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10 months ago

Is Thailand In An Economic Crisis Or An Economic Crisis Of ‘The Majority ’?

The debate on the Digital Wallet scheme has brought about an important question to light on whether Thailand is in an economic crisis or not.

The Digital Wallet Scheme Is Pheu Thai party’s flagship policy that promised 10,000 baht to every Thai aged 16 years, who have a monthly income of less than 70,000 baht and bank deposits not exceeding 500,000 baht and is the most debated topic in Thailand at all levels of Thai society.

The fact that the scheme involves a borrowing of 500 billion baht to fund it makes the topic even more contentious.

Critics have questioned whether the scheme will truly stimulate the economy or will the financial burden drive the country towards another economic crisis.

More importantly, Pheu Thai’s digital wallet scheme faces reservations expressed by a panel under the National Anti Corruption Commission Commission (NACC) and the Council of State. In its study, the panel suggested that the scheme could be regarded as policy-oriented graft and recommended that the government prove that the scheme will not benefit any specific political party or big businesses and that it will prove to be beneficial to the economy of the country.

The Council of State has warned that borrowing such a large amount could be violating laws governing state financial discipline.

Furthermore, a group of senators are seeking a general debate against the government and are expected to raise the ‘digital wallet’ as one of their key concerns.

It’s right and healthy that every government scheme should be scrutinized but while debating the pros and cons of the ‘Digital Wallet’ scheme, one observation, which has far reaching consequences, came to light and that is ‘Thailand may not be in an economic crisis’ at all.

For the country to progress or even to plan economic strategies , shouldn’t there be a consensus on this issue first ?

Whether Thailand is in an ‘economic crisis’ or not depends on which data you wish to look at and which demographics you focus on.

Thailand’s level of inequality has always been one of the highest in Southeast Asia. According to the Credit Suisse report in 2019, the bottom 10% of Thais hold 0% of the wealth, being either in debt or having no household income. The poorest 50 % of Thais hold only 1.7% of the country’s wealth, while the richest 10% hold a massive 85.7%.

Thailand’s growth has lost momentum over the last decade , as highlighted in an edition of the OECD Economic Survey of Thailand (OECD, 2023). GDP per capita has stagnated at the same time as other countries in the region experienced higher growth.

Covid -19 exacerbated the existing income gap and household debt challenges. The already softer growth momentum was further weakened by the economic fallout from the pandemic.

As expected, the recovery took the form of a K-shape, with a small group of people, big businesses, recovering faster and even doing better, while the majority did not recover at all or are still struggling to recover, judging from the increasing household debt that threatens to cripple their growth.

Making a quick calculation from 2019’s data, it’s clear that at that time if 90% of the people of Thailand held only 15% of the country’s wealth, then with the pandemic and the K-shape recovery, it's probably safe to say that more than 90% of 70 million people hold less than 15% of the country’s wealth today.

Thailand has among the highest household debt to gross domestic product (GDP) ratios in Asia, behind only South Korea and Hong Kong, according to a Bank for International Settlements ranking and millions of people, one in every three Thais are trapped in debt.

Household debt problems in Thailand differ from those of other countries as credit cards and personal loans, which are consumer loans, play a significant role and account for one third of total household debt. Consumer loans are not taken to generate income but to make ends meet.

About a third of Thais owe about16 trillion baht to formal lenders and an estimated 1trillion to loan sharks in 2023. According to Bloomberg, Thailand’s outstanding value of household debt is expected to rise further and peak in 2024 as people borrow more to service past debt and also cover the surging costs of living.

According to the above statistics, the only conclusion that makes sense is that the majority of Thais are not in a healthy financial state and are struggling to stay afloat.

Would this not constitute an “economic crisis of the majority’ if we look at the sheer numbers in terms of people adversely affected by economic turndown?

While most Thais have seen the effects of an economic slowdown, the wealthiest families of Thailand have felt either no impact from the country’s economic stagnation or have continued to grow. For example, Dhanin Cheravanont , President of the Charoen Pokphand Group saw his wealth grow from US$14.4 billion in 2015 to US$26.5 billion in 2022.

Bank of Thailand governor Sethaput Suthiwartnarueput has clearly stated that Thailand is not in a state of ‘economic crisis’.

His remarks are not surprising given the fact that the top five commercial banks of Thailand have reported a combined net profits of 138.9 billion baht for 2023.

The danger of looking at just the bigger picture of the Thai economy, where the GDP is chucking along, buoyed by growth from certain segments is misleading where the financial struggles of the majority of Thais are masked by credit and not given a red alert tag of ‘economic crisis’.

PM Sretha believes the country is in economic crisis and has reiterated so over several occasions but it was always seen as justification to push Pheu Thai’s flagship policy of Digital Wallet Scheme.

In a recent Nida poll, 63.51% of respondents think the country is in an economic crisis and at the same time 68.85% said they would not be upset at all if PM Srettha Thavisin cancelled the Digital Wallet Scheme.

It’s evident that the majority of people want the government to recognize that the country is in an economic crisis regardless of whether the Digital Wallet Scheme is the solution or not.

The PM needs to be seen fighting for the “common” people as it has been their hope that a change in government would bring in one that would prioritize their plight and call it for what it is, ‘an economic crisis of the majority’.

In the end, if the ‘Digital Wallet’ scheme is not implemented, the public will forgive the government, knowing that the government will leave no stone unturned to bring back economic viability to the lives of Thai people, one way or another.
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9 months ago

Is Thailand’s Two-Prime Minister Scenario Necessary For Political Stability?

Is Thailand’s Two-Prime Minister Scenario Necessary For Political Stability?

Speculation is rife from the day that ex-PM Thaksin Shinawatra was released on parole that soon Thailand would have two Prime Ministers instead of one. Some went so far as to speculate that Thaksin is the real power behind the chair with PM Sretha Thavisin as just the front man.
Are these speculations baseless or have elements of truth in them?
It may sound bizarre to many of those who are not well versed in Thai politics but in actuality, it is the norm. The Prime Minister of Thailand, if not a veteran politician, has no hope of navigating through the intricacies of the political system.
PM Sretha, although an accomplished businessman, needs to rely on the ‘Baramee’ of Thaksin. The Thai word is hard to explain, but if someone has ‘Baramee’ that means that person has a combination of popularity, power, influence and goodwill which has been accumulated through earning and building it over the years.
During General Prayuth Chan-o-cha’s administration, General Prawit Wongsuwan, a longtime ally of Prayuth and part of the military junta, that ruled Thailand following Prayuth’s 2014 coup and ouster of an elected government, was known as a kingmaker behind the scenes.
As Prime Minister, Prayuth has often displayed open disdain towards politicians and elected MPs and has stayed aloof from politics, including party politics.
Like Prayuth, Prawit was a former chief of the army and both served in the elite Queen’s Guard but unlike Prayuth, he was deeply immersed in politics and wielded tremendous influence behind the scenes.
The Palang Pracharath party was born with the sole objective of prolonging the post 2014 Prayuth-led military regime and Prawit had had to play the power-broker to unite the disparate factions within the Palang Pracharath party ,while at the same time, Prawit wielded influence with the business and wealthy elite of Thailand.
Prawit had the ‘Baramee’ to perform well.
Prayuth was free to run the country while Prawit was the behind the scenes man smoothing out potential conflicts and distributing benefits.
The Prayuth-Prawit duo was necessary to keep Palang Pracharath party and Prayuth in power.
Today, PM Sretha Thavisin and ex PM Thaksin Shinawatra find themselves in a similar position.
In September 2023, Pheu Thai formed a coalition government with parties who supported the military.
This could not in any stretch of imagination be an easy coalition to manage.
It is the same military that overthrew the Pheu Thai government in 2014 and for the military regime, Thaksin and his Pheu Thai have been their number one enemy, having spent years trying to keep Thaksin and his party out of power.
The only person who can walk this tightrope is Thaksin, who has the ‘Baramee’ to make sure all feathers remain unruffled and the ‘cake’ is divided satisfactorily to every one involved.
This leaves Sretha free to concentrate on getting Thailand’s economy back on track while Thaksin pulls the strings behind the scenes to make sure the coalition government lasts its four year term.

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10 months ago

Move Forward Party At Crossroads: Looking For A New Way Forward?

Recently, the Constitutional court ruled that the Move Forward Party’s campaign to amend Article 112, violated the charter and amounted to an attempt to overthrow the constitutional monarchy.

Since then, Theerayut Suwankesorn, the lawyer who petitioned the Constitutional Court to block Move Forward Party’s campaign to amend sec 112 has asked the Election Commission (EC) to seek a Constitutional Court order to dissolve the MFP party based on the ruling.

Furthermore, activists have filed a petition seeking life bans of 44MPS from the Move Forward party for alleged serious breaches of ethics when they signed in support of a bill to amend Sect 112.

It’s clear that the ruling has presented a predicament to the Move Forward Party: to continue with it’s flagship agenda or pivot to a more toned down one.

There is no question that the Move Forward Party is now a party in a crisis of identity and rumors are rife that party members are not in agreement on what course of action to pursue next.

If the Move Forward Party decides to pursue the amendment of Sec 112 agenda albeit within the limits set by the Constitutional Court, the big question is, is it still beneficial for the party to do so in the long run?

The Move Forward Party’s ideology is based on reforms, believing that the political and economic structure of the country needs to be reformed from the foundation itself before the country can progress. Their ideology includes reforming the monarchy and the political system, reducing the power of the military by rewriting the country’s constitution and ending conscription.

The Move Forward Party may have the impression that the reform of sec 112 was a key part of the campaign that helped them sweep 40% of popular votes in the general election last May beating the Pheu Thai party, which has won every election since 2001.

But is that really true? Is the Move Forward Party misreading the election results?

Did all 14 million people who voted for the Move Forward Party voted for the party’s stance on amendment of Sec 112 or for the party who people believed would bring change to their wellbeing and economic progress in the backdrop of a dismal performance by the earlier administration?

The election results can also lead to a conclusion that majority of people voted for economic policies that would improve their financial status. During the elections, the economic policies of three parties, Move Forward Party, Pheu Thai Party and Bhumjaithai stood out. Move Forward Party’s policy of 3,000 Thb monthly allowance for the elderly, increase of daily minimum wage to 450 Thb , legalizing casinos and online betting run by the state, reducing cost of living and doing away with conscription. It’s to be noted that while canvassing for votes, candidates from Move Forward Party were quite muted on reforms, especially on the amendment of Sec 112. The Pheu Thai Party campaigned most notably on Soft Power, Digital Wallet Scheme and increased minimum wages. Perhaps if Pheu Thai’s proposed policies were easier to understand or communicated better to the public at that point, the party would have fared better. Till today, many still haven’t understood the concept of the Digital Wallet Scheme or Soft Power movement fully. However, what propelled Pheu Thai to being a close runner up to Move Forward Party, in the election results, is their undeniable, proven record of turning the country around economically. As for Bhumjaithai, their journey is truly exceptional. Despite being part of the earlier pro-military administration, Bhumjaithai managed to secure 70 seats, up from 50 during the 2019 elections. Their legislation of cannabis gave rise to many businesses and alternate sources of income, again driving home the huge possibility that many voted for a better economy.

Looking at the bigger picture in extremes, if an assumption is made that 14 million people voted for the amendment of sec 112 then that leaves 25 million of voters who were opposed to radical reforms.

With the limit set on how Move Forward Party can proceed with their push to amend Sec 112 and with the increasingly invisible and shadowy “demon” of military influence on politics, it’s hard to see how the Move Forward Party will achieve the landslide they are aiming for and fare well in their next election based on their ideology of radical reforms.

While the court has ruled as such, pursuing radical reforms may keep MFP in the spotlight and media space but is the party in danger of sliding towards being a ‘Rebellious & Divisive’ party rather than a ‘Progressive & Constructive’ party?

Take the recent case of Tawan and the royal motorcade of Princess Sirindhorn. A known activist, Tantawan Tawan Tuatulanon and a colleague honked at a motorcade carrying the much loved and revered Princess Sirindhorn and shared the incident on social media, where the video showed Tawan arguing with the police.

After the incident, Tawan and other activists from the Thalu Wang Group an anti- monarchy group, proceeded to conduct a poll about royal motorcades at Siam BTS station, when a group called ‘Thai People Protecting The Monarchy’ also turned up at the scene, which then ended in a brawl between the two groups.

A red line has been crossed in the sentiments of the Thai public and people took to social media and even gatherings, wearing purple clothes, the color of her birthday, across the country to show support for their beloved Princess Sirindhorn.

Move Forward Party has denied all allegations that they were in anyway behind the actions of ‘Tawan’ and the Thalu Wang Group but have not been able to shake off the perception that their anti-monarchy philosophy are aligned with the activists.

The Move Forward Party has been increasingly criticized and accused for using the young to further their agenda, ruining their lives when they end up on the wrong side of the law or in jail and all the while filling their heads with radical views. Whether these accusations hold any water or not is to be debated but the optics does not look good.

It can be argued that the Move Forward Party can try to duplicate their earlier winning strategy from 2019 to 2023, when they shot to fame and stayed in the spotlight due to their calls for radical reforms supported by mobs of youngsters. However, during the run up to the 2023’s election, Move Forward Party campaigned on progressive economic reforms rather than on hardcore radical reforms. Most will remember Pita Limjaroenrat, leader of the party then, rallying around a 3,000 Thb monthly allowance for the elderly when he said “what sort of country is this where the elderly can afford only one egg a day?” After the Move Forward Party’s unexpected win, the first policies that the party disowned was the 3,000 Thb monthly allowance along with the increase in minimum wage. People were relieved though that the memorandum signed by the 8- party coalition did not contain amendment of sec. 112. Pita, as the leader of the winning party was elected as their prime ministerial candidate by the coalition parties.

The 2023’s election will always be remembered as the time when Pheu Thai betrayed Move Forward Party and joined hands with the parties from the earlier administration to form a Pheu Thai led government.

In actuality, Move Forward Party let the 8-party coalition down from the moment Pita did not honor their signed memorandum and placed his own party's agenda of amending sec 112 as the higher priority, by refusing to back down from it.

The rest is history with Move Forward Party back in Opposition today.

To go down the same path of history may not serve the Move Forward Party well as the risks of being seen as a party that is ‘divisive’ is high and circumstances have changed. The next elections will be fought focussed on a multi party system and not divided by pro-democracy and pro-establishment ideologies. Pheu Thai and Bhumjaithai parties will likely retain or even increase their vote base if the government is able to deliver on economic performance while Move Forward Party is unlikely to be able to swing extreme conservatives to their side, therefore, a landslide scenario seems unlikely. With radical reforms still on their agenda it would be difficult for other parties to form a coalition with Move Forward Party and the party might find itself in Opposition once again.

Is it not better if Move Forward Party pivots towards fulfilling people’s expectations of being a progressive and constructive party that builds on the foundation of our country instead of holding it back with divisiveness and conflicts?

Many are waiting to see what a grown up version of Move Forward Party would look like, something for the party to think about as they search for a new way forward.
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10 months ago

Can Pheu Thai Deliver On ‘Economic Transformation From ‘Bottom-up’?

Six months in, since the formation of PM Srettha Thavisin’s cabinet and the critics are already doubtful about whether PM Srettha can deliver on people’s expectations that Pheu Thai has the ability to turn the economy around, given the fact that the ‘Digital Wallet’ scheme has met with strong resistance from various institutions, ‘Soft Power’ is trying to find its footing and the implementation of the ‘Land Bridge’ project still seems in the distant future.

Expectations ran high from the day Pheu Thai formed the coalition government due to Pheu Thai party’s reputation for exceptional economic governance and the added bonus of having Srettha Thavisin as Prime Minister, a successful business tycoon.

Perhaps its unfair to judge too soon as it’s not easy to undo years of economic policies based on the trickle-down effect.

For over decades now, the assumption is that development will take place from industrialization, which generates income or capital to the owner first and then will trickle down to the lower income people. Large businesses and wealthy investors have been beneficiaries of tax breaks and other forms of benefits that derived from close ties between politicians and big corporations resulting in an economy dominated by business giants and monopolies.

In the same manner that it did not have the desired effect in other countries that employed trickle-down effect policies, the same story also applies to Thailand, the country did not see reduced wealth inequality in Thailand but instead saw only a widening gap.

In research first published in 2020, David Hope and Julian Limberg, of LSE’s International inequalities Institute and King’s College London, analyzed the economic effects of major tax cuts and benefit policies for the rich across five decades in 18 wealthy nations.

Their conclusion was that the rich got richer and there was no meaningful effect on unemployment or economic growth. The paper went viral, attracting extensive global media coverage and was the most downloaded paper in the history of LSE Research Online-the database of all research produced by LSE academics.

The current government seems to be on a mission to correct income inequality through flagship policies such as Digital Wallet Scheme and Soft Power along with debt restructuring measures, visa exemption for tourists, energy and electricity cost subsidies and push for lower interest rates.

However, these measures have been criticized for failing to address underlying systematic and structural issues.

The problem seems to be that each policy is promoted and executed on its own merit and is not part of one cohesive strategy that complements and works in unison to deliver a specific target.

Now more than ever Thailand requires new, bold policy actions to tackle widening gaps of income inequality in the backdrop of a global environment that is unpredictable and high on geopolitical risks and tension.

The worsening income inequality gap and the increase of household debt problems points to the fact that poverty at the base and middle level of the pyramid is simply masked by credit where most of a household’s income goes towards servicing of these debts. Structuring of loan payments will alleviate the situation for a while but will not help in the long run as new household debts will incur as long as the income stays the same.

The major contributing factor to the problem is the slow or negligible improvement in the income of low-income earners and low labor productivity.

Increasing minimum wage as a solution for low income earners is counterproductive as Thailand’s labor costs is already high compared to other competitive Asian countries.

Implementation of programs and policies to skill up the workforce and reform the education system is what is needed to scale up labor force productivity, analysts say. However, implementation of such policies takes years for it to bear fruit and can only be looked at as a long term investment.

Is there an alternative way for the government to increase the income of lower income earners?

The alternative to the failed trickle-down effect theory is the bottom-up theory.

Theoretically, bottom-up economic plan is all about investing in local entrepreneurs and small-scale businesses to spur growth and increase production.

Lack of capital is top of the list of barriers to economic growth for entrepreneurs whilst bottom-up economics gives capital to entrepreneurs who then utilize the capital to create jobs, improve technology, increasing production and ultimately economic growth.

A few years ago, India employed a bottom-up approach with the use of technology to increase the income levels of low income earners and small business owners which transformed India’s economy. Today,India’s GDP registered a growth of 7.6 percent in the second quarter of FY24. India’s GDP growth rate is higher than major economies such as Russia, the USA, China and the UK, which have registered a growth of 5.5 %, 5.2%, 4.9% and 0.6 percent respectively in the same period.

India is a rising economic might as it emerges from a pandemic amid a sluggish world economy.

As part of their bottom up approach, the Indian government incentivized smaller, micro players to grow in such a way that the effect of the growth reaches a larger section of the population and eventually the bigger players.

Rather than China’s way of top-down approach of building 100 new factories that employs thousands, India’s way was to use a single national ID card to get loans and grants to millions of micro businesses scattered throughout the country. The reasoning of policy makers was that if 10 million micro businesses have access to capital that let them start and each hire two more people, that’s 20 million new jobs.

For the first time in modern history, India used technology and concerted schemes to trigger bottom-up growth. With the help of technology the government has managed to disburse vast amounts of benefits at a minimal cost directly to the population that is in need of them.

Along with this, the country introduced legislations that frees up micro level business from unnecessary regulations, enhancing the ease of doing business even at the individual level.

India’s tax restructuring From VAT to GST ensured that the government’s tax collections were higher than before and at the same time served as an incentive for people to pay taxes. The higher tax collections enabled the government to be able to fund loans and grants back to the people who are in need of it.

Whilst the digital wallet scheme in its present form was designed to stimulate domestic consumption and may or may not alleviate the financial crunch of the people in need, the tweaking of the digital wallet scheme, a restructuring of the country’s tax system and de-regularization of legal formalities at the individual level to foster growth of micro and small businesses may well bring about an economic transformation to Thailand from the bottom up.

If Pheu Thai is able to bring about such an economic transformation, their reputation of delivering on economic prosperity will be cemented .
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10 months ago

Is Thaksin’s ‘Privileged Person’ Status A High Price In Return For Country’s Political Transformation?

From the minute Thaksin Shinawatra stepped foot on Thai soil on August 22nd 2023 not a day has gone by without him being in the news.

And the barrage of questions grew.

Is he in the hospital? Is he eligible to stay in the hospital for so long? Why is he in the hospital and not in jail? Is he actually ill? Why has his hair not been cut and why is he not in prisoner’s garb? Is he actually living outside in an apartment somewhere?

Now, with his release on bail after not having spent a day in prison, the question of “Why is he being given a ‘Privileged Person’ status” looms large.

The official answer by several officials while he was in hospital was that Thaksin was seriously unwell as stated by Justice Minister Tawee Sodsong and the confirmation by the Director-General of the Corrections Department that treatment outside of prison is within the law and a right given to prisoners who are genuinely ill as stated. The Justice Minister went further and praised Thaksin for returning home to reconcile the country even though he had to face legal consequences.

Recently the Corrections Department issued a statement confirming that Thaksin’s release on parole is within the confines of the law.

The unofficial answer though is based on speculations that there was a “secret deal” to bring Thaksin home without having to spend a single night in jail ( The day he landed he was whisked off to the Police General Hospital during the night) and now he is out on bail.

It’s inconceivable to think that Thaksin would have decided unilaterally to come back home and face the consequences without any “understanding” being negotiated beforehand or getting a very clear and vigorous nod from the old power base.

The ‘Big Question’ is “ Has it been worth it for the country?”

Thaksin’s return was and is a huge step and missing link ( till now) towards a ‘Political Transformation’ in Thailand that was much needed to end decades of color coded battle between differing ideological camps , which has led to incalculable losses for the country. The conflict plunged Thailand into what could be called “ lost decades” where the nation saw other Asean countries making strides economically while Thailand trailed behind, stumping its own ambition to move towards being a developed country.

The GDP itself is low and at the same time unrevealing as to the income inequality that exists and threatens to blow household debt out of control.

During two decades of political instability, Thailand has seen two coups, three Prime Ministers brought by down by court rulings and destabilizing color-coded street demonstrations.

Mobs of Thailand were a permanent feature and famous all across the globe, deterring foreign investments to the country.

After the 2023 Thai elections, there is no doubt that a ‘political transformation’ took place, engineered by involved powers and leaders on both sides of the red and yellow blocs, who seemingly came to the same conclusion that prolonging the conflict was simply not a sustainable option any longer, especially in the face of Move Forward party’s growing popularity.

The ‘reconciliation’ had to take place and it was done amidst much fanfare and entertainment for the public, through not so much a Lakorn(Thai drama) scenario but more a ‘reality show’ as Dr. Cholnan Srikaew drank mint-choc drinks with various parties of the old government and all the while listening to reasons of why they are unable to join the 8 party coalition with Move Forward Party as part of the coalition.

The offshoot of the ‘show’ hosted by Cholnan was a move towards a coalition between parties of the ‘democratic’ side (without Move Forward Party) and parties of the ‘pro-military’ side with Pheu Thai taking the lead.

So, is the country better off?

The ‘Political Transformation’ has succeeded in bringing Thailand back to ‘normality’ in the eyes of the world and the country can do away with qualifying democracy with such terms as ‘Thai Style’ democracy.

The current Prime Minister Sretha Thavisin is accepted internationally wherever he goes and is able to negotiate deals for Thailand’s benefit with various countries.

The dreaded divide of the country and political parties into ‘pro democracy’ and ‘pro military’ camps is now a faint line.

The Pheu Thai Alliance with the old pro-military parties looks solid and there is no hint of a break or crack in their union which means military coups may be a thing of the past.

Thailand can finally step proudly into the world arena and forge ahead economically.

In the end, if the bigger picture is that the country emerged the winner, the reaper of the benefits of the ‘Political Transformation’ then what does it matter if key players who brought it about benefited from some ‘deal’ or ‘understanding’? It’s also quite clear that it wasn’t a 100% win for either side and while there was ‘take’, there was also ’give’ through certain sacrifices from both sides so that a compromise can be reached.

And for all that, Thaksin deserves to be treated as a “Privileged Person”.
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10 months ago

Land Bridge Project Moves From ‘An Impossibility’ To ‘A Possibility With Challenges’?

Land Bridge project feasibility study passed the vote in parliament last week with 269 lawmakers voting in favor and 147 against the project moving the project from ‘ An Impossibility’ to ‘A Possibility With Challenges’.

Land Bridge is a revisited project and an adaptation of the centuries old Kra canal project, which was to dig a canal across the Isthmus of Kra between Chumphon and Ranong.

However, because the canal would physically separate the country into two, it was always shelved due to national security and several other reasons deeming it ‘An Impossibility’.

Previously, the earlier administration under ex PM Prayuth Chan-ocha came out with a solution that does not divide the country and connects the two ports, Ranong and Chumphon, with a Land Bridge instead. The project included two deep-water ports, a motorway and a railway system. Today, PM Sretha Thavisin has taken over the project and started marketing it vigorously with different countries to raise funds for the project which is estimated at a budget of 1 trillion baht.

In the past, major concerns have been raised in arguments against the project which involves high costs, environmental issues and displacement of locals, existing inefficient logistics network and management system and most importantly, profitability of the project.

In parliament last week, Pita Limjaroenrat, chief adviser to Move Forward Party voiced his opposition to the project and repeated most of the issues that have been put forth earlier by critics of the project.

Will the government be able to overcome these challenges and turn the project into a reality?

A project of this size requires a massive outlay and Thailand needs to look for foreign investment. PM Sretha has pitched the project to several companies from countries such as America, China, Japan , Germany, United Arab Emirates and India. The most interested party so far seems to be DP World, a company based in Dubai that specializes in investments in marine shipping, deep sea ports, logistics and transport.

PM Sretha is confident that getting the investment on board will not be an issue and has gone ahead in setting up a timeframe for the bidding of the contract by construction companies, scheduled for mid 2025. Project is expected to be completed by 2030.

Another concern is that the land bridge project would have a negative impact on the environment affecting Southern Thailand’s tourism and displacing locals.

In today’s world where awareness and emphasis is on environment and ecosystem sustainability, ports now play a vital role in the shipping industry’s broader drive towards decarbonization and environmental guardianship, generating unique strategies and new business models to cope with global green shift transformation.

While the International Maritime Organization(IMO) works with the shipping industry and other global stakeholders to manage the emissions of tankers and colossal container ships, port operators are working with shipowners and operators to ensure ports and other container terminals are supporting industry-wide efforts to decarbonize, reduce waste and mitigate local impacts on marine ecosystems.

Ports can turn to any number of projects to achieve their sustainability goals, from embedding clean energy, electrification to the bunkering of cleaner fuels.

With the industry’s growing emphasis on sustainability, new port facilities need to balance environmental responsibility with economic development. There exists an opportunity for Thailand to build ports based on sustainability as we start off with a clean slate where environment-conscious ideas can be embedded into a project from the very beginning.

There have been concerns raised by locals who fear that their livelihood might be adversely impacted or that they might not receive compensation for land they live on without legal documents. In an acknowledgement to these concerns, Transport Minister Suriya Juangroongruangkit has said that the land bridge contractors must set up compensation funds for such cases.

Perhaps one of the most discouraging reasons given for not going ahead with the project is the fact that Thailand’s current ports have existing inefficient logistics networks and management systems. This reason is discouraging because it implies that we cannot improve or get better to meet new challenges. The way forward should surely be to make certain that we implement the best logistics system and management, prepare the best talent from the start of the project itself , learn from the best and take lessons from our past inefficiencies? Is it not a possibility that the country can overcome this challenge with dedication and determination? Or do we wish to throw in the towel and say while other countries can run their ports efficiently, we are unable to and it is an ‘Impossibility’?

The most important question to be answered though is the question of profitability. Will there be a demand for the services of Thailand’s new ports?

Critics say bypassing the Mallacca Straits may well save sailing time but unloading goods at one end, transporting them onto other ships at the other end could take just as long as sailing through the straits and would actually increase transportation costs. Valid point, but critics are overlooking the fact that Singapore is currently the world’s busiest transshipment hub, with more than 30 million TEUs (Twenty-foot Equivalent Unit container) passing through every year.

What then is the concept of transshipment? Transshipment is when ships carrying goods stop at one distribution port( such as Singapore) to unload goods going to other ports, before loading goods to be transported to their destination port. Transshipment saves time and money as ships make less trips by going to one port, instead of traveling to several ports to load and unload goods.

Therefore, ships do not just refuel at Singapore port and then sail through the Malacca Straits to several ports along the way, they load and unload cargo at the Singapore port which serves as a distribution port and then the goods are transported to various destinations from there to other ports. It stands to reason that if Thailand can unload cargo or load cargo within the same time that it takes Singapore to do so then the saving in sailing time and the waiting time due to choking at the Malacca Straits will add to Thailand’s new ports’ competitive advantage.

Nothing is an impossibility, just challenges, albeit formidable ones, but the big question is whether the country is up to meeting these challenges or not?
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10 months ago

Can ‘Soft Power Labelling’ Turn Into A Powerful ’Soft Power Movement’ ?

The debate on what ‘Soft Power’ means and whether it’s the right usage of the term as intended by Joseph Nye, the former dean of the Harvard Kennedy School of Government, has been going back and forth since PM Srettha Thavisin announced an intention to promote ‘Soft Power’ to spur the economy.

A National Soft Power Strategy Committee has been set up chaired by the premier with Paetongtarn Shinawatra, leader of Pheu Thai party as vice chair.

Paetongtarn has dismissed criticisms on definitions and has acknowledged that many are trying to define ‘Soft Power’ but the definition is not really important as the government is trying to boost the economy through the promotion of ‘Soft Power’ .

The government has set aside a budget of 5.1 billion baht to support initiatives in 11 sectors which are design, fashion, tourism, festivals, sports, cuisine, film, music , arts, books and gaming and is expecting to generate 4 trillion baht, create 20 million jobs and raise household income.

With expected returns like that, does it matter then what ’Soft Power’ means? Or should the emphasis be on achieving it?

Now, Thailand is ‘labeling’ anything that is Thai and that has the ability to pull in the power of money and economic growth, ’Soft Power’. Creating chefs specializing in Thai food or putting up old Thai favorites such as ‘Mango Sticky Rice’ or ‘Tom Yum’ or ‘Elephant Pants’ and labelling them as ‘Soft power’ is a positive starting point as any, as it galvanizes the country and gets the public rallying around it.

However, as the country goes down this path , it shouldn’t be seen as selling old wine in a new bottle repeatedly. Traditional Thai food is now already one of the most popular cuisines where you can find Thai cooking ingredients in the remotest parts of the world. Can anything more be derived by pouring investments into this field? The answer is yes, if the industry develops with creativity and innovation and ‘Soft Power Labeling’ turns into a powerful ‘Soft Power Movement’.

To unleash the full potential of ‘Soft Power’, more needs to be done to bring it out over time and at some point, go beyond labelling conventional assets like traditional Thai food, culture, tourism and festivals etc as ’Soft Power’ and start a ’Soft Power Movement’ to generate talent and most importantly brands.

If one were to look at the ’Soft Powers’ of two other Asian countries, the Anime industry from Japan and the Kpop bands from Korea, they are both inherently Asian but appealing to the West. A blend of their own culture with the modern Western Culture.

‘Soft Power’ can emerge from any industry in a country such as chic and sophisticated fashion brands and labels from France and leading technology brands from America.

The commonality from the above examples of ’Soft Power’ is that they all have global appeal, are innovative ideas that emerged in today’s world, have a modern context and a certain distinct style of their own and lastly have the ability to spin out industries that become a money making hub for the country.

In all cases, the governments were involved in some form or another in promoting talent and brands from the beginning while establishing their country's image when ’Soft Power’ was not even a term defined by Joseph Nye yet.

Thailand has the benefit of knowing what ’Soft Power’ is and can go about building it from the beginning.

The way forward for Thailand would therefore be, as part of the ’Soft Power Movement’, to first create an awareness through our initial ’Soft Power Labeling’ which the policies are geared to do at the moment and then go about implementing the necessary policies for a ’Soft Power Movement’ to bring out a ’Soft Power’ industry or maybe several ’Soft Power Industries’.

A creative economy is based on people’s use of their creative imagination to increase an idea’s value. John Howkins developed the concept in 2001 to describe economic systems where value is based on novel qualities rather than the traditional resources of land, labour and capital. Howkin’s creativity-based model includes all kinds of creativity, whether expressed in art or innovation.

Compared to creative industries, which are limited to specific sectors, the term is used to describe creativity throughout a whole economy. The term increasingly refers to all economic activity that depends on a person’s individual creativity for its economic value whether the result has a cultural element or not. Some observers take the view that creativity is the defining characteristic of developed 21st century economies, just as manufacturing typified 19th and early 20th centuries.

Thai policy makers need to build and implement a new model for the country whereby creativity, thinking out of the box, being different and innovative are traits that need to be nurtured, respected, valued and most importantly rewarded.

Creative thinkers can come from any section of the society but unfortunately many that come from less affluent backgrounds will never see their dreams fly through lack of funding or just having to keep jobs that may not foster their talent but pays the bills. Policies need to be implemented to make sure these talents are nurtured and fostered to ensure the burgeoning of pools of talents in several fields.

Central to the ‘Soft Power Movement’ is the creation of brands.

SMEs must be encouraged and incentivized with the support of the government to build brands based on new ideas, creativity and innovation.

Building brands separates products from Thailand into a class of its own. The power of brands is that people will pay a higher price for the product because of its name.

Take any fashion label who charge exorbitant prices for their products and still generate huge revenue even though there are cheaper knockoffs available in the market.

On the other hand, see the case of ‘Elephant Pants,’ which has been labelled as one of Thailand’s ’Soft Power’. Turns out, most are manufactured in China and Thai manufacturers cannot compete with their pricing. The way to overcome this obstacle is not to compete with Chinese manufacturers on pricing but to bring up numerous Thai brands of fisherman’s pants which are creative, of unique designs, of better quality and finished to perfection.

Churning out such brands will not only be beneficial in terms of increased exports and revenue but will also go towards building up the reputation of the country as a whole, a ‘Brand Thailand’.

The power of a “Soft Power Movement’ is not to be underestimated and can restructure the thinking of how to navigate Thailand to a position of ’Soft Power’ in the world stage.
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9 months ago

PM Sretha’s Vision :Waking Up Thailand From Populist Policies To Pillars Of Growth?

PM Sretha’s Vision :Waking Up Thailand From Populist Policies To Pillars Of Growth?
Thailand has been in a slumber for more than a decade with the country running in auto mode.
Flashbacks to General Prayuth Chan-O-Cha administration days reminds us that Thailand was coined ‘The sick man of Southeast Asia’ and perhaps the headline by the Japanese media, Nikkei Asia, in 2021 sums it all, ‘Thai Economy Is A Disaster In Slow Motion.’
Much has been said about Pheu Thai and their populist policies, where the party and its predecessor parties were known for economic policies that revitalized the economy more broadly at the grass root level.
Today, the Pheu Thai government, with Sretha Thavisin as Prime Minister, seems to be concentrating on new pillars of growth rather than on populist policies, which over the years have been copied by other parties.
It can be argued that the party’s signature campaign promise of a 10,000 Baht Digital Wallet Scheme for Thais under a certain monthly salary is an enormous budgeted populist policy.
However, the original intention of the 10,000 baht digital wallet scheme was not meant to be a populist handout but as a policy to stimulate domestic spending , judging from the original plan of giving 10,000 baht to every Thai above 16 years.
PM Sretha has himself reiterated this fact on many occasions.
‘Soft Power’ another flagship policy is about creating new pillars of growth based on a creative economy, which hopefully will not only concentrate on certain ‘creative industries’but on creativity and innovation in all industries as a whole,moving away from the 19th-century-focus on manufacturing.
Interestingly, PM Sretha recently shared his vision of ‘Ignite Thailand’ with 8 hubs to be developed, including food, tourism, medical treatment, electric vehicles, digital economy, finance, logistics and aviation.
The concentration is on building up on and reinforcement of old pillars of growth such as food and agriculture, medical treatment, electric vehicles, while at the same time setting up digital economy, finance, logistics and aviation hubs as new pillars of growth.
It’s clear that PM Sretha has his vision set on building engines of growth and moving away from populist policies of handouts.
Is this a good move for the Pheu Thai party and the country?
While populist policies may have worked for the country even a decade ago, it had not succeeded as an economic tool under the previous administration of General Prayuth Chan-0-Cha. Some say the execution of populist policies were flawed but could it be that populist policies have run it’s course for the Thai economy?
New bold ideas are now needed to wake up Thailand from its slumber and going down the engine of growth path will create new avenues for bringing in revenue for the country, apart from the traditional engines of growth such as tourism and exports.
To promote traditional hubs and build new ones the government would need to reinforce the foundation of the old and build solid foundation for the new, which would include employing new systems and creating talent pools to support the growth for each engine of growth or hub.
This in turn will sort out many structural underlying problems of the country in the long run.

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9 months ago

PM Sretha’s Vision :Waking Up Thailand From Populist Policies To Pillars Of Growth?

PM Sretha’s Vision :Waking Up Thailand From Populist Policies To Pillars Of Growth?
Thailand has been in a slumber for more than a decade with the country running in auto mode.
Flashbacks to General Prayuth Chan-O-Cha administration days reminds us that Thailand was coined ‘The sick man of Southeast Asia’ and perhaps the headline by the Japanese media, Nikkei Asia, in 2021 sums it all, ‘Thai Economy Is A Disaster In Slow Motion.’
Much has been said about Pheu Thai and their populist policies, where the party and its predecessor parties were known for economic policies that revitalized the economy more broadly at the grass root level.
Today, the Pheu Thai government, with Sretha Thavisin as Prime Minister, seems to be concentrating on new pillars of growth rather than on populist policies, which over the years have been copied by other parties.
It can be argued that the party’s signature campaign promise of a 10,000 Baht Digital Wallet Scheme for Thais under a certain monthly salary is an enormous budgeted populist policy.
However, the original intention of the 10,000 baht digital wallet scheme was not meant to be a populist handout but as a policy to stimulate domestic spending , judging from the original plan of giving 10,000 baht to every Thai above 16 years.
PM Sretha has himself reiterated this fact on many occasions.
‘Soft Power’ another flagship policy is about creating new pillars of growth based on a creative economy, which hopefully will not only concentrate on certain ‘creative industries’but on creativity and innovation in all industries as a whole,moving away from the 19th-century-focus on manufacturing.
Interestingly, PM Sretha recently shared his vision of ‘Ignite Thailand’ with 8 hubs to be developed, including food, tourism, medical treatment, electric vehicles, digital economy, finance, logistics and aviation.
The concentration is on building up on and reinforcement of old pillars of growth such as food and agriculture, medical treatment, electric vehicles, while at the same time setting up digital economy, finance, logistics and aviation hubs as new pillars of growth.
It’s clear that PM Sretha has his vision set on building engines of growth and moving away from populist policies of handouts.
Is this a good move for the Pheu Thai party and the country?
While populist policies may have worked for the country even a decade ago, it had not succeeded as an economic tool under the previous administration of General Prayuth Chan-0-Cha. Some say the execution of populist policies were flawed but could it be that populist policies have run it’s course for the Thai economy?
New bold ideas are now needed to wake up Thailand from its slumber and going down the engine of growth path will create new avenues for bringing in revenue for the country, apart from the traditional engines of growth such as tourism and exports.
To promote traditional hubs and build new ones the government would need to reinforce the foundation of the old and build solid foundation for the new, which would include employing new systems and creating talent pools to support the growth for each engine of growth or hub.
This in turn will sort out many structural underlying problems of the country in the long run.

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9 months ago

Is Thailand’s Two-Prime Minister Scenario Necessary For Political Stability?

Is Thailand’s Two-Prime Minister Scenario Necessary For Political Stability?

Speculation is rife from the day that ex-PM Thaksin Shinawatra was released on parole that soon Thailand would have two Prime Ministers instead of one. Some went so far as to speculate that Thaksin is the real power behind the chair with PM Sretha Thavisin as just the front man.
Are these speculations baseless or have elements of truth in them?
It may sound bizarre to many of those who are not well versed in Thai politics but in actuality, it is the norm. The Prime Minister of Thailand, if not a veteran politician, has no hope of navigating through the intricacies of the political system.
PM Sretha, although an accomplished businessman, needs to rely on the ‘Baramee’ of Thaksin. The Thai word is hard to explain, but if someone has ‘Baramee’ that means that person has a combination of popularity, power, influence and goodwill which has been accumulated through earning and building it over the years.
During General Prayuth Chan-o-cha’s administration, General Prawit Wongsuwan, a longtime ally of Prayuth and part of the military junta, that ruled Thailand following Prayuth’s 2014 coup and ouster of an elected government, was known as a kingmaker behind the scenes.
As Prime Minister, Prayuth has often displayed open disdain towards politicians and elected MPs and has stayed aloof from politics, including party politics.
Like Prayuth, Prawit was a former chief of the army and both served in the elite Queen’s Guard but unlike Prayuth, he was deeply immersed in politics and wielded tremendous influence behind the scenes.
The Palang Pracharath party was born with the sole objective of prolonging the post 2014 Prayuth-led military regime and Prawit had had to play the power-broker to unite the disparate factions within the Palang Pracharath party ,while at the same time, Prawit wielded influence with the business and wealthy elite of Thailand.
Prawit had the ‘Baramee’ to perform well.
Prayuth was free to run the country while Prawit was the behind the scenes man smoothing out potential conflicts and distributing benefits.
The Prayuth-Prawit duo was necessary to keep Palang Pracharath party and Prayuth in power.
Today, PM Sretha Thavisin and ex PM Thaksin Shinawatra find themselves in a similar position.
In September 2023, Pheu Thai formed a coalition government with parties who supported the military.
This could not in any stretch of imagination be an easy coalition to manage.
It is the same military that overthrew the Pheu Thai government in 2014 and for the military regime, Thaksin and his Pheu Thai have been their number one enemy, having spent years trying to keep Thaksin and his party out of power.
The only person who can walk this tightrope is Thaksin, who has the ‘Baramee’ to make sure all feathers remain unruffled and the ‘cake’ is divided satisfactorily to every one involved.
This leaves Sretha free to concentrate on getting Thailand’s economy back on track while Thaksin pulls the strings behind the scenes to make sure the coalition government lasts its four year term.

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10 months ago

Can Pheu Thai Deliver On ‘Economic Transformation From ‘Bottom-up’?

Six months in, since the formation of PM Srettha Thavisin’s cabinet and the critics are already doubtful about whether PM Srettha can deliver on people’s expectations that Pheu Thai has the ability to turn the economy around, given the fact that the ‘Digital Wallet’ scheme has met with strong resistance from various institutions, ‘Soft Power’ is trying to find its footing and the implementation of the ‘Land Bridge’ project still seems in the distant future.

Expectations ran high from the day Pheu Thai formed the coalition government due to Pheu Thai party’s reputation for exceptional economic governance and the added bonus of having Srettha Thavisin as Prime Minister, a successful business tycoon.

Perhaps its unfair to judge too soon as it’s not easy to undo years of economic policies based on the trickle-down effect.

For over decades now, the assumption is that development will take place from industrialization, which generates income or capital to the owner first and then will trickle down to the lower income people. Large businesses and wealthy investors have been beneficiaries of tax breaks and other forms of benefits that derived from close ties between politicians and big corporations resulting in an economy dominated by business giants and monopolies.

In the same manner that it did not have the desired effect in other countries that employed trickle-down effect policies, the same story also applies to Thailand, the country did not see reduced wealth inequality in Thailand but instead saw only a widening gap.

In research first published in 2020, David Hope and Julian Limberg, of LSE’s International inequalities Institute and King’s College London, analyzed the economic effects of major tax cuts and benefit policies for the rich across five decades in 18 wealthy nations.

Their conclusion was that the rich got richer and there was no meaningful effect on unemployment or economic growth. The paper went viral, attracting extensive global media coverage and was the most downloaded paper in the history of LSE Research Online-the database of all research produced by LSE academics.

The current government seems to be on a mission to correct income inequality through flagship policies such as Digital Wallet Scheme and Soft Power along with debt restructuring measures, visa exemption for tourists, energy and electricity cost subsidies and push for lower interest rates.

However, these measures have been criticized for failing to address underlying systematic and structural issues.

The problem seems to be that each policy is promoted and executed on its own merit and is not part of one cohesive strategy that complements and works in unison to deliver a specific target.

Now more than ever Thailand requires new, bold policy actions to tackle widening gaps of income inequality in the backdrop of a global environment that is unpredictable and high on geopolitical risks and tension.

The worsening income inequality gap and the increase of household debt problems points to the fact that poverty at the base and middle level of the pyramid is simply masked by credit where most of a household’s income goes towards servicing of these debts. Structuring of loan payments will alleviate the situation for a while but will not help in the long run as new household debts will incur as long as the income stays the same.

The major contributing factor to the problem is the slow or negligible improvement in the income of low-income earners and low labor productivity.

Increasing minimum wage as a solution for low income earners is counterproductive as Thailand’s labor costs is already high compared to other competitive Asian countries.

Implementation of programs and policies to skill up the workforce and reform the education system is what is needed to scale up labor force productivity, analysts say. However, implementation of such policies takes years for it to bear fruit and can only be looked at as a long term investment.

Is there an alternative way for the government to increase the income of lower income earners?

The alternative to the failed trickle-down effect theory is the bottom-up theory.

Theoretically, bottom-up economic plan is all about investing in local entrepreneurs and small-scale businesses to spur growth and increase production.

Lack of capital is top of the list of barriers to economic growth for entrepreneurs whilst bottom-up economics gives capital to entrepreneurs who then utilize the capital to create jobs, improve technology, increasing production and ultimately economic growth.

A few years ago, India employed a bottom-up approach with the use of technology to increase the income levels of low income earners and small business owners which transformed India’s economy. Today,India’s GDP registered a growth of 7.6 percent in the second quarter of FY24. India’s GDP growth rate is higher than major economies such as Russia, the USA, China and the UK, which have registered a growth of 5.5 %, 5.2%, 4.9% and 0.6 percent respectively in the same period.

India is a rising economic might as it emerges from a pandemic amid a sluggish world economy.

As part of their bottom up approach, the Indian government incentivized smaller, micro players to grow in such a way that the effect of the growth reaches a larger section of the population and eventually the bigger players.

Rather than China’s way of top-down approach of building 100 new factories that employs thousands, India’s way was to use a single national ID card to get loans and grants to millions of micro businesses scattered throughout the country. The reasoning of policy makers was that if 10 million micro businesses have access to capital that let them start and each hire two more people, that’s 20 million new jobs.

For the first time in modern history, India used technology and concerted schemes to trigger bottom-up growth. With the help of technology the government has managed to disburse vast amounts of benefits at a minimal cost directly to the population that is in need of them.

Along with this, the country introduced legislations that frees up micro level business from unnecessary regulations, enhancing the ease of doing business even at the individual level.

India’s tax restructuring From VAT to GST ensured that the government’s tax collections were higher than before and at the same time served as an incentive for people to pay taxes. The higher tax collections enabled the government to be able to fund loans and grants back to the people who are in need of it.

Whilst the digital wallet scheme in its present form was designed to stimulate domestic consumption and may or may not alleviate the financial crunch of the people in need, the tweaking of the digital wallet scheme, a restructuring of the country’s tax system and de-regularization of legal formalities at the individual level to foster growth of micro and small businesses may well bring about an economic transformation to Thailand from the bottom up.

If Pheu Thai is able to bring about such an economic transformation, their reputation of delivering on economic prosperity will be cemented .
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10 months ago

Land Bridge Project Moves From ‘An Impossibility’ To ‘A Possibility With Challenges’?

Land Bridge project feasibility study passed the vote in parliament last week with 269 lawmakers voting in favor and 147 against the project moving the project from ‘ An Impossibility’ to ‘A Possibility With Challenges’.

Land Bridge is a revisited project and an adaptation of the centuries old Kra canal project, which was to dig a canal across the Isthmus of Kra between Chumphon and Ranong.

However, because the canal would physically separate the country into two, it was always shelved due to national security and several other reasons deeming it ‘An Impossibility’.

Previously, the earlier administration under ex PM Prayuth Chan-ocha came out with a solution that does not divide the country and connects the two ports, Ranong and Chumphon, with a Land Bridge instead. The project included two deep-water ports, a motorway and a railway system. Today, PM Sretha Thavisin has taken over the project and started marketing it vigorously with different countries to raise funds for the project which is estimated at a budget of 1 trillion baht.

In the past, major concerns have been raised in arguments against the project which involves high costs, environmental issues and displacement of locals, existing inefficient logistics network and management system and most importantly, profitability of the project.

In parliament last week, Pita Limjaroenrat, chief adviser to Move Forward Party voiced his opposition to the project and repeated most of the issues that have been put forth earlier by critics of the project.

Will the government be able to overcome these challenges and turn the project into a reality?

A project of this size requires a massive outlay and Thailand needs to look for foreign investment. PM Sretha has pitched the project to several companies from countries such as America, China, Japan , Germany, United Arab Emirates and India. The most interested party so far seems to be DP World, a company based in Dubai that specializes in investments in marine shipping, deep sea ports, logistics and transport.

PM Sretha is confident that getting the investment on board will not be an issue and has gone ahead in setting up a timeframe for the bidding of the contract by construction companies, scheduled for mid 2025. Project is expected to be completed by 2030.

Another concern is that the land bridge project would have a negative impact on the environment affecting Southern Thailand’s tourism and displacing locals.

In today’s world where awareness and emphasis is on environment and ecosystem sustainability, ports now play a vital role in the shipping industry’s broader drive towards decarbonization and environmental guardianship, generating unique strategies and new business models to cope with global green shift transformation.

While the International Maritime Organization(IMO) works with the shipping industry and other global stakeholders to manage the emissions of tankers and colossal container ships, port operators are working with shipowners and operators to ensure ports and other container terminals are supporting industry-wide efforts to decarbonize, reduce waste and mitigate local impacts on marine ecosystems.

Ports can turn to any number of projects to achieve their sustainability goals, from embedding clean energy, electrification to the bunkering of cleaner fuels.

With the industry’s growing emphasis on sustainability, new port facilities need to balance environmental responsibility with economic development. There exists an opportunity for Thailand to build ports based on sustainability as we start off with a clean slate where environment-conscious ideas can be embedded into a project from the very beginning.

There have been concerns raised by locals who fear that their livelihood might be adversely impacted or that they might not receive compensation for land they live on without legal documents. In an acknowledgement to these concerns, Transport Minister Suriya Juangroongruangkit has said that the land bridge contractors must set up compensation funds for such cases.

Perhaps one of the most discouraging reasons given for not going ahead with the project is the fact that Thailand’s current ports have existing inefficient logistics networks and management systems. This reason is discouraging because it implies that we cannot improve or get better to meet new challenges. The way forward should surely be to make certain that we implement the best logistics system and management, prepare the best talent from the start of the project itself , learn from the best and take lessons from our past inefficiencies? Is it not a possibility that the country can overcome this challenge with dedication and determination? Or do we wish to throw in the towel and say while other countries can run their ports efficiently, we are unable to and it is an ‘Impossibility’?

The most important question to be answered though is the question of profitability. Will there be a demand for the services of Thailand’s new ports?

Critics say bypassing the Mallacca Straits may well save sailing time but unloading goods at one end, transporting them onto other ships at the other end could take just as long as sailing through the straits and would actually increase transportation costs. Valid point, but critics are overlooking the fact that Singapore is currently the world’s busiest transshipment hub, with more than 30 million TEUs (Twenty-foot Equivalent Unit container) passing through every year.

What then is the concept of transshipment? Transshipment is when ships carrying goods stop at one distribution port( such as Singapore) to unload goods going to other ports, before loading goods to be transported to their destination port. Transshipment saves time and money as ships make less trips by going to one port, instead of traveling to several ports to load and unload goods.

Therefore, ships do not just refuel at Singapore port and then sail through the Malacca Straits to several ports along the way, they load and unload cargo at the Singapore port which serves as a distribution port and then the goods are transported to various destinations from there to other ports. It stands to reason that if Thailand can unload cargo or load cargo within the same time that it takes Singapore to do so then the saving in sailing time and the waiting time due to choking at the Malacca Straits will add to Thailand’s new ports’ competitive advantage.

Nothing is an impossibility, just challenges, albeit formidable ones, but the big question is whether the country is up to meeting these challenges or not?
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10 months ago

Can ‘Soft Power Labelling’ Turn Into A Powerful ’Soft Power Movement’ ?

The debate on what ‘Soft Power’ means and whether it’s the right usage of the term as intended by Joseph Nye, the former dean of the Harvard Kennedy School of Government, has been going back and forth since PM Srettha Thavisin announced an intention to promote ‘Soft Power’ to spur the economy.

A National Soft Power Strategy Committee has been set up chaired by the premier with Paetongtarn Shinawatra, leader of Pheu Thai party as vice chair.

Paetongtarn has dismissed criticisms on definitions and has acknowledged that many are trying to define ‘Soft Power’ but the definition is not really important as the government is trying to boost the economy through the promotion of ‘Soft Power’ .

The government has set aside a budget of 5.1 billion baht to support initiatives in 11 sectors which are design, fashion, tourism, festivals, sports, cuisine, film, music , arts, books and gaming and is expecting to generate 4 trillion baht, create 20 million jobs and raise household income.

With expected returns like that, does it matter then what ’Soft Power’ means? Or should the emphasis be on achieving it?

Now, Thailand is ‘labeling’ anything that is Thai and that has the ability to pull in the power of money and economic growth, ’Soft Power’. Creating chefs specializing in Thai food or putting up old Thai favorites such as ‘Mango Sticky Rice’ or ‘Tom Yum’ or ‘Elephant Pants’ and labelling them as ‘Soft power’ is a positive starting point as any, as it galvanizes the country and gets the public rallying around it.

However, as the country goes down this path , it shouldn’t be seen as selling old wine in a new bottle repeatedly. Traditional Thai food is now already one of the most popular cuisines where you can find Thai cooking ingredients in the remotest parts of the world. Can anything more be derived by pouring investments into this field? The answer is yes, if the industry develops with creativity and innovation and ‘Soft Power Labeling’ turns into a powerful ‘Soft Power Movement’.

To unleash the full potential of ‘Soft Power’, more needs to be done to bring it out over time and at some point, go beyond labelling conventional assets like traditional Thai food, culture, tourism and festivals etc as ’Soft Power’ and start a ’Soft Power Movement’ to generate talent and most importantly brands.

If one were to look at the ’Soft Powers’ of two other Asian countries, the Anime industry from Japan and the Kpop bands from Korea, they are both inherently Asian but appealing to the West. A blend of their own culture with the modern Western Culture.

‘Soft Power’ can emerge from any industry in a country such as chic and sophisticated fashion brands and labels from France and leading technology brands from America.

The commonality from the above examples of ’Soft Power’ is that they all have global appeal, are innovative ideas that emerged in today’s world, have a modern context and a certain distinct style of their own and lastly have the ability to spin out industries that become a money making hub for the country.

In all cases, the governments were involved in some form or another in promoting talent and brands from the beginning while establishing their country's image when ’Soft Power’ was not even a term defined by Joseph Nye yet.

Thailand has the benefit of knowing what ’Soft Power’ is and can go about building it from the beginning.

The way forward for Thailand would therefore be, as part of the ’Soft Power Movement’, to first create an awareness through our initial ’Soft Power Labeling’ which the policies are geared to do at the moment and then go about implementing the necessary policies for a ’Soft Power Movement’ to bring out a ’Soft Power’ industry or maybe several ’Soft Power Industries’.

A creative economy is based on people’s use of their creative imagination to increase an idea’s value. John Howkins developed the concept in 2001 to describe economic systems where value is based on novel qualities rather than the traditional resources of land, labour and capital. Howkin’s creativity-based model includes all kinds of creativity, whether expressed in art or innovation.

Compared to creative industries, which are limited to specific sectors, the term is used to describe creativity throughout a whole economy. The term increasingly refers to all economic activity that depends on a person’s individual creativity for its economic value whether the result has a cultural element or not. Some observers take the view that creativity is the defining characteristic of developed 21st century economies, just as manufacturing typified 19th and early 20th centuries.

Thai policy makers need to build and implement a new model for the country whereby creativity, thinking out of the box, being different and innovative are traits that need to be nurtured, respected, valued and most importantly rewarded.

Creative thinkers can come from any section of the society but unfortunately many that come from less affluent backgrounds will never see their dreams fly through lack of funding or just having to keep jobs that may not foster their talent but pays the bills. Policies need to be implemented to make sure these talents are nurtured and fostered to ensure the burgeoning of pools of talents in several fields.

Central to the ‘Soft Power Movement’ is the creation of brands.

SMEs must be encouraged and incentivized with the support of the government to build brands based on new ideas, creativity and innovation.

Building brands separates products from Thailand into a class of its own. The power of brands is that people will pay a higher price for the product because of its name.

Take any fashion label who charge exorbitant prices for their products and still generate huge revenue even though there are cheaper knockoffs available in the market.

On the other hand, see the case of ‘Elephant Pants,’ which has been labelled as one of Thailand’s ’Soft Power’. Turns out, most are manufactured in China and Thai manufacturers cannot compete with their pricing. The way to overcome this obstacle is not to compete with Chinese manufacturers on pricing but to bring up numerous Thai brands of fisherman’s pants which are creative, of unique designs, of better quality and finished to perfection.

Churning out such brands will not only be beneficial in terms of increased exports and revenue but will also go towards building up the reputation of the country as a whole, a ‘Brand Thailand’.

The power of a “Soft Power Movement’ is not to be underestimated and can restructure the thinking of how to navigate Thailand to a position of ’Soft Power’ in the world stage.
https://thaimoves.com

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