Advance Blog

May 21, 2020
Australian Embassy

Headline summary as of 21st May 2020

News

  • Updates related to COVID-19:
    • Today, Thailand reports 3 newly confirmed cases, a total number of 3037 cases. Out of the total number, 2,897 have been discharged from the hospital; 84 are being hospitalised. The death toll is at  56. The new 3 cases contain one in a state quarantine (arriving from the Philippines); one Thai national in Bangkok; and the other German national went to visit a relative in the Northeastern province of Chaiyaphum.
    • National Security Council (NSC) secretary-general Gen Somsak said authorities will decide today whether the state of emergency needs to be extended. After the decision has been reached by CCSA, the cabinet will consider the recommendation at a cabinet weekly meeting on May 26.—all media outlet
    • Breaking: NSC Sec-gen has just announced after the meeting that the CCSA has reached a decision to extend the emergency decree for another month, effective from 1 June. The sec-gen quotes that the second wave of COVID-19 transmission is feasible.—Khao Sod, Than Settakij, Krungthep Turakij, Than Settakij
    • The CCSA said Thailand will begin testing the mRNA (messenger RNA) vaccine in monkeys next week after successful trials in mice and expects to have a vaccine for the novel coronavirus ready next year.
  • Police in Thailand have arrested 15 Rohingya Muslims on charges of illegal entry and are investigating the possibility that they could be victims of human trafficking.—Reuters, Siam Rath, Manager

Politics

  • Following on yesterday’s report on a key person in the main ruling Pheu Thai Party will split up and establish a new political party, media report that it is Chaturon Chaisang, former Education Minister and former member of the dissolved Thai Raksa Chart (TRC) Party. Media reports that he will join hands with other TRC candidates, businesses and former state officials to establish a political party which shares ideology with opposition parties.—Daily News, Krungthep Turakij, Nation Weekend
  • Palang Pracharath (PPRP) leader and Finance Minister Uttama Savanayana has dismissed talk of him and several key figures resigning from their positions in the ruling party due to an internal conflict. He and other key members involving in the report yesterday denied that they are planning to form a new political party.—all media outlet
  • Main opposition Pheu Thai Party secretary-general Anudith complained against the allocated time given to grill the three executive loan decrees. The debate time which will see only 30 hours debate in total across 3 days provided with the opposition getting only half that to scrutinise the decrees is too short.—all media outlet
  • As coronavirus-related restrictions ease and people gradually resume their normal lives, Thai politics is all set to heat up again.—ThaiPBS World

Business:

Pesticide Banning

  • The Royal Gazette published an Industry Ministry’s announcement on 19 May that the pesticides chlorpyrifos and parquet will be included in the hazardous substance type 4 list, effective from 1 June.  In short, the use and import of the pesticides chlorpyrifos and parquet will be banned from June onwards. 
  • In response, the Agricultural Safety Association (ASA) will join groups of farmers to petition the Administrative Court for an injunction to suspend this ban.  ASA contended that farmers have no substitutes for the pesticides and the government does not have measures to mitigate the ban’s impact on the farmers.  Farmers will have to use milder chemicals at a larger quantity, which increases their production cost.  ASA also threatened to file a lawsuit against all involved ministries and NGOs that support the ban.
  • Thai Chamber of Commerce (TCC) is advocating for the government to relax the ban.  TCC has established a committee to compile opinions from businesses, farmers and consumers on the ban for presenting to the government.  Source:  https://www.bangkokpost.com/thailand/general/1921520/farmers-reject-chemical-ban

Economic News

  • Thailand’s car production in April hit its lowest level in 30 years due to weak global demand, factory shutdowns and redundancies.  April’s car production of 24,711 units was a decrease of 83.6 percent YoY.  Domestic car sales also shrank for an 11th straight month in April, tumbling 65 percent from a year earlier to 30,109 vehicles.  This was the first contraction in three years. 
  • Industrial confidence index stood at 75.9 in April; Thailand’s lowest in 11 years.  Entrepreneurs, particularly SMEs, are facing a liquidity crunch and agricultural output is likely to be weak due to the drought.  Sources:  https://www.bangkokpost.com/business/1921664/30-year-low-for-car-output    https://www.bangkokpost.com/business/1921336/domestic-car-sales-plunge-65-in-april https://www.bangkokpost.com/business/1921648/april-confidence-hits-in-11-year-nadir
  • Bank of Thailand has reduced policy rate yesterday by 0.25 percentage point to a new historical low of 0.5 percent.  The policy rate reduction is the fifth since August 2019.  BOT estimates further downside risk in 2020, led by deep global economic contraction and muted headline inflation averaging -1.0 percent in the year ahead.  BOT urged financial institutions to accelerate debt restructuring as borrowers’ debt servicing ability may decline and it will also monitor the Baht appreciation, which could hurt economic recovery.  Source:  UOB newsletter, 20 May; https://www.bangkokpost.com/business/1921632/interest-rate-cut-to-record-low-0-5-
  • CIMB Thai Bank anticipates a 14 percent fall in Q2 GDP YoY and an 8.9 percent GDP contraction for year 2020.  Tourism and export would continue to decline due to weak global demand and continual lockdown of other countries.  The efficiency of the government’s stimulus measures depends on how fast and how much it can spend to speed up budget utilization.  Thailand will face higher uncertainty given the slow recovery of the tourism sector.  Source:  https://www.bangkokpost.com/business/1921628/cimbt-sees-sharp-q2-gdp-contraction
  • Thailand Development Research Institute (TDRI) projects that it could take three years for Thailand’s economic condition to return to normalcy since this economic crisis will be bigger than the episode in 2018.  TDRI said the pandemic might increase trade barriers, highlighting the chance of a renewed trade war between US and China and other countries imposing protectionist measures on China.  There is likely to be a delay in Thailand’s infrastructure projects since the government will prioritise its spending on combating the pandemic.  The government will collect higher tax and this will chip away household wealth and business sector’s profit.  Source:  https://www.bangkokpost.com/business/1921640/tdri-return-to-normal-in-three-years
  • Board of Investment will work with SME Development Bank and Exim Bank to help SMEs.  Some of the assistant measures are: reducing the minimum investment requirement for applicants of BOI privileges to Baht 500,000; increasing corporate tax break to 200 per cent of investment value for type A entrepreneurs; allowing the import of second hand machines to be used in the project.  Source:  https://www.nationthailand.com/news/30388158

Aviation and others news

  • Federation of Thai Industries (FTI) is concerned China is dumping its steel into Thailand.  The pandemic has reduced China’s domestic demand, while the Chinese government also promoting steel exports, such as by increasing export tax rebate.  Data from China’s Customs Department showed its steel exports to Thailand in March increased by 53 percent YoY.  Meanwhile, Thailand’s domestic steel consumption is expected to drop as downstream industries (automotive, construction) are in a slump, with Thailand’s steel utilisation capacity in March standing at 36 percent.  FTI seeks the government’s support for the domestic steel industry by using local steel to for state construction projects, i.e.: high-speed train, electric trains and at the EEC.  Source:  https://www.bangkokpost.com/business/1921776/fti-seeks-measures-to-counter-chinese-dumping
  • The Finance Ministry will sell 3.17 percent of its stake in Thai Airways International to the state-run Vayupak 1 Fund, thereby stripping the airline of its state enterprise status.  This will allow the airline to fulfil the court-ordered restructuring.  Thai will also be able to select 30 professionals to be appointed as rehabilitation planners, which will be presented to PM Prayut for his consideration on Monday and later to the Central Bankruptcy Court.  As part of the rehabilitation plan, some 6,000 of the 21,000 Thai Airways employees will be laid off.  It is feared that the 82 cooperatives which invested in the airline’s debentures worth 42 billion Baht will start panic withdrawals, although the cooperatives’ debentures mature at different time.  Source:  https://www.bangkokpost.com/thailand/general/1921508/ministry-to-cut-thai-stake
  • Higher Education, Science, Research and Innovation Ministry is hiring 40,000 employees.  It secured a budget of 800 million Baht to pay employees 9,000 Baht monthly from July to September after the application opens in June.  Source: National News Bureau of Thailand fb page, 20 May

ASEAN/World

  • Tsai Ing-wen inaugurated her second term as Taiwanese President, negating PRC’s core principle of ‘One country-Two systems’. Mainland government counter-argued that reunification is inevitable.—all media outlet
  • Nikkei has learned that Panasonic will shut down a large appliance factory outside Bangkok as early as this fall and consolidate production to a larger facility in Vietnam for greater efficiency.—Asia Nikkei

Australia

  • Thai language outlet of Chinese media reported on Chinese MFA spokesperson requesting Australia to stop politicise COVID-19, claiming the Australian-led proposition of independent investigation into COVID-19 is an intention to assault China.–XinHua, CRI Online
The Australian Embassy Bangkok
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