|
|
 |
|
Viewing report
|
|
|
|
Thailand Defence and Security Report Q4 2011
Business Monitor International, Oct 2011, Pages: 78
Thailand’s recent elections went ahead surprisingly smoothly. The United Front for Democracy Against Dictatorship (UDD) political group or, more specifically, the Pheu Thai Party, won in a landslide victory against the Democrat Coalition. Yingluck Shinawatra was formally appointed as Thailand’s first female prime minister by the king in early August 2011.
The election was surprising, not only for the outcome which was better for the UDD than we had anticipated but also for the aftermath. A month after the election, the new government has settled in surprisingly well, easing tensions with the military and being immediately accepted by the king. Most notably, there has been very little unrest. This alone sent share markets soaring, returning with a surplus after they flinched in anticipation of protests and rioting. Overall, this has been an astounding victory for the ‘red-shirts’ and the Shinawatra backed progressive parties.
The new Pheu Thai government led by Yingluck Shinawatra, the younger sister of exiled former prime minister Thaksin Shinawatra will undoubtedly adopt many of the policy positions of her elder brother’s administaration. Thaksin Shinawatra’s government introduced highly popular and quite successful policies to alleviate rural poverty, the country’s first healthcare scheme, anti-drug laws and massive infrastructure overhauls while reducing public debt from 57% of GDP in 2001 to 41% in 2006. He was re-elected in a 2005 landslide victory where he got the highest voter turnout in Thailand’s history.
The previous Democrat Party ruled Thailand with a heavy hand and oversaw military crackdowns on unrest in the South as well as border skirmishes with Cambodia and Myanmar. It is expected that the new government will instead focus more on diplomatic resolutions and negotiation. To that effect, the Cambodian foreign minister announced that he is pleased with the election results and that he expects the border dispute between Thailand and Cambodia will be settled under the new regime.
The granting of ‘Major non-NATO ally’ status to Thailand by the US and the West in general have opened up access to more advanced weapons systems and will allow arms imports to increase. These new options are likely to be taken full advantage of, as the Thai military looks for new equipment for its counter-insurgent ‘hunter-soldiers’ and as it seeks to better fight the radical Islamic rebels in the south. Additionally, Thailand’s desire to develop an indigenous defence industry through technology transfers is also expected to encourage greater purchases. Arms exports are likely to be non-existent, except for a few surplus articles delivered, such as the Bronco aircraft donated to the Philippines in late 2003.
Thailand’s real GDP growth reached 3.8% y-o-y in Q410, taking full-year 2010 growth to a 15-year high of 7.8%. Notably, inventory restocking made up the bulk of growth, contributing 3.2pp to headline growth, while private consumption made the second largest contribution at 2.6pp. For 2011, we have a cautiously optimistic outlook for the Thai economy, but note that the high base effect from 2010 and the winding down of the inventory restocking cycle will mean that growth will moderate sharply. Currently, we project real GDP growth to slow to 3.6% in 2011 before accelerating to 4.0% in 2012.
Thailand Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Thailand's defence and security industry.
|
|
|
|
