Headline summary as of 29th May 2020

News

Updates related to COVID-19:

• Thailand reports 11 newly confirmed cases, a total of 3,076 cases. Out of the total number, 2,945 have been discharged from hospital; 74 are being hospitalised. The death toll is at 57. All the newly confirmed cases are from Kuwait and in state quarantine.
• The CCSA will make a decision to have the 3rd phase of restriction easing today. It is expected that the curfew hours will be from 11.00pm-03.00am and that massage parlour and cinema will be allowed to re-opened. The department store will be allowed to opened until 9pm. Plus, the numbers of people sharing the same table for dining in will be allowed to be up to 4-6 people. Event holding venue (smaller than 20,000 square metres) will be allowed to be re-operated.
• Prasit Watanapa, dean of the Faculty of Medicine at Siriraj Hospital of Mahidol University, warned that a 2nd wave of Covid-19 is possible for Thailand.
• Former Foreign Minister Surakiart Sathirathai did a keynote speech on Thailand and its impacts on Thai Foreign Policy, pointing out the vague post COVID-19 world order, Thai-ASEAN engagements, Thai engagements with major powers, Thai response to food & health security and Thai long-term strategy.—The Standard Economic Forum

Politics

• Exclusive interview from the former Foreign Minister Kasit Piromya. The former top diplomat has criticised the current government for being as corrupt as previous administrations and undermining the country’s democratic system.—Thai Enquirer
• A video clip of a conversation between an army sergeant and his superior went viral after the former lodged a complaint on May 20th with the House committee on law, justice and human rights committee about alleged irregularities in the army’s allowances for soldiers. The superior threatened the sergeant’s military career will be cut short, if he does not adjust himself to fit in the army tradition (not being a whistle-blower).—all media outlet
• The Attorney-General announced decision to not appeal the acquittal by the Criminal Court for Corruption and Misconduct Cases of ousted and self-exiled former Prime Minister Thaksin Shinawatra’s son Panthongtae Shinawatra in connection with money laundering charges related to a Krungthai Bank Plc (KTB) loan scandal.—all media outlet

Business:

 Economic News Summary, 29 May 2020

• National Economic and Social development Council (NESDC) estimates that 8.4 million workers are at risk of unemployment, of which 2.5 million are from the tourism, 1.5 million from industrial and 4.4 million from other service sectors.  Employment in the agricultural sector will also decline due to the drought, with the farm sector is seeing the highest seasonally unemployed workers in 7 years of 370,000 workers. Unemployment changes will be apparent in Q2 and the second half of the year. 
• However, as the economy starts to re-open, NESDC forecasts the 2020 unemployment rate to be 3-4 percent with 2 million unemployed people. To create 200,000 jobs for new graduates, NESDC plans to ask for financial assistance from the government’s 400 billion Baht budget allocated for economic and social rehabilitation. 
• In Q1 2020, Thailand’s unemployment rate was still low at 1.03% of the total workforce (395,000 people), but was an increase from 0.92% YoY.  There are 37.42 million workers employed in Q1, down 0.5 percent YoY, marking the fourth straight quarter of decrease. Source:  https://www.bangkokpost.com/business/1926036/nesdc-14-4m-workers-at-risk
• The Industry Ministry, NESDC and Finance Ministry plan to establish a 5-billion-Baht venture capital fund to provide liquidity to entrepreneurs affected by the pandemic.  The funding will come from the 400 billion Baht allocated for economic and social rehabilitation and will be proposed to the cabinet by July 7. 
• The Industry Ministry is not concerned that electronic companies will move production plants to neighbouring countries.  Global brands, ie: Panasonic, Mitsubishi Electric and Toshiba, assured the ministry they will continue to increase investment in Thailand, particularly in high technology and innovation.  In the Q1 2020, three electronics factories closed in Thailand but 33 new factories opened, creating a net gain of 25,000 jobs.  Source:  https://www.bangkokpost.com/business/1926088/ministry-led-b5bn-venture-capital-fund-moves-ahead
• Nissan Motors (Japan) will be closing its manufacturing plants in Spain and Indonesia, while increasing the activities of its plant in Thailand.  The closure of Nissan’s Indonesian plant will make Thailand its only manufacturing base in ASEAN.  Nissan’s commitment to the country reflected through its previous 10 billion Baht investment in electric vehicles project in Thailand.  This is part of Nissan’s 4-year business plan to restructure its car manufacturing plants worldwide.  Source: https://www.thansettakij.com/content/motor/436348
• Yesterday the Federation of Thai Industries (FTI) met with foreign investors from Japan, Europe and the US, many of whom are interested to co-invest with Thai entrepreneurs because of the pandemic.  Most companies with operations in China are eyeing relocating to Southeast Asia.  Thailand is among the top choice due to its geographical location as well as availability of seaports and basic infrastructure for high-tech industries.  Foreigners have already switched to buying electronic components from Thailand when China was under lockdown. 
• Japan is encouraging its manufacturers to move out of China, with mid-tech manufacturers aiming to move to Thailand due to the cheaper labour.  High-tech industries will re-shore its workers.  Source:  https://www.nationthailand.com/news/30388713
• Paraquat and chlorpyrifos manufacturers/importers have 270 days to destroy their stock, while a 90-day deadline was given to farmers to return the chemicals for destruction as their possession is considered illegal.  Ministry of Agriculture and Cooperatives has set up a working group on the three hazardous agrochemicals to deal with the case.  Guidelines for how to destroy the chemicals will be publicised later. 
• Department of Agriculture faces a challenging job creating a task force to create understanding with local farmers on how to deal with the two banned hazardous chemicals.  The Federation of Safe Agriculture commented that farmers are the ones most affected by the ban.  There is no compensation for farmers although they spent their own money to buy the chemicals.  Source:  https://www.bangkokpost.com/thailand/general/1925892/farmers-given-90-days-to-hand-in-chemicals
• Association of Thai Travel Agents (ATTA) plans to propose three conditions for reviving tourism to the government: open up in July by first allowing coronavirus-free nations to visit without the 14-day quarantine; require a health certificate; and provide a free rapid test on arrival.  This could garner 4 million Chinese visitors and 16 million international tourists this year as targeted by the Tourism Authority of Thailand (TAT).
• During the first two months of reopening, at least 100,000 international tourists will visit Thailand each month (down from 3 million before the outbreak), which will generate 5 billion baht in monthly income. The few months leading to China’s Golden Week in October are crucial for operators to start up their marketing to Chinese tourists.  Chinese tourists during Q1 plunged 60 percent YoY to 1.25 million, with revenue falling by 64 percent to 57.2 billion baht.  Source:  https://www.bangkokpost.com/business/1925980/travel-agents-want-tourists-in-july

Economic Analysis

• Standard Chartered Bank forecasts that Thailand’s GDP will shrink by 13 percent in Q2 YoY and may not be the lowest point, depending on the recurrence of the pandemic outbreak and vaccine development.  Recovery will take two years to return to pre-pandemic level, starting in the second half of 2020.   Domestic demand will gradually recover with Thailand’s reopening in May.  The government is advised to adopt new instruments that are not soft loans to help SMEs.
• The bank projects that year 2020 will witness a 5 percent GDP contraction if a vaccine is commercially available next year; 3 percent contraction if a vaccine is ready this year and a 10 percent contraction if the pandemic recurs.  Source:  https://www.bangkokpost.com/business/1926000/two-year-path-to-prior-growth-seen
• Fitch Ratings speculates that Thailand will face its longest period of contraction since the 1997 Asian Financial crisis. Thailand’s exposure to external demand (exports account for 50 percent of GDP) – and tourism and travel which indirectly account for 22% of economic activity – leaves it vulnerable to the global slump. The full effect of the global tourism slump will become more apparent in the second quarter of this year.  The pace at which domestic activity can recover in the second half of 2020 and 2021 will depend on the effectiveness of policymakers’ stimulus measures, and when the government kick-starts its infrastructure investment.  Source:  https://www.bangkokpost.com/business/1926216/hard-road-to-recovery

ASEAN/World

• Chinese Embassy Bangkok Facebook Page earlier yesterday published a post legitimising the passing of Hong Kong security bills before it was deleted and replaced with a scoop on protests violence by CGTN.

Australia

• Foreign Ministers of Australia, Canada, the UK and the US jointly issued a joint statement condemning the mainland Chinese decision to pass the security law threatening stability and the prosperity of Hong Kong.—VOA Thai