum wage toBT300 ($9.57) per day in general and to BT15,000($478.50) per month for graduates, derailing key elec-tion pledges, Thailand’s worst floods in 60 yearsabruptly terminated the government’s honeymoonperiod in October 2011. By the end of January 2012, 65 provinces had beendeclared disaster zones. Over 800 people died, with13.6m more affected, while seven industrial estatesand 20,000 sq km of land had been inundated. Thegovernment’s response to the national tragedy wasslow as it struggled to coordinate between 17 sepa-rate agencies and manage the flooding. Its inabilityto adequately communicate the situation or devisean effective response strategy brought visceral criti-cism of the government, but little drop in its popu-larity. In contrast, the military’s deployments, grassroots coordination and resilience of the Thai bureau-cracy restored much of the public’s confidence.SEATING ARRANGEMENT: The January 2012 cab- The October 2011 floods were a national disaster, leaving nearly 800 people dead and over 13m affectedinet reshuffle was partially in response to the floods, fold. However, the proposed Keynesian economic poli- The end of the five-yearalthough many criticised members retained their cies would pose substantial fiscal burdens on the political ban on TRT party leaders is likely to influenceseats. In all, 10 new cabinet members were named, state, undermining political stability and increasing the next reshuffling of theincluding Natthawut Saikua, a red-shirt leader. Appoint- dependence on further deficit and borrowing. With Cabinet, with manyed as the deputy agriculture and cooperatives minis- depressed export demand, a shortage of labour and expecting that this willter, Natthawut objects to the prior lack of red-shirt a low tax-paying base, Thailand currently has insuffi- occur later in 2012.representation. Other important changes included cient revenue streams for such political aspirations.the appointment of Air Chief Marshall Sukumpol Such populist nurturing is a two-edged sword forSuwanatat as minister of defence, reinforcing civilian Thailand. Debt-laden governments can produce volatileoversight of the armed forces, and the removal of the political environments and the commencement offinance minister, Thirachai Phuvanatnaranubala. the ASEAN Economic Community (AEC) in 2015 couldReplaced by then deputy prime minister and minis- yet heighten populist demands. Although the coun-ter of commerce, Kittiratt Na-Ranong, the former sec- try’s established manufacturing industry has sus-retary-general of the Securities and Exchange Com- tained the economy through several downturns, it ismission, Thirachai publicly condemned his removal as feared that Thailand’s current and future labour forces,an attempt by the government to manipulate public upstream industrial capabilities, financial institutionsdebt figures, which are now approaching the consti- and services sector have lost much of their momen-tutional limit of 50% of GDP (see Economy chapter). tum and will lack the necessary competitive edge to Such incidences underlined the resistance of many compete in the open market that the AEC guarantees.institutions to PT oversight and control, which will Just three years ahead of the AEC, this economiccontinue to plague the government during its term imperative may prove to be Thailand’s greatest polit-in office. However, May 2012 heralded the return of ical challenge. Despite the political instability of recentthe first 111 TRT executives from their five-year polit- years, Thailand registered economic growth in everyical moratoriums. Many observers expect a second quarter bar six in the 21 months since the coup. Thatcabinet reshuffle later in 2012 that will see some of said, the last six years of political conflict squanderedThaksin’s “A-team” players return to the bench. Yet Thailand’s lead among the regional economies andstanding in their way are the current incumbents, a deprived it of billions of baht from would-be generation of politicians who are not expected OUTLOOK: Following six years of political strife, theto pass quietly into the night. As the party remains 2011 election was a public rejection of violence andcareful not to upset the national balance of power, extra-constitutional interventions by non-state actorsPT’s own internal politics may prove to be the most in favour of full, participatory democracy. While Thai-effective check and balance in government. land’s political crisis looks to be at an end, grievancesECONOMIC PRESSURES: Demand for socio-eco- remain deeply engrained on all sides of the political Recent political campaignsnomic equality among the rural and urban masses spectrum. An ongoing dialogue between the parties have championeddrives much of Thai politics. This issue remains an is only the first step in a broader programme of nation- economic equality as wellimportant focus to the coveted popular political sup- al reconciliation that will continue for many years. as greater welfare provisions. Such policiesport base, which has transitioned from a position of Thailand’s economy remains on a strong footing, but have effectively attracted“recipient” to “provider” of political support. Accord- managing the public debt, investor confidence and voters, but are likely toingly, Thailand has witnessed a flux of competitive the aspirations of its party forerunners may prove to be hard to sustain in thepopulism that has brought many politicians into its be the PT government’s greatest challenge for 2013. long term. THE REPORT Thailand 2012
  10. 10. 18 COUNTRY PROFILE ANALYIS Prime Minister Yingluck met with President Obama in late 2011 Back to business Rebuilding international standingAs a member of ASEAN, The 2011 elections gave the government a strong man- DIPLOMATIC RESPONSIBILITY: To the east, relationsThailand is party to a range date to regain a proactive international role, stressing with Cambodia remain strained following bitter militaryof multilateral trade commitment to democracy, justice and reconciliation. skirmishes over the Temple of Preah Vihear in 2010.agreements and iscurrently considering Following the 2006 military coup d’état, Thai prime Goaded by right wing elements, the Thai governmentjoining the Trans-Pacific ministers were denied meetings with the US president, allowed the conflict to spill over into the UN SecurityPartnership. The country is a historically routine matter for a close US ally in South- Council, the International Courts of Justice (ICJ) andalso building a network of east Asia. The November 2011 meeting between Prime UNESCO in 2011, undermining Thailand’s internation-bilateral agreements Minister Yingluck Shinawatra and President Barack al credentials. Representing Thailand at the UN, Sihasakaround the world. Obama at the East Asia Summit, just three months after acknowledges that the politicisation of the issue is the her appointment, was a clear endorsement of Thailand’s reason behind the international intervention. Both Thai- return to a democratic process. land and Cambodia have maintained a ceasefire since Membership in ASEAN has been important to the 2011 and await the final ICJ ruling on ownership of the country’s global positioning, and Thailand’s economy temple’s 4.6-sq-km grounds. “Eventually the court will and geographic location made it a leading player in the decide, but both sides must recognise that our rela- organisation prior to 2006. Speaking with OBG, Sihasak tionship will have to move forward,” Sihasak said. Phuangketkeow, the permanent secretary of the Min- “We have to bring Thai foreign policy into a new era istry of Foreign Affairs, reinforced Thailand’s commit- by looking beyond Thailand, by looking at how we can ment to ASEAN and integration with East Asia. “Promot- contribute to the broader issues of the international ing ASEAN in the region is one of our key foreign policy community to deal with global challenges,” Sihasak told objectives while moving beyond the immediate parochial OBG. “I would like to see our foreign policy clearly raise interests of Thailand itself,” he said. the banner of democracy, human rights and humani- Thailand’s preference for ASEAN to be a central force tarian principles. These are important values shared by for broader free trade in the Asia-Pacific region would the international community and should be reflected allow the organisation to balance the economic inter- in the conduct of our own foreign policy.” ests of China, India and the US, which had pushed for BACK TO BUSINESS: The government knows that a Thailand’s inclusion in the latest multilateral free trade strong diplomacy record and high international stand- agreement, the Trans-Pacific Partnership (TPP). ing will also open doors for Thai business. The efforts WELL PLACED: Thailand’s strong political and trade rela- made by the former premier Abhisit Vejjajiva to expand tionship with Myanmar, now increasingly attractive to business opportunities were frustrated by uncooper- global investors, are an advantage. Thailand’s support ative coalition parties and a weak parliamentary major- for a transition to greater democracy and internation- ity slow to act due to a number of political issues. al engagement in Myanmar has helped to position Thai- However, the renewed push for international engage- land as the gateway to this emerging economy. ment and expansion has allowed Thailand to close aStronger ties with Establishing deeper ties with Myanmar also supports number of free trade agreements and other ties withMyanmar are proving growth of the Southern Economic Corridor, which brings African and Latin American countries over the last fivepositive for both countries, India into the fold, linking it with ASEAN and China. years. Pheu Thai’s parliamentary majority and return toas well as the wider region, Thailand and India are strengthening their relationship a more democratic political process has helped rebuildwith Myanmar facilitatingIndia’s entry into the and working to establish reciprocal economic ties. Suc- investor confidence after six years of instability and theSouth-east Asian economic cessful integration on Myanmar into the arena is expect- 2011 floods. It is clear that within the global andsphere. ed to benefit regional economic flow on the whole. economic arenas, Thailand is getting back to business.
  11. 11. COUNTRY PROFILE VIEWPOINT 19 Bhumibol Adulyadej, King of ThailandA balanced approachHis Majesty Bhumibol Adulyadej, King of Thailand, on his philosophy forsustainable developmentWhen considering development, first and foremost the national level, this philosophy is consistent with awe must keep in mind humanitarian considerations. If balanced development strategy which will reduce thewe are to be kind to our fellow countrymen, known to nation’s vulnerability to shocks and excesses that maybe in dire need, the authorities endowed with both arise due to the effects of globalisation. At the sameknowledge and wealth must go to their assistance. time, it is essential to strengthen the nation’s moral When the country is faced with difficulties and peo- fibre so everyone, particularly public officials, academ-ple in the remote areas are suffering, we cannot sim- ics, business people and financiers adhere to princi-ply stay put in this paradise of a capital. If we want the ples of honesty and integrity.people to be prosperous, we have to invest in devel- A balanced approach with patience, perseverance,opment projects which will involve budgets that may diligence, wisdom and prudence is indispensable tocost hundreds or even thousands of millions of baht. cope with the challenges arising from extensive andBut this expense is justified. If the project is a good rapid socio-economic, environmental and culturalone, the people will very soon derive benefits from it. change. It requires thoughtful planning with consid- When people talk about solving the current crisis, eration for contingencies, and maintaining the reservesone of the things they talk about is “globalisation.” We of money and resources necessary to tide one throughsay we are now in the age of globalisation, and we must any bad times that occur. Self-sufficiency means hav-“comply” with it and follow its rules. If we fail to follow ing enough to live on and to live for. If everybody hasthrough with what we have committed to, others will enough to live on and to live for, that is good. And ifbe dissatisfied. Why? Both because they are also in trou- the whole nation is able to reach this status, that would,ble and because we would find it more difficult to of course, be even better.recover from the crisis ourselves. Self-sufficiency means that whatever we produce, The countries in this region are not the only ones we have enough for our use. We can rely on ourselvesaffected by the crisis. Even prosperous and stable – as people say, we can stand on our own legs.countries are in trouble. This is because if a problem But sufficiency carries a broader meaning. It is hav-is not solved in one corner of the world, other parts ing enough and being satisfied with situations as theyare also affected. So we must try to support the peo- exist. If people are contented, they are less greedy.ple, providing them with jobs, so that they earn an With less greed, they will face fewer problems. Coun-income and can survive the crisis. tries should value having just enough, which means Development must take account of a country and being contented, being honest and not being greedy.its people’s physical, sociological and cultural environ- This will make people be satisfied.ments. By the local sociological environment, we mean Being sufficient does not restrict people from hav-the certain characteristics and ways of thinking which ing a lot, or possessing luxury items, but it does implywe cannot force people to change. We cannot require one must not take advantage of others. Everything mustpeople to do those things they will not choose to do. be within limits. We must say what is necessary, act asWe can only suggest. If we go in and find out what the is needed and work as is adequate. Thus, sufficiencypeople really want, and then fully explain how they can here means within the proper bounds and reasons ofbest achieve their aims, the principles of development the country and the people.can be fully and effectively applied and implemented. Adapted from His Majesty’s royal speeches in 1974, “Sufficiency economy” applies to conduct and a way 1997, 1998 & 1999 and His Majestys speeches on theof life at individual, family, and community levels. At Royal Development Projects in 1970. THE REPORT Thailand 2012
  12. 12. 20 COUNTRY PROFILE INTERVIEW Yingluck Shinawatra, Prime Minister Heal and grow OBG talks to Prime Minister Yingluck Shinawatra How did the floods of late 2011 affect the admin- What is the government’s strategy for restoring istration’s priorities? What reforms are most press- confidence in long-term investment in Thailand? ing following such a natural disaster? YINGLUCK: Business confidence in Thailand remains YINGLUCK: The government has given high priority to strong, not only because of our policies but also because alleviating the impact of the floods and putting in place of our solid economic fundamentals. That is why our measures that will help to prevent such crises from economy is forecast to expand by around 5.5-6.5% in occurring again in the future. 2012 in the form of a v-shaped recovery, despite the We are turning the flood into an opportunity to make floods in 2011. That is why foreign companies affect- Thailand’s infrastructure and economy safer from such ed by the floods continue to invest in our future. The disasters. A multi-billion-dollar flood recovery and fiscal and financial position is sound. Public debt stands restructuring package has been set aside to compen- at 40% of GDP. The level of foreign exchange reserves sate and assist affected sectors in the recovery effort is high at $180bn. We also have a large pool of skilled and to ensure that small and medium-sized enterpris- labour that is valued by multinational companies. es, entrepreneurs and industrial estate development In terms of policies, this government is committed can resume production as soon as possible. to promoting domestic demand through investment and More than $11bn has been set aside to create an government spending. Projects that have been planned improved water and crisis management system. Flood include large transport and infrastructure schemes to walls, barriers and dams are being built to protect indus- promote national and regional connectivity. trial estates and communities. With regard to policies for the private sector, corpo- Floodways and diversions are being created to allow rate income tax is being lowered from 30% to 23% in water to flow in and out. Drainage systems are being 2012, and to 20% in 2013. We have removed some built to prevent water build-up. Information databas- restrictions to make it easier for companies to set up es and contingency plans are being developed. regional operating headquarters here. In addition, labour Most importantly, a single command authority on skills are being upgraded. Thailand is preparing itself water management is being put in place to oversee and for the ASEAN Community in 2015, which will make the execute plans, in particular during times of crisis. South-east Asian region of over 600m consumers a sin- At the regional level, ASEAN has given full support gle market and production base. to my initiative to work together to address and pre- The message I received from foreign investors, both vent flooding. This government will continue its poli- in Thailand and abroad, including at the annual meet- cies such as strengthening domestic demand, pursu- ing of the World Economic Forum in Davos in January ing people-centred development, creating a 2012, is that they are confident in Thailand’s econom- business-friendly environment and expanding invest- ic future and would like to continue to be our trading ment in transportation and logistics. and investment partners. Thailand’s hosting of the In addition, we will be following through on the high World Economic Forum for East Asia in 2012 is expect- priority agenda announced when we took office. This ed to underscore that message. In view of the current will take a variety of forms, including the empowering mix between our water management and recovery of women so that they can contribute further to the package on the one hand, and people-centred devel- country’s economic development and strengthening opment and business-friendly economic policies on education for our children, which is a very impor- the other, Thailand is striking the appropriate balance tant form of investment for the future of our country. between emergency relief and long-term planning.
  13. 13. COUNTRY PROFILE INTERVIEW 21What are the challenges to fostering unity and rec- Which are the most urgent priorities on your for-onciling the political differences of recent years? eign policy agenda? What bilateral relationships inYINGLUCK: The political situation in Thailand has been Asia would you like to develop?back to normal for some time now. The elections in July YINGLUCK: One of the most important foreign policy2011 were a fresh start which resulted in a peaceful priorities of this government is to expedite the promo-transition of power. They also showed that all sides are tion and development of close and cordial relations withcommitted to resolving issues through democratic neighbouring countries by enhancing cooperationprocesses. The elections saw voter turnout of 75%, one between the public sector, private sector, people andof the highest in recent years. In my visits to foreign the mass media to cultivate mutual understanding andcountries and at international meetings, the message promote mutual interests. This will lead to expandedfrom our foreign friends is the same – they strongly cooperation in all relevant areas, including trade, invest-support Thailand’s democracy and this government, ment, tourism promotion, transportation and people-which came from a democratic process. to-people ties. Indeed, this is part of Thailand’s overall We should not overlook the fact that the political foreign policy of maintaining good relations with allevents in Thailand in the past few years reflect increased members of the international community.activism on the part of the Thai people, who have In this regard, I am pleased that in my visits to neigh-become more aware of the importance of politics to bouring countries in South-east Asia, there has alwaystheir lives and want to make their voices heard. The diver- been a warm reception, as well as a great receptivitysity of views being expressed by different groups shows and willingness to reciprocate these policies.that Thailand is a vibrant democracy and an open soci- As a founding member of ASEAN, Thailand attachesety. However, one cannot deny that political activism great importance to the realisation of a people-cen-in the past few years has also been marred by violent tred and effective ASEAN Community in 2015. We areincidents and a lack of compromise. While this is truly committed to playing a more proactive role in commu-regrettable, it is perhaps part of the process of learn- nity building and in developing an ASEAN-centreding how to become a more mature democracy which regional architecture that promotes peace, prosperityThailand has to go through. I am sure that democracy and progress. To this end, Thailand supports the devel-in Thailand will emerge stronger after this experience. opment of enhanced connectivity within our region, Recognising that more work remains to be done on whether in the Greater Mekong subregion, ASEAN orthis issue, this government attaches great importance beyond, and will use its geographical location and oth-to promoting national reconciliation. The government er assets to promote further progress in this area.supports the work of the Truth and Reconciliation Com- In addition, as a member of good standing within themission of Thailand (TRCT), established by the previ- international community and with Bangkok serving asous government, and the TRCT’s recommendations. A regional headquarters for the UN as well as for othercompensation package has been approved to provide international organisations, Thailand will be playing anremedies to all sides that suffered losses in the politi- active role in the international community and withcal violence of the past several years. relevant organisations to address global issues of com- Political stability has been the fruit of this govern- mon concern, particularly those that impact Thailandment’s efforts so far. We will continue to consolidate and the region. One such issue is disaster manage-these gains by supporting good governance, the rule ment, which Thailand is hoping will benefit fromof law, human rights, transparency and accountability. enhanced regional and international cooperation. THE REPORT Thailand 2012
  14. 14. 22 COUNTRY PROFILE INTERVIEW Surin Pitsuwan, Secretary-General, ASEAN Pulling together OBG talks to Surin Pitsuwan, Secretary-General, ASEAN How will a free and open investment regime help the ASEAN economic ministers (AEM) in August 2007. increase investment into ASEAN? The roadmap provides for the detailed measures and SURIN: ASEAN’s vision for an integrated regional econ- action plans to integrate logistics services, and involves omy includes the free flow of investment and servic- the participation of various related ASEAN bodies in es. To this end, set out several strategic initiatives in the trade, services, Customs, transport, telecommunica- ASEAN Economic Community (AEC) Blueprint and has tions and investment, as well as private sector bodies. taken concrete steps to realise these by 2015. ASEAN also actively conducts public-private engage- One of the bold steps that ASEAN took to establish ment dialogues. In October 2010, ASEAN leaders adopt- this free and open regime is the ASEAN Comprehen- ed the Master Plan on ASEAN Connectivity, which is sive Investment Agreement (ACIA). An important pillar intended to add value to and expedite the implemen- of the ACIA is its liberalisation component, in which a tation of the logistics roadmap and the AEC Blueprint, negative list approach was adopted in the so-called and to address issues such as market access, trade and reservation list, with all else being open. ASEAN also Customs facilitation, supply chain security and cross- agreed to progressively reduce or eliminate the reser- border, inter-state and multimodal transport through vations contained in the list following the strategic clear measures, targets and timelines. phases outlined in the AEC Blueprint, and member From the trade in services side, significant progress states are working to improve their investment regimes. is made in the liberalisation of the nine logistics serv- On a far greater scale, ASEAN has also entered into ices subsectors. This year all member states will be free trade agreements with dialogue partners through required to open their logistics services up to 51% for- which we are trying to expand our reach in terms of eign ownership, and up to 70% by the end of 2013. With source of investment. We have to provide adequate pro- these ambitious targets, trade barriers will be kept at tection to investors and their investments to remain minimum level and links between the logistics providers competitive. Our agreements have safeguarding pro- among ASEAN countries will be improved. visions which enable direct recourse through the investor-state dispute settlement mechanisms. How can ASEAN nations work together to position Promotion and facilitation are two of the main pil- the region as a world leader in tourism? lars of the ACIA, and we recognise that we has to SURIN: ASEAN has been implementing a number of increase awareness of ASEAN as an integrated invest- regional initiatives to promote ASEAN as one tourism ment area in order to attract and increase both intra- destination or market, such as developing multiple- ASEAN and foreign investment into the region. To do country or region-wide tour packages, joint promotion this we are looking at streamlining and simplifying pro- campaigns and ASEAN-wide tourism websites. cedures for investment applications and approvals and ASEAN is currently coordinating joint marketing establishing one-stop shops for investors. efforts in our main source markets, i.e. China, Korea, Japan and Australia. This joint work is being undertaken in addi- How are logistical integration issues being addressed tion to the individual tourism offices that member in order to transform ASEAN into a single market? states already operate in these markets. The collabo- SURIN: Logistics services is the 12th Priority Integra- ration includes: establishment of ASEAN common area tion Sector (PIS) and ASEAN plans to achieve full inte- at international travel fairs, the creation of the ASEAN gration of logistics services by 2013. ASEAN has a Promotional Chapter for Tourism in Australia and pro- roadmap for this process, which has been endorsed by motion of tourism products on a dedicated webpage.
  15. 15. COUNTRY PROFILE ANALYSIS 23 Proposed changes to the 2007 constitution worry the militaryBurying the hatchetRegrouping, recouping and ready to move onReconciliation was central to Pheu Thai’s (PT) 2011 upholding the court’s rulings is crucial to ensuringelection platform, a sentiment that continued to that justice is served. They have resisted all movesresonate with voters despite five years of confronta- to expunge TRT and PPP leaders, fearing that thistion following the 2006 military coup that had oust- would pave the way for Thaksin’s return to Thailanded and exiled the prime minister Thaksin Shinawa- and politics. PT’s proposal also faces oppositiontra. Since receiving her overwhelming mandate in the among its own supporters. Many want to see the PAD2011, Prime Minister Yingluck Shinawatra, Thaksin’s leadership held accountable for its six-month occu-sister, has stuck to the specifics of the campaign pation of Government House, attacks on red-shirtpromise. Reconciliation has remained a priority supporters and the closure of national airports indespite hurdles, yet finding the right path leading 2008. The PAD’s ability to operate with impunity wasto the new era remains a challenge. in stark contrast to the aggressive measures the mil-SPEAKING SOFTLY: Addressing the grievances on itary took against red-shirt supporters for similarboth sides of the pro- and anti-Thaksin divide is nei- felonies. Of the military’s actions, the most divisivether straightforward nor assured. Anti-Thaksin sen- remain its partisan refusal to intervene when the PPPtiment still runs deep among supporters of the Peo- government declared a state of emergency in 2008,ple’s Alliance for Democracy (PAD) and members of and the military crackdowns of April and May 2010the establishment, colouring their views of PT’s pop- that saw 92 deaths (86 civilian), over 2000 wound-ulist base and policies. Despite PT’s popular mandate, ed and the burning of several buildings.the government has recognised the need to tread Previous negotiation attempts by the Democratslightly. Future military intervention remains unlikely in the weeks before the confrontations had failedgiven the international and domestic condemnation due to disunity and lack of compromise among theit would no doubt provoke. leadership of the United Front for Democracy against The military cites Thaksin’s abuses of power while Dictatorship (UDD), a pro-Thaksin umbrella group,in office, notably corruption and electoral irregular- precipitating a military crackdown. However, theities, as the justification for the coup and the disso- labelling of the protests as “terrorism” and mishan-lution of both Thai Rak Thai (TRT) and its successor, dled investigations by the internal security agency,the People’s Power Party (PPP). the Department of Special Investigations (DSI), into These verdicts, handed down by the Constitution- the deaths, remains disputed and contentious. Sinceal Court in 2007 and 2008, respectively, alongside PT came to power, the DSI has reverted to many ofthe decision to terminate the premiership of PPP its original findings that found the military respon-leader, Samak Sundaravej in September 2008, are sible in some deaths, although they have yet to rulestill condemned by pro-Thaksin groups as political- conclusively on all motivated miscarriages of justice. CONSTITUTIONAL CHANGE: While the amnesty Living up to its campaign These rulings and the Constitutional Court’s rejec- proposal is debated, PT has proposed the formation promise of “reconciliation”tion of a case to dissolve the Democrats in 2011 for of a 99-member Constitutional Drafting Assembly is proving to be challengingalleged electoral fraud and vote-buying, perpetuate (CDA) through Article 291 of the 2007 constitution. for the PT government. Delicate negotiations andclaims of judicial impartiality, a hotly contested issue The move to repeal certain sections of the current appropriate reparationsfuelling allegations of double-standards. constitution and revert to some principles of the ensure that the process willAMNESTY OR JUSTICE: PT’s solution has been to pro- 1997 framework has caused the military establish- require compromise,pose a blanket amnesty. However, to many opponents, ment to fear that this will strip immunity from coup patience and time. THE REPORT Thailand 2012
  16. 16. 24 COUNTRY PROFILE ANALYSIS land’s Rubicon moment. The 1991 coup, 1992 upheaval and 1997 constitution were chapters in the nation’s struggle against military influence and for democratic reform. Yet the 2011 election has made the country’s demand for a new social contract inclu- sive of justice and equality impossible to bury. This is a positive development for Thailand, with the debate squarely in the public forum. Yet barri- ers remain, and reconciliation on this scale is unprece- dented in Thailand. The grievances of previous coups and conflicts were allowed to drift into obscurity, although this does not seem to have had a notice- ably harmful affect on national development. Today’s pervasive connectivity means that this is no longer possible, says Ramkhamhaeng University’s associate professor of political science, Chaichana Inkawat. “Social media will be [the foundation of] new poli- tics in Thai society. It may not be like the Arab Spring, but it will remain a huge influence,” Chaichana said. ACCEPTING RESPONSIBILITY: To reconcile, eachPT allocated BT2bn ($63.8m) to a compensation fund as part of the reconciliation process side must be willing to recognise the legitimate griev-Proposed changes to the leaders and lead to the annulment of Constitution- ances of other parties. However, PT’s BT2bn ($63.8m)2007 constitution will have al Court rulings. At the time writing, the proposed compensation fund for victims of both the politicalto be approved by national changes are under discussion in the wider political violence and the insurgency in the south, announcedreferendum, a volatile butarguably more democratic and judicial arenas. The court ruled that individual in 2011, may be the closest the government is ableprocess. amendments may be applied, but not a wholesale to venture in acknowledging the responsibility of constitutional re-write. Furthermore, any changes the state for the events. must be approved via national referendum. It is for this reason that previous initiatives have This verdict neither fully endorses nor rejects mod- been unsuccessful. The Thailand Truth and Recon- ifications, but it does throw the process into a volatile ciliation Committee (TTRC), created in 2010 and re- political ring. The court’s decision also undermines constituted by the PT government, is headed by the function of the CDA, which would give the gov- Anand Panyarachun. Despite being one of Thailand’s ernment greater control over reforms, ruling that the most popular and conciliatory prime ministers, CDA’s legitimacy rests in the approval which was appointed in the aftermath of the 1991 coup, the expressed through the referendum. dialogue he created brought little traction to the Such moves are not purely partisan; rather they TTRC. In parliament, former 2006 coup leader and respond to bipartisan calls to review sections of the now Matubhum Party head, general Sonthi Boon- constitution. The 1997 constitution’s broad consul- yaratglin is the chairman of the House Committee tative approach was seen as genuinely participato- on National Reconciliation, but has refused to dis- ry in contrast to the 2007 draft, which was engineered cuss many details of the coup. with the deliberate exclusion of some stakeholders. Central to the debate is the exile of Thaksin and Irrespective of the 2007 constitution’s merits, much if he will return. He recognises the upheaval that his of the ongoing discourse stems from its genesis, permanent return would cause. While public provo- which is cast in the shadow of the political circum- cations suggest an imminent return, practical and stances at the time of its creation. political realities preclude this possibility. Opponents THE REAL QUESTION: Such issues are at the heart are steeling themselves for this scenario, and are pre- of the reconciliation debate. Tacitly, the pursuit of pared to pursue legal action. reconciliation, first fielded by the Democrats in 2010, Although substantive constitutional reform and has become a question of where the moral author- reconciliation are still a ways off, the process of ity to lead and govern resides today. The social divi- ongoing consultation has provided an alternative to sions and foundations of this debate, long latent in confrontation and conflict, facilitating broader Thai society, were exacerbated by the 2006 coup d’é- national dialogue. “The political system should reflectHeightened tat, when many who had previously fought against the changes in Thai society and give greater spaceinterconnectivity and therise of social media mean military intervention condoned the coup. The belief for all to participate in politics,” said Sihasakthat current grievances that the military acted in the interests of the nation’s Phuangketkeow, the permanent secretary of thecannot be swept under the greater good deeply pervaded public opinion, civil Ministry of Foreign Affairs, speaking with OBG. Yetrug and forgotten. Today’s society speakers and parts of the bureaucracy. both the government and the people are faced withconflicts must be This division of ideologies continues today. While a choice, said professor Gothom Arya of the Humanaddressed, and both sidesneed to be willing to accept the contemporary conflict and debate are seen by Rights and Peace Council at Mahidol University: “Theythe legitimate grievances many as just another chapter in Thailand’s evolution must absorb and accommodate the new modelof the other. toward democracy, last year’s election was Thai- of government, or remain an asynchronous society.”
  17. 17. COUNTRY PROFILE INTERVIEW 25 Lyonpo Khandu Wangchuk, Minister for Economic Affairs, Kingdom of BhutanA close affinityOBG talks to Lyonpo Khandu Wangchuk, Minister for Economic Affairs,Kingdom of BhutanWhat is the thrust of the bilateral economic rela- important strategy that we can learn from. We cantionship? How high do economic ties rank? share our experiences with environmental conserva-WANGCHUK: As two Buddhist kingdoms whose mon- tion and economic development, our grassroots-basedarchs are revered for their benevolence, love for their five-year planning and our hydropower knowledge. Wepeople and vision, Thailand and Bhutan enjoyed close have seen an increasing number of high-level contactsrelations even before the establishment of formal diplo- and visits between government officials of both thematic ties in 1989. The links have grown rapidly over countries. Thailand also offers scholarships forthe years. There is a close affinity between our royal Bhutanese students and there are many Thais workingfamilies, people and governments. There is also strong in development projects in the country.commitment to further enhance our relations andcooperation on a variety of fronts. How can economies such as those of Bhutan and On the economic front, Thailand is a major source Thailand drive higher-value tourism?of imports for Bhutan, and in recent years we have WANGCHUK: Thailand has a very large tourism indus-seen an increasing range of consumer goods from Thai- try and caters to all the market segments from budg-land. Bangkok is the number-one destination for thou- et to ultra luxury. Thailand offers a diversity of culture,sands of Bhutanese travellers. Druk Air has daily flights geography and products for high-value tourism. Forto Bangkok and we expect more flights in the coming my own country, Bhutan faces stiff competition fromyears. In 2011 we received a Thai trade delegation of many destinations, even in the high-end segment, andover 40 members on a mission to explore business it is important for us to position ourselves as a uniqueopportunities. They were well received by our business and once-in-a-lifetime experience for visitors. To mar-community. There is also an investment by a Thai com- ket this concept we have a new Bhutan logo with thepany in our hotel sector. In the tourism sector, Thais are tagline “Happiness is a Place”. We are promoting invest-among the10 largest markets for us. We held a road- ments in luxury hotels by allowing 100% foreign own-show in Bangkok in 2010 to encourage more invest- ership and encouraging our hotels to upgrade to at leastment. Recognising the importance for closer trade a three-star category. To tackle infrastructure chal-relations, we have initiated negotiations on a prefer- lenges, the national airline is planning to expand to newential trade agreement with Thailand. destinations and a new airline has been approved. However, even high-end tourism is not without itsWhat lessons can Bhutan and Thailand learn from share of problems. A couple flying in a private jet overeach other’s economic development strategies? generates a much larger carbon footprint than 114 pas-WANGCHUK: Bhutan is particularly interested in the sengers travelling in one of our Airbus 319 jets. We wantsuccess of Thailand’s small and medium-sized enter- to encourage more per-capita spending by a smallprises as well as its promotion of traditional Thai art group of tourists rather than expanding the numberand crafts and the food processing industry. Many of of visitors because we can never compete in the massour officials have visited Thailand’s royal projects, indus- tourism market. Many of Bhutan’s historical and cul-trial estates, farms and industries, and we see that the tural attractions are not designed for very large num-strategies have been well designed. Overall, Thailand’s ber of visitors. Some of these institutions are still placesdual-track development strategy of attracting foreign of worship and are an integral part of Bhutanese life;direct investment and promoting exports of manufac- we want to allow visitors to enjoy the beauty and charmtured goods, and stimulating domestic demand is an of the country in solitude without being disturbed. THE REPORT Thailand 2012
  18. 18. 26 COUNTRY PROFILE VIEWPOINT William Hague, UK Secretary of State for Foreign and Commonwealth Affairs Bound together William Hague, UK Secretary of State for Foreign and Commonwealth Affairs, on UK-ASEAN relations in the 21st century Today the idea of the “developed West and developing region are strongest with our Commonwealth part- rest” is all but irrelevant. The world has changed and ners, Singapore and Malaysia. But while strengthening so must the UK if we are to prevent our role and influ- these we should be looking for opportunities else- ence in international affairs from declining. Key to this where as well. We also need to continue to work along- will be making the most of opportunities presented by side EU partners to secure free trade agreements with a new international paradigm in which economic pow- ASEAN countries to open markets and boost trade. Fur- er and influence is moving east and south. We are doing thermore, we need to do more to promote two-way this by shifting our diplomatic weight to reflect these investment. International institutions rate the UK as changes and by building our relationships with emerg- the easiest place to do business in Europe, with the ing powers. These relationships will be increasingly vital strongest business environment on the continent and for forging agreements on the international stage and the lowest barriers to entrepreneurship in the world. for boosting trade and investment that support the UK. But our relationship is about more than trade and South-east Asia epitomises the rationale for this investment. We have interests in maintaining security approach. The ASEAN countries are already more pop- in a region that straddles some of the world’s most ulous than the EU and the Arab world, have a larger important shipping routes and in tackling common economy than India and absorb more UK exports than threats, such as terrorism, nuclear proliferation, cyber- China. They hold substantial geopolitical significance, crime and climate change. There are a number of sep- with influence on neighbouring major powers. They aratist or other conflicts within ASEAN, and tensions should be, and are, key partners for the UK. remain in the South China Sea. The UK has a wealth of The region deserves serious attention from global experience and we are keen to share our knowledge partners. The UK is fortunate to draw on a foundation to promote stability. We form part of a small group of of existing relationships, and we already enjoy multi- countries formally supporting efforts by the Filipino Gov- billion pound trade and investment links with ASEAN. ernment and rebel groups to end their conflict. Our largest businesses in finance, energy, life sciences The voices of ASEAN leaders will be increasingly influ- and food and drink are establishing a regional foothold ential, both regionally and globally, in the future. Indone- and more of our retailers are becoming household sia’s impressive democratisation and Malaysia’s strong names, especially in Thailand. Furthermore, every year stand against violent extremism can serve as examples over 30,000 ASEAN students study in the UK, often for the entire international community. returning to positions of influence. They form part of We also want to work with ASEAN members on cli- the rich people-to-people links between our countries. mate change. They are among the heaviest emitters of We build on these links all the time. On his visit to greenhouse gases, but could also be among those most Indonesia last month the business secretary, Vince seriously affected by the consequences of changing Cable, launched the new UK-ASEAN Business Council temperatures. Any durable solutions will therefore to strengthen commercial engagement with the region. require commitment and close coordination with ASEAN. The government’s public-private partnership body, Thus, our approach will be to build up our relations Infrastructure UK, is already in the Philippines sharing with ASEAN, to share expertise and knowledge, to pro- expertise, and we aim to do this more widely across the mote increased and freer trade and to work together region. Moreover, we continue to support develop- in a wide range of areas, from security to climate change. ment, democratic freedoms and transparency. But there We will continue to look east, toward the tremendous is more we can do. Our commercial relationships in the wealth of opportunity to be found in South-east Asia.
  19. 19. 28 COUNTRY PROFILE VIEWPOINT Tony Blair, former Prime Minister of the UK Key components for success Tony Blair, former Prime Minister of the UK, on challenges and opportunities of globalisation In the light of the devastation caused by flooding, I have to set that within the context of basic elements of fair- huge sympathy and admiration for the courage, digni- ness: essential workplace rights, basic principles that ty and determination of Thai people. Thailand is open mean that people get access to quality training and skills, for business and can be confident of its future, and the welfare systems that help people back into work. world should be confident as well. The second point is that our welfare and public sec- It is important that Thailand has increasingly focused tor systems have to be reshaped and reformed in light on English proficiency in its schools, because success of the changes around us. There is no welfare system today is not only measured by a nation’s pride in its own that will work unless it balances the contribution from culture, but in its openness to others. Thailand has big the state with individual responsibilities. There is no pub- advantages: its culture, its people and its geography. lic service that will work unless it is flexibly organised, But Thailand operates in the global economy, especial- unless there are different providers, which offer choice ly as it is an exporting nation. for consumers, and where it is innovative in the use of Global economy is in trouble and that trouble is com- technology. Countries that are still developing their ing from Europe. In this European crisis I also think public welfare systems should learn from our experi- there are important lessons for how ASEAN develops. ence so as they create those systems in the 21st cen- The arithmetic and politics of integration must be in tury they can avoid some of the mistakes we made in sync. Europe faces essentially the same challenge as creating these systems in the 20th century. nations everywhere today, including Thailand. The essen- The third component is that if it is true that societies tial nature of that challenge is the challenge of change succeed if they combine economic enterprise with – the speed and the scale of the change happening in social justice, and if they have a different type of rela- the world today. There is now intense competition and tionship between state and citizen, human capital and as countries become more prosperous so they find its development is the key to the future. The biggest they have competition from lower-wage nations. To injustice that anyone can suffer is a poor education. continue to compete in this environment, they have to That education is not just about learning; it is an edu- move up the value-added chain. cation to be creative. Foreign direct investment can The way the world is changing is important in its bring intellectual capital into our countries that, along- speed and its scale, not just for companies, but also for side a proper functioning education system, can deliv- countries and for governments. The problem is that er economic prosperity in the future. change moves fast and, in my experience, government When I look at Thailand today – and I know there are moves slow. I think there are three key lessons of gov- issues of reconciliation in Thai politics – I still think ernment. The first is the most successful countries there is a genuine serious basis for confidence in Thai- combine strong commitment to economic enterprise land. Thai people are respected in the world, Thailand with strong commitment to social justice. People used is as good a place as any to come and do business. This to think these two were exclusive, but I think today the is a country with enormous potential. One of the most two go together. For business we need regulation that importance things to do – not just as an individual but is sensible but not too burdensome, a predictable rule as a country – is to put all the problems to one side and of law. We need to encourage enterprise, particularly think of the opportunity, the potential. And in relation small enterprises. We need to create an environment to Thailand, we should be proud of what it is, where it in which investors feel confident, in which outside has come from and where it is going, and confident that investors feel comfortable to invest. But we also need its destination will be one of success and prosperity.