(English)
THAILAND IN 2012

Introduction

Regardless to the governments majority ruling in the Parliament, political rift between two factions, support and anti Thaksin Shinawatra, was going on and no reconciliation is foreseeable.

Polls done by academic research revealed dismal values among Thai youth and violence in the south is still unsolved.

At least 3 public policies; the Rice Pledging, the First Car and the Tablet PCs were strongly criticized but the first one significantly affected the economy. While export sector was impact by the world economy shrank, the other private sectors were not doing well also.

Significant incidences in 2012 is grouped in 3 main topics; politics, social and economy. They have sub-incidence that were inter-relating. They are:
  • Political incidences were; Constitutional amendment, reconciliation, public policy, the government, political parties and civil society.
  • Social incidences were; environment, social values, health program, and southern violence.
  • Economy incidences were; national and private sector economy, pay increase.


POLITICS

  • Constitutional amendment.

  • The amendment of the 2007 Constitution was starting in December 2011 when three bills were submitted by the Government, Phue Thai MPs and Chart Thai Pattana MPs. They passed the Parliament on 25th February and a committee comprises of both the government and opposition party sections, was appointed to deliberate within 30 days. All three drafts have similar principle; to revise Article 291 and to set up a Constitutional drafting assembly (CDA). There were oppose several groups including the Law School at the National Institute of Development Administration (NIDA) reasoning the revision will lead to parliamentary dictatorship by monopolistic capitalists under the guise of democracy.

    The CDA number and its mean of election was hotly debated in the Committee since of n 28th March, the Committee voted for 200 elected members, favoring the opposition party, but it was re-voted on the next day and changed to 99 members, with 77 being elected from 77 provinces and 22 appointed, favoring the Phue Thai. Qualifications of its members, the election date of the CDA and election regulations were later decided.

    The Bill sailed through its second reading in May until five groups of people including senators petitioned the Constitutional Court, on 1st June, to rule whether the establishment of CDA might lead to a revocation of the Constitution and violate Section 68. The Court voted by 7 to 1 accepted the petition and informed the House of Representatives to suspend its third reading, scheduled for 5th June, until the Courts ruling.

    The Courts decision has resulted in criticisms; some viewed is as judiciary interference with legislative process. The petitions were also submitted to the Attorney General, who had not taken any action. Former Phue Thai party leader, Chaturon Chaisang commented that the Constitution Courts decision is equivalent to a coup detat by judicial review and thate there were groups and political parties who wish to overthrow the government. The Court announced it has authority to accept the petitions. Under Section 68 of the Constitution, the Court is to guard against the type of government change not authorized by the Constitution. In any event, the petitions are unrelated to the case of the dissolution of political parties.

    On 13th July, the Constitution Court ruled that the contentious constitutional amendment bill is constitutional. Allegation against the breaching of the Constitution and seeking to overthrow the constitutional monarchy were rejected on no sufficient evidence. The verdict added that Parliament could amend the constitution, but not completely rewrite it. The Court advised the government to hold a referendum should it wish to rewrite the Constitution.

    In December, the coalition parties panel resolved they would proceed on the Constitutional revision of Article 291. It was anticipated that the third or final voting would take place in February2march.

    Before the Courts verdict was read, some few Red Shirt leaders including 5 Phue Thai MPs, strongly commented the Courts acceptance to ruling in public and threatened judges and their families. As they were charged with offences of violence in April-May 2010 and were on conditional bail, the Secretary-General of Constitutional Court. Chaowana Traimas applied the Criminal Court to revoke their bails.

    On 22nd August, the Criminal Court lifted all revocation attempts except one, against Yoswarit Chooklom, a.k.a. Jeng Dokjik, reasoned that he incited public disorder and violated rights of the constitutional judges families. However, after two months back to jail, Jeng revocation was lifted. In September, he was bailed with additional conditions that he must not leave the country, incite unrest and violates other people rights. He was also reminded on his previous conditions; not to give public speech and interference with politics.

    Lastly, the government decided to hold a nationwide referendum. The law stated the referendum effective when more than half of the eligible voters casted ballots and their majority agreed to amend the constitution.

  • Reconciliation.

  • On 10th January 2012 the Cabinet approved compensation for victims of violence from the coup in September 2006 to the riots in April 2010. All victims; including state officials, reporters, protestors and families of deceased persons will get a monetary compensation. The deceased and disabled will each get Bt. 4.5 million plus the amount of actual loss such as funeral, medical and rehabilitation expenses, making a maximum of Bt. 7.75-7.95 million per person. Morefurther, a budget of Bt. 43 million will be allocated to bail detainees arrested during the 2010 violence.

    Though the resolution was in conformity to the Truth and Reconciliation Commission, the compensation per person is different from the Truth Panel recommendation. The Panel recommended a Bt. 3.24 million compensation for the deceased and actual expense plus minimum wage daily for the loss of working opportunity. The Panel was appointed by former Democrat administration and chaired by former Attorney-General Kanit Na Nakorn.

    On 5th June, the Truth Panel published an open letter warning Thai society to unite before the current political rift becomes a national crisis. Six measures, including a reconsideration of the enactment of the Reconciliation Bill, should be taken by the government, parliament and Phue Thai party. All parties; political groups and interest groups must not arouse more conflict and violence. They should cooperate in bringing reconciliation to society.

    On 17th September 2012, the Kanit Na Nakorn's Truth And Reconciliation Committee unveiled its final report of nearly 300 pages with details on the evidence of the April-May 2010 violence that caused 26 deaths and 864 injuries. The committee found evident that several armed men in black outfits were among the protestors and military weapons were used and caused casualty to the officers. They also found connection between these men and some Red Guards familiar with Seh Daeng or Maj. Gen. Kattiya Sawasdiphol. However, no evident was found between relation of the Men in Black and the Red Shirt leaders except the leaders made no attempt to prevent those violence.

    The committee also commented that military deployment was inappropriate for handling civilian unrest. The CRES (Centre for the Resolution of Emergency Situation) was defectively and lacking of monitoring and evaluation measures on the operation. Most of all, some high rank officers thought the soldiers were using exercising bullets.

    Following the House of Representatives appointed an extraordinary panel, chaired by Matubhum Party leader General Sonthi Bunyaratglin, to find solutions for reconciliation and resolution for political conflict following the 19th September 2006 coup. The Sonthi Panel asked the King Prechatipok Institute (KPI) to study how to conciliate the different warring groups. The study came out with short and long term measures including to enact an amnesty bill applicable to 1.) all political violence cases, or 2.) applicable to only offenders of the emergency law excluding other criminal cases even motivated by political purposes. The KPI also recommended to void all acts of the Asset Examination Committee (AEC) , appointed by the coups Council for Democratic Reform (CDRM). Regardless to the panel members controversy on whether the amnesty bill will be used to free Thaksin Shinawatra, on 5th April the Parliament voted to submit the study to the House and later 4 Reconciliation Bills were submitted to the Parliament. All 4 bills aim to give a general pardon to offenders who breached laws enacted by the CDRM, specially, Thaksin Shinawatra, executive members of dissolved political parties and state officers involving in disbanding Red Shirt protests in April 2009 and May 2010. The parliamentary session, due to end on 19th April, was extended and on 31st May, they were expedited from the 27th up to the first rank on the parliamentary agenda. Regardless to strong opposed within and outside the House, the bills passed its second reading incited the House disorder while outside, in front of the Parliament, hundreds of protesters gathered demanding the bills be dropped from consideration. On 2nd June the third the House Speaker cancelled a reading of the Reconciliation Bills, scheduled for 5th-7th June due to many MPs were unable to attend Parliament.

  • Public policy.

  • Among all public policies implemented, only 3 received most criticism and they were ranked among the worst policies by Bangkok Poll, carried out between21st to 28th August among 70 economists from 27 leading institutions. They were:

    RICE PLEDGING PROGRAM. Started on 7th October 2011, the Rice Pledging Scheme principle to allow farmers to pledge their 2011-2012 crops for 4 months started from 7th October 2011 to 29th February 2012 at Bt. 15,000 to Bt. 20,000 per ton according to the rice. These prices were 40 percent higher than market prices. A Bt. 435,547 million was allocated.

    Normally yields during this period are rain-rice of best quality. However, by December 2011, a few irregularities were report on cheaper rice of Bt. 10,000 per ton was smuggled from neighboring countries. A profit was divided between mills, rice farmers and state officers. They could be rice from mills stock, bought at Bt. 10,000 per ton, too. The government assigned the Division of Special Investigation (DSI) to look into this matter but no big player was caught except the amount of pledged rice in some provinces was higher than what was endorsed on the certificates.

    The off-season or second crop rice pledging season started from 1st March to 15t September 2012. The price was Bt. 15,000 per ton similarly to the price of rain rice. There will be no limit as to the total quantity. Analyst observed that this policy encourages farmers to produce quantity rather than quality, as better quality rice takes longer to cultivate. Total yield was expected at approximately 11.11 million tons and another Bt. 166,650 million will be spent for this off-season rice pledging project.

    By May 2012, the responsible agency Bank of Agriculture and Agriculture Co-operatives reported a total of 6.8 million ton of paddy rice had been pledged at Bt. 15,000 per ton, Bt. 2,500-30,000 higher than market price and anticipated a loss of Bt. 17-20.4 billion since the project was launched.

    During December 2011 to May 2012, rice export was decreasing because Thai prices were higher than similar rice from other countries. The US Agriculture Ministry reported that Thailand would export only 6.5 to 7 million tons of rice in 2012, losing to India its leading position as rice exporter.

    In July, the Thai Rice Exporters Association announced that during the first 6 months of 2012, Thailand exported 3.45 million tons of rice, that is only 45% of the same period last year. The value of rice export was Bt. 71,438 million, also a decrease of 34% against Bt. 107,644 million in 2011. Anticipation of another 3.05 million tons, equivalent to Bt. 50,000 million, would be exported in the next 6 months, making target of 6.5 million tons, against 10.65 million tons in 2011. The anticipated 6.5 million tons represent a decrease of 39%. The decline pushed Thailand down to third on the rank of rice exporters, after India and Vietnam.

    In October, the Public Debt Management Office (PDMO) sent two letters, each signed by the Finance Minister and Deputy Finance Minister, warning the cabinet over public expenditure and public debt. The Bank of Agriculture and Agricultural Co-operatives was mentioned on its expenditure in the 2012/13 Rice Pledging Scheme anticipated at Bt. 405 billion. Since the government is liable to guarantee the Banks Bt. 113 billion debt refinance, therefore, the PDMO recommended the only Bt. 150 billion new loans should be guaranteed by the government, making a total of Bt. 260 billion and equivalent to 55 percent of the total state enterprises government guaranteed debt.

    In November, Commerce Minister Boonsong Teriyapirom said the government signed 6 MOU with 4 countries and a total of 7.5 million tons will be sold on the G-to-G basis. Moreover, 2 million tons had been delivered. His statement was commented on the lack of supporting evidence; packaging supply, shipment, etc. He later announced the Republic of China government agreed to buy 5 million ton of rice on a G-to-G basis but it was later confirmed that the actual amount was only 500,000 ton.

    The Rice Pledging Program became one of the hottest issues the censure debate on 25th November. The opposition leader Abhisit Vejjajiva pointed that the policy leads to a state monopoly of rice trading. Cited the National Economic and Social Development Board, a Bt. 570 billion was used in 2012, therefore, if the program continues for another 6 years the public debt would rise to a critical of 60% of GDP foreseeing an unavoidably of tax increase and public expenditures reduce. Moreover, the program loopholes enhanced corruptions in all levels.

    Prime Minister Yingluck ensured transparency and assured that the lost would not exceed than Democrats prices guaranteed program. Admitted Thailand fell from the first, to a third ranking of global rice exporters, but average selling price was higher than the first and second ranked. She argued the programs achievement was on the monetary income, not the export tonal.

    Deputy Prime Minister and Finance Minister Kittiral Na Ranong disclosed his concern over the government rice supply. He suggested Thai farmers should turn to other cash crops, tapioca, cane sugar etc., if Thai rice, in the long run, is not competitive in the global market.

    ONE TABLET PCS PER CHILD. Firstly, a Bt. 1,632 million budget was estimated for purchasing of tablet PCs for 477,561 which were 62% of the grade 1 students nationwide but revised to Bt. 1,900 million and 860,000 students according to the cabinet resolution on 22nd February 2012. Each PC was estimated at Bt. 3,400 and will be purchased from China. The policy was strongly critics since it was announced that grade 1 students are too young for the PCs.

    A study on the use of tablet PCs by grade 1 and grade 4 pupils in 5 schools in different parts of the country revealed that the older grade 4 pupils were able to use the devices more efficiently and were quicker to learn. It recommended that tablet PCs should be provided to grade 4 students and should be rotated amongst pupils in each class instead of individually distributed. The study also found that in spite of training provided to teachers, they were still unable to solve technical problems and needed assistance from technicians.

    Distribution of tablet PCs started on the first semester of 2012 in spite of criticism.

    FIRST CAR POLICY. The policy is to refund excise tax of maximum Bt. 100,000 to people who buy their first car of maximum 1,500 cc. or pick-up or double cap truck locally assembled. Buyers will get tax refund after 12 months of purchase. After one month of implementation, great flood swept across the central region where most vehicle industry locate so the buying period extended from 31st December 2011 to 31st December 2012, for the purchase order, while the delivery can be extended indefinitely.

    The policy was overwhelmed and beyond anticipation. At 31st December, there were more 1.3 million first car-buyers entitled to get tax refund. The number was exceeded than the estimated 500,000 units, therefore, the Excise Department must seek an extra budget to cover the surplus expenditure.

    On May, the World Bank warned that the government should reconsider populist policies which were high-cost-low-return such as rice-pledging program, one tablet PCs per student etc. since they cost 3% of the national budget and a loss of 1.5 % to 2012 GDP. The Deputy Prime Minister and Finance Minister, Kittirat Na Ranong, argued these policies are not only about giving money but they empowered the people to think about and solve their own problems. When people pay less tax they have more money to spend on goods. However, on October, he seemed to realize that these populist policies put enormous burden to financial balance.

  • The Cabinet.

  • After 5 months in office, in January 2012, the Yingluck administration made its first reshuffled and the second one was made in October. However, there was no significant change since it was a balance of gratitude to all fractions under Thaksin Shinawatras patronage. The cabinet is dutiful to approve budget according to Phue Thai party election campaign policy.

    In August, Suan Dusit Poll of the Rajabhat Suan Dusit University disclosed its nationwide study of public opinion of Yingluck administration. The Prime Minister received 6.95 and 6.41, out of 10, for her intention and accomplishments respectively. These were higher than the whole cabinets that received only 6.25 out of 10. The Poll also revealed the governments best performance, 35.58% and 26.76% on fighting against drugs and salary increase respectively. The worst were solving economic problems and flood management, 32.12% and 19.45% respectively.

    The opposition Democrat submitted no-confidential motion towards the Prime Minister and three cabinet members and the censure debate was held between 25-27 November. Despite evidence on irregularities in the Rice Pledging Scheme, the flood relief budget and the procurement of military equipment, the four received more than half of the votes and survived. The Democrat then sought other means to monitor the administrative power. They petitioned the independence authority; the Ombudsman and the National Anti-Corruption Commission to investigate these cases.

  • Political parties.
    2012 was not a good year for Phue Thai party despite of their majority votes in the Parliament always outnumbered the opposition, Democrat. The bye-election in Pathum Thani constituency 5 on 21st April came out with Democrats victory although the seat belonged to former Phue Thai MP. The day after, on 22nd April, in the Provincial Administration Organization election, this resigned Phue Thai MP was unable to defeat his rival, the former head of PAO. Prathum Thani was always Phue Thai stronghold.

    On 20th June, the Election Commission disqualified Phue Thai MP for Bangkok Constituency 12, Karun Hosakul, for defaming Democrat candidate during the 2011 election campaign.

    Democrat has nothing much to do in the Parliament due to its minority votes. On 25-26 November, the 155 Democrat and 2 Rak Prathet Thai MPs sought impeachment and held censure debate retroactively against Prime Minister Yingluck Shinawatra and 2 cabinet members; Defence Minister Sukampol Suwannathat and Deputy Interior Minister Chatt Kuldilok. It was noted that Bhum Jai Thai and Machima faction did not join their opposition since there was a rumour that they were seeking a chance to join the coalition.

    2012 was a turbulence year for Democrat leader Abhisit Vejjajiva since shortly after the 2011 flood, he was charged of distributed government flood relief bags during the flood. The petition was submitted to the Constitution Court through the House Speaker. The Court, on 20th April, rejected the petition reasoned the distribution was not for Abhisits nor Democrats benefits.

    In 8th November, one day before the censure motion submitted, the Defense Minister Sukampol Suwannathat endorsed a ministerial proposal to strip Abhisit from his military rank, acting second lieutenant, acquired when serving as a lecturer in the Military School after graduated from Oxford University. Abhisit was charge of violating military discipline on producing false certificate when he applied to the School. The certificate certified Abhisit was exempted from recruitment while he was studying abroad and has minor error on its date. Abhisits new accusation could lead him to a nullification of the House membership and political ban forever according to violating officer disciplinary is banned by the Constitution from running MP election. Abhisits petitioned to the Administration Court was accepted.

    Abhisit and former Deputy Prime Minister also faced another criminal charge due to their command during the April-May 2010 violence. The Department of Special Investigation is investigating the causes of civilians death. This accusation has the highest live penalty if the court ruled the two Democrats guilty.

  • Civil Society.

  • In December 2011, a few hundreds of flood victims filed suits in the Administration Court against the Prime Minister and 10 heads of state agencies over failing to provide proper flood management and proper flood relief operation. They asked for compensation for their lost. No legal procedural was disclosed yet.

    Similar case was made to but to the Civil Court asking for compensation on 19th May 2010 violence. The petition was filed by a group of traders in the Ratchaprasong shopping area against state agencies and some Red Shirt leader. On 28th September 2012, the Court dismissed the petition reasoning there is no evidence that these accused agents and persons related to the fire that damaged their properties. The court advised the traders to seek remediation from the government.

    Displeased over the government escalating to its peak in October/November when more than 30,000 people assembled to express their call for Yingluck administration resignation. However, there seemed to be no clear roadmap on what would be done if the government overthrown.

    On 28th October the Pitak Siam group led retired general Boonlert Kaewprasit held an anti-government demonstration at the Nang Leung racecourse to show their displeased over Yingluck administration that they failed to protect the monarchy and not react properly over defamation. Another two reasons were the politicians lack of ethics and corruption. As the first demonstration received an overwhelming support; more than 30,000 people registered, and few thousands more attended without registration. The Pitak Siam held its second demonstration on 24th November 2012 at King Rama IV statue near the parliament. A few days earlier, the Emergency Law was declared to counter demonstration and 50,000 police officers were summoned from all over the country to guard barriers along the roads leading to every public building in that area including the government house and the parliament. Checkpoints were also set on highways into Bangkok to delay provincial supporters.

    The attempt was a success since only less than 20,000 made their way through the police barriers to the venue. There were two clashes with the police resulted in a few injuries and 130 arrested. Gen. Boonlert cancelled the demonstration immediately, resigned from the leader position and said he would no more involve in popular politics.

    Regardless to no violence happened among civil society groups in 2012, a rift widened and escalated to hatred without any endeavor to reconcile.

    SOCIAL

  • Environment

  • Flooding in 2011 led to the approval of 4 financial bills by the emergency decree allowing the government to seek Bt. 350 billion for water management. Two executive boards were also appointed, by the Prime Minister, to responsible water management and flood prevention. Private sector was invited to submit proposal on flood management plan of Bt. 300 billion turn-key project. A Bt. 50 billion was allotted for repairing and upgrading of existing waterway facilities.

    As industrial sector were badly affected by the flood, there were attempts to prevent flooding by construction walls around industrial estates. State enterprise, the Industrial Estate Authority of Thailand, got Bt. 5,000 million loans from the Government Saving Bank and state subsidies.

    The natural catastrophe was in line with NASA request to use U-tapao airbase for atmospheric research in the south-east Asia region. Unfortunately, this proposal was opposed until the US government cancelled the operation.

    There was no flood in 2012 but drought spread across more than 50 provinces particularly in the northeast region. In November, 18 provinces were officially declared drought-affected and the government inquired rice farmers in 4 provinces to cease from planting new crops. Without irrigation water, they must wait until May when raining season normally starts.

    The World Meteorological Organization (WMO) warned that there were signs that drought was sweeping across the globe, from Africa to India and across the Pacific to the USA.

    On 24th July, the Stop Global Warming Association Thailand and about 160 affiliations of supported groups, filed a complaint to the Central Administration Court asking the Court to nullify the Cabinets approval of the construction of the Mae Wong dam in Kamphaeng Phet province. While the government reasoned the dam is one of 21 dams, part of the governments flood management scheme, the complaints said over 13,260 rais of fertile forest in the national park will be submerged under the water. They called for an alternative of several smaller dams and forest conservation.

  • Social Values

  • The University of the Thai Chamber of Commerce unveiled its study in December 2011 that the private sector had to pay an additional 25-30 percent of the cost in order to get public contracts. These totaled more than Bt. 200 billion annually. The most corrupted projects were road/bridge construction, equipment procurement, flood compensation, crops and livestock compensation and other financial aids. There is an attempt to amend state contract regulations.

    Bangkok Poll revealed its study between 21st-28th August 2012 among 70 economists from 27 leading institutions that 48.6% of the economists think Thai people are now addicted to populist policies and 47.1% think they are starting to be addicted.

    For Thai youth, regarding to an attempt to promote public participation among the youth through establishing youth councils in every sub-district (tambon), a study in 10 provinces found that only 30 percent were successful. Their failures were due to lack of local administrators support, inappropriate activities, lack of time for participation, lack of initiative nor opportunity from the youth and lastly, no support from the public. The study stated that civic education is absent from the current educational system and youth council is an attempt to lead young people away from drugs, games, and sexual activity. Youth problems can be sustainably resolved only if their opinions are listened to and responded.

    Thailand ranked the first in Asia with the highest teenage pregnancy rate and second worldwide after Africa. Pregnancy rate amongst teen was rising from 13.55% in 2011 to 13.76% in 2012. The average age of teenage mothers is between 13 and 15 years and unplanned pregnancy of the under 15 increased by 3.1% in 2010. Teenage pregnancy was 14% of all pregnancies nationwide.

    Another study done by the National Economic and Social Development Board unveiled in August said that Thai students are disadvantaged in language skills and English compared to other students in ASEAN countries. It also found that they are at risk of mental problems, melancholy and irritability.

    His Majesty King Bhumipol is donating Bt. 90 million to set up a foundation to promote civic education in schools. The foundation aims to promote and instilling ethics and morality among students as well as giving financial support to needy students.

  • Health program

  • From 1st April 2012, everyone insured under the 3 healthcare programs; the Civil Servants Benefits, the Social Security and the Universal healthcare programs are to be admitted to all public and private hospitals for emergency treatment.

  • Southern violence

  • After 9 years, the southern violence was not resolved and the emergency order was re-extended every 3 months until the end of 2012. In 2012 only, by 30th September, there were 843 violent incidents resulted in 513 deaths and 921 injuries. They were grouped into 1) state officers 9 54 deaths and 316 injured), 2) locals (353 deaths and 560 injured), 3) volunteers (35 deaths and 28 injured), 4) local leaders (38 deaths and 8 injured) and 5) terrorists (33 deaths and 9 injured).

    The biggest casualty was on 31st March 2012 when 3 explosions occurred subsequently in Yala, Songkla and Pattani provinces. Houses and commercial buildings were shattered and torched. 11 deaths and 120 injured were reported.

    In February 2012, the cabinet resolved the victims of the southern violence to the same rate compensation as for those affected by political unrest. They were victims of 1) the violence at Krue Se mosque and Saba Yoi on 28th August 2004, 2) the Tak Bai and Ayr Pa Yae, and 3) those missing, abused or tortured by state officers. Families of the deceased will receive Bt.7.5 million while those whose human rights were breached by state officers will each receive Bt.4 million and people affected by general violence, including Buddhist monks, Muslim clergy, international tourists and the locals, will receive compensation of Bt. 500,000.

    ECONOMY

  • National economy

  • In 2012 the economy grew at 5.5% against it anticipation of 5.7% due to shrinkage in export sector. It is expected to grow at 5.2% in 2013.

    The 2013 fiscal budget is Bt. 2.4 trillion which is Bt. 20 billion, 0.8% higher than the 2012s and is 19.1% of GDP.

    Treasury reserve at September 2012 was Bt. 450 billion and expecting to reach Bt. 500-600 billion by December.

    Public debt at 31st January 2012 was Bt. 4.36 trillion which was 41.06 % of GDP. It rose to Bt. 4.61 trillion or 42.40% of GDP and 5.01 trillion, or 44.89% of GDP in April and August respectively. Regarding to the 2013 fiscal budget, public debt is anticipated to rise to Bt. 9.59 trillion, or 47.5% of GDP.

    Regardless to the economic growth rate, 5.5%, is very satisfactory due to the economy slow down due to the impact of flooding in 2011, Thai household average debt increased to Bt. 134,000. Small debts on credit cards also increased and its causes were the various populist policies: first home loan, first car loan, flood alleviation loan, debt re-structuring from non-formal to formal and vehicle leasing.

  • Private sector economy

  • In March 2012, private sector economy was recovering after the flood and 68.1% of the affected industries are at 68.1% of their normal capacity before the floods. The flooded factories have a corporate tax exempt for 8 years.

    However, the value of the export sector had shrunk since June. The new business registration also dropped by 4% in the first 4 months of 2012. The trend in new registration is steadily declining. Between January to April, a total of 3,584 businesses were dissolved and it was 15 % higher than the same period in 2011.

  • Pay increase.

  • The Phue Thai pay increase policy was implemented on the civil servant group on 31st January 2012. The minimum salary of bachelor graduates was increased from Bt. 9,140 to Bt. 15,000 monthly. A Bt. 18,396 million was allocated and the budget was expected to increase in 2013. In September, the local authority pay also rose to a Bt. 15,000 monthly for the graduate and Bt.300 daily for the non-graduate, too. Local authorities without sufficient funds to cover the increase will get subsidiaries from the central government.

    A Bt. 300 minimum wage will be applied nationwide on 1st January 2013. Previously, it was applied only in 7 provinces, including Bangkok and Phuket. The policy caused a crack among the Federal of Thai Industry as 139 members voted to strip its President Payungsak Chartsuthipol out from the position over his support to this nationwide application and failed to present the industrial sectors difficulties to the government. They would like the effective date to postpone to 1st January 2015. Payungsak reacted he could be ousted either by two third of the 7,871 members, or by the Industry Minister upon severely offence.
     


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