Thailand Update: PACOM Commander to Attend 36th Cobra Gold

Thailand Update | February 13, 2017
Authors: Matt Solomon, Timotheos Tan
 
LOOKING AHEAD
 
 

February 15/16 - Please join the US-ASEAN Business Council's Thailand Committee for its first conference call of 2017. Click here to register. We will recap the Committee's 2016 activities and review the draft 2017 Work Plan

 
THE COUNCIL'S TAKE
 
 

PACOM Commander to Attend 36th Cobra Gold

Cobra Gold, the largest multilateral exercise in Asia, will take place from February 14-24 in Thailand. While this year’s exercise will again be reduced in size, the United States will be represented by the highest-ranking military official since the 2014 coup. That Admiral Harry Harris, head of Pacific Command, will kickoff the exercise on February 14 can be read as an indication of warming bilateral ties.

General Thanchaiyan Srisuwan, the head of Thailand’s Joint Chiefs of Staff, remarked, “It is not common for an officer of Admiral Harris' rank to attend these sorts of events,” and added, “It is a good signal for Thai-American relations and shows that the US has given importance to this region and this exercise.” The spokeswoman at the U.S. embassy in Thailand, Melissa Sweeney, has also reaffirmed the importance of diplomatic ties, while making a point of reinforcing the United States’ hopes for further democratic reform, in her statement, “We are eager to see our cooperation fully resume with the restoration of a democratically elected civilian government.”

The 36th version of Cobra Gold will bring together more than two dozen nations, including Singapore, Japan, Indonesia, Korea, and Malaysia. According to the U.S. Embassy in Bangkok, this year’s exercise will consist of three primary events: a senior leader's seminar; a field training exercise; and humanitarian assistance projects in Thai communities. There will be up to 29 nations participating in or observing the exercises, with approximately 3,600 U.S. participants.

 
IN THIS UPDATE
 
 
Regional Affairs
MoUs inked to step up Thailand-Myanmar cross-border trade
Thailand offers $51m highway upgrade, as trade mission boosts bilateral ties

National Affairs
Thailand's next election in exactly one year: deputy PM
Charter draft set for royal endorsement as amendments completed
UN rights expert urges Thailand to loosen restrictions around monarchy defamation law
Thailand's king appoints new Buddhist patriarch
Junta denies ‘Washington Post’ assertion about Thailand’s coup risk this year
Thailand hopes for upgrade in U.S. human trafficking report

Customs
Thai, S. Korea customs agencies cooperate over AEO mutual recognition

Defense & Security
Cobra Gold 2017 military exercise starts Valentine's Day

Economics
Thai central bank seen holding policy rate this week
As public spending is pumped up, capital flees from Thailand
Thailand risks losing out to CLMV
Moves to make business easier in Thailand

Financial Services
Thailand’s PromptPay Plans B2B Payments Entrance
‘Prompt’ debit card to be launched soon
Thailand prepares for blockchain
PromptPay focus on security after launch
Thailand: Insurance regulator in tripartite fintech supervision
Thailand: Private health cover plan for govt officials shelved
Thai banks' bad loans to decline as economy improves - finmin
Update to Thai Funds Investment Regulations

Food & Agriculture
Thailand approves US$1b measures to help farmers in flood-hit south
Thai rice exports seen slipping on greater Vietnam competition

ICT
Thailand to roll out IoT network in April 2017
IT infrastructure gearing to cloud computing under 4.0
Fingerprint ID mandatory to register SIMs
'Big Bang' conference to tantalise investors
 
ARTICLE CLIPS
 
 
Regional Affairs

MoUs inked to step up Thailand-Myanmar cross-border trade Myanmar Times 9th Feb 2017
The Thai delegation, led by Thailand’s Deputy Prime Minister Somkid Jatusripitak, met with State Counsellor Daw Aung San Suu Kyi on February 2. Jatusripitak was also received by President Htin Kyaw at the Credential Hall of the President’s Office in Nay Pyi Taw. In a statement, the President’s Office said the two sides discussed supporting small-and-medium-sized enterprises (SMEs), developing the border areas and promoting investment in infrastructure. The deputy PM, who was on his first visit to civilian-administered Myanmar, highlighted the economic importance of border trading for both countries, and announced that both sides agreed to deepen ties by extending and upgrading the Thailand-Myanmar Road.

Thailand offers $51m highway upgrade, as trade mission boosts bilateral ties Frontier Myanmar 7th Feb 2017
Myanmar has approved a proposal for Thailand to pay for a US$51 million upgrade to a section of the main highway linking the two countries, the Bangkok Post reported on February 4. The proposal involves a 68-kilometre section of road between Thaton in Mon State and Eindu in Kayin State, Thai Transport Minister Mr Arkhom Termpittayapaisith was quoted as saying after returning from a visit to Myanmar. The Thai cabinet had on January 31 endorsed a plan to spend 1.8 billion baht (about K70 billion) to help Myanmar upgrade the stretch of road, on the proposed East-West Economic Corridor transport route, the newspaper said. Arkhom said Myanmar also wanted Thailand’s assistance to upgrade more roads on the EWEC, an ambitious project to link Vietnam with India via Myanmar, Thailand and Laos.

National Affairs

Thailand's next election in exactly one year: deputy PM Reuters 8th Feb 2017
An election to restore democracy in military-ruled Thailand will take place a year from now, the government said on Wednesday, affirming for the first time widespread expectations a vote the military had promised for this year will be postponed. "One year from today, there'll be elections," Deputy Prime Minister Wissanu Krea-ngam told reporters. The military government that came to power in a 2014 coup had repeatedly said a general election would be held in 2017, even after the death of King Bhumibol Adulyadej on Oct. 13 raised doubts about the timing, given a one-year period of official mourning for the revered monarch. Wissanu said the conclusion of the junta's election timeline could not be clearly set down as a new constitution, a key part of the junta's plans to restore democratic rule, is being amended.

Charter draft set for royal endorsement as amendments completed The Nation 7th Feb 2017
A special panel has finished amending the charter draft in line with His Majesty the King’s observations. National Legislative Assembly president Pornpetch Wichitcholchai said yesterday that the Secretariat of the Cabinet would now submit the draft to the King for royal endorsement by February 18. The latest charter draft was passed in the referendum on August 7 last year, but was then subject to amendments following to the King’s observations. This resulted in a 90-day royal endorsement period and the charter promulgation was postponed.

UN rights expert urges Thailand to loosen restrictions around monarchy defamation law UN News Centre 7th Feb 2017
As a student activist awaits trial in detention for posting a news article about the new monarchy on social media, an independent United Nations expert today called on Thai authorities to stop using royal defamation laws to stifle free speech. At issue is the concept of lèse-majesté – the defaming, insulting or threatening of the royal family – which in Thailand carries a penalty of up to 15 years in prison. “Lesè-majesté provisions have no place in a democratic country,” said David Kaye, the UN Special Rapporteur on the promotion of freedom of opinion and expression. “The lèse-majesté provision of the Thai Criminal Code is incompatible with international human rights law.” The expert underlined that public figures, including those exercising the highest political authority, may be subject to criticism.

Thailand's king appoints new Buddhist patriarch Channel NewsAsia 7th Feb 2017
Thailand's king has appointed a new Buddhist supreme patriarch, the prime minister said on Tuesday (Feb 7), ending more than a year of tussling over the position that had been fuelled by politics and allegations of corruption. Somdet Phra Maha Muniwong, 89, the abbot of Wat Rajabopit, will be the head of more than 300,000 monks in the Southeast Asian country, where 95 per cent of people are Buddhist. The country's last supreme patriarch, Somdet Phra Nyanasamvara, died in 2013 aged 100. The Sangha Supreme Council of monks had proposed their favoured candidate last year. But the junta vetoed him and the military-appointed parliament granted new King Maha Vajiralongkorn the power to pick a chief monk himself instead of relying on the council. Somdet Phra Maha Muniwong was among five senior monks nominated by Prime Minister Prayuth Chan-ocha for royal consideration. "This went according to the King's wishes and consideration," the prime minister told reporters.

Junta denies ‘Washington Post’ assertion about Thailand’s coup risk this year The Nation 2nd Feb 2017
Deputy Prime Minister and Defence Minister Prawit Wongsuwan Thursday ruled out the possibility of a fresh military coup this year, rebuffing a prediction in the Washington Post that Thailand had a high risk of another power seizure.

Thailand hopes for upgrade in U.S. human trafficking report Reuters 2nd Feb 2017
Thailand has stepped up prosecutions for human trafficking and hopes its status will be upgraded in the annual U.S. Trafficking in Persons report, the foreign minister said on Thursday. The report, which ranks countries based on anti-trafficking efforts, matters to Thailand's junta as it tries to fully normalize relations with Washington and to show it is tackling tough issues better than previous civilian administrations. Last year, Thailand's status was upgraded a notch to Tier 2 "Watch List". It had been downgraded to the lowest level, Tier 3, after a 2014 coup. "We believe that any government would have a good feeling about, or even admire, what we have done," Foreign Minister Don Pramudwinai told a news conference. "We certainly are hopeful we'll be viewed favorably."

Customs

Thai, S. Korea customs agencies cooperate over AEO mutual recognition Port Calls Asia 6th Feb 2017
The customs agencies of Thailand and South Korea have agreed to recognize each other’s Authorized Economic Operator (AEO) programs, according to the World Customs Organization (WCO). The AEO mutual recognition arrangement (MRA) signing ceremony between the Thai Customs Department and the Korea Customs Service was held at the former’s offices on December 27, 2016.

Defense & Security

Cobra Gold 2017 military exercise starts Valentine's Day Bangkok Post 1st Feb 2017
Up to 29 participating and observing nations will take part in this year's 36th annual Cobra Gold exercise co-hosted by Thailand and the United States from Feb 14-24. Cobra Gold is the largest multilateral military exercise in Asia. The exercise will bring together more than two dozen nations to address regional and global security challenges and to promote international cooperation and stability within the region, according to a statement released by the US embassy in Bangkok.

Economics

Thai central bank seen holding policy rate this week The Star Online 8th Feb 2017
Thailand’s central bank will likely leave its policy rate unchanged near record lows this week, as policymakers turn their focus to fiscal spending to support weak economic growth. Bank of Thailand governor Veerathai Santiprabhob told Reuters last month that monetary policy would remain “accommodative” as the economic recovery was fragile and inflation was not a big concern. Thailand’s ruling junta has ramped up infrastructure projects and approved an extra budget of US$5.4bil to help revive growth in South-East Asia’s second-largest economy, which has lagged its peers. Exports and domestic demand remain sluggish.

As public spending is pumped up, capital flees from Thailand Asia Times 8th Feb 2017
As Thailand’s military government pumps up public spending, including big capital outlays on trains, roadways and other mega projects, Thai companies and individuals are increasingly sending their funds overseas. The capital flight threatens to limit the effectiveness of the junta’s fiscal push and signals to some analysts a lack of local confidence in the country’s economic direction under Prime Minister Prayuth Chan-ocha’s military rule. Bank of Thailand data shows a clear rising trend of resident capital flight in 2016, with total outflows of nearly US$24 billion. Over US$20 billion of that amount was characterized by the central bank as direct or other investment overseas.

Thailand risks losing out to CLMV Bangkok Post 1st Feb 2017
As the Asean Economic Community (AEC) enters its second year, Thailand is set to lose further market share in agricultural and processed agricultural products to Cambodia, Laos, Myanmar and Vietnam (CLMV), new research says. According to Aat Pisanwanich, director of the Center for International Trade Studies at the University of the Thai Chamber of Commerce, the four neighbouring countries are becoming a new production base in lieu of Thailand, with many leading international firms relocating their plants from here.

Moves to make business easier in Thailand The Nation 29th Jan 2017
THE GOVERNMENT plans to upgrade the efficiency of doing business in the country so that the Kingdom is in the world’s top 20 in this area by May. Deputy Commerce Minister Sontirat Sontijirawong said that the Business Development Department would this year modernise its work and its role as a regulator so more business can be set up and grow in the country. Under the plan, the department aims to attract more investors by shortening the period its takes to approve a business via an electronic registration system from about 10 days now to four days. This will result in it taking fewer than 20 days to set up a business instead of the current 21 days, the department said. “This new procedure should be implemented by May and that should help save time and the cost in doing business in the country,” he said.

Financial Services

Thailand’s PromptPay Plans B2B Payments Entrance PYMNTS 9th Feb 2017
Thailand peer-to-peer payments tool PromptPay, a part of the nation’s efforts to push electronic payments, will soon step into the world of B2B payments. Reports Wednesday (Feb. 8) said the solution, which has so far focused on the P2P electronic funds transfer space, will soon provide a way for companies to pay each other using its technology. “From what we have monitored, the PromptPay service has worked efficiently, and even though there might be some problems, they were caused by human error, not the system,” said Bank of Thailand Governor Veerathai Santiprabhob this week, adding that transactions over the platform hit about 15,000 a day. The central bank struggled to roll out the tool last year after plans for an Oct. 2016 rollout had to be pushed back thanks to a “technical glitch.” Further testing for security enabled the full rollout last month, reports said. “Even though the volume [of] transactions keeps increasing, it only accounts for a very small portion of traffic the system can handle,” Santiprabhob said, emphasizing the reliability of the tool that aims to help Thailand adopt electronic payments technologies. Considering the success, he said, PromptPay will soon begin services for business users.

‘Prompt’ debit card to be launched soon The Nation 7th Feb 2017
The Prompt debit card will be launched by National ITMX as soon as the consortium of banks begins expanding electronic data capture devices (EDCs). “Now, the local debit card, what we call PromptCard, is ready to be issued. Each bank can issue this card when the EDCs are spread out nationwide,” Arak Sutivong, a National ITMX board member, said after a board meeting last Friday that raised questions about the preparation of the scheme. Arak, who is also a first executive vice president of Siam Commercial Bank, said the local-debit-card scheme was aimed at complying with the Bank of Thailand’s policy of encouraging the use of such cards instead of cash.

Thailand prepares for blockchain Bangkok Post 30th Jan 2017
Blockchain technology is headed for widespread adoption in Thailand within two years, necessitating legal amendments to support its use, say academics and technology experts. Blockchain underlies Bitcoin and other cryptocurrencies. The blockchain format is a decentralised ledger system that requires "decentralised approval" from the nodes and participants in the system, as opposed to the current mechanism in which "centralised approval" (such as from a bank) is required. "The adoption of blockchain technology is expected to be widely seen here by 2018, thanks to its capability of transferring valued assets with trustworthiness, transparency and security," said Bhume Bhumiratana, a blockchain specialist. Globally, the three sectors that have seriously adopted blockchain technology are finance, healthcare and government. Thailand lags behind global peers but is still a leader in Asean in the use of the technology.

PromptPay focus on security after launch Bangkok Post 30th Jan 2017
After the start of customer-to-customer (C2C) last Friday, all eyes have turned to the security measures applied to the national electronic PromptPay service. "All parties have been focused on ensuring the security of the service both in the central system for commercial banks and for customer privacy," said Bank of Thailand governor Veerathai Santiprabhob. He said the launch of C2C PromptPay service is expected to increase the traffic of electronic money transfers, especially through mobile banking channels. Mr Veerathai said that in the past five years, the amount of money transferred through mobile banking has grown an average of 74% each year, and in 2015 the value accounted for 3.3 trillion baht from a total of 264 million transactions.

Thailand: Insurance regulator in tripartite fintech supervision Asia Insurance Review 10th Feb 2017
The insurance regulator, the Office of Insurance Commission (OIC), is one of Thailand's financial regulators involved in coordinating fintech development and supervision. The Securities and Exchange Commission (SEC) says the structure of the fintech coordination centre will become clearer in the next few months.

Thailand: Private health cover plan for govt officials shelved Asia Insurance Review 9th Feb 2017
The Finance Ministry has put on hold a plan for insurance firms to take over the government's role in providing health insurance cover for five million government employees and their families. Mr Somchai Sujjapongse, Permanent Secretary for Finance, said recently that the idea was suspended because of opposition from government officials and medical personnel, reported The Bangkok Post.

Thai banks' bad loans to decline as economy improves - finmin Reuters 1st Feb 2017
Thai banks' non-performing loans (NPLs) are expected to fall over the next six months as the economy is improving, the finance minister said on Wednesday. A rise last year in NPLs reflected economic conditions that are worse than current ones, Finance Minister Apisak Tantivorawong told reporters. "So over the next six months, NPLs will improve... It's banks' cycle. That's why we are trying to get the economy fully recovering," said Apisak, who was former Krung Thai Bank chief.

Update to Thai Funds Investment Regulations Lexology 30th Jan 2017
The Office of the Securities and Exchange Commission (SEC) has amended the investment regulations for Thai retail private funds, mutual funds and provident funds (collectively, funds). The amendment came into effect on 16 January 20171. This Client Alert intends to flag the key changes that have been made.

Food & Agriculture

Thailand approves US$1b measures to help farmers in flood-hit south Channel NewsAsia 7th Feb 2017
Thailand's cabinet approved measures worth US$1 billion to help farmers in its flood-hit south, the commerce ministry said on Tuesday (Feb 7). Thailand, the world's biggest rubber producer, accounts for nearly 40 per cent of the world's natural rubber, most of which is used in car tyres. Nearly two-thirds of Thailand's rubber growing area is in the south. Persistent heavy rain which started in December has triggered floods across Thailand's south, cutting road and rail links, affecting about 1.6 million people and killing 99 so far. The floods were expected to hit Thailand's rubber output by 7.6 per cent this year, authorities have said.

Thai rice exports seen slipping on greater Vietnam competition Bangkok Post 2nd Feb 2017
Rice shipments from Thailand, the largest supplier after India, are likely to decline about 4% this year amid increased competition from Vietnam and other producers. Exports will total 9.5 million tonnes in 2017, Chookiat Ophaswongse, the honorary president of the Thai Rice Exporters Association, said Wednesday in an interview. That compares with 9.88 million tonnes in 2016, according to data from the Ministry of Commerce. Competition from Vietnam may cut white rice exports by about 400,000 tonnes to 4.6 million tonnes even as sales of premium jasmine grade rise climb about 9% to 2.5 million tonnes, Mr Chookiat said.

ICT

Thailand to roll out IoT network in April 2017 Computer Weekly 10th Feb 2017
The country's first IoT network will offer location tracking, smart metering and smart street lighting services in Phuket and Bangkok. Residents and visitors in Thailand can look forward to a slew of new digital services when an internet of things (IoT) network is rolled out in April 2017. The long-range IoT network, one of the first commercial deployments of its kind in Southeast Asia, would be built by South Korea’s SK Telecom and Thailand’s CAT Telecom, a state-owned telecommunications service provider.

IT infrastructure gearing to cloud computing under 4.0 Bangkok Post 9th Feb 2017
The emergence of a value-based economy under the Thailand 4.0 initiative is enhancing the local cloud computing market as it enters another year of expected double-digit growth. IDC Thailand, the local operating unit of global IT research firm IDC, reports that Thailand's IT infrastructure spending grew by 3.9% to 400 billion baht in 2016 and is forecast to reach 500 billion in 2020. The local cloud market, meanwhile, grew by 16% last year, with an undisclosed market value.

Fingerprint ID mandatory to register SIMs Bangkok Post 31st Jan 2017
Mobile virtual network operators (MVNOs) will have to use an online fingerprint ID system for new prepaid and postpaid mobile SIM card registrations by March without exception, says the National Broadcasting and Telecommunications Commission (NBTC). An MVNO is a company that provides mobile service but does not have its own mobile network. MVNOs have called on the regulator over the past several months to exempt them from the rule, saying the system will impose additional cost burdens on them and make it difficult for them to compete with major mobile operators. All mobile operators will have to introduce the online fingerprint ID system by March, but mobile users can choose whether or not to put their fingerprints in the system for their own security.

'Big Bang' conference to tantalise investors Bangkok Post 30th Jan 2017
The government plans to attract global tech companies and venture capital funds to invest in Thailand and share knowledge with local startups. The "Thailand Digital Big Bang" conference in late May will provide international tech firms with updates on the drive towards a digital economy in the country. Digital Economy and Society Minister Pichet Durongkaveroj said state officials want global tech firms and venture capital funds to support Thai tech startups and share knowledge with them. "We hope there will be investments or partnerships with Thai tech startups in the near future," he said. The conference will be held at Queen Sirikit National Convention Center during May 25-28 with support from the Industry and Science and Technology ministries. The government has set aside 120 million baht for the conference budget.