Thailand Update: November 29, 2018

Thailand Update | November 29, 2018
Authors: Riley Smith, Ella Duangkaew and Monica Chritton
 
LOOKING AHEAD
 
 

December 4, 2018 - December 6, 2018: 2018 Business Mission to the 18th ASEAN Telecommunications and Information Technology Ministers Meeting: The USABC will lead a Business Mission to the 18th ASEAN Telecommunications and Information Technology Ministers Meeting (TELMIN) taking place Tuesday, 4 December to Thursday, 6 December, 2018 in Ubud, Indonesia. The deadline to register has passed, but please contact Ella Duangkaew (eduangkaew@usasean.org) for late registration information. 

 
THE COUNCIL'S TAKE
 
 

Thailand Announces “Advancing Partnership for Sustainability” as 2019 ASEAN Chairmanship Theme

On November 15, Prime Minister Prayut Chan-o-cha announced Thailand’s official theme for its ASEAN 2019 Chairmanship: “Advancing Partnership for Sustainability”. The theme will promote initiatives that include a focus on connectivity and developing a strong digital economy.

Prime Minister Prayut further elaborated on Thailand’s choice for its theme in a speech after accepting the ASEAN Chairmanship at the symbolic handover ceremony from 2018 ASEAN Chair Singapore. Prime Minister Prayut stated that the “advancing” aspect of Thailand’s Chairmanship theme will focus on driving advancement in technology and infrastructure, the Fourth Industrial Revolution and development toward a “Digital Asean”. The “partnership” element of the theme speaks to the need for continued cooperation among ASEAN member nations and Dialogue Partners amid challenges the region will face with uncertainties such as “trade and political competition, disruptive technologies, transnational crime, inequities, and changes in the region’s social structure”. The theme’s focus on “sustainability” will be all-encompassing, from promotion of economic growth and security to a green economy and sustainable development, according to Prime Minister’s speech. Thailand’s vision for its 2019 Chairmanship will also build upon the priorities ASEAN has set in recent years.

Prime Minister Prayut touched on current and expected challenges at both the national and regional levels in his 2019 ASEAN Chair acceptance speech. At the national level, at a time when the international spotlight is shining brighter on Thailand as the ASEAN Chair for 2019, the country will simultaneously be preparing for its first national elections since the current military government came to power in 2014, with a new government potentially seated by May. Underscoring the delicate scheduling that will have to take place, Thailand has already taken the unusual move of pushing back the first ASEAN Summit date in anticipation of the election. The clearing of space on the official ASEAN calendar for 2019 is one of the stronger indications that the much-delayed national election actually could take place next year. The government is expected to announce the official date of the election next month (for more information on the elections timeline, see our previous update here).

At the regional level, Thailand will have to maintain, if not preferably strengthen, regional cohesion amid political shifts and realignments in other ASEAN member states and geopolitical headwinds that in the past have driven a wedge between countries in the region, such as flareups in the dispute over the South China Sea. Perturbations in the global economy, potentially caused by the fallout from Brexit or the U.S.-China trade war, could put added pressure on a region that has seen high levels of economic growth but is still susceptible to currency weakness and capital outflows. However, it is not strictly challenges that Thailand may face. The 2019 ASEAN Chair could also gain from major developments in regional initiatives, such as the finalization of the Regional Comprehensive Economic Partnership, on the horizon.

Ministry of Digital Economy and Society to Prepare Plan Supplementing Thailand’s ASEAN Chairmanship Theme

Supporting Thailand’s recently announced 2019 ASEAN Chairmanship theme, “Advancing Partnership and Sustainability”, Thailand’s Ministry of Digital Economy and Society (MDES) is preparing a plan that aims to support continued cooperation among ASEAN nations and catalyze Thailand’s digital transformation.

Minister of Digital Economy Dr. Pichet Durongkaveroj said that the 2019 ASEAN Chairmanship theme will boost the country’s digital transformation through further collaboration in the region, according to the Bangkok Post. The ASEAN digital economy is on track to reach US$240 billion by 2025, according to a Temasek and Google report. The latest projection is $40 billion more than the 2016 estimate of ASEAN’s digital economy. Regional cooperation and collaboration will be key to MDES’s plan to foster a digital ecosystem that helps meet the goals set forth in Thailand’s 20-year digital roadmap.

Although specifics of MDES’s plan are still being developed, Minister Pichet said achieving the five targets of the 20-year digital roadmap, which are “the development of infrastructure, governance, cyber security, technological development, and manpower”, would help the government achieve three critical objectives by 2020 – of modernizing rural areas, reducing income disparity and increasing capacity to thrive in the digital age. Minister Pichet also said that in the coming year Thailand will continue enhancing the Bangkok-based ASEAN-Japan Cybersecurity Capacity-Building Center and is proposing a 2019 ASEAN Digital Agility Leaders’ Meeting. For more information on the ASEAN-Japan Cybersecurity Capacity-Building Center, please see our update here.

The potential for growth and innovation in Thailand’s cyber capabilities is clear. Currently, Thailand has the second largest internet economy in ASEAN, valued at US$12 billion in 2018 and with a 27% compound annual growth rate (CAGR) from 2015-2018, according to the Google and Temasek report. Thailand also spends more time than any other country on the internet and recently claimed the title for the world’s first blockchain-supported elections, which were held by the Democrat party primary election earlier this month. Thailand’s technology startup ecosystem is also growing as evidenced by ASEAN unicorn startup GrabTaxi’s $50 million payments joint venture with Thailand’s KBank and Bangkok based startup Eko, a B2B messaging platform, successfully securing a $20 million investment from an Indonesian VC firm SMDV.

Although Thailand has placed an emphasis on building capacity with its ASEAN-Japan Cybersecurity Capacity-Building Center and other initiatives intended to bolster its digital economy, its regulatory environment must also be conducive to achieving its digital economy goals. Most recently, Thailand’s latest Cybersecurity Bill has drawn concerns from foreign and domestic businesses and state agencies for its creation of a powerful National Cybersecurity Committee and for its potential to jeopardize confidential data and limit data flows. For more information, read our previous update here.

Thai Fintech Act Expected This Year

Thailand’s Fintech Act is on track to be enacted by the end of the year according to industry groups that have been involved in drafting. The Fintech Act, which the Council first covered in 2017 in this update, will include measures on electronic transactions, know-your-customer rules, and due diligence. It will also require the government to provide open data sources to entrepreneurs to support innovation. This work to build the regulatory infrastructure of a digital financial services system will be critical to building a thriving and modern financial ecosystem, which has lately been a priority of the Thai government and especially the Bank of Thailand.

Outsourcing Regulations Evolving in ASEAN

Financial services regulators in ASEAN have recently been re-examining regulations how financial institutions outsource IT systems, with changes to regulations in Thailand, Vietnam, and Malaysia.

Thailand: On October 1, Thailand’s Capital Market Supervisory Board (CMSB) issued a new outsourcing regulation that greatly reduces regulatory burden for securities companies. Unlike the previous regulation, which requires securities companies to obtain approval from the Office of the Securities and Exchange Commission (Office of the SEC) prior to outsourcing, now companies only need to notify Office of the SEC within 15 days after they outsource business functions to external providers.

Under the new, more lenient regulation, a securities company may outsource any of its functions if they meet two requirements: (1) the company may not reduce itself to an empty shell and (2) if the outsourced function is a central utility function, the company may only outsource to a provider who has been approved by the Office of the SEC. There is no clear definition under this regulation as to what is considered a “central utility function.” However, the Office of the SEC commented in a public hearing document that fund service platform function and electronic payment for a settlement of securities and derivatives may constitute central utility function. The regulation also stipulates requisite provisions which an outsourcing agreement must contain. A sub-outsourcing arrangement is also permissible provided that the securities company consents to the arrangement and the arrangement contains the same requisite contents that was agreed upon between the securities company and the principal external provider. The SEC is authorized to issue further guidance on the regulation so clarification on some points may emerge in the future.

 
ADVOCACY UPDATE
 
 
  • Thailand Cybersecurity Bill: Thailand's draft Cybersecurity Bill was revised following a public hearing period that ended in October. The Council submitted comments for this public hearing on October 12. The latest revised bill was released (in Thai) on November 16, 2018. The revised version does not differ vastly from the new version--it maintains a powerful National Cybersecurity Committee, slightly reduced but still heavy-handed penalties and language that is vague. Adjustments have been made allowing agencies to appeal requests for information if they are unable to provide information for contractual or legal reasons, and that the secretary-general must file a request in a court of jurisdiction to access data in the case of preventing a cyberattack at the "significant" level of impact. Unofficial translations of the bill (a clean version and a version with tracked changes to show the differences from the October version) are attached. Please contact Praab Pianskool (praab@usasean.org) and Ella Duangkaew (eduangkaew@usasean.org) with any questions, or for a copy of our October submission.  
  • Vietnam Law on Cybersecurity: The Council has developed a draft industry submission in response to the official release of the Law on Cybersecurity (LOCS) draft implementation decree. An English translation of the latest draft implementation decree is attached. The Council is urgently seeking members' comments on our draft industry submission by EOD December 2 SGT. Please contact Ella Duangkaew (eduangkaew@usasean.org) and Vu Tu Thanh (tvu@usasean.org) for more information, a copy of the draft submission, or with any questions.
 
IN THIS UPDATE
 
 
Regional Affairs
Thailand assumes Asean chairmanship

National Affairs
Political party donations now tax deductible, says government
First day for senate candidate registrations passes quietly
2,000 southerners join Thai Raksa Chart Party
EC to investigate cash handout spree

Economics
Debt moratorium for millions of villagers waiting Cabinet approval
Somkid: 4% growth 'achievable' via exports
BoT tweaking lending to support SMEs

Energy
IEAT requests LNG demand for Map Ta Phut decision
Thailand keen to explore areas of cooperation in SCORE
Power Surge

Food & Agriculture
Agribusiness slow to adopt tech, far from 4.0
Guideline prices for high-value lumber prioritised
New rubber price subsidy is 'unfair', says RNRF
Durian quality scheme gets growth boost
Rubber farms stretched as US-China trade war saps demand

Health & Life Sciences
A major milestone
Public, private sectors must do more to support rising number of Thai seniors, says Thonburi Healthcare chief
Prayut to use S44 to settle weed patents
Govt urged to lift ban on e-cigarettes

ICT
AI to help students select majors
IoT regulations due next year
E-tax update on the cards
NBTC nudges MCOT for spectrum return
Govt reveals digital transformation master plan
Boost in workers’ skills necessary to propel nation forward: minister
Role of 5G put under scrutiny
Big tech firms pledge training for workers in Southeast Asia

Infrastructure
Treasury Department's land scheme ready in a few years
Bang Sue mega-station to operate by January 2021
Terminal put on ice pending feedback
BoI offers incentives to meet Bt300-bn EEC target

Travel & Tourism
Street vendor rules in Bangkok 'hurting tourism'
TAT promotes weekday trips to lonely provinces
E-visa on arrival service now operating at 3 major airports
Visitor numbers down in Oct as Chinese stay away
Making a home for digital nomads
 
ARTICLE CLIPS
 
 
Regional Affairs

Thailand assumes Asean chairmanship Bangkok Post 15th Nov 2018
Thailand is expected to push Asean to finalise the negotiations on the Regional Comprehensive Economic Partnership (RCEP) and the South China Sea code of conduct as it assumes the bloc's chairmanship. Although the handover ceremony will take place later today, with Singaporean Prime Minister Lee Hsien Loong slated to give the symbolic gavel to Prime Minister Prayut Chan-o-cha, Thailand will officially assume the chair on Jan 1 next year.

National Affairs

Political party donations now tax deductible, says government Bangkok Post 27th Nov 2018
The government has announced that donations to political parties are now tax deductible, in what it says is a bid to encourage people to support the role of political parties in a democracy.

Thaksin's son tipped to help lead Pheu Thai campaign Bangkok Post 26th Nov 2018
Panthongtae Shinawatra, who joined Pheu Thai on Sunday, will join senior members in leading the party's political campaign, a party source said on Monday. The source said Mr Panthongtae will join Khunying Suradat Keyurphan and Chalerm Yubamrung as lead   campaigners for the party in the lead up to the general election, tentatively planned for Feb 24.

First day for senate candidate registrations passes quietly Bangkok Post 26th Nov 2018
Applications for appointment to the new senate opened on Monday, but election officials reported a very quiet day. Election commission officials were on duty at district offices across the country, including Bangkok, but no well-known names showed up or expressed any interest. Officials believed potential candidates were taking a wait-and-see approach.

2,000 southerners join Thai Raksa Chart Party Bangkok Post 25th Nov 2018
More than 2,000 people in this southern province have applied for membership of the Thai Raksa Chart Party at the opening of the 4th party branch (South Region) on Sunday. A party meeting, held at a hotel in Muang district to elect the party branch committee, was attended by party leader Lt Preechapol Pongpanich and core party members including Sutham Saengprathum and former United Front for Democracy against Dictatorship (UDD) leaders Veerakan Musikapong, Korkaew Pikulthong, Nattawut Saikuar and Wiphuthalaeng Pattanaphumthai.

EC to investigate cash handout spree Bangkok Post 23rd Nov 2018
The Election Commission (EC) will look into whether the government is trying to canvass for votes ahead of the general election through its 86.9-billion-baht splurge on low-income earners, the elderly and retirees. EC chairman Ittiporn Boonpracong said Thursday that investigators will look into whether the government's massive cash handout is an act of vote-canvassing ahead of the poll tentatively scheduled for Feb 24.

Economics

Debt moratorium for millions of villagers waiting Cabinet approval The Nation 26th Nov 2018
Villagers are facing multiplying debts as they are unable to make repayments to village funds and are thus forced to borrow from loan sharks who charge very high interest rates, thus landing them in even more serious debt. The proposal for debt suspension aims to relieve that burden, said the source.

Somkid: 4% growth 'achievable' via exports Bangkok Post 22nd Nov 2018
Economic growth of 4% is achievable if exports, the lifeblood of producers, expands more than 7% from November to December, says Deputy Prime Minister Somkid Jatusripitak. To reach annual growth of 4%, the fourth-quarter figure must not slip below 3.5%, Mr Somkid said.

BoT tweaking lending to support SMEs Bangkok Post 21st Nov 2018
The Bank of Thailand is revamping a series of regulations by applying information-based lending in a bid to help financial institutions and small businesses cut costs. Most of the regulations are undergoing amendment. All regulations are expected to be completely rejigged by next March.

Energy

PTT joins Sertis for smart building hub Bangkok Post 29th Nov 2018
PTT Plc, the state-owned oil and gas conglomerate, has teamed up with data consultancy Sertis Co to explore business opportunities for a new smart energy building complex, to move the country's energy industry towards renewables.

IEAT requests LNG demand for Map Ta Phut decision Bangkok Post 28th Nov 2018
The Industrial Estate Authority of Thailand (IEAT) is calling for the Energy Ministry to provide a demand projection for liquefied natural gas (LNG) shipped to the Map Ta Phut port.

PTTEP evolves with the times Bangkok Post 26th Nov 2018
Phongsthorn Thavisin was appointed chief executive of PTT Exploration and Production Plc (PTTEP), the SET-listed oil and gas drilling firm, in early October.

PTTEP hunts for resources as prices firm Bangkok Post 23rd Nov 2018
SET-listed oil and gas driller PTT Exploration and Production Plc (PTTEP) is embarking on a rapid expansion of new resources following recent investments and asset acquisitions.

Thailand keen to explore areas of cooperation in SCORE The Star Online 22nd Nov 2018
Thailand is keen to explore potential areas of cooperation with Sarawak, especially in the Sarawak Corridor of Renewable Energy (Score), said its Ambassador to Malaysia, Narong Sasitorn.

PTT revising investment to shore up oil risks Bangkok Post 16th Nov 2018
SET-listed PTT Plc, the national oil and gas conglomerate, plans to revise its 340-billion-baht investment plan after considering the risk global oil prices bring to its future investments.

Power Surge Asian Legal Business 15th Nov 2018
As Thailand becomes one of the world’s first countries to trial blockchain-enabled peer-to-peer trading of solar power, regulators have their hands full drafting rules to catch up.

Food & Agriculture

Agribusiness slow to adopt tech, far from 4.0 Bangkok Post 27th Nov 2018
Only 3% of the agricultural and food processing industry is considered part of the digitally-focused 4.0 era, despite being a crucial component of the economy and employing 15 million people, according to the University of the Thai Chamber of Commerce (UTCC). Most of them are still considered 2.0 or 1.0 based on their lack of adoption and use of modern technologies, said UTCC director Saowanee Thairoongroj.

Guideline prices for high-value lumber prioritised Bangkok Post 29th Nov 2018
The Commerce Ministry is prioritising setting guideline prices for high-value or economic trees to be used as collateral under the Secured Transactions Act.

New rubber price subsidy is 'unfair', says RNRF Bangkok Post 29th Nov 2018
The Rubber Network Council and Rubber Farmers Institute of Thailand (RNRF) is opposing the cabinet's resolution to implement a new rubber price subsidy programme, saying the decision is unfair to over 8 million rubber farm workers who won't benefit from the subsidy.

Durian quality scheme gets growth boost Bangkok Post 27th Nov 2018
A project to improve the quality of durian will be expanded to cover Pattani and Narathiwat as well as Yala in the far South, with a projected yield of 3,000 tonnes for export to China next year.

Rubber farms stretched as US-China trade war saps demand Bangkok Post 25th Nov 2018
The rubber trade is at a crossroads as a bitter dispute between the world's two biggest economies ricochets across Southeast Asia with unexpected consequences. The price of rubber has slumped 20% since June, as those same tariffs bite hard on demand from factories in China -- the market for more than half its latex exports.

Health & Life Sciences

A major milestone Bangkok Post 27th Nov 2018
It is the country's first drug to have passed international-scale criteria and been included in the WHO's list of pre-qualified medications. The WHO Prequalifcation aims to ensure that diagnostics, medicines, vaccines and immunisation-related equipment and devices for high-burden diseases meet global standards for quality, safety and efficacy in order to optimise use of health resources and improve health outcomes.

Public, private sectors must do more to support rising number of Thai seniors, says Thonburi Healthcare chief The Nation 27th Nov 2018
Thailand is one of the countries with the fastest rates of ageing-citizen growth in Asia – reportedly second only to China – while the public and private sectors’ preparations to support the rising number of seniors are not yet sufficient, Thonburi Healthcare Group chairman Dr Boon Vanasin said earlier this month.

Prayut to use S44 to settle weed patents Bangkok Post 27th Nov 2018
Prime Minister Prayut Chan-o-cha is preparing to use Section 44 to settle contentious requests to patent marijuana extracts, which has sparked concern it could set back plans to develop them for medical purposes. A total of 11 requests are being considered by the Department of Intellectual Property. This has become a heated issue as the National Legislative Assembly is in the process of enacting a law to allow for marijuana extracts to be legally used for medicinal purposes.

Govt urged to lift ban on e-cigarettes The Nation 25th Nov 2018
A network of e-cigarette users and importers have suggested that lifting the ban on smoke-free products and issuing appropriate regulations would be a more-effective measure to discourage people from smoking rather than selling cigarettes in plain packages.  

ICT

AI to help students select majors Bangkok Post 27th Nov 2018
The Council of University Presidents of Thailand (CUPT) has developed an artificial intelligence (AI) system to analyse students' interests and show them which university majors may be a good match.

IoT regulations due next year Bangkok Post 26th Nov 2018
A series of regulatory conditions for the Internet of Things (IoT) and related device connectivity are scheduled to be implemented by 2019 to handle machine-to-machine connectivity in the industrial sector, with 5G wireless broadband set for worldwide commercial launch by 2020.

E-tax update on the cards Bangkok Post 24th Nov 2018
The Finance Ministry is planning to develop an integrated electronic tax system, aiming to facilitate swift tax payments and refunds. The Revenue Department is tasked with developing all tax systems to be compatible with an electronic platform, including a system to offset tax payments and refunds, said Finance Minister Apisak Tantivorawong.

NBTC nudges MCOT for spectrum return Bangkok Post 23rd Nov 2018
The telecom regulator is resuming discussions with MCOT Plc, calling on the state-owned public broadcaster to return unused 2600MHz broadcasting spectrum for later use in 5G network development. The move follows Thursday's resolution by the National Broadcasting and Telecommunications Commission (NBTC) board that officially passed the final draft and established a spectrum and compensation regime for recalling unused spectrum ranges for auction.

Govt reveals digital transformation master plan Bangkok Post 22nd Nov 2018
The Ministry of Digital Economy and Society (DE) is preparing a master plan for collaboration that echoes Asean's theme of "Advancing Partnership for Sustainability", which was chosen by Thailand as the theme of its chairmanship in 2019.

Boost in workers’ skills necessary to propel nation forward: minister The Nation 20th Nov 2018
The government is focusing on technological enhancement to drive development, Labour Minister Pol General Adul Saengsingkaew said at the opening ceremony of the 2nd TVET (technical and vocational education and training) Forum in Bangkok yesterday.

Role of 5G put under scrutiny Bangkok Post 20th Nov 2018
The next generation of wireless technology, known as 5G, will enable Thai voters to directly exercise their democratic rights through the use of electronic voting systems (iVote), but such a shift will depend on the readiness of all players within the political system, a seminar was told on Monday.

Big tech firms pledge training for workers in Southeast Asia Bangkok Post 19th Nov 2018
Microsoft, Google and other major technology companies have promised to help provide training in digital skills for around 20 million people in Southeast Asia by 2020 to make sure the region's burgeoning working-age population is a fit for the future job market. Up to 28 million full-time jobs are subject to being displaced, according to a new estimate.

Infrastructure

Treasury Department's land scheme ready in a few years Bangkok Post 26th Nov 2018
The Treasury Department's land development scheme worth 70 billion baht will be ready for investment within the next 1-2 years, says director-general Amnuay Preemonwong. The scheme constitutes four large-scale projects and 200 small-scale projects.

Bang Sue mega-station to operate by January 2021 Bangkok Post 23rd Nov 2018
Bang Sue Central Station, which is set to replace Hua Lamphong as the capital's main rail transport hub, will be operational by January 2021, says Worawut Mala, acting governor of the State Railway of Thailand (SRT). He said construction of the station was expected to be completed by November of next year and the installation of the signal system should be wrapped up by mid-2020, followed by test runs in June.

Terminal put on ice pending feedback Bangkok Post 22nd Nov 2018
Airports of Thailand (AoT) has put the brakes on a second terminal scheduled to be built at Suvarnabhumi airport, pending steps to glean opinions from relevant parties including the International Civil Aviation Organisation (ICAO).

BoI offers incentives to meet Bt300-bn EEC target The Nation 20th Nov 2018
In the first nine months of this year, Bt230.55 billion has been invested in the EEC, showing an increase of up to 117 per cent compared to the same period last year, Duangjai Asawachintachit, BoI secretary-general, said yesterday at Government House. She was there to meet with Prime Minister Prayut Chan-o-cha. 

Travel & Tourism

Street vendor rules in Bangkok 'hurting tourism' Bangkok Post 27th Nov 2018
City Hall's efforts to regulate the use of pavements is damaging one of Thailand's biggest tourism draws, an expert at Chulalongkorn University's Urban Design and Development Centre (UCDC) has warned. "The government is trying to make street vendors disappear, despite the global recognition of Thailand's street food scene," said Adisak Guntamuanglee, an expert on urban planning at the UCDC.

TAT promotes weekday trips to lonely provinces Bangkok Post 26th Nov 2018
The Tourism Authority of Thailand (TAT) has unveiled additional plans to encourage locals to travel during weekdays, especially to second-tier provinces. The move aims to boost visitors and tourism income in 55 secondary provinces, or those provinces that get fewer than 4 million tourists a year, as well as offset the decline in arrivals from the Chinese market.

E-visa on arrival service now operating at 3 major airports Bangkok Post 22nd Nov 2018
Electronic visa-on-arrival services are now operative at three major airports and will soon be available at two others, according to the immigration bureau. Acting chief Surachate Hakparn said on Thursday booths had been opened at Suvarnabhumi, Don Mueang and Phuket airports for visitors who applied in advance for e-visas via the immigration police online service.

Visitor numbers down in Oct as Chinese stay away Bangkok Post 21st Nov 2018
Thailand welcomed 2.71 million visitors in October, down 0.51% year-on-year, on falling numbers of Chinese tourists, according to the Ministry of Tourism and Sports.

Making a home for digital nomads Bangkok Post 21st Nov 2018
'There's no place like it in the world," says Quinn Zeda, a graphic design entrepreneur, referring to Chiang Mai's bustling "digital nomad" scene. From November to February, between the rainy and burning seasons, Chiang Mai's Nimman neighbourhood is bustling with young, foreign freelancers, entrepreneurs and self-help gurus who can work online from anywhere in the world. And year after year, many choose to spend their winters in Chiang Mai.