The World This Year

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The World This Year
Thailand: Economic stability despite political instability

  Nuha Aamina
Nuha Aamina is an undergraduate student at the Department of International Relations, Peace and Public Policy, St Joseph's University.

Major Developments in 2023
First, efforts towards economic revival. On 19 September, to boost tourism, Thailand sought to waive visas for arrivals from China and Kazakhstan from 25 September to the end of February. In October, with a target of 28 million, according to government data reported to have 22 million visitors to Thailand, generating THB 927.5 billion. Among these, India has proven to be the fourth largest source of market as 1.2 million arrivals were recorded, after Malaysia, China, and South Korea.

On 10 July, Chinese EV manufacturers proposed to invest 1.4 billion in production facilities. The government aimed to transform 30 per cent of annual vehicle production by 2030. Chinese electric vehicle (EV) giant BYD is making a substantial investment of 17.9 billion baht to establish a new facility in Thailand. This facility will start the production of 150,000 passenger cars annually from 2024 and will be sold in Southeast Asian and European markets. In the first half of 2023, Thailand saw the registration of over thirty-one thousand EVs, surpassing more than three times the total recorded for the entire year of 2022. This surge in EV registrations may be due to the narrowing price gap between EVs and traditional combustion engine cars, facilitated by government subsidies.

On 31 October, to accelerate its railway project as part of the Belt and Road Initiative (BRI), Srettha announced that addressing logistics challenges is a priority for Thailand. The plan involves improving connectivity by integrating the domestic railway system with the China-Laos Railway. This railway line is designed to span from Bangkok, traverse Laos, and reach Yunnan province in China.

On 09 November, according to government data, the Thai investment application expanded to 22 per cent from the previous year. Foreign electronics, food, and auto projects have contributed to the rise. The statement also reported that China has emerged as the biggest investor in projects worth around 97 billion baht, followed by Singapore and Japan in projects costing about 80 billion baht and 43 billion baht, respectively. On 15 November, a government spokesperson announced that the country would receive THB 300 billion worth of investment from well-known firms, namely, Amazon web series, Google and Microsoft.

Second, a controversial election, leading to Srettha of the Pheu Thai becoming Thailand's Prime Minister. On 08 May, the Moving Forward Party and the Pheu Thai emerged as winners in the general elections, with a total win of one hundred and forty-seven and one hundred and thirty-eight seats, respectively. The United Nations Thai Party of Thai Prime Minister Prayuth Chan-ocha acquired thirty-six seats. His former party, Palang Pracharath, acquired around forty seats. The Bhumjaithai Party came in third with a win of seventy seats. 

In July, the Moving Forward Party, with a coalition of eight parties with three hundred and twelve seats in the five hundred-member House of Representatives, lost to the Pheu Thai. Pita, the leader of the MFP, fell short by over 50 votes, primarily due to the support of only 13 senators. Also in July, the Constitutional Court of Thailand declared the temporary suspension of Pita Limjaroenrat, leader of the Moving Forward Part, as he was ineligible to run due to his ownership of shares in a media company, which violates electoral regulations. According to Thai law, members of parliament are prohibited from holding stocks in media companies. On 22 August, Srettha of the Pheu Thai was elected as the next Prime Minister of Thailand, four hundred and eighty-two votes received with seven hundred and eighty-two politicians present and voting.

The Pheu Thai was in the lead of the opinion polls as it did in previous elections, and the Moving Forward rose in popularity among young voters. The reforms introduced by the latter party included the end to monopolies, introduction of same-sex marriage, amendment of the constitution formulated by the previous government into a more democratic one, alter the military conscription to voluntary enlistment in times of war and scrapping of the lese-majesty law, article 112, that prohibits defamation of the royalty and any criticism would lead to fifteen years of punishment. Critics believe Article 112 has often been used as a "political weapon" to "stifle dissent." However, the Senate perceives its role as safeguarding conservative royalist values. Numerous senators expressed their reluctance to vote for Pita as his party advocated for reforming the law that prohibited defamation of the royal family.

Third, the problem of drugs. On 02 June, The United Nations reported a surge in the trafficking of synthetic drugs in East and Southeast Asia, noting the emergence of new smuggling routes for methamphetamine and an expansion in the production of ketamine. On 29 September, in the largest drug haul seized by police in a single operation, 15 million methamphetamine pills, 443 heroin bars, 420 kg crystal methamphetamine and narcotics known as "happy water" and "five-five" were obtained from four men in the Nakhon Pathom province.

In 2022, the government removed the use of cannabis, hemp plants and marijuana from the narcotics list to be used for medicinal purposes. This led to the establishment of many businesses that sold these substances in various forms and even attracted tourism. Marijuana was also a contentious issue in the political arena, with the opposition accusing the ruling pro-military coalition of hastily pushing through decriminalization last year before the elections. Critics argue that this decision has negatively impacted society, particularly the youth. The Pheu Thai and the Moving Forward both adopted an anti-narcotics campaign. This year, Myanmar was recorded to be the largest producer of opium, surprising Afghanistan. According to a UN report, high volumes of methamphetamine are produced in the Golden Triangle, where the borders of Thailand, Laos and Myanmar meet. It is transported from the Shan state in Myanmar and trafficked through Thailand and Laos.

Fourth, a balanced foreign policy. Amid the growing tensions between China and the US, as the former has been seeking ways to expand its influence, such as the Silk Road, Thailand lies in the middle of the two. As trade relations grow between the two, it becomes imperative for Thailand to maintain neutrality and maintain its distance from both countries.

2024: Looking Ahead
The growing foreign investments and tourist arrivals would help improve the economic situation. The visa waivers are likely to attract more people into the country. Thailand is Southeast Asia's primary automobile manufacturer and exporter, with its second-largest market for sales being Indonesia. Japanese car manufacturers have long considered Thailand an extension of their domestic market due to their significant dominance. However, China has overtaken Japan as Thailand's leading foreign investor, driven by BYD's investment in a new plant scheduled to commence operations in 2024. This shift is a result of proactive endeavours by Thai authorities to attract Chinese electric vehicle producers to invest in the country. Thailand may transform into an EV hub. 

About the author
Nuha Aamina is an undergraduate student at the Department of International Relations, Peace and Public Policy, St Joseph's University.

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