July 2011 : Pheu Thai won 265 seats Pheu Thai heads coalition of 6 parties. Abhisit resigned Democrat leadership Comments on Pheu Thai policies. World Court's provisional measures on Phra Viharn Temple NACC filed complaint about fire trucks Fewer agricultural workers Six agencies cooperate to fight corruption. Pheu Thai heads coalition of 6 parties The Election Commission (EC) announced election results on 3rd July that Puea Thai Party won the most seats with 265, followed by Democrat 159, Bhum Jai Thai 34, Chart Thai Pattana 19, Chart Pattana Puea Pandin 7, Phalang Chon 7, Rak Thailand, 4, Matubhum 2 and the rest, Rak Santi, Mahachon,and new Democracy or Prachathipatai Mai, each with 1 seat. There were 46,939,548 eligible voters and 35,220,370 and 35,220,537 respectively voted for party list and constituency MPs. There were 2,039,694 invalid votes and 1.4 million votes for no candidate. The EC received many complaints but called for new elections in only two constituencies: constituency 2 Nong Khai and constituency 3 Uttradit. The re-elections were held on 31st July. The Phue Thai candidate requested a recount in constituency 2 Yala but the result was the same. As soon as informal results were known, Phue Thai Party formed a coalition government of 300 seats with Chart Thai Pattana, Chart Pattana Puea Pandin, Phalang Chon, Mahachon and New Democracy. Miss Yingluck Shinawatra becomes the 28th Prime Minister of Thailand, the first Thai female Prime Minister and the youngest female government leader in the world. Yingluck said that her administration has 7 urgent missions to accomplish: Institute reconciliation measures recommended by the Kanit Na Nakorn‘s Independent Truth and Reconciliation Commission of Thailand. Complete His Majesty 84th birthday events in December. Revitalize the economy by reducing costs, increasing income and stimulate state investments. Improve foreign affairs particularly with neighboring countries. Boost state officials’ morale. Tackle corruption and promote good governance. Quickly Implement policies announced during the election campaign. Abhisit resigned Democrat leadership On 4th July, Abhisit Vejjajiva resigned as leader of the Democrat Party following lost election. The Democrat received 159 seats fewer than previously. According to the party’s rules, a general meeting needs to be held within 90 days to elect a new leader and new executive committee. Democrat Secretary-General, Suthep Theugsuban who went out with Abhisit and other executive members said that he does not want to become Secretary-General again. Comments on Phue Thai policies In response to Phue Thai policies particularly on reducing petroleum prices by stopping contributions into the petroleum fund, on 7th July, Ms. Yingluck Shinawatra explained that Phue Thai does not intend to cancel the petroleum fund but to terminate contributions from benzene 91, 95, diesel, NGV and LPG. Prices will be maintained by payments from the petroleum fund after which the government has to find other resources. The most interesting of electoral promises was to increase the minimum wage to 300 baht/day and the starting salary for bachelor degree graduates to 15,000 Baht/month, effective on 1st January 2012. Kongkrit Hirankit, Chairman of the Tourism Council of Thailand said he was concerned about the impact on the tourist industry because it is labor intensive and labor comprises of about 15-20 percent of total costs. However, this view is different from Chareon Wangananont, President of the Thai Travel Agents Association who sees no impact from the 300 Baht minimum wage policy. He said workers in the travel agent industry are already being paid higher than the minimum wage. They will feel a greater burden from the 15,000 Baht/month starting salary because most of the industry employs graduates and if their starting salaries are raised, more experienced workers’ salaries would also have to be raised. Taweekit Chaturachareonkhun, Vice-President of the Federation of Thai Industries, said that the state should subsidize small and medium size entrepreneurs (SMEs). A reduction of corporate tax, from 30 to 23 percent, has no effect on SMEs’ minimal profits with some were not even taxable, but workers were already demanding the new minimum wage. He suggested that a step-rise should be used to reduce the impact on manufacturing, agricultural and service industries. Furthermore, a rise in the minimum wage would be a further incentive for illegal immigrants leading to the problem of human trafficking. Dr. Aat Pisanwanich director of the Center for International Trades Studies, Thai Chamber of Commerce University said that the adoption of the 300 Baht minimum wage and 15,000 baht starting salary would reduce exporters’ competitiveness against China and Vietnam and slows down exports for 2012. His study found that these raises would cause an average increase in production costs by 28 percent divided into 31.52 for manufacturing and 26.51 for service industries. Among these increases, the highest would be in the food-beverage-tobacco industry at 35.02 percent; followed by textile and garment at 34.45 and paper-pulp-printing at 22.39. “A raise in the minimum wage has a negative impact on export and can cause more harm than the policy to let the Baht appreciate to reduce domestic costs. Exchange rates cannot be much distorted by the government, depending more on market factors. Raises in minimum wage should be implemented step-by-step so as to be in line with labor efficiency and to allow manufacturers time to adapt gradually to the new environment. Food, textile and electrical goods industries will be leaders in raising labor efficiency.” Payungsak Chartsutipolpresident, President of the Federation of Thai Industries said that the Federation Executive Board does not think that wages should be raised equally nationwide, they should be made only in response to the market. If the Phue Thai government really wants to implement this policy, it should refund the difference to employers. However, there were supports from the academics such as Lae Dilokwittayarat lecturer from the Faculty of Economics, Chulalongkorn University. He said that raising the minimum wage to 300 Baht should cause no more than a 10 percent increase to the average cost of production, therefore, it is unjust to say that it would have significant impact on inflation. Citing South Korea and Taiwan, where industrial development started at about the same time as Thailand. Their minimum wages are higher while retaining their competitiveness. The raising of the minimum wage is one of the means to reduce social inequality and could be a peaceful mean to resolve national conflict. Direk Patamasiriwat, lecturer from the Faculty of Economics Development, National Institute of Development Administration also supports the 300 Baht daily wage. He thinks that the policy is worth implementing in spite of risks. The government can only gain with this policy, employers will have to adapt and the rich must make sacrifices. He is against the idea of using taxes to subsidize capitalists and suggested the government should set up a working party to provide supporting evidence to counteract employers’ complaints. Narong Petchprasert of the Economics Faculty, Chulalongkorn University pointed out that Thailand is becoming an aging society and the number of workers is declining. A worker is going to have to support both his parents and his children; therefore, needs to earn more. At the moment, workers are worth more than their pay. A raise will make efficiency develop better and a raise to 300 Baht per day will add only 3 Baht to the unit cost. The Phue Thai government should set up a fund to give SME loans at 1-2 percent interest. Thai minimum wages are lower than those in Indonesia, South Korea and Malaysia and the increase should have a positive impact on domestic consumption adding 1 percent to Thai GDP. A big conglomerate such as Chareon Pokaphand Group or CP is also positive about this policy. CP Group Vice Chairperson of Finance and member of the group’s Investment Committee, Suparut Kawatkul, supports the 300 Baht daily wage because the raise would minimize gaps between laborers and those in other industrial sectors as well as boost production efficiency. The minimum wage was raised from 157 Baht in 1997 to 206 Baht in 2010, or 1.31, which is lower than the increase in the retail price index of 1.42. He suggested, however, that the government should introduce mechanisms to help entrepreneurs such as reduce corporate tax, give low interest loans or SMEs subsidies. World Court's provisional measures on the Phra Viharn Temple On 18th July, the International Court of Justice or World Court decided provisional measures in the case concerning the Temple of Pra Viharn as follow: Both Cambodian and Thai governments should immediately withdraw their military personnel currently in the provisional demilitarized zone. Both parties should refrain from any military presence or activities within that zone. Thailand should not obstruct access to the Temple of Phra Viharn or the demilitarized zone by Cambodian non-military personnel for the purpose of supplying provisions. Cambodia and Thailand should continue their co-operation within ASEAN and, in particular, to allow duly appointed observers access into the provisional demilitarized zone. Both Parties should refrain from any action that might aggravate, extend the dispute or make it more difficult to resolve. Each of the Parties should inform the Court as to its compliance with these provisional measures and until the Court had rendered its final judgment on the request for interpretation of the original judgment, the Court would remain seized of the matters that form the subject of this Order. The demilitarized zone designated by the Court is 17.3 sq. km in the shape of a trapezium in which 8.5 sq. km lies in Thai territory, 8.8 Cambodian and the remaining of 4.6 located next to the Phra Viharn Temple. The last is the disputed area where both countries claim sovereignty. In June 1962, after the World Court rendered its judgment that Phra Viharn Temple belongs to Cambodia, Thailand limited the Temple's site and turned over only the temple. In 1998, in the 4.6 sq. km. area on the west of the temple, Cambodia built a Buddhist temple called Wat Kaew Kirisawara for Cambodian villagers living in the vicinity. The Cambodian Patriarch visited it on 1st August 2007. Shortly before Thai troops entered the site and remained there until 1st December 2010. On 31st January 2011, the Thai Ministry of Foreign Affairs requested Cambodia to lower its flag at the temple and remove the temple from the dispute area. On 28th April 2011, Cambodia submitted a request for an interpretation of the 1962 World Court decision. During the Cambodian civil war and the Khmer Rouge regime, Phra Viharn Temple was deserted and inaccessible. The Temple was revisited after the war ended and it was more convenient for tourists to visit it from Thailand. Tourism benefits were shared between the two countries until June 2008, when the People Alliance for Democracy (PAD) staged a protest against the then Foreign minister, Noppadol Pattama, for his consent to the Thai Cabinet's resolution of 17th June, to support Cambodia listing of Phra Viharn Temple as World Heritage site. PAD opposed to the Cambodian administrative plan which included the 4.6 sq. km area. They filed a complaint to the Administrative Court and the Court decided to dissolve the Cabinet's resolution to approve the joint-communique between Thailand and Cambodia on the World Heritage listing of Phra Viharn Temple. Meanwhile, the then opposition party, Democrat, asked the Constitutional Court to rule on the status of the joint-communique under Article 190 of the Constitution. The Court ruled that the joint-communique was an international treaty, which requires approval from Parliament. On 8th July 2008, Phra Viharn Temple was listed as a UNESCO World Heritage site. NACC filed complaint about fire trucks On 25th July, the National Anti-Corruption Commission (NACC) submitted a complaint to the Supreme Court's Criminal Division for Holders of Political Positions against five former officials and an Austrian company for corruption in the purchase of fire boats and fire trucks for the Bangkok Metropolitan Administration in 2004. Named as defendants in the case are: former Interior Ministry Pokin Polakul, former Interior Deputy-minister Pracha Maleenont, former Commerce Minister Wattana Muangsook, former head of Bangkok Fire and Rescue Department, Pol. Gen. Atthiluk Tanchukiat, Steyr-Daimler-Puch Spezialfahrzeug AG, and former Bangkok governor Apirak Kosayodin. The NACC's probe found that the 6,687 million Baht procurement of 315 fire trucks and 30 fire boats was made at an inflated price. The Court will decide whether to accept the case for consideration on 24th August 2011. The NCCC action came after the Office of the Attorney-General decided last year not to indict Apirak, Pokin and Wattana, citing insufficient evidence. Fewer agricultural workers The Secretary-General of the Office of Agricultural Economics, Apichart Jongsakul, foresees critical future in the agricultural workforce because their average age is 49.3 years old, higher than the median age of 48.6 in all sectors. Further, the percentile in this sector is decreasing - from 68 percent in 1977 to 38.2 percent in 2010. A study done in 2009 revealed that the average monthly income of an agricultural household is 11,087 Baht against 20,903 Baht for all households. This confirms that agricultural work is hard and risky and return low and irregular. Another study done in 2010 found that the major problem of the agricultural workforce is their low education. 75 percent of them had only primary school or below level of education which is the lowest among all workers. Despite measures to alleviate these problems, such as providing education grant for children of agriculture households or promoting rubber planting in the northeastern region, policies are uncoordinated and results intangible. Apichart predicted Thailand will lack of agricultural workers in the future and proposed that the problem must be seriously addressed. Meanwhile, the Bank of Thailand disclosed that in May 2011, there were a total of 17,310,300 employees in the country, of which 3,560,000 and 13,750,300 were in public and private sectors respectively. Employees in the agricultural sector were the lowest paid at an average of 4,900 Baht per month while the average in other sectors was 10,501 Baht with an average for all sectors 9,775 Baht. Six agencies cooperate to fight corruption A network of six agencies cooperated to launch a campaign to counter corruption and instill moral values in Thai society. They are from political and civil services, education, civil society, religious, mass communication, and business sectors. Their plan is to: Stimulate awareness about ethics and honesty, starting with oneself and one's own agency. Instill honesty in Thai society, starting from the family, community, educational and religious institutions, officials, politicians and mass media. Designate 22th July as the Honesty Day and honor individuals and agencies as examples. Cooperate in using mechanisms such as social sanctions and to condemn people who breach societal rules, regulations and laws, to counter corruptions of all forms, and to initiate reforms on crime monitoring and punishment. Launch a campaign to promote honesty, motivate moral activities and practices. Designate 2012-2021 to become ethical years and implement activities according to the five year-action-plan of 2012-2017. Previously, ABAC poll revealed a study on public opinion about corruption and honesty. 64.5 percent of the studied group can accept corruption if the nation prospers and the people are living well. This opinion varies according to age groups, the highest percentile, 71.0 percent are those aged below 20 followed 70.5 percent by those 20-29.