oxford business group - thailand 2012

THE REPORTThailand 2012

ECONOMY ENERGY INDUSTRYBANKING REAL ESTATE CAPITAL MARKETSINSURANCE CONSTRUCTION AGRICULTURETOURISM TELECOMS & IT INTERVIEWS 9 7 8 1 9 0 7 0 6 5 6 3 7

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Country 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

COUNTRY PROFILE SNAPSHOT

By 2025, Thailand is expected to have a population of over 70m

The Kingdom of Thailand, formerly known as Siam,is situated in the heart of South-east Asia. Thailandlies between the Lao People’s Democratic Republicto its north-east, Myanmar to its north-west andwestern, Cambodia to the south-east, and Malaysiaon the southern border. GEOGRAPHY: Thailand comprises 76 provinces,which are divided into districts, sub-districts and vil-lages. Covering an area of approximately 514,000 sqkm, the country can be broadly divided into fourgeographic regions. The central region includes theBangkok metropolitan area and the basin of theChao Phraya River, which runs from north to southand flows into the Gulf of Thailand. Next, the north-ern region, which is heavily forested and mountain-ous makes up roughly one-third of Thailand’s totalland mass. It encompasses the Khorat Plateau andis boarded on the north and the east by the MekongRiver. The southern region extends roughly fromChumphon, 460 km south of Bangkok, through theKra Isthmus along to the Thai-Malaysian border,which is framed by the Gulf of Thailand to the east. HISTORY: The Kingdom of Thailand was formallyerected in the mid 14th century, although Thais firstbegan settling in their present territory as early asthe sixth century. By the end of the 13th century,they ruled most of the western region. Known as Siam(land of the white elephant) until 1939, Thailand isthe only country in South-east Asia to have neverbeen colonised. Although an Anglo-French accordsigned in 1896 guaranteed Thailand’s independenceas buffer between the two powers, Great Britainhad held a colonial foothold in the region since in1824. In 1932, a coup established a constitutionalmonarchy in Thailand, with a representative govern-ment based on universal suffrage. Thailand’s sover-eignty was not seriously challenged until the Sec-ond World War when Japan invaded the country.

International events continued to influence Thai-land throughout the 1960s as conflicts arising in

neighbouring countries like Cambodia and Vietnamhad rippling effects for the region. The US remaineda close ally during this period, and Thailand receiv-ing approximately $2bn in economic and military aidand permitted US military bases on its territory.

Following the conclusion of the Vietnam War in1975, Thailand reformed its diplomatic policies andasked US forces to remove their military outposts.The 1970s were also marked by domestic politicalunrest, with periods of military rule and civil demon-strations upending stability throughout the nation.In 1973, student demonstrations against the mili-tary junta were so severe that after violence beganKing Bhumibol Adulyadej gave sanctuary to the stu-dents in the Chitralada Palace. He then expelled theprime minister and removed the reigning junta. ECONOMY: Stability and economic progress char-acterised the mid- to late-1980s, as booming mar-kets and political stability allowed the economy tomove forward. Growth remained strong at roughly6% and increased to above 8% in 1986, a level itmaintained for 10 years. Growth rates hit their peakbetween 1988 and 1990, averaging 12% per year.

However, the rapid economic expansion did notlast, and years of soaring market growth were abrupt-ly halted by the Asian economic crisis in 1997-98.The Thai economy became mired in a deep reces-sion resulting from the severe financial problemsthat faced many Thai companies, banks and finan-cial institutions. Exports, which were a significant driv-er of growth, collapsed in 1996 and raised doubtsabout the Bank of Thailand’s ability to maintain thebaht’s peg against the dollar. A variety of interna-tional investors that had previously been investingheavily in the state removed or lost their capital,leaving many sectors of the economy exposed, mostnotably in the real estate sector where foreign invest-ment had been particularly high.

Like the recent global financial crisis that emergedout of the US sub-prime market, the recession spread

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Life in colourA diverse ecosystem and population help the country thrive

www.oxfordbusinessgroup.com/country/Thailand

COUNTRY PROFILE SNAPSHOT

rapidly 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.The rainy season typically begins in late June and con-tinues through until October. RELIGION & CULTURE: The dominant religion inThailand is Hinayana Buddhism or Theravada Bud-dhism, similar to that practised by other countriesin the region including Sri Lanka, Myanmar, Cambo-dia and Laos. Buddhists make up roughly 94% of thetotal population, while Muslims represent 3.9%, Con-fucians 1.7% and Christians some 0.65%.

Naturally, Buddhism forms an integral part of Thaiculture, acting not only as the dominant religiousfaith, but also comprising the base of many of thecountry’s rituals, its monarchy and the national iden-tity. The country’s tri-colour flag emphasises thisinfluence with the two white stripes representingBuddhism. The white runs alongside red bands sym-bolising the colour of the nation, and blue striperepresents the monarchy. Religion also influences thecountry’s art, literature and architecture. Buddhisttemples, shrines and intricate statues decorated ingold are a ubiquitous feature of the Thai landscape.

Many Buddhist males above the age of 21 areordained for a period between five days and threemonths at least once during their lifetimes. This rit-ual often takes place during the rainy season whenmonks stop their travels and remain in their monas-teries. To this day, the custom is supported by theThai government and forms an important part of ayoung adult male’s life. As a result, even male civilservants are allowed to leave their positions for upto three months to complete their monastic duties. Each day of the week is associated with a Buddhistcolour: yellow for Monday, pink for Tuesday, greenfor Wednesday, orange for Thursday, blue for Friday,purple for Saturday and red for Sunday. It is there-fore a sign of respect for visitors to adopt this colourcoordination in their dress. POPULATION: Thailand is the 20th-most populat-ed country in the world with a population of about65.7m. The average annual population growth rateis estimated to be around 0.7%, and is projected to

reach a stable population of 70.2m by 2025. Thecapital city Bangkok alone is home to anywherebetween 8m and 10m people, and it is by far thebiggest city in the country.

Of the population, 78% are ethnically Thai, butwithin this group a significant range of dialects anddiversity of customs exists. The largest minority groupis the ethnic Chinese, which comprises 11% of thepopulation and is mainly centred in Bangkok, espe-cially in the thriving Chinatown district of the city.Other prominent ethnic groups include Malays, Cam-bodians, Indians and Vietnamese. LANGUAGE: The majority of the local populationspeaks Thai. The language can be traced to the Tailanguage family that has its roots in the Austric lan-guage group. Four main Tai languages are spokenacross the country, the most common being CentralThai or Bangkok Thai. The others include SouthernThai, Northern Thai and Laotian, commonly referredto as North-eastern Thai. The Thai language isbelieved to have originated in the region now bor-dering Vietnam and China. NATURAL RESOURCES: Thailand is home to anabundance of natural resources. Metallic resourcesinclude lead, tin, tungsten, tantalum, zinc, iron, andsilver. Gold deposits are located in Phichit, Loei,Narathiwat, Phetchabun and Prachinburi.

In terms of energy resources, Thailand has bothonshore and offshore gas and oil fields. The coun-try’s proven oil reserves stood at roughly 659m bar-rels by the end of 2011. Reserves have increased inrecent years after standing at 100m barrels in 1987and 300m barrels in 1997, however the reserve ratehas remained relatively constant since 2006 as newdiscoveries have balanced out the depletion of oldreserves. Nevertheless, Thailand is the region’s sec-ond-largest net oil importer after Singapore. Othernatural resources include natural gas, fluorite, gypsium, lignite, rubber, timber and a multitude oflocally harvested food products and fish from the sea.

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THE REPORT Thailand 2012

Buddhism is the religion of 94% of Thais, and as such, plays a part in many aspects of society

COUNTRY PROFILE OVERVIEW

The country’s first female prime minister was elected in 2011

Today, Thailand is undergoing its most profound trans-formation of the last 30 years. The military coup d’é-tat of September 19, 2006 that deposed the populistprime minister, Thaksin Shinawatra, radically alteredthe nation’s political dynamic, launching the countryinto five protracted years of domestic strife and weak-ened international standing.

However, last year’s peaceful landslide election winby Yingluck Shinawatra, Thaksin’s younger sister, hasrestored much confidence in the country’s demo-cratic process. Thailand’s first female prime ministeris now taking pragmatic steps to engage all parties ina concerted dialogue of national reconciliation andto rebuild the nation’s international credentials. At thesame time, the kingdom continues to enjoy sustainedeconomic growth largely inviolate from political cir-cumstance, as it has done since the introduction ofa constitutional monarchy in 1932 and throughout80 years of democratisation.SIAM RESOLUTE: Emerging from the virtual col-lapse of the Siamese empire following the Burmesepillaging of its historic capital Ayuthuya in 1767 onlyto then fend off British and French colonial overturesin the 19th century, the Thai nation remains distinct-ly patriotic and independent.

At the centre of its contemporary political systemlies the monarchy, due in part to the astute diplomat-ic policies of reform and modernisation pursued byKing Chulalongkorn (King Rama V, 1853 − 1910), whichpreserved the then Kingdom of Siam’s sovereigntyfrom European influence. The ceding of some terri-tories to the European powers remains a bitter chap-ter that still punctuates fringe elements of Thailand’scontemporary political dialogue.MILITARY CUSTODIANS: Aspirations to reclaim theceded territories motivated Thailand’s alignment withJapan during the Second World War. This was opposedby the Free Thai Movement, the group that laterbecame the foundation for the principally pro-Amer-ican governments following the war’s end. Overthrown

by a military coup d’état in 1947, military govern-ments soon became the custodians of democracy inThailand with US support as a pivotal ally in the fightagainst communism in South-east Asia. Consolidat-ing their role over the next three decades, the mili-tary restored the monarchy’s standing after its descentinto relative obscurity and self-imposed exile post-1932. Civilian prime ministers held office for just 12months between 1947 and 1972. Following the suc-cessful assimilation of several waves of Chinese immi-grants during the 1950s (and overcoming fears of a“red wave”), US economic and military support toThailand as the war in Vietnam escalated became thecatalyst for a fledgling middle class in the 1960s. Therise of this socioeconomic group ignited demands foraccountable, representative democracy in the 1970s. DEMOCRATIC DEMANDS: Student-led demonstra-tions in 1973 brought about the expulsion of then-prime minister, Field Marshal Thanom Kittikachorn.This was followed by a brief interlude of civilian gov-ernment until a violent military assault on ThammasatUniversity and a subsequent coup saw a return to mil-itary rule from 1976 to 1988. Middle class demandsrose again at the turn of the decade, rejecting mili-tary rule and precipitating a military crackdown in1992 that was only ended by King Bhumipol Adulyadejsummoning protagonists to the palace for a televisedlecture on the need for unity.

Although taking place 16 years apart, 1976 and1992 were formative years for many of Thailand’sleading political figures and activists. This cadre of lead-ers flourished in a new era of heightened democrat-ic participation and economic prosperity during the1990s. The rising tide came to a head with the 1997“people’s” constitution, which brought ballot votingto both upper and lower houses of parliament for thefirst time. Yet until the emergence of telecoms mag-nate Thaksin Shinawatra’s Thai Rak Thai (Thais loveThais) (TRT) party in 1998, political movements hadbeen catering primarily to their urban constituencies.

The first military coup d’état occurred in 1947, following which the armed forces aligned themselves with the US inthe fight against communism.

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Rising tidesA democratic ethos and populist politics carry the nation forward



POPULIST 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 Alliancefor Democracy (PAD) movement that took to thestreets on the back of largely urban and middle-classpopular support. Led by Thaksin’s erstwhile businesspartner, Sonthi Limthongkul, the PAD’s obstruction ofgovernment contributed to Thaksin’s decision to calla snap election in 2006, just three months into his sec-ond term. The PAD led opposition parties boycottingthe vote, and Thaksin secured 60% of the electoral roll.However, hounded by continued street demonstra-tions, one-party rule lasted just four months. Thenation’s 18th military coup d’état took place on Sep-tember 19, 2006. As part of its actions, the coupremoved Thaksin, who remains in self-imposed exile.INTERVENTION & STREET POLITICS: The 2006coup was a response to the political evolutions in Thaisociety, most notably to the demands for accountablegovernment and accelerating the transition of polit-ical control from Bangkok to the masses.

In May 2010 Thailand’s political landscape waspunctuated by confrontations between the govern-ment, the PAD, the pro-Thaksin red-shirt movement,the United Front for Democracy Against Dictatorship(UDD), which emerged in 2006, and the military. Thegrievances that arose out of the events between 2005and May 2010 remain fundamental to the dialogueof reconciliation now under way (see analysis).

However, by December 2008 the power of streetpolitics was already waning. The PAD struggled for rel-evance as a Democrat Party-led coalition took pow-er following the Constitutional Court’s dissolution ofTRT’s successor, the People’s Power Party (PPP). Mar-ginalised by its occupation of national airports andan increasingly far-right-wing message, it never fullyrecovered its popular base, despite branching intomainstream politics via the New Politics Party (NPP).

Military confrontations in Bangkok with red-shirtsin 2009 and 2010 brought an end to the street poli-tics uprisings. The protracted confrontation and deathsof 92 protesters and soldiers in April and May 2010deeply affected public opinion. At the brink of anopen conflict, these events sparked demand for a

peaceful solution, expressed in the open and trans-parent election results of July 2011. GOVERNMENT: Thailand is a constitutional monar-chy and a parliamentary democracy, as stipulated inthe 2007 constitution drafted by the military-appoint-ed Constitution Drafting Assembly. It replaces the1997 constitution, which was abrogated in 2006.Approved by public referendum in 2007, executivepower is vested in the government with King BhumipolAdulyadej as the reigning monarch and head of state.The prime minister is the leader of the largest partyor coalition in parliament and is limited to two four-year terms. The leader of the ruling party is requiredto hold a seat in the lower chamber of parliament,and representatives must relinquish any holdings inmajor companies prior to assuming a role in office.

The Cabinet, or Council of Ministers, is restrictedto 35 ministerial positions, of which 20 are head min-isters and 15 are without portfolio, including thedeputy prime minister and several other deputy min-isters. Members must receive royal approval. The Cab-inet is authorised to submit bills to the House of Rep-resentatives, the decisions of which are in turn subjectto the non-partisan upper house, the Senate.

The lower house is composed of 500 members, ofwhich 375 are elected through single constituencyelections and 125 are appointed according to party-list proportional representation. The current speakerof the house is PT’s vice-chairman and former minis-ter of culture and justice, Somsak Kiatsuranont.

The senate is mad up of 150 members who arerestricted to one six-year term each. It comprises of76 senators that are directly elected, one from eachprovince and one from Bangkok. The remaining 74 rep-resentatives are appointed by the Senate SelectionCommittee, composed of the heads of the Constitu-tional Court, Election Commission, National CounterCorruption Commission (NCCC), State Audit Commis-sion, Chief Ombudsman, and one judge from both theSupreme Court and the Supreme Administrative Court.

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The prime minister is limited to two four-year terms and leads the largest political party in parliament

The Thai Rak Thai Partyushered in a new era ofpopulist politics in 2011and was the first majorpolitical movement toemphasise the demands ofthe rural masses.

The 2006 military coupsparked a wave of conflictsand angry street politics.The consequences of thesealtercations left Thaisdemanding greater stabilityand a peaceful politicalprocess.


The 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,which is the final level of appeal in matters of crimi-nal law. The Dika is also the forum for prosecutionsof politicians, which has placed it at the centre ofseveral anti-corruption cases brought against elect-ed officials in the last six years.

Established by the 1997 constitution, the Consti-tutional Court is the highest authority on constitution-al matters. Strengthened in 2007 as part of the con-stitutional amendments, its rulings are at the centreof perceived establishment bias following the disso-lution of the TRT and PPP parties, while dismissing sim-ilar cases against the Democrats in 2010.

Other judicial tiers include: the administrative courtswith jurisdiction over conflicts between the state,state organs and private citizens; the courts of trade,tax and labour; and the military courts.POLITICAL PARTIES: The Pheu Thai (“for Thais”)Party (PT) was founded in 2008 as the successor toboth the TRT and pro-Thaksin PPP. Both were dis-solved and their executives banned from politics forfive years by the Constitutional Court in 2007 and2008, respectively. Led by incumbent Prime Minister,Yingluck Shinawatra, PT has continued TRT and PPP’spopulist platform and took 53% of the vote (265 seats)in the 2011 general election. As the dominant forcein Thai politics, its electoral base is concentratedamong the rural and urban poor, particularly in northand north-east Thailand, as well as Bangkok.

The Democrat Party, led by former prime ministerAbhisit Vejjajiva, makes up the current opposition andThailand’s oldest political party, although it has notwon an electoral plurality in any election since 1992.Maintaining a conservative political position withstrong links to the establishment, the Democrats’electoral support base is concentrated throughoutBangkok and southern Thailand in the middle to uppersocioeconomic classes. The Democrats formed a six-party coalition government in 2008 with the allegedtacit backing of the military, replacing the dissolvedPPP coalition parties and serving in office until itselection defeat in July 2011. Despite a very strong

economic performance, the party suffered from unco-operative coalition partners and was confronted byprotracted pro-Thaksin street protests in 2010. Thesubsequent military crackdown on protesters hurtthe party, reinforced by an anti-Thaksin election plat-form, yet it secured 31.8% of votes cast (159 seats).

Led by Newin Chidchob, the Bhumjaithai Party mir-rors TRT’s populist platform. Once favoured by thePPP administration, it was later ostracised for “betray-ing” the pro-Thaksin parties by joining the Democratcoalition in 2008. PT recriminations deliberately cam-paigned heavily in Bhumjaithai-held seats during the2011 election, a move which helped halve the par-ty’s expected election yield. While it took 6.8% of thevotes (34 seats), it has been kept out in the cold bythe PT-led government.

The Chartthaipattana Party replaced the Chart ThaiParty that was also banned in 2008. Led by ChumpolSilpa-archa, the party has crossed the parliamentaryfloor several times in the last decade. First allied withTRT and PPP, it joined the 2008 Democrat coalitionbefore siding with Bhumjaithai in the 2011 elections,only to break ranks and join the PT coalition in Julythat year. It holds 3.8% of the votes (19 seats).

With just 1.4% of the vote (7 seats) each, Chart Pat-tana Puea Pandin (CPPP) and Phalang Chon, an off-shoot of Bhumjaithai, are minor coalition partners inthe PT government. CPPP includes both former TRTmembers and opponents, following a merger withthe Puea Pandin Party in 2011. CPPP is led by Wan-narat Channukul, who served as minister of energy inthe Democrat coalition and briefly as minister of indus-try in the current administration. 2011 ELECTION: Since 1992, Thailand has main-tained a plurality of political parties that has con-tributed to a succession of coalition governments.While PT’s 2011 election win constituted a parlia-mentary majority, its six-party coalition is less indica-tive of election platform compatibilities than oldalliances renewed. However, the election campaign

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The Pheu Thai Party leads the parliament with a six-party coalition

The current constitutionalcourt saw its powersexpanded in 2007 followingthe 2006 militaryintervention, alongsideconstitutional amendmentsbrought in that year.

The Pheu Thai (PT) Partyhas picked up the mantle ofthe disbanded TRT. PT’s2011 parliamentary victoryhas seen it continuepopulist politics that focuson urban and rural masses.


in 2011 highlighted the depth of the Thai political spec-trum, with 40 competing parties and an estimatedspend of BT39bn ($1.24bn), according to the Kasiko-rn Research Centre; an 85% rise on the 2007 estimateof BT21bn ($670m). Whereas vote-buying was a com-mon and all-too-apparent stain on the previous elec-toral process, appearing in charges levelled againstTRT and PPP, observers have noted Thailand’s improvedperformance in terms of monitoring and transparen-cy over the past six years.NEWCOMERS: The 2011 election was also notablefor the emergence of three political parties and move-ments that defied traditional norms. The New PoliticsParty (NPP), the PAD’s vehicle to mainstream politics,was founded in 2009, espousing a hard-line nation-alistic and royalist ideology, provoking military con-frontations with Cambodia. Although wracked by aschism in 2011 over demands by PAD leader SonthiLimthongkul that it boycott the election, its short-livedpolitical aspirations illustrated the rejection of hard-line nationalism by the general Thai electorate.

Diametrically opposed to the NPP, the red-shirtmovement also made a point to distance itself fromthe hard-line and confrontational tactics of 2009 and2010. With the movement’s UDD leaders abroad orin jail, the movement re-emerged in the form of grass-roots “red shirt villages” that espoused demands forsocio-economic equality and justice independent oftheir calls for Thaksin’s return. Whilst distinct from PT,

these continue to influence the popular platform onwhich PT relies, tying them to an unpredictable, butnecessary ally in the UDD.

The election also highlighted the question over themoral authority of elected officials. The previous sixyears brought growing public disenchantment withpoliticians and leaders across the spectrum. The RakThailand Party of former massage parlour king pin,Chuwit Kamolvisit, was the unlikely beneficiary of pub-lic ire. Campaigning on an independent, anti-corrup-tion platform, he attracted substantial support fromyoung adults, first-time voters and notable figuresamong Thailand’s intelligentsia, winning four seats.While a small player, support for the party’s platform,despite its leader’s unconventional background,betrays a growing public unease with Thailand’s polit-ical leadership among the new generation of voters.THAILAND TODAY: PT’s six-party coalition govern-ment faced an unforgiving set of circumstances andevents in the months immediately after taking pow-er. Foremost amongst its opponents’ concerns and alle-gations is the belief that Yingluck is a placeholder forher brother. Whilst this claim has been strenuouslydenied, Thaksin’s frequent consultations with PT advi-sors and government members in neighbouring coun-tries, openly and documented by local media, have added fuel to the speculations. The real extentof Thaksin’s influence, however, remains unclear, and Yingluck insists that she governs with impartiality.

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In the 2011 electioncampaign, candidates andcompeting parties spent$1.24bn, significantly morethan expected, and vote-buying was markedlyreduced.


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-inet reshuffle was partially in response to the floods,although many criticised members retained theirseats. In all, 10 new cabinet members were named,including Natthawut Saikua, a red-shirt leader. Appoint-ed as the deputy agriculture and cooperatives minis-ter, Natthawut objects to the prior lack of red-shirtrepresentation. Other important changes includedthe appointment of Air Chief Marshall SukumpolSuwanatat as minister of defence, reinforcing civilianoversight of the armed forces, and the removal of thefinance minister, Thirachai Phuvanatnaranubala.Replaced by then deputy prime minister and minis-ter of commerce, Kittiratt Na-Ranong, the former sec-retary-general of the Securities and Exchange Com-mission, Thirachai publicly condemned his removal asan attempt by the government to manipulate publicdebt figures, which are now approaching the consti-tutional limit of 50% of GDP (see Economy chapter).

Such incidences underlined the resistance of manyinstitutions to PT oversight and control, which willcontinue to plague the government during its termin office. However, May 2012 heralded the return ofthe first 111 TRT executives from their five-year polit-ical moratoriums. Many observers expect a secondcabinet reshuffle later in 2012 that will see some ofThaksin’s “A-team” players return to the bench. Yetstanding in their way are the current incumbents, anew generation of politicians who are not expectedto pass quietly into the night. As the party remainscareful not to upset the national balance of power,PT’s own internal politics may prove to be the mosteffective check and balance in government.ECONOMIC PRESSURES: Demand for socio-eco-nomic equality among the rural and urban massesdrives much of Thai politics. This issue remains animportant focus to the coveted popular political sup-port base, which has transitioned from a position of“recipient” to “provider” of political support. Accord-ingly, Thailand has witnessed a flux of competitivepopulism that has brought many politicians into its

fold. However, the proposed Keynesian economic poli-cies would pose substantial fiscal burdens on thestate, undermining political stability and increasingdependence on further deficit and borrowing. Withdepressed export demand, a shortage of labour anda low tax-paying base, Thailand currently has insuffi-cient revenue streams for such political aspirations.

Such populist nurturing is a two-edged sword forThailand. Debt-laden governments can produce volatilepolitical environments and the commencement ofthe ASEAN Economic Community (AEC) in 2015 couldyet heighten populist demands. Although the coun-try’s established manufacturing industry has sus-tained the economy through several downturns, it isfeared that Thailand’s current and future labour forces,upstream industrial capabilities, financial institutionsand services sector have lost much of their momen-tum and will lack the necessary competitive edge tocompete in the open market that the AEC guarantees.

Just three years ahead of the AEC, this economicimperative may prove to be Thailand’s greatest polit-ical challenge. Despite the political instability of recentyears, Thailand registered economic growth in everyquarter bar six in the 21 months since the coup. Thatsaid, the last six years of political conflict squanderedThailand’s lead among the regional economies anddeprived it of billions of baht from would-be investors. OUTLOOK: Following six years of political strife, the2011 election was a public rejection of violence andextra-constitutional interventions by non-state actorsin favour of full, participatory democracy. While Thai-land’s political crisis looks to be at an end, grievancesremain deeply engrained on all sides of the politicalspectrum. An ongoing dialogue between the partiesis only the first step in a broader programme of nation-al reconciliation that will continue for many years.Thailand’s economy remains on a strong footing, butmanaging the public debt, investor confidence andthe aspirations of its party forerunners may prove tobe the PT government’s greatest challenge for 2013.

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The October 2011 floods were a national disaster, leaving nearly 800 people dead and over 13m affected

The end of the five-yearpolitical ban on TRT partyleaders is likely to influencethe next reshuffling of theCabinet, with manyexpecting that this willoccur later in 2012.

Recent political campaignshave championedeconomic equality as wellas greater welfareprovisions. Such policieshave effectively attractedvoters, but are likely to be hard to sustain in the long term.

COUNTRY PROFILE ANALYIS

Prime Minister Yingluck met with President Obama in late 2011

The 2011 elections gave the government a strong man-date to regain a proactive international role, stressingcommitment to democracy, justice and reconciliation.Following the 2006 military coup d’état, Thai primeministers were denied meetings with the US president,a historically routine matter for a close US ally in South-east Asia. The November 2011 meeting between PrimeMinister Yingluck Shinawatra and President BarackObama at the East Asia Summit, just three months afterher appointment, was a clear endorsement of Thailand’sreturn to a democratic process.

Membership in ASEAN has been important to thecountry’s global positioning, and Thailand’s economyand geographic location made it a leading player in theorganisation prior to 2006. Speaking with OBG, SihasakPhuangketkeow, the permanent secretary of the Min-istry of Foreign Affairs, reinforced Thailand’s commit-ment to ASEAN and integration with East Asia. “Promot-ing ASEAN in the region is one of our key foreign policyobjectives while moving beyond the immediate parochialinterests of Thailand itself,” he said.

Thailand’s preference for ASEAN to be a central forcefor broader free trade in the Asia-Pacific region wouldallow the organisation to balance the economic inter-ests of China, India and the US, which had pushed forThailand’s inclusion in the latest multilateral free tradeagreement, the Trans-Pacific Partnership (TPP).WELL PLACED: Thailand’s strong political and trade rela-tionship with Myanmar, now increasingly attractive toglobal investors, are an advantage. Thailand’s supportfor a transition to greater democracy and internation-al engagement in Myanmar has helped to position Thai-land as the gateway to this emerging economy.

Establishing deeper ties with Myanmar also supportsgrowth of the Southern Economic Corridor, which bringsIndia into the fold, linking it with ASEAN and China.Thailand and India are strengthening their relationshipand working to establish reciprocal economic ties. Suc-cessful integration on Myanmar into the arena is expect-ed to benefit regional economic flow on the whole.

DIPLOMATIC RESPONSIBILITY: To the east, relationswith Cambodia remain strained following bitter militaryskirmishes over the Temple of Preah Vihear in 2010.Goaded by right wing elements, the Thai governmentallowed the conflict to spill over into the UN SecurityCouncil, the International Courts of Justice (ICJ) andUNESCO in 2011, undermining Thailand’s internation-al credentials. Representing Thailand at the UN, Sihasakacknowledges that the politicisation of the issue is thereason behind the international intervention. Both Thai-land and Cambodia have maintained a ceasefire since2011 and await the final ICJ ruling on ownership of thetemple’s 4.6-sq-km grounds. “Eventually the court willdecide, but both sides must recognise that our rela-tionship will have to move forward,” Sihasak said.

“We have to bring Thai foreign policy into a new eraby looking beyond Thailand, by looking at how we cancontribute to the broader issues of the internationalcommunity to deal with global challenges,” Sihasak toldOBG. “I would like to see our foreign policy clearly raisethe banner of democracy, human rights and humani-tarian principles. These are important values shared bythe international community and should be reflectedin the conduct of our own foreign policy.”BACK TO BUSINESS: The government knows that astrong diplomacy record and high international stand-ing will also open doors for Thai business. The effortsmade by the former premier Abhisit Vejjajiva to expandbusiness opportunities were frustrated by uncooper-ative coalition parties and a weak parliamentary major-ity slow to act due to a number of political issues.

However, the renewed push for international engage-ment and expansion has allowed Thailand to close anumber of free trade agreements and other ties withAfrican and Latin American countries over the last fiveyears. Pheu Thai’s parliamentary majority and return toa more democratic political process has helped rebuildinvestor confidence after six years of instability and the2011 floods. It is clear that within the global and economic arenas, Thailand is getting back to business.

As a member of ASEAN,Thailand is party to a rangeof multilateral tradeagreements and iscurrently consideringjoining the Trans-PacificPartnership. The country isalso building a network ofbilateral agreementsaround the world.

Stronger ties withMyanmar are provingpositive for both countries,as well as the wider region,with Myanmar facilitatingIndia’s entry into the South-east Asian economicsphere.

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Back to businessRebuilding international standing


COUNTRY PROFILE VIEWPOINT

Bhumibol Adulyadej, King of Thailand

When considering development, first and foremostwe must keep in mind humanitarian considerations. Ifwe are to be kind to our fellow countrymen, known tobe in dire need, the authorities endowed with bothknowledge and wealth must go to their assistance.

When the country is faced with difficulties and peo-ple in the remote areas are suffering, we cannot sim-ply stay put in this paradise of a capital. If we want thepeople to be prosperous, we have to invest in devel-opment projects which will involve budgets that maycost hundreds or even thousands of millions of baht.But this expense is justified. If the project is a goodone, the people will very soon derive benefits from it.

When people talk about solving the current crisis,one of the things they talk about is “globalisation.” Wesay we are now in the age of globalisation, and we must“comply” with it and follow its rules. If we fail to followthrough with what we have committed to, others willbe dissatisfied. Why? Both because they are also in trou-ble and because we would find it more difficult torecover from the crisis ourselves.

The countries in this region are not the only onesaffected by the crisis. Even prosperous and stablecountries are in trouble. This is because if a problemis not solved in one corner of the world, other partsare also affected. So we must try to support the peo-ple, providing them with jobs, so that they earn anincome and can survive the crisis.

Development must take account of a country andits people’s physical, sociological and cultural environ-ments. By the local sociological environment, we meanthe certain characteristics and ways of thinking whichwe cannot force people to change. We cannot requirepeople to do those things they will not choose to do.We can only suggest. If we go in and find out what thepeople really want, and then fully explain how they canbest achieve their aims, the principles of developmentcan be fully and effectively applied and implemented.

“Sufficiency economy” applies to conduct and a wayof life at individual, family, and community levels. At

the national level, this philosophy is consistent with abalanced development strategy which will reduce thenation’s vulnerability to shocks and excesses that mayarise due to the effects of globalisation. At the sametime, it is essential to strengthen the nation’s moralfibre so everyone, particularly public officials, academ-ics, business people and financiers adhere to princi-ples of honesty and integrity.

A balanced approach with patience, perseverance,diligence, wisdom and prudence is indispensable tocope with the challenges arising from extensive andrapid socio-economic, environmental and culturalchange. It requires thoughtful planning with consid-eration for contingencies, and maintaining the reservesof money and resources necessary to tide one throughany bad times that occur. Self-sufficiency means hav-ing enough to live on and to live for. If everybody hasenough to live on and to live for, that is good. And ifthe whole nation is able to reach this status, that would,of course, be even better.

Self-sufficiency means that whatever we produce,we have enough for our use. We can rely on ourselves– as people say, we can stand on our own legs.

But sufficiency carries a broader meaning. It is hav-ing enough and being satisfied with situations as theyexist. If people are contented, they are less greedy.

With less greed, they will face fewer problems. Coun-tries should value having just enough, which meansbeing contented, being honest and not being greedy.This will make people be satisfied.

Being sufficient does not restrict people from hav-ing a lot, or possessing luxury items, but it does implyone must not take advantage of others. Everything mustbe within limits. We must say what is necessary, act asis needed and work as is adequate. Thus, sufficiencyhere means within the proper bounds and reasons ofthe country and the people.

Adapted from His Majesty’s royal speeches in 1974,1997, 1998 & 1999 and His Majesty's speeches on theRoyal Development Projects in 1970.

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A balanced approachHis Majesty Bhumibol Adulyadej, King of Thailand, on his philosophy forsustainable development

COUNTRY PROFILE INTERVIEW

Yingluck Shinawatra, Prime Minister

How did the floods of late 2011 affect the admin-istration’s priorities? What reforms are most press-ing following such a natural disaster?YINGLUCK: The government has given high priority toalleviating the impact of the floods and putting in placemeasures that will help to prevent such crises fromoccurring again in the future.

We are turning the flood into an opportunity to makeThailand’s infrastructure and economy safer from suchdisasters. A multi-billion-dollar flood recovery andrestructuring package has been set aside to compen-sate and assist affected sectors in the recovery effortand to ensure that small and medium-sized enterpris-es, entrepreneurs and industrial estate developmentcan resume production as soon as possible.

More than $11bn has been set aside to create animproved water and crisis management system. Floodwalls, barriers and dams are being built to protect indus-trial estates and communities.

Floodways and diversions are being created to allowwater to flow in and out. Drainage systems are beingbuilt to prevent water build-up. Information databas-es and contingency plans are being developed.

Most importantly, a single command authority onwater management is being put in place to oversee andexecute plans, in particular during times of crisis.

At the regional level, ASEAN has given full supportto my initiative to work together to address and pre-vent flooding. This government will continue its poli-cies such as strengthening domestic demand, pursu-ing people-centred development, creating abusiness-friendly environment and expanding invest-ment in transportation and logistics.

In addition, we will be following through on the highpriority agenda announced when we took office. Thiswill take a variety of forms, including the empoweringof women so that they can contribute further to thecountry’s economic development and strengtheningeducation for our children, which is a very impor-tant form of investment for the future of our country.

What is the government’s strategy for restoringconfidence in long-term investment in Thailand?YINGLUCK: Business confidence in Thailand remainsstrong, not only because of our policies but also becauseof our solid economic fundamentals. That is why oureconomy is forecast to expand by around 5.5-6.5% in2012 in the form of a v-shaped recovery, despite thefloods in 2011. That is why foreign companies affect-ed by the floods continue to invest in our future. Thefiscal and financial position is sound. Public debt standsat 40% of GDP. The level of foreign exchange reservesis high at $180bn. We also have a large pool of skilledlabour that is valued by multinational companies.

In terms of policies, this government is committedto promoting domestic demand through investment andgovernment spending. Projects that have been plannedinclude large transport and infrastructure schemes topromote national and regional connectivity.

With regard to policies for the private sector, corpo-rate income tax is being lowered from 30% to 23% in2012, and to 20% in 2013. We have removed somerestrictions to make it easier for companies to set upregional operating headquarters here. In addition, labourskills are being upgraded. Thailand is preparing itselffor the ASEAN Community in 2015, which will make theSouth-east Asian region of over 600m consumers a sin-gle market and production base.

The message I received from foreign investors, bothin Thailand and abroad, including at the annual meet-ing of the World Economic Forum in Davos in January2012, is that they are confident in Thailand’s econom-ic future and would like to continue to be our tradingand investment partners. Thailand’s hosting of theWorld Economic Forum for East Asia in 2012 is expect-ed to underscore that message. In view of the currentmix between our water management and recoverypackage on the one hand, and people-centred devel-opment and business-friendly economic policies onthe other, Thailand is striking the appropriate balancebetween emergency relief and long-term planning.

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Heal and growOBG talks to Prime Minister Yingluck Shinawatra



What are the challenges to fostering unity and rec-onciling the political differences of recent years?YINGLUCK: The political situation in Thailand has beenback to normal for some time now. The elections in July2011 were a fresh start which resulted in a peacefultransition of power. They also showed that all sides arecommitted to resolving issues through democraticprocesses. The elections saw voter turnout of 75%, oneof the highest in recent years. In my visits to foreigncountries and at international meetings, the messagefrom our foreign friends is the same – they stronglysupport Thailand’s democracy and this government,which came from a democratic process.

We should not overlook the fact that the politicalevents in Thailand in the past few years reflect increasedactivism on the part of the Thai people, who havebecome more aware of the importance of politics totheir lives and want to make their voices heard. The diver-sity of views being expressed by different groups showsthat Thailand is a vibrant democracy and an open soci-ety. However, one cannot deny that political activismin the past few years has also been marred by violentincidents and a lack of compromise. While this is trulyregrettable, it is perhaps part of the process of learn-ing how to become a more mature democracy whichThailand has to go through. I am sure that democracyin Thailand will emerge stronger after this experience.

Recognising that more work remains to be done onthis issue, this government attaches great importanceto promoting national reconciliation. The governmentsupports the work of the Truth and Reconciliation Com-mission of Thailand (TRCT), established by the previ-ous government, and the TRCT’s recommendations. Acompensation package has been approved to provideremedies to all sides that suffered losses in the politi-cal violence of the past several years.

Political stability has been the fruit of this govern-ment’s efforts so far. We will continue to consolidatethese gains by supporting good governance, the ruleof law, human rights, transparency and accountability.

Which are the most urgent priorities on your for-eign policy agenda? What bilateral relationships inAsia would you like to develop?YINGLUCK: One of the most important foreign policypriorities of this government is to expedite the promo-tion and development of close and cordial relations withneighbouring countries by enhancing cooperationbetween the public sector, private sector, people andthe mass media to cultivate mutual understanding andpromote mutual interests. This will lead to expandedcooperation in all relevant areas, including trade, invest-ment, tourism promotion, transportation and people-to-people ties. Indeed, this is part of Thailand’s overallforeign policy of maintaining good relations with allmembers of the international community.

In this regard, I am pleased that in my visits to neigh-bouring countries in South-east Asia, there has alwaysbeen a warm reception, as well as a great receptivityand willingness to reciprocate these policies.

As a founding member of ASEAN, Thailand attachesgreat importance to the realisation of a people-cen-tred and effective ASEAN Community in 2015. We arecommitted to playing a more proactive role in commu-nity building and in developing an ASEAN-centredregional architecture that promotes peace, prosperityand progress. To this end, Thailand supports the devel-opment of enhanced connectivity within our region,whether in the Greater Mekong subregion, ASEAN orbeyond, and will use its geographical location and oth-er assets to promote further progress in this area.

In addition, as a member of good standing within theinternational community and with Bangkok serving asregional headquarters for the UN as well as for otherinternational organisations, Thailand will be playing anactive role in the international community and withrelevant organisations to address global issues of com-mon concern, particularly those that impact Thailandand the region. One such issue is disaster manage-ment, which Thailand is hoping will benefit fromenhanced regional and international cooperation.

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Surin Pitsuwan, Secretary-General, ASEAN

How will a free and open investment regime helpincrease investment into ASEAN? SURIN: ASEAN’s vision for an integrated regional econ-omy includes the free flow of investment and servic-es. To this end, set out several strategic initiatives in theASEAN Economic Community (AEC) Blueprint and hastaken concrete steps to realise these by 2015.

One of the bold steps that ASEAN took to establishthis free and open regime is the ASEAN Comprehen-sive Investment Agreement (ACIA). An important pillarof the ACIA is its liberalisation component, in which anegative list approach was adopted in the so-calledreservation list, with all else being open. ASEAN alsoagreed to progressively reduce or eliminate the reser-vations contained in the list following the strategicphases outlined in the AEC Blueprint, and memberstates are working to improve their investment regimes.

On a far greater scale, ASEAN has also entered intofree trade agreements with dialogue partners throughwhich we are trying to expand our reach in terms ofsource of investment. We have to provide adequate pro-tection to investors and their investments to remaincompetitive. Our agreements have safeguarding pro-visions which enable direct recourse through theinvestor-state dispute settlement mechanisms.

Promotion and facilitation are two of the main pil-lars of the ACIA, and we recognise that we has toincrease awareness of ASEAN as an integrated invest-ment area in order to attract and increase both intra-ASEAN and foreign investment into the region. To dothis we are looking at streamlining and simplifying pro-cedures for investment applications and approvals andestablishing one-stop shops for investors.

How are logistical integration issues being addressedin order to transform ASEAN into a single market?SURIN: Logistics services is the 12th Priority Integra-tion Sector (PIS) and ASEAN plans to achieve full inte-gration of logistics services by 2013. ASEAN has aroadmap for this process, which has been endorsed by

the ASEAN economic ministers (AEM) in August 2007.The roadmap provides for the detailed measures andaction plans to integrate logistics services, and involvesthe participation of various related ASEAN bodies intrade, services, Customs, transport, telecommunica-tions and investment, as well as private sector bodies.

ASEAN also actively conducts public-private engage-ment dialogues. In October 2010, ASEAN leaders adopt-ed the Master Plan on ASEAN Connectivity, which isintended to add value to and expedite the implemen-tation of the logistics roadmap and the AEC Blueprint,and to address issues such as market access, trade andCustoms facilitation, supply chain security and cross-border, inter-state and multimodal transport throughclear measures, targets and timelines.

From the trade in services side, significant progressis made in the liberalisation of the nine logistics serv-ices subsectors. This year all member states will berequired to open their logistics services up to 51% for-eign ownership, and up to 70% by the end of 2013. Withthese ambitious targets, trade barriers will be kept atminimum level and links between the logistics providersamong ASEAN countries will be improved.

How can ASEAN nations work together to positionthe region as a world leader in tourism? SURIN: ASEAN has been implementing a number ofregional initiatives to promote ASEAN as one tourismdestination or market, such as developing multiple-country or region-wide tour packages, joint promotioncampaigns and ASEAN-wide tourism websites.

ASEAN is currently coordinating joint marketingefforts in our main source markets, i.e. China, Korea, Japanand Australia. This joint work is being undertaken in addi-tion to the individual tourism offices that memberstates already operate in these markets. The collabo-ration includes: establishment of ASEAN common areaat international travel fairs, the creation of the ASEANPromotional Chapter for Tourism in Australia and pro-motion of tourism products on a dedicated webpage.

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Pulling togetherOBG talks to Surin Pitsuwan, Secretary-General, ASEAN


COUNTRY PROFILE ANALYSIS

Proposed changes to the 2007 constitution worry the military

Reconciliation was central to Pheu Thai’s (PT) 2011election platform, a sentiment that continued toresonate with voters despite five years of confronta-tion following the 2006 military coup that had oust-ed and exiled the prime minister Thaksin Shinawa-tra. Since receiving her overwhelming mandate in the2011, Prime Minister Yingluck Shinawatra, Thaksin’ssister, has stuck to the specifics of the campaignpromise. Reconciliation has remained a prioritydespite hurdles, yet finding the right path leadingto the new era remains a challenge.SPEAKING SOFTLY: Addressing the grievances onboth sides of the pro- and anti-Thaksin divide is nei-ther straightforward nor assured. Anti-Thaksin sen-timent still runs deep among supporters of the Peo-ple’s Alliance for Democracy (PAD) and members ofthe establishment, colouring their views of PT’s pop-ulist base and policies. Despite PT’s popular mandate,the government has recognised the need to treadlightly. Future military intervention remains unlikelygiven the international and domestic condemnationit would no doubt provoke.

The military cites Thaksin’s abuses of power whilein office, notably corruption and electoral irregular-ities, as the justification for the coup and the disso-lution of both Thai Rak Thai (TRT) and its successor,the People’s Power Party (PPP).

These verdicts, handed down by the Constitution-al Court in 2007 and 2008, respectively, alongsidethe decision to terminate the premiership of PPPleader, Samak Sundaravej in September 2008, arestill condemned by pro-Thaksin groups as political-ly motivated miscarriages of justice.

These rulings and the Constitutional Court’s rejec-tion of a case to dissolve the Democrats in 2011 foralleged electoral fraud and vote-buying, perpetuateclaims of judicial impartiality, a hotly contested issuefuelling allegations of double-standards. AMNESTY OR JUSTICE: PT’s solution has been to pro-pose a blanket amnesty. However, to many opponents,

upholding the court’s rulings is crucial to ensuringthat justice is served. They have resisted all movesto expunge TRT and PPP leaders, fearing that thiswould pave the way for Thaksin’s return to Thailandand politics. PT’s proposal also faces oppositionamong its own supporters. Many want to see the PADleadership held accountable for its six-month occu-pation of Government House, attacks on red-shirtsupporters and the closure of national airports in2008. The PAD’s ability to operate with impunity wasin stark contrast to the aggressive measures the mil-itary took against red-shirt supporters for similarfelonies. Of the military’s actions, the most divisiveremain its partisan refusal to intervene when the PPPgovernment declared a state of emergency in 2008,and the military crackdowns of April and May 2010that saw 92 deaths (86 civilian), over 2000 wound-ed and the burning of several buildings.

Previous negotiation attempts by the Democratsin the weeks before the confrontations had faileddue to disunity and lack of compromise among theleadership of the United Front for Democracy againstDictatorship (UDD), a pro-Thaksin umbrella group,precipitating a military crackdown. However, thelabelling of the protests as “terrorism” and mishan-dled investigations by the internal security agency,the Department of Special Investigations (DSI), intothe deaths, remains disputed and contentious. SincePT came to power, the DSI has reverted to many ofits original findings that found the military respon-sible in some deaths, although they have yet to ruleconclusively on all cases. CONSTITUTIONAL CHANGE: While the amnestyproposal is debated, PT has proposed the formationof a 99-member Constitutional Drafting Assembly(CDA) through Article 291 of the 2007 constitution.The move to repeal certain sections of the currentconstitution and revert to some principles of the1997 framework has caused the military establish-ment to fear that this will strip immunity from coup

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Living up to its campaignpromise of “reconciliation”is proving to be challengingfor the PT government.Delicate negotiations andappropriate reparationsensure that the process willrequire compromise,patience and time.

Burying the hatchet Regrouping, recouping and ready to move on

COUNTRY PROFILE ANALYSIS

leaders and lead to the annulment of Constitution-al Court rulings. At the time writing, the proposedchanges are under discussion in the wider politicaland judicial arenas. The court ruled that individualamendments may be applied, but not a wholesaleconstitutional re-write. Furthermore, any changesmust be approved via national referendum.

This verdict neither fully endorses nor rejects mod-ifications, but it does throw the process into a volatilepolitical ring. The court’s decision also underminesthe function of the CDA, which would give the gov-ernment greater control over reforms, ruling that theCDA’s legitimacy rests in the approval which wasexpressed through the referendum.

Such moves are not purely partisan; rather theyrespond to bipartisan calls to review sections of theconstitution. The 1997 constitution’s broad consul-tative approach was seen as genuinely participato-ry in contrast to the 2007 draft, which was engineeredwith the deliberate exclusion of some stakeholders.Irrespective of the 2007 constitution’s merits, muchof the ongoing discourse stems from its genesis,which is cast in the shadow of the political circum-stances at the time of its creation.THE REAL QUESTION: Such issues are at the heartof the reconciliation debate. Tacitly, the pursuit ofreconciliation, first fielded by the Democrats in 2010,has become a question of where the moral author-ity to lead and govern resides today. The social divi-sions and foundations of this debate, long latent inThai society, were exacerbated by the 2006 coup d’é-tat, when many who had previously fought againstmilitary intervention condoned the coup. The beliefthat the military acted in the interests of the nation’sgreater good deeply pervaded public opinion, civilsociety speakers and parts of the bureaucracy.

This division of ideologies continues today. Whilethe contemporary conflict and debate are seen bymany as just another chapter in Thailand’s evolutiontoward democracy, last year’s election was Thai-

land’s Rubicon moment. The 1991 coup, 1992upheaval and 1997 constitution were chapters in thenation’s struggle against military influence and fordemocratic reform. Yet the 2011 election has madethe country’s demand for a new social contract inclu-sive of justice and equality impossible to bury.

This is a positive development for Thailand, withthe debate squarely in the public forum. Yet barri-ers remain, and reconciliation on this scale is unprece-dented in Thailand. The grievances of previous coupsand conflicts were allowed to drift into obscurity,although this does not seem to have had a notice-ably harmful affect on national development. Today’spervasive connectivity means that this is no longerpossible, says Ramkhamhaeng University’s associateprofessor 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, eachside must be willing to recognise the legitimate griev-ances of other parties. However, PT’s BT2bn ($63.8m)compensation fund for victims of both the politicalviolence and the insurgency in the south, announcedin 2011, may be the closest the government is ableto venture in acknowledging the responsibility ofthe state for the events.

It is for this reason that previous initiatives havebeen unsuccessful. The Thailand Truth and Recon-ciliation Committee (TTRC), created in 2010 and re-constituted by the PT government, is headed byAnand Panyarachun. Despite being one of Thailand’smost popular and conciliatory prime ministers,appointed in the aftermath of the 1991 coup, thedialogue he created brought little traction to theTTRC. In parliament, former 2006 coup leader andnow Matubhum Party head, general Sonthi Boon-yaratglin is the chairman of the House Committeeon National Reconciliation, but has refused to dis-cuss many details of the coup.

Central to the debate is the exile of Thaksin andif he will return. He recognises the upheaval that hispermanent return would cause. While public provo-cations suggest an imminent return, practical andpolitical realities preclude this possibility. Opponentsare steeling themselves for this scenario, and are pre-pared to pursue legal action.

Although substantive constitutional reform andreconciliation are still a ways off, the process ofongoing consultation has provided an alternative toconfrontation and conflict, facilitating broadernational dialogue. “The political system should reflectthe changes in Thai society and give greater spacefor all to participate in politics,” said SihasakPhuangketkeow, the permanent secretary of theMinistry of Foreign Affairs, speaking with OBG. Yetboth the government and the people are faced witha choice, said professor Gothom Arya of the HumanRights and Peace Council at Mahidol University: “Theymust absorb and accommodate the new model of government, or remain an asynchronous society.”

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PT allocated BT2bn ($63.8m) to a compensation fund as part of the reconciliation process

Proposed changes to the2007 constitution will haveto be approved by nationalreferendum, a volatile butarguably more democraticprocess.

Heightenedinterconnectivity and therise of social media meanthat current grievancescannot be swept under therug and forgotten. Today’sconflicts must beaddressed, and both sidesneed to be willing to acceptthe legitimate grievancesof the other.



Lyonpo Khandu Wangchuk, Minister for Economic Affairs, Kingdomof Bhutan

What is the thrust of the bilateral economic rela-tionship? How high do economic ties rank?WANGCHUK: As two Buddhist kingdoms whose mon-archs are revered for their benevolence, love for theirpeople and vision, Thailand and Bhutan enjoyed closerelations even before the establishment of formal diplo-matic ties in 1989. The links have grown rapidly overthe years. There is a close affinity between our royalfamilies, people and governments. There is also strongcommitment to further enhance our relations andcooperation on a variety of fronts.

On the economic front, Thailand is a major sourceof imports for Bhutan, and in recent years we haveseen an increasing range of consumer goods from Thai-land. Bangkok is the number-one destination for thou-sands of Bhutanese travellers. Druk Air has daily flightsto Bangkok and we expect more flights in the comingyears. In 2011 we received a Thai trade delegation ofover 40 members on a mission to explore businessopportunities. They were well received by our businesscommunity. There is also an investment by a Thai com-pany in our hotel sector. In the tourism sector, Thais areamong the10 largest markets for us. We held a road-show in Bangkok in 2010 to encourage more invest-ment. Recognising the importance for closer traderelations, we have initiated negotiations on a prefer-ential trade agreement with Thailand.

What lessons can Bhutan and Thailand learn fromeach other’s economic development strategies? WANGCHUK: Bhutan is particularly interested in thesuccess of Thailand’s small and medium-sized enter-prises as well as its promotion of traditional Thai artand crafts and the food processing industry. Many ofour officials have visited Thailand’s royal projects, indus-trial estates, farms and industries, and we see that thestrategies have been well designed. Overall, Thailand’sdual-track development strategy of attracting foreigndirect investment and promoting exports of manufac-tured goods, and stimulating domestic demand is an

important strategy that we can learn from. We canshare our experiences with environmental conserva-tion and economic development, our grassroots-basedfive-year planning and our hydropower knowledge. Wehave seen an increasing number of high-level contactsand visits between government officials of both thecountries. Thailand also offers scholarships forBhutanese students and there are many Thais workingin development projects in the country.

How can economies such as those of Bhutan andThailand drive higher-value tourism? WANGCHUK: Thailand has a very large tourism indus-try and caters to all the market segments from budg-et to ultra luxury. Thailand offers a diversity of culture,geography and products for high-value tourism. Formy own country, Bhutan faces stiff competition frommany destinations, even in the high-end segment, andit is important for us to position ourselves as a uniqueand once-in-a-lifetime experience for visitors. To mar-ket this concept we have a new Bhutan logo with thetagline “Happiness is a Place”. We are promoting invest-ments in luxury hotels by allowing 100% foreign own-ership and encouraging our hotels to upgrade to at leasta three-star category. To tackle infrastructure chal-lenges, the national airline is planning to expand to newdestinations and a new airline has been approved.

However, even high-end tourism is not without itsshare of problems. A couple flying in a private jet overgenerates a much larger carbon footprint than 114 pas-sengers travelling in one of our Airbus 319 jets. We wantto encourage more per-capita spending by a smallgroup of tourists rather than expanding the numberof visitors because we can never compete in the masstourism market. Many of Bhutan’s historical and cul-tural attractions are not designed for very large num-ber of visitors. Some of these institutions are still placesof worship and are an integral part of Bhutanese life;we want to allow visitors to enjoy the beauty and charmof the country in solitude without being disturbed.

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A close affinityOBG talks to Lyonpo Khandu Wangchuk, Minister for Economic Affairs,Kingdom of Bhutan


William Hague, UK Secretary of State for Foreign andCommonwealth Affairs

Today the idea of the “developed West and developingrest” is all but irrelevant. The world has changed andso must the UK if we are to prevent our role and influ-ence in international affairs from declining. Key to thiswill be making the most of opportunities presented bya new international paradigm in which economic pow-er and influence is moving east and south. We are doingthis by shifting our diplomatic weight to reflect thesechanges and by building our relationships with emerg-ing powers. These relationships will be increasingly vitalfor forging agreements on the international stage andfor boosting trade and investment that support the UK.

South-east Asia epitomises the rationale for thisapproach. The ASEAN countries are already more pop-ulous than the EU and the Arab world, have a largereconomy than India and absorb more UK exports thanChina. They hold substantial geopolitical significance,with influence on neighbouring major powers. Theyshould be, and are, key partners for the UK.

The region deserves serious attention from globalpartners. The UK is fortunate to draw on a foundationof existing relationships, and we already enjoy multi-billion pound trade and investment links with ASEAN.Our largest businesses in finance, energy, life sciencesand food and drink are establishing a regional footholdand more of our retailers are becoming householdnames, especially in Thailand. Furthermore, every yearover 30,000 ASEAN students study in the UK, oftenreturning to positions of influence. They form part ofthe rich people-to-people links between our countries.

We build on these links all the time. On his visit toIndonesia last month the business secretary, VinceCable, launched the new UK-ASEAN Business Councilto strengthen commercial engagement with the region.The government’s public-private partnership body,Infrastructure UK, is already in the Philippines sharingexpertise, and we aim to do this more widely across theregion. Moreover, we continue to support develop-ment, democratic freedoms and transparency. But thereis more we can do. Our commercial relationships in the

region are strongest with our Commonwealth part-ners, Singapore and Malaysia. But while strengtheningthese we should be looking for opportunities else-where as well. We also need to continue to work along-side EU partners to secure free trade agreements withASEAN countries to open markets and boost trade. Fur-thermore, we need to do more to promote two-wayinvestment. International institutions rate the UK asthe easiest place to do business in Europe, with thestrongest business environment on the continent andthe lowest barriers to entrepreneurship in the world.

But our relationship is about more than trade andinvestment. We have interests in maintaining securityin a region that straddles some of the world’s mostimportant shipping routes and in tackling commonthreats, such as terrorism, nuclear proliferation, cyber-crime and climate change. There are a number of sep-aratist or other conflicts within ASEAN, and tensionsremain in the South China Sea. The UK has a wealth ofexperience and we are keen to share our knowledgeto promote stability. We form part of a small group ofcountries formally supporting efforts by the Filipino Gov-ernment and rebel groups to end their conflict.

The voices of ASEAN leaders will be increasingly influ-ential, both regionally and globally, in the future. Indone-sia’s impressive democratisation and Malaysia’s strongstand against violent extremism can serve as examplesfor the entire international community.

We also want to work with ASEAN members on cli-mate change. They are among the heaviest emitters ofgreenhouse gases, but could also be among those mostseriously affected by the consequences of changingtemperatures. Any durable solutions will thereforerequire commitment and close coordination with ASEAN.

Thus, our approach will be to build up our relationswith ASEAN, to share expertise and knowledge, to pro-mote increased and freer trade and to work togetherin a wide range of areas, from security to climate change.We will continue to look east, toward the tremendouswealth of opportunity to be found in South-east Asia.

26

Bound togetherWilliam Hague, UK Secretary of State for Foreign and CommonwealthAffairs, on UK-ASEAN relations in the 21st century



Tony Blair, former Prime Minister of the UK

In the light of the devastation caused by flooding, I havehuge sympathy and admiration for the courage, digni-ty and determination of Thai people. Thailand is openfor business and can be confident of its future, and theworld should be confident as well.

It is important that Thailand has increasingly focusedon English proficiency in its schools, because successtoday is not only measured by a nation’s pride in its ownculture, but in its openness to others. Thailand has bigadvantages: its culture, its people and its geography.But Thailand operates in the global economy, especial-ly as it is an exporting nation.

Global economy is in trouble and that trouble is com-ing from Europe. In this European crisis I also thinkthere are important lessons for how ASEAN develops.The arithmetic and politics of integration must be insync. Europe faces essentially the same challenge asnations everywhere today, including Thailand. The essen-tial nature of that challenge is the challenge of change– the speed and the scale of the change happening inthe world today. There is now intense competition andas countries become more prosperous so they findthey have competition from lower-wage nations. Tocontinue to compete in this environment, they have tomove up the value-added chain.

The way the world is changing is important in itsspeed and its scale, not just for companies, but also forcountries and for governments. The problem is thatchange moves fast and, in my experience, governmentmoves slow. I think there are three key lessons of gov-ernment. The first is the most successful countriescombine strong commitment to economic enterprisewith strong commitment to social justice. People usedto think these two were exclusive, but I think today thetwo go together. For business we need regulation thatis sensible but not too burdensome, a predictable ruleof law. We need to encourage enterprise, particularlysmall enterprises. We need to create an environmentin which investors feel confident, in which outsideinvestors feel comfortable to invest. But we also need

to set that within the context of basic elements of fair-ness: essential workplace rights, basic principles thatmean that people get access to quality training and skills,welfare systems that help people back into work.

The second point is that our welfare and public sec-tor systems have to be reshaped and reformed in lightof the changes around us. There is no welfare systemthat will work unless it balances the contribution fromthe state with individual responsibilities. There is no pub-lic service that will work unless it is flexibly organised,unless there are different providers, which offer choicefor consumers, and where it is innovative in the use oftechnology. Countries that are still developing theirpublic welfare systems should learn from our experi-ence so as they create those systems in the 21st cen-tury they can avoid some of the mistakes we made increating these systems in the 20th century.

The third component is that if it is true that societiessucceed if they combine economic enterprise withsocial justice, and if they have a different type of rela-tionship between state and citizen, human capital andits development is the key to the future. The biggestinjustice that anyone can suffer is a poor education.That education is not just about learning; it is an edu-cation to be creative. Foreign direct investment canbring intellectual capital into our countries that, along-side a proper functioning education system, can deliv-er economic prosperity in the future.

When I look at Thailand today – and I know there areissues of reconciliation in Thai politics – I still thinkthere is a genuine serious basis for confidence in Thai-land. Thai people are respected in the world, Thailandis as good a place as any to come and do business. Thisis a country with enormous potential. One of the mostimportance things to do – not just as an individual butas a country – is to put all the problems to one side andthink of the opportunity, the potential. And in relationto Thailand, we should be proud of what it is, where ithas come from and where it is going, and confident thatits destination will be one of success and prosperity.

28

Key components for successTony Blair, former Prime Minister of the UK, on challenges and opportunities of globalisation


CONTENTS THAILAND 2012

The next chapterPage 31

Real GDP grew by just 0.1% in 2011 as theresult of heavy flooding during the fourthquarter. The economy has since started torecover, however, with the government pro-jecting 5-6% growth for 2012, as factoriesrepair damage and restore operations. Poten-tial challenges for 2012 include the threat ofinflation, which could come from a plannedhike to the minimum wage or rising oil prices.

Bouncing backPage 52

Sector fundamentals were stable andimproving as of early 2012, with lend-ing up 14.2% year-on-year as of the endof the first quarter. The central bank hasmandated the adoption of 38 newaccounting rules between 2011 and2013, bringing local lenders in line withinternational financial reporting stan-dards. Foreign banks at present play asmall role, but the market is set to openup to more foreign competition in 2015.

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SNAPSHOTThailand in numbers

COUNTRY PROFILELife in colour: A diverse ecosystem and population help the country thriveRising tides: A democratic ethosBack to business: Rebuilding international standingViewpoint: His Majesty Bhumibol Adulyadej, Kingof ThailandInterview: Prime Minister Yingluck ShinawatraInterview: Surin Pitsuwan, Secretary-General,ASEANBurying the hatchet: Ready to move onInterview: Lyonpo Khandu Wangchuk, Ministerfor Economic Affairs, Kingdom of BhutanInterview: William Hague, UK Secretary of Statefor Foreign and Commonwealth AffairsInterview: Tony Blair, former Prime Minister ofthe UK

ECONOMYThe next chapter: Expanding the economic baseand reducing reliance on exportsInterview: Kittiratt Na-Ranong, Deputy PrimeMinister and Minister of FinanceInterview: Boonsong Teriyapirom, Minister ofCommerceA different model: The hunt for new economicdrivers is onInterview: Atchaka Sibunruang, Secretary-General, Thailand Board of Investment

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Interview: Minoru Furusawa, President, JapaneseChamber of Commerce, Bangkok Rebalancing wealth: A rise in minimum wageReduced barriers: Economic integration ofASEAN nations moves a step forwardInterview: Joe Hinrichs, President of Asia Pacificand Africa Region, Ford Motor Company

BANKINGBouncing back: Sector posts solid numbersFair play: Commercial and socially oriented banksspar over territory Interview: Prasarn Trairatvorakul, Governor, Bankof ThailandInterview: Chartsiri Sophonpanich, President,Bangkok BankHigh five: A look at the largest playersInterview: Matthew Lobner, CEO, HSBC Thailand

CAPITAL MARKETSAnticipating a surge: The sector is expected topick up after a flood-related slowdown in 2011Increasing supply: Government likely tointroduce more bondsGolden opportunities: The derivatives marketDivided stance: Plans to liberalise brokerage sector confirmedInterview: Vorapol Socatiyanurak, Secretary-General, Securities and Exchange Commission Interview: Asvini Tailanga, Chairman of the Executive Board, Thanachart SecuritiesA potential merger: Consolidation of the derivatives exchanges is still on the cardsInterview: Charamporn Jotikasthira, President,Stock Exchange of Thailand

Stocks & bonds: Share analysis & data providedby Thanachart SecuritiesSiam Cement: Building materials BGH: Health careBig C Supercenter: RetailAdvanced Info Service: TelecommunicationsBangkok Bank: Banking

ISBN 978-1-907065-63-7

Editor-in-Chief: Andrew JeffreysEditorial Director: Peter Grimsditch

Regional Editor: Paulius KucinasEditorial Manager: Alex GordyChief Sub-editor: Alistair TaylorDeputy Chief Sub-editor: JenniePattersonWeb Editor: Barbara IsenbergSub-editors: Sam Inglis, Elyse Franko-Filipasic, Esther Parker, William Zeman.Elise Laker, Danya ChudacoffContributing Sub-editor: MiiaBogdanoffAnalysts: Oliver Fall, Matt Mossman,Joe Wilcox

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CONTENTS THAILAND 2012


4

Still movingPage 117

Despite experiencing the worst monsoon flood-ing in 50 years, the country has continued toexhibit strong growth across a range of man-ufacturing and industry segments. Indeed, 84%of exports in 2011 came from manufacturing,while raw material exports accounted for less than 1%. Automobiles, electronics and jewellery look set to help fuel future growth.

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INSURANCEImproved coverage: Reforms are laying astronger foundation for expansionInterview: Pravej Ongartsittigul, Secretary-General, Office of the Insurance CommissionInterview: Sutti Rajitrangson, President, Thai LifeAssurance AssociationBright prospects: The life segment presents opportunities for growthAfter-effects: Severe floods have an impact onthe non-life segment

ENERGY & UTILITIESSupply and demand: A variety of activities tokeep up with increasing energy needsInterview: Pailin Chuchottaworn, CEO, PTT GroupInterview: Chanin Vongkusolkit, CEO, BanpuReturning to growth: Power consumption ratesare expected to pick up againAdded incentives: Renewable power suppliesPlanned improvements: New opportunities arisefor water resource management firmsUntapped potential: Hydrocarbons reserves

INDUSTRYStill moving: Despite major setbacks, some segments are recovering full swingInterview: MR Pongsvas Svasti, Minister of IndustryLife in the fast lane: A resilient auto sector hasquickly bounced backPaper trail: The pulp and paper sector is seeingnew interest and techniques

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Shine on: The jewellery segment briefly soared,but now faces a slowdownGoing digital: A rapid return to form after flooddamage forces factory shutdownsInterview: Boonchai Chokwatana, Chairman,President & CEO, Saha Pathanapibul Interview: Thapana Sirivadhanabhakdi, President& CEO, Thai Beverage Public Company

TRANSPORTSpend, spend, spend: Funds promised for big-ticket infrastructure projectsTrain of thought: Railways back on trackTo Myanmar and beyond: One small step forwardfor $50bn port and industry projectTwo in one will go: Soaring passenger numberslead to backtrack on single airport policy

CONSTRUCTION & REAL ESTATEOn firm footing: Continued growth expected withnew infrastructure projects in sightInterview: Plew Trivisvavet, President and CEO,CH. KarnchangInterview: Apichart Chutrakul, CEO, Sansiri Trending up: Robust demand is seen in residential and retail segmentsIndustry insiders: A detailed look at the nation’sleading developers

TELECOMS & ITMore, please: Upcoming 3G auction to help meetrising demand for data servicesInterview: Anudith Nakornthap, Minister of Information and Communication TechnologyInterview: Thares Punsri, Chairman, NationalBroadcasting and Telecommunications Commission Expanding broadband: Moves afoot to enablethe sector to reach its full potential Interview: Jon Eddy Abdullah, CEO, Total AccessCommunication Growing up: Services play an increasingly important role Interview: Suphachai Chearavanont, President &CEO, True CorporationInterview: Wichian Mektrakarn, CEO, AdvancedInfo ServiceTaking to tablets: Applications are big businessas the market goes mobile

Chairman: Michael Benson-Colpi

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CONTENTS THAILAND 2012 5


Spend, spend, spendPage 134

The government plans to borrow more than$50bn to finance several major transportprojects, including the construction of ahigh-speed railway and capacity expansionsat Suvarnabhumi Airport and the Laem Cha-bang deep-water port. A Thai company isdeveloping a port and industrial complex inMyanmar that could significantly reduceshipping times between Thailand and Europe.

Friendly invasionPage 182

According to the World Travel and TourismCouncil, the country’s tourism sector,already an economic mainstay, will con-tinue to grow at a rapid pace, reaching acontribution of 6.4% of GDP by the year2022. Between 2010 and 2011 revenuesincreased by some 31%. The country islooking to expand its MICE offerings andbring in tourists from further afield.

On firm footingPage 146

Construction spending fell by 5.9% inthe fourth quarter of 2011 due to flood-ing, but expenditures are expected torise in 2012 as rebuilding proceeds. Inthe real estate market, demand for res-idential and retail property remainsresilient. The office segment is stable,while prices for industrial land increasedslightly in the first months of 2012.

Pushing aheadPage 192

Economic growth is placing greater pres-sure on the health and education sec-tors. Secondary schooling has comeinto focus as part of a push to establisha knowledge-based economy, and pub-lic health care centres are incorporat-ing private services to fortify the systemand establish new revenue streams.

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TOURISMFriendly invasion: Chinese, Russian and Indian visitor numbers soar Driving ahead: Golf and F1Twice is nice: The MICE business

EDUCATION & HEALTHPushing ahead: Encouraging new developmentInterview: Reverend Brother Bancha Saenghiran,Rector, Assumption University Beyond borders: International challengesDeveloping welfare: Universal health care system Interview: Prasert Prasarttong-Osoth, President,Bangkok Dusit Medical Services Prospective producer: R&D investment

AGRICULTUREGrowing up: New visions and goals give the sector a fresh position in the global marketplaceGreen power: Alternative ways to fuel the futurePacking it in: Local firms hold their own

RETAILA resilient market: Major international and localbrands continued to expand and upgradeInterview: John Christie, CEO, Ek-Chai DistributionSystem Online and clicking: Web-based shoppingincreases in popularityA growth driver: The home improvement segment

MEDIA & ADVERTISINGWinds of change: Digital media offers muchpotential for growthInterview: Supakorn Vajjajiva, President, The PostPublishing Public Company By land or by air: With access expanding, manyopportunities await broadcasters and providersBack on track: The industry remains resilient

TAXBDO AdvisoryTaxes at a glance: Navigating the systemPaying dues: Classifications of transactionsViewpoint: Andrew Jackomos and Paul Ashburn,Senior Partners, BDO Advisory

LEGALTilleke & GibbinsLooking abroad: Regulatory changes aim toencourage international businessBy the book: The kingdom’s rules and regulationsViewpoint: Darani Vachanavuttivong, Co-Managing Partner, Tilleke & Gibbins

THE GUIDEWater wars: The traditional Thai New Year At peace with the past: Kanchanaburi Lap of luxury: Business and leisure hotelsListings: Important contact informationFacts for visitors: Useful tips for new arrivals

SNAPSHOT6


Thailand in numbers

Animalproducts

Horticulturalproducts n.i.e.Agriculture

2009 2010 20110

5

10

15

20

25

Value of agricultural exports by segment, 2009-11 ($ bn)

SOU

RCE:

Ban

k of

Tha

iland

Fisheries

Broker/custodian

Non-resident

Govt. &BOT

Depositarycorp.

Insurers& other

Household &non-profit

0

5

10

15

20

25

30

Bond investor profile, 2011 (%)

SOU

RCE:

BO

T

Residential Commercial

Q1 Q2 Q3 Q42

4

6

8

10

12

14

16

Private construction growth, 2011 (%)

SOU

RCE:

NES

DB

SOURCE: Ministry of Tourism and Sports, Immigration Bureau, Police Department

International tourist arrivals by region, 2008-12

2008 2009 2010 2011 2012 (H1)

Region No. (’000) Share (%) No. (’000) Share (%) No. (’000) Share (%) No. (’000) Share (%) No. (’000) Share (%)

East Asia 7602 52.12 7076 50.01 8167 51.25 10,346 53.80 5487 52.27

Europe 3984 27.32 4060 28.69 4442 27.88 5101 26.53 2972 28.31

Americas 909 6.23 853 6.03 845 5.30 953 4.95 545 5.19

South Asia 711 4.88 826 5.85 995 6.25 1158 6.02 634 6.04

Oceania 794 5.45 737 5.21 790 4.95 934 4.85 478 4.55

Middle East 464 3.18 484 3.42 569 3.57 601 3.13 297 2.83

Africa 119 0.82 112 0.79 128 0.80 138 0.72 85 0.81

Total 14,583 100 14,148 100 1,5936 100 19,231 100 10,498 100

SNAPSHOT 7


ImportsExports

2006 2007 2008 2009 2010 20110

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Exports & imports, 2006-11 (BT trn)

SOU

RCE:

BO

T

SOURCE: Department of Mineral Fuels *crude oil equlvalent

Energy, inputs & consumption, 2009-11 (’000 bpd*)

2009 2010 2011

Production 894.8 989.2 1017.5

Crude 154.0 153.2 140.0

Condensate 76.4 80.7 76.6

Natural gas 537.4 630.9 643.5

Lignite 96.1 100.8 122.2

Hydro 30.9 23.7 35.2

Import (net) 922.0 1000.6 1016.5

Crude 762.3 786.2 761.0

Petroleum products -194.0 -163.0 -134.1

Coal 205.0 211.4 204.3

Electricity 4.2 12.4 18.5

Natural gas 144.5 153.5 167.0

Stock change -93,372 -81,498 -119,799

Consumption 1662.6 1782.9 1845.5

Petroleum products 642.7 652.5 673.9

Natural gas 681.7 784.2 810.3

Coal 205.0 211.4 204.3

Lignite 98.0 98.7 103.4

Hydro & imported eletric 35.2 36.2 53.7

M attendance (%)F attendance (%)

Pre-primary Primary Secondary Tertiary0

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Enrolment & attendance by gender, 2010

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istr

y of

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catio

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Students (m)

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5.0

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Bangkok KualaLumpur

Jakarta Singapore HongKong

Ho ChiMinh City

Tokyo0

200

400

600

800

1000

1200

Rental price for grade-A office space, Q4 2011

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RCE:

Jone

s La

ng L

asal

le

($ per sq metre)

SOURCE: Thai Automotive Industry Association

Vehicle production, 2005-11

2005 2006 2007 2008 2009 2010 2011

Total 1,125,316 1,193,885 1,301,149 1,391,728 999,378 1,645,304 1,358,369

Passenger cars 277,603 298,819 329,223 399,435 313,442 554,267 503,951

Buses 412 272 578 376 458 592 421

Trucks 847,301 894,794 971,348 991,917 685,478 1,090,445 853,997

SOURCE: Bank of Thailand

Value of exports by product group, 2007-11 ($ bn)

2007 2008 2009 2010 2011

Electronics 31.65 32.08 27.76 33.57 32.71

Electrical appliances 9.50 9.66 8.03 10.48 11.37

Metal & steel 8.10 8.97 7.59 8.33 9.40

Automotive 16.11 19.71 14.66 22.40 23.25

Aircraft, ships, floating 1.91 2126.55 1648.6 1687.51 3130.47

structures & locomotive

Machinery & equipment 11.54 12.35 10.40 14.94 16.98

Jewellery 3.75 4.79 4.02 5.10 6.28

Chemicals 3.87 4.27 4.40 5.71 8.21

Petrochemicals products 7.42 8.08 6.63 9.05 11.91

Petroleum products 5.64 9.63 6.67 8.66 11.34

SOURCE: Siam Commercial Bank Economic Intelligence Centre

Regional internet penetration, 2011

Country No. of internet users (m) Penetration rate (%)

Singapore 4 78

Malaysia 17 65

Thailand 18 27

Vietnam 29 32

Philippines 30 30

Indonesia 30 12

Korea 39 81

Q1 Q2 Q3 Q42.8

3.0

3.2

3.4

3.6

3.8

4.0

4.2

4.4

Quarterly inflation rate, 2011 (%)

SOU

RCE:

Fis

cal P

olic

y O

ffic

e