The Vongthip Letter Aug ’10

Looking more like 46 now?! With the extra heavy cares and woes that he has been experiencing in the last 20 months, PM Abhisit has certainly matured before our eyes. In 7/10 he was given hell by the yellow shirts for failing to take drastic actions to claim back the land surrounding the Preah Vihear temple. The private sector too was more than frustrated by the (30%) corruption prevailing among his cabinet members and their bureaucrat underlings. Notwithstanding the seemingly quieter political atmosphere, PM Abhisit simply could not go against the CRES’ advice to keep the emergency decree on.

There was constant threat of violence, lurking between isolated small bombing incidents in the city. On 9/7/10 the Election Committee and the Attorney General jointly asked the constitution court to dissolve the Democrat Party for accepting a THB 258 million unlawful donation and for misusing the THB 29 million election-campaign funds in 2006. A wave of panic swept through the Democrats and their voters at the prospect of PM Abhisit being banned from politics for five years. The private sector too was dismayed by the possibility of losing once again the country’s credibility, stability and continuity. Many believed a new PM at this point of time would do more harm than good to the fragile morale and confidence of the people at home and abroad.

Keeping his cool: Notwithstanding the continued threats to unseat him, PM Abhisit went about his business as usual. Healthcare subsidy was increased to THB 2,546 (from THB 2,401) per head. The 7% VAT was extended for another two years until 9/12. The amnesty legislation for illegal war weapon possessors was readied for parliament session in 8/10. The emergency decree was lifted in 28 provinces by end of 7/10. PM Abhisit called on the management of key newspapers to hear their views on media reform and to seek their active support for his reconciliation plan.

By Vongthip Chumpani*

To provide a level playing field for old and new operators, he announced the (uphill) plan to end telecom concessions for 2G and to replace them with licences before auctioning out 3G in mid 9/10. Bung Kan in Nong Khai got the green light to become Thailand’s 77th province. Following close on the trail of droughts, came the heavy monsoon downpours, often not in the reservoir areas. Bangkok could not wait any longer for more mass transit lines to ease the near impossible traffic jams in the CBD districts, now badly overcrowded by newly built residential high rises.

Changing of the guards

In 7/10, the annual military reshuffle list was finalized earlier than usual. As expected, General Prayuth Chan-ocha was nominated to succeed General Anupong as the new army chief at the end of 9/10. Former CEO of Kasikornbank, Prasarn Traiworakul, was nominated as the new governor of the Bank of Thailand to succeed retiring Governor Tarisa on 1/10/10. Senior Judge Hassawut was elected to succeed retiring President Ackarathorn of the Supreme Administrative Court.

With a rather slim majority in the House (after the cabinet reshuffle in 6/10), the government has been drumming up their MP’s attendance to ensure they have sufficient numbers to pass the second and third reading of the 2010 budget bill in 8/10. Notwithstanding their comfortable victory in the Bangkok by-election on 25/9/10, the Democrats were far from complacent. They have been gearing up, not only for the BMA assembly election on 29/8/10 but also for a snap general election that would have to be called in case an “unexpected event” were to occur between now and early (or mid?) 2011.

World Heritage controversy

During the last week of 7/10, the country became preoccupied with UNESCO meeting in Brazil and their decision whether or not to accept Cambodia’s unilateral proposal for the management of Khao Preah Vihear as a world heritage. The PAD took to the street once again to protest UNESCO and PM Abhisit had to come out again and again to assure the people that his government would do everything possible to protect the 4.6 sqare kilometer territory by adhering to the 1904 demarcation map to settle the border dispute with Cambodia. He however refused to cancel the MOU signed in 2000 as called for by the PAD.

A delegation, headed by Minister Suwit of Natural Environment Ministry, was dispatched to Brazil to convince the WHC that border dispute between Thailand and Cambodia would first have to be settled before Preah Vihear’s world heritage plan could be considered and adopted. Rather than risking a military conflict between the two countries, WHC decided at the 11th hour to postpone their decision till their next meeting in 2011 in Dubai. Preah Vihear became a national agenda. Minister Suwit was appointed to head the committee to work on the proposed development plan and to negotiate a peaceful settlement.

In further disarray

In 7/10 police’s performance seemed to have improved markedly. More red shirts suspects of violence were caught and detained. One of the jailed leaders was allowed by the court to run, in absentia, in the Bangkok by-election. So far only one of their leaders was allowed bail on account of his reconciliation efforts and non involvement in any act of violence. On 29/7 the DSI submitted their probe reports to the attorney general office, with the recommendation that the 25 suspects, including Thakisn, be indicted and trialed for terrorism. Contrary to his habit, Thaksin kept a low profile in 7/10, except for messages sent to his followers as they celebrated his 61st birthday. However, Thaksin’s lawyer and lobbyist, Robert Amsterdam, was making big headlines in Thailand with his “Bangkok Massacres” white paper.

The lawyer’s “half truths” and “lies about the truth” have triggered some scathing public rebuttals especially from a Thai-American opera composer and science fiction writer. Overnight, Somtow Sucharitkul became a hero of the anti Thaksinists but a target of hate mails and death threats from their opponents. Meanwhile, the Puea Thai Party was suffering from further set-back. On 22/7 they could not get more than six ambassadors to attend their expensive light and sound exhibition of the “April-May political crackdown.” Five of their MPs have defected to Bhum Jai Thai Party. Many more were reported to be to the verge of joining other small parties in the next election.

A robust recovery

Thailand’s export growth in 6/10 proved to be the highest in the region as well as the country’s record high at USD 17.878 billion, up 47% in term of value yoy. Industrial goods went up 52.6% (export of cars alone up 96%) and farm products 52.6%. Shipments to Asean increased by 51.2% as the country continued to benefit from AFTA’s tariffs reductions. With export to China also up dramatically by 50%, export growth rate for the whole year was adjusted up to 19%. Import in 6/10 totaled USD 15.342 billion (+38.3%) made up mostly of capital goods for manufacturing of vehicles and parts, electronics and electrical appliances. Trade balance showed a surplus of USD 2.54 billion.

Current account balance and Balance of payments were both in the black again at USD 681 million and USD 2.17 billion respectively. Official international reserve increased to USD 146.8 billion. Manufacturing production index was back at 21.3% yoy and industrial capacity utilization went up to 68.6%. Private investment was also trending north. Consumer price index was firm at 3.3% and core inflation 1.1%. Unemployment was estimated to be 350,000 or 1%. In 7/10 the Baht strengthened to end the month at THB 32.25 to USD, THB 37 to Yen, THB 42 to Euro and THB 50 to Sterling. The return of foreign investors boosted the SET to end the month on a stronger note at 855.

More good news

With higher than expected tax collection (+32.4%) due to consumer spending and robust export, budget deficit this year was expected to be within the range of 3.5% to 4.5%, with public debt of only around 40% of GDP. On 14/7 the Bank of Thailand increased the repo rate by 0.25% to 1.5% and banks followed suit during the second half of 7/10 by increasing their deposit and lend rates by 0.1% to 0.55%. The Bank of Thailand once again adjusted GDP growth forecast for 2010 to 6.5%-7.5% and inflation to 2.5% to 3.5%. In line with the world economic recovery, tourist arrivals increased markedly in 7/10, prompting the Tourism Council of Thailand to increase its projection this year to between 15 to 15.5 million, up from only 13 million in the days after the May 19 riots. Adding to the good news, Travel & Leisure magazine ranked Bangkok as number one on their 2010 best cities list.

Reconciliation on track

In 7/10 former PM Anand announced the list of the two National Reform panelists who went studiously to work with the people on national reconciliation and reform. Then out of the blue came a pleasant surprise of the Loei model. The red shirts and the yellow shirts were meeting regularly to work out their differences and to join hands to develop their province. The mass media too have toned down their political sarcasm and divisive rhetoric measurably. Political and social conferences, seminars and workshops mushroomed all over the country as people from all walks of life put their heads together, trying to come up with what they could do to move their communities and the Thai society forward in peace and harmony.

Businessmen too have vowed to eradicate corruption, practice self-control and return profits to society in earnest. The people of Thailand have finally woken up and taking control of their own destiny rather than waiting for another white knight to clean up the political and social mess for them!

* Vongthip Chumpani is an advisor to and former president of Bangkok Bank and a former advisor to the Senate Foreign Relations Committee. All views and opinions expressed herein are entirely from her own personal observations.