Regional News
Thai City of Udon Thani in the Grip of a Boom
CHIANG RAI – Steel girders jut from the low skyline of the Thai city of Udon Thani near the Laos border as workers lay cement for a new shopping mall, one of many illustrating a boom in the Thai economy beyond the bright lights of Bangkok.
The malls, factories and construction sites in Thailand’s northeast are emerging alongside its farms as a potent economic fuel in one of Asia’s top emerging markets. Growth in Thailand, Southeast Asia’s second-biggest economy, has begun to slow, but the economy of the northeast is in the grip of a boom.
A worker stands on a pile of construction materials at the 168 Platinum mall building site in Udon Thani in northeastern Thailand
The economic renaissance of “Isaan”, Thailand’s poorest and most populous region, has coincided with expansionary policies – from wage increases to farm subsidies – that are enriching an area at the heart of a “red shirt” protest movement that backed Prime Minister Yingluck Shinawatra in a 2011 election.
As a new middle class emerges, investors and companies are taking note. CLSA emerging markets guru Chris Wood cites the region in explaining long-term bets on Thailand.
“There is a macroeconomic ramping up of the northeast,” he said.
The potential may never be realised if a crucial 2.2 trillion baht ($71 billion) infrastructure programme becomes a casualty of the feuding between Yingluck’s ruling Puea Thai Party and its opponents.
But if the plan went ahead, as is generally expected, it would change the entire economic structure of the northeast, said Rahul Bajoria, an economist at Barclays Capital.
“It’s the next entry point for investors and consumers – if they link it up to China, it becomes the entry point to Thailand, not Bangkok,” he said.
“But it’s been difficult for the bureaucracy to execute programmes because they don’t know who will be in power in a year or two.”
Economic growth in the region reached 40 percent from 2007 to 2011, against 23 percent for the country and just 17 percent for greater Bangkok.
A worker welds girders at the 168 Platinum mall construction site in Udon Than
Monthly household income rose 40 percent between 2007 and 2011, the biggest jump of any Thai region. Interviews with businessmen and investment data suggest the trend is continuing.
The number of private investment projects in the northeast rose 49 percent in 2012 from the previous year, with the total amount invested more than doubling to $2.3 billion, according to the Bank of Thailand. Much of it is concentrated in property – from high-rise condominiums to town houses and shopping plazas.
“The northeast has a large population, a dense population, so the income is big,” said Naris Cheyklin, chief financial officer of Central Pattana Pcl, referring to the one-third of Thailand’s 68 million people who live there.
In April, Central Pattana opened a 2.75 billion baht ($88.7 million) mall in Ubon Ratchathani, near the southern tip of Laos, their third in the region.
POLITICALLY DRIVEN BOOM
Politics explains part of what is going on.
Yingluck’s government brought in a nationwide minimum wage of 300 baht ($10) a day in January. In some Isaan provinces, that was an increase of 35 percent, among the biggest gains in the country, on top of a nationwide 40 percent rise in April 2012.
Many workers, such as those building the 168 Platinum Mall in Udon Thani, are happy to return to the northeast for wages that are now on a par with Bangkok’s.
Isaan’s “red shirts” are among the staunchest supporters of Yingluck’s brother, former prime minister Thaksin Shinawatra, who was ousted in a 2006 coup but influences policy from self-imposed exile in Dubai.
People shop at the Landmark Plaza shopping mall in Udon Thani in northeastern Thailand
While in power from 2001, his populist policies – from virtually free healthcare to low-interest loans to the rural poor – made him a hero in Isaan.
The red shirts formed the core of a movement that paralysed Bangkok in April-May 2010 in protest at the government of then Prime Minister Abhisit Vejjajiva and the forces that ousted Thaksin – the traditional Bangkok elite including top generals, royal advisers, business leaders and old-money families.
Those protests were put down with force, but the red shirts got their revenge in the 2011 election and now see the rewards.
“A lot of the boom is upcountry, and that is politically driven, partly, because that’s where Thaksin’s supporters are,” said Wood at CLSA.
The poverty rate in Thailand fell to 13 percent of the population in 2011 from 58 percent in 1990, according to the World Bank, but per capita gross domestic product in Isaan in 2011 was still less than an eighth of that of Bangkok at $1,600 a year, according to the state planning agency, the NESDB.
That is changing. Government policies have pushed up purchasing power by subsidising agricultural products such as rice, tapioca and rubber. Under Yingluck’s government, farmers have been paid 15,000 baht per tonne of unmilled rice, a 50 percent premium over market prices, according to exporters.
“During the Thaksin and Yingluck era, a lot has been given to Isaan, and the amount of money being poured into the region is significantly more than previous governments spent,” said Ittiphol Treewatanasuwan, mayor of Udon Thani, once a U.S. Air Force base for anti-communist operations in Southeast Asia.
Lives are being transformed. Panjaporn Phatanapitoon, general manager of the 168 Platinum Mall, said people in the northeast were now better educated, attitudes were evolving fast and urbanisation would come much more quickly than in Bangkok.
REGIONAL INVESTMENT
The 2006 coup that toppled Thaksin caused years of unrest, but political calm has returned since Yingluck’s election win.
“When we change the politicians, they change the policy. If there are more changes to these policies, it will damage the economy,” said Uthai Uthaisangsuk, a senior vice president at property developer Sansiri Pcl.
Sansiri is developing two $127 million condominium projects in Khon Kaen, 240 miles (380 km) northeast of Bangkok, in 2013 and plans a third for $35 million in 2014.
“At least five years and then we’ll get something done,” Uthai said, highlighting the need for a high-speed train and further infrastructure.
Now such plans are in hand, given impetus by floods that devastated the industrial central region, near Bangkok, in late 2011.
“Logistics providers and consumer products are moving upcountry because of the floods,” said Patan Somburanasin, general manager of TPARK, a logistics company and subsidiary of TICON Industrial Connection Pcl, which is investing up to 2 billion baht in a 79-acre logistics park in the northeastern city of Khon Kaen.
Isaan should also profit as factories and distribution centres move in ahead of an EU-style ASEAN Economic Community (AEC) planned by the Association of Southeast Asian Nations (ASEAN) from late 2015 or 2016.
The AEC’s East-West corridor, a motorway and infrastructure route for trade, will stretch from Vietnam’s Danang port through Laos, Thailand and Myanmar to the Andaman Sea, cutting through the centre of the northeast and its commercial hub of Khon Kaen.
That will support Thailand’s ambitions to position itself as a gateway to China via road and rail links through Laos, itself seeing dramatic economic change.
The infrastructure programme and the urbanisation it will foster, if the plan goes ahead, will support Thai growth into the future, Credit Suisse said in a report, raising its estimate of trend GDP growth in 2014 to 2018 to between 4.5 and 5.0 percent from 4.2 percent.
No wonder, then, that Thai manufacturers such as CP All Pcl , Thai Beverage Pcl and Siam Cement , plus foreign firms with Thai plants such as Panasonic Corp, Kraft Foods Group Inc and Fraser and Neave Ltd are gravitating towards the northeast.
“If you look at all the corporates, every single large cap out there, they don’t talk about Bangkok any more. They talk about provincials,” said Patrick Chang, head of ASEAN equity for BNP Paribas Investment Partners. “The sexy stuff is the provincial urbanisation and the way it impacts consumption.” – By Paul Carsten and Pairat Temphairojana
Thailand’s Immigration Police have detained approximately 26,000 illegal migrant workers from Laos, Myanmar, and Cambodia during an eight-day operation in Bangkok and surrounding regions, according to a Royal Thai Police spokesperson.
Mr Adisorn Keudmeuangkhon of the Bangkok-based Migrant Working Group said the drive was in response to an increasing number of concerns about an influx of illegal migrant labor.
“Some Thai people see that many illegal workers are competing for their job positions in the past few months,” he told me. “That’s why the ministry has to take tougher action.”
Civil strife in Myanmar and the recent implementation of a military conscription have driven thousands of Burmese into Thailand, while severe inflation and limited job opportunities in Laos have also encouraged an influx of workers from that country.
Between June 5 and 12, officials detained and checked 20,111 Myanmar laborers, 1,659 Laotian migrant workers, and 3,971 Cambodian workers, according to the Ministry of Labor.
It marked the start of a 120-day campaign to audit workplaces and arrest unlawful migrant workers, according to the government.
Migrant Workers to be Deported
According to Keudmeuangkhon, undocumented workers face fines ranging from 5,000 to 50,000 Thai baht (US $136 to $1,365), deportation, and a two-year prohibition on re-entering Thailand.
Authorities did not intend to file criminal charges, he claimed.
Authorities raided 1,774 workplaces, according to Moe Gyo, chairman of the Joint Action Committee on Burmese Affairs, which advocates for Myanmar labor rights.
He stated that since the military junta activated conscription, there has been an upsurge in the number of arrests of Myanmar citizens in Thailand who do not have a work permit identity card.
All men aged 18 to 35 and women aged 18 to 27 must serve in the military for at least two years. The first group of 5,000 conscripts summoned by Myanmar’s junta will start duty at the end of this month, military sources told AFP on Monday.
According to Keudmeuangkhon, the bulk of Lao migrant workers in Thailand work as fresh market shopkeepers, restaurant servers, and mall salespeople.
Most people visit Thailand as part of ASEAN’s visa-free policy for tourists, but they stay longer than the 30-day restriction once they find job.
“Employers like to hire Lao migrant workers in the service sector because they can speak fluent Thai,” he told me.
Immigration Police Detain Illegal Migrant Workers
The Thai Cabinet may approve an enhanced program for Thai employers to register their unauthorized foreign workers in July or August. Keudmeuangkhon explained.
Last month, the Thai Ministry of Labor’s Foreign Workers Administration office announced that 268,465 Lao migrant workers were officially working in Thailand.
Baykham Kattiya, Lao Minister of Labor, told Radio Free Asia earlier this month that there are 415,956 migrant workers in other nations, the majority of whom work in Thailand.
According to her, the Lao government believes that over 203,000 persons working outside of the nation lack proper work documents.
However, a Lao official familiar with the labor industry informed Radio Free Asia, a BenarNews-affiliated news station, on June 20 that the number of illegal Lao migrant workers in Thailand and abroad is likely significantly greater.
“They go to other countries as illegal migrant workers through different types of methods – as tourists or students,” said the politician. “Thus, it is hard for the immigration police to collect data on these people.”
Government Officials Responsible for Smuggling in Migrant Workers
Government Officials Responsible for Smuggling in Migrant Workers
Thailand’s Office of Basic Education Commission has initiated an investigation into the electrocution of a 14-year-old student by a water dispenser in a high school. The event happened at noon on Friday, during the high school’s sports day. The victim was a Grade 8 student.
According to local media in Trang Province, the incident occurred when a teacher instructed the pupil to turn off a water dispenser amid a heavy rain.
According to a witness, the child collapsed while strolling with his friend near a water station. The friend claimed he attempted to assist but was also shocked by electricity.
According to reports, the friend then recovered, left the site, and requested assistance from teachers. A teacher ran to the scene and used a towel to pull the boy away by the ankle. He was taken to the hospital, but it was too late, they claimed.
The event sparked criticism from parents and netizens over school safety, as well as the slow response to aid the young youngster.
Mr. Chainarong Changrua, head of Trang-Krabi’s Secondary Educational Service Area Office, told local media on Sunday that forensic officers from Trang Provincial Police had visited the area. They discovered the blown breaker switch behind the water dispenser, he explained.
The breaker was burned out, thus the authorities assumed the disaster was caused by a short circuit that allowed energy to spill to a neighboring power pole. The student also appeared wet and was not wearing shoes when electrocuted.
According to the Office of Basic Education Commission, a probe team will complete its investigation this week.
The student’s father, Mr Pornchai Thepsuwan, 53, claimed he was saddened when he saw his son’s body. The boy (Wayu), was the youngest of two boys, he explained. He stated that following the tragedy, the school director and staff gave financial assistance to the families.
Mr Pornchai also said he would not seek charges against the institution because he believed it was an accident.
Electrical accidents in Thailand
Electrocution instances in Thailand have increased alarmingly in recent years. Many mishaps occur as a result of improper wiring and inadequate maintenance of electrical systems.
Public locations, such as schools and markets, frequently lack adequate safety precautions, putting individuals in danger. In rural areas, antiquated infrastructure exacerbates the situation, resulting in more frequent and serious events.
Although several high-profile cases have brought these challenges to light, genuine progress has been gradual. Furthermore, the rainy season heightens the likelihood of electrical accidents, as water and exposed wires do not mix well.
The government has made steps to strengthen safety standards, but enforcement is patchy. More education on electrical safety could help to reduce these accidents.
Unfortunately, better infrastructure and tougher rules may have prevented many of these incidents. The loss and injuries caused by electrocution are avoidable, emphasizing the need for immediate action.
Over 200 High School Students Facing Sedition Charges in Thailand
Over 200 High School Students Facing Sedition Charges in Thailand
Thailand’s Tourist Police said it is collaborating with embassies from five countries to combat tourist scams and ten criminal gangs in Pattaya. The Tourist Police Bureau, convened a meeting on Thursday Pol Lt Gen Saksira Phuek-am told a press briefing.
Pol Lt Gen Saksira Phuek-am, the Tourist Police bureau commissioner said the participants included ambassadors from South Korea, Ukraine, Russia, India, and Switzerland.
He told the briefing the he had ordered a crackdown on tourist frauds, such as fraudulent or low-quality tour operators and unfair sales of goods and services. Stepped-up operations began on June 19 and will continue until June 25.
He stated that the agency was working with numerous organisations to increase tourists’ confidence in visiting Pattaya.
Gen Saksira spent time on the famed Walking Street speaking with officers on duty and assigned them to seek for members of ten criminal groups known to operate in Pattaya.
Meanwhile, Prime Minister Srettha Thavisin will visit Chon Buri on Saturday to assess the tourism situation. He intends to visit the site of a future Formula One racecourse near Khao Phra Tamnak in Bang Lamung District.
Prime Minister Srettha recently met with Formula One organisers in Italy to examine the potential of including Thailand on the race schedule in the future.
On Sunday, the Prime Minister will pay a visit to Rayong’s U-tapao airport to discuss development on the airport’s land, with the goal of encouraging investment in the Eastern Economic Corridor.
Police Chief Reinstated
In other police news, Pol Gen Torsak Sukvimol has been reinstated as national police chief following the conclusion of an investigation into a highly publicised quarrel, according to Wissanu Krea-ngam, Prime Minister Srettha Thavisin’s counsellor.
Mr Wissanu released the investigation’s findings on Thursday, after the prime minister formed a fact-finding committee chaired by Chatchai Promlert to investigate into the quarrel between Pol Gen Torsak and his deputy, Pol Gen Surachate Hakparn.
The four-month study revealed conflicts and disorder at all levels of the Royal Thai Police, but it was unclear whether these issues arose from a single cause or several causes, according to Mr Wissanu.
The findings revealed that both Pol Gen Torsak and Pol Gen Surachate were involved, with each team contributing to the tensions, he noted.
Mr Wissanu indicated that Pol Gen Surachate was reinstated as deputy national police head on 18 April following his relocation to the Prime Minister’s Office on 20 March. A disciplinary committee was formed to investigate Pol Gen Surachate, and he was ordered temporarily suspended from the police force.
Because there were no further difficulties to explore, it was decided to restore Pol Gen Torsak. He plans to retire on September 30.
On March 20, Mr Srettha abruptly transferred both top police officers to the Prime Minister’s Office in an effort to address the growing schism within the police service.
Kitrat Panphet, Deputy National Police Chief, was subsequently named Acting Police Chief. According to sources, Pol Gen Surachate could face money laundering charges related to online gaming networks.
Source: Bangkok Post
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