Chang Noi is one of the keenest foreign observers of the Thai political scene. Here again he is spot on in his analysis.
A new cold war underway in Thailand
Chang Noi
The Nation, November 26, 2007
The Army seems to have its own view of the current situation in the country, and has defined for itself a prominent role in confronting this situation.
This conclusion comes from various documents that are floating around, the authenticity of which has not been denied. It is confirmed by recent actions and policies which are consistent with this way of thinking.
The Army's analysis of the current situation goes like this. There is a "war for the people" in process, meaning a contest for popular support. On one side is the Army. On the other are politicians, and especially former communist activists who lurk in the background of party politics.
A generation ago, the Army won the cold war in Thailand by dragging the communist rebels back from the jungle to a normal life in the city. But, this analysis contends, the activists have never changed their way of thinking or forsaken their ambitions. They aim to use popular support to grab state power, and then to use state power to implement their own agenda, which includes the overthrow of the monarchy. Although they now seek popular support through the ballot box, this is not significantly different from the old guerrilla strategy of mobilising the villages.
Their tools now are the populist policies offered to the electorate. These policies are designed solely to win popular support and gain election to political office. They do not truly solve the problems of the people. Unless something is done to halt this trend, the Army analysis concludes, Thailand will find itself in the same situation as Nepal where Maoists have built massive popular support and are trying to replace the monarchy.
According to this view, the Army has no greater duty at present than fighting this new cold war. Threats to the country from the outside are insignificant, except for the intrusion of drugs and illegal immigrants. Even the situation in the far South is judged less serious. But the Army seems to be already on the defensive in this "war for the people". It feels it must "win back" the people, especially at the grassroots level.
From this analysis of the situation flow strategies and action plans. Several recent actions seem quite consistent with these plans.
First, to win the "war for the people", the Army must be an exemplary institution which is worthy of the respect and support of the people.
Certainly in recent months the media have carried few or no stories about soldiers engaged in protection rackets, drug dealing, or other misdemeanours. Army radio is currently broadcasting a line which goes like this: the Thai Army is unique amongst the militaries of the world in that it works for the people and is responsible in large part for the country's successful development; this fact has gained acknowledgement all over the world.
Second, the Army must gain the support of other official agencies as allies in this war for the people. Under the conditions created by the coup, Army men have had the opportunity to insert themselves into the workings of government at all levels. The Army must use this position to persuade officials to embrace the view of the current situation outlined above, and to accept the implications for action.
Third, ministries and other bureaucratic agencies must draw up long-terms plans and insist upon following these plans in their day-to-day operations so that politicians who are put in charge of these agencies will not be able to implement the policies they promise to the electorate.
Fourth, as a first stage of regaining popular support, the Army must concentrate on merchants, businessmen, and the middle classes. Programmes with this target have already been launched.
Fifth, the Internal Security Operations Command (Isoc) units at the regional and the provincial level must play the key role in mobilising people at the grass roots to support the Army. These Isoc units can use the kamnan, village headmen, and other official bodies at the local level as their tools to win the "war for the people". The recent changes, which have converted the kamnan and village headmen back from elective to bureaucratic positions, are consistent with this strategy.
Ideally the provincial Isoc units should take control of issues like drugs, illegal migration, terrorism, poverty eradication, drought and flood relief so that these policies are more efficient and help win popular support. To ensure success, Army officers need to be better educated and more politically aware so that they are more effective leaders. Demobbed soldiers should be organised to supplement the serving troops, given that the military budget is still insufficient.
Sixth, if these plans are made known to the public, there is a risk that the Army will be accused of digging up the past and reviving dictatorship. Hence, these plans must be implemented using a softly-softly approach, and winning the support of strategic allies at every point.
The implications of this Army strategy are very deep and wide-ranging. Here only a couple of points can be made.
The urgency to pass the Internal Security Act is clearly linked to this "war for the people", and especially to the aim of using provincial Isoc units to fight this war at the grass roots. The legislators supporting the bill should be aware of this.
These plans were drafted when it still looked possible for the Army to engineer a tame coalition through the ballot box on December 23. As this seems less and less likely, what must the Army do to implement this strategy?
Although the military budget has increased by over 50 per cent in the last fifteen months, largely at the expense of social and economic projects, the Army hopes for more funds to pursue this strategy. The fact these plans have floated into the public domain suggests the Army is far from united behind them.
How can such a blinkered, outdated, fear-ridden, divisive, authoritarian, manipulative approach ever lead in the direction of democracy?
Chang Noi
Sunday, November 25, 2007
Wednesday, July 18, 2007
Baht appreciation: crisis or opportunity?
Shift spotlight from exports
The crux of the 'baht problem' lies in Thailand's persistent current account surplus and the continued focus on export as the main engine driving the economy
By SUPAVUD SAICHEUA
I am surprised that the recent baht appreciation is now referred to as a crisis in the making. I recall numerous occasions in the past in which the United States' Treasury Secretary saw a strengthening US dollar as a reflection of US economic strength and wellbeing. A baht appreciation raises Thailand's purchasing power, enabling us to buy more of anything we want from the rest of the world. Yet, the Bank of Thailand (BoT) is being criticised for incompetently allowing the baht to appreciate. It has also been suggested that the BoT intervene more heavily and immediately cut rates by 1.0-1.5% in order to reverse the baht's appreciation, thus enabling exporters to survive.
I am sure that the Thai public is worried because the prime minister and top ministers are worried. Exporters, who account for 70% of Thailand's GDP, have made it clear that they want the baht weakened. Industry sources point out that thousands of Thai SMEs have already closed down. If the baht strengthens to Bt32/US$1, they said that half of Thailand's SMEs would have to close down and 2.5 million jobs would be immediately threatened.
Indeed, exports have been Thailand's sole engine of growth for the past 18 months. For example, in the first quarter of this year, if net exports were to be zero, then our GDP would have shown no growth at all.
I would argue that the crux of the ''baht problem'' is Thailand's persistent current account surplus that is now no longer needed. This surplus was essential during 1997-2004 when Thailand had to generate excess dollars to repay foreign debt, repay the IMF and build up international reserves lost during the 1997 economic crisis.
Once all the excessive debts had been repaid, Thailand began to attract a moderate level of capital inflow which began since 2004. We suddenly faced a situation in which we had surpluses in both the current and capital accounts _ except for 2005, when misguided diesel subsidies helped incur a current account deficit of $8 billion (267 billion baht).
It is likely that Thailand will see a current account surplus of $10 billion (333.3 billion baht) and capital inflows worth $5-6 billion (200 billion baht).
The point is, we are generating a surplus of dollars, possibly with no end in sight as the dollar itself is also expected to depreciate vis-a-vis all currencies, not just the baht. This is because the US continues to run a current account deficit of about $2 billion (67 billion baht) a day.
Thailand's options
Faced with an unending stream of surpluses, either the BoT absorbs this excess or the baht appreciates in order for the market to clear.
Thailand has been doing a bit of both in recent years. Note that a typical developing country attracts a moderate level of capital inflow which means that it simultaneously runs an offsetting current account deficit which would enable its currency to stabilise.
Looked at another way, a developing country should not have net capital outflows (which means that it is investing in the rest of the world rather than investing in itself) which would have meant an offsetting current account surplus.
It would now appear that the BoT is tiring of accumulating more reserves than it needs, for obvious reasons. First, given the consensus that the dollar would depreciate further, such accumulation can only lead to more forex losses. Second, the need to sterilise the intervention has increased the BoT's baht-denominated debt in excess of one trillion baht versus Thailand's base money of only 800 billion baht. In addition, the $10.5 billion (350 billion baht) in forward dollar position is also a growing burden requiring continuing rollover and added losses to the BoT as the dollar depreciates further.
Option 1: Accumulate dollars
One option (apparently supported by many) is to force the BoT to continue this reserve accumulation indefinitely as a way of stabilising the baht. This would, however, require Thailand to make the legislative changes for excess reserves to be set aside under, say, a government investment corporation of Thailand (GICT) to spend/invest these excess dollars.
The legislative changes will be a challenge, especially accepting the possibility that some of GICT's investments could face losses.
This option is not ideal for two main reasons. First, persistent balance of payments surpluses arising from a policy of undervalued exchange rates would only force the GICT to get bigger, pushing it to eventually make risky investments. If it does not, and returns are low, then the opportunity cost to the Thai economy and people would be large. Second, excess reserves can be seen as a tax on imports. In other words, if the baht was allowed to appreciate, Thai consumers and investors would have enjoyed cheaper imports.
Option 2: Let baht appreciate and reallocate resources
The second choice is to let the baht appreciate and intervene only when the volatility is considered excessive. Here, the idea is to err on the side of caution and intervene modestly, given the already excess reserves and sterilisation burdens.
This option is hardest on exporters and faces the most serious political resistance. Yet, it is likely to be the best solution for the long run since, at the end of the day, there is a need to reallocate resources away from the export sector into the domestic economy.
Thailand's export was 35% of GDP in 1996. It is now twice that because of the need to generate excess dollars as mentioned above. Now that such is no longer needed, an equilibrium can only be restored by a contraction of exports and an expansion of imports, which can be achieved by a nominal baht appreciation. This means that the government and the BoT cannot afford to send out ''false'' signals that it is committed to keeping the baht weak. To do so would only incentivise exporters to stay put. Current criticisms of the BoT (and the Minister of Finance) for inaction are sending such signals to exporters who would be waiting for the baht to be ''defended'' at the level that allows exports to grow, continuing current account surpluses.
This does not mean, however, that the government and BoT should do nothing more. First of all, it is a lesson that too much dependence on exports and too little overall growth is risky. The government seemed contented with 4% growth but this leaves little room for economic shocks such as the baht appreciation. It would be much better to make it a policy target for growth to be around 6%, allowing a cushion to absorb unforeseen shocks.
Second, the BoT has been multi-tasking and this may have come at the expense of core policy objectives. It was keen to prevent property bubbles and set a ceiling on credit-card interest rates. These can be eased to create domestic spending opportunities.
In 2004, the BoT raised fears that mega-projects could have caused excessive current account deficits (which would ironically be much welcomed at the moment).
Third, the government needs to quickly come up with a set of policies and measures that would facilitate the reallocation of resources out of the export sector. This means looking to liberalise domestic sectors in order to create growth and investment opportunities. Of course, the notion that mega-projects are a priority must be more than just talk.
The appreciation of the baht must be seen for what it is: an increase in Thailand's purchasing power which presents us with the opportunity buy the many things we need from the world market.
Option 3: Create domestic inflation
I am afraid that this may be the most enticing option because it minimises the pains of adjustment and may even create euphoria, but there will be payback several years down the road. Calling for massive interest rate cuts would be classified as option 3.
Large interest rate cuts would necessarily mean significant easing of monetary policy since it is necessary to inject more liquidity to bring down interest rates. This monetary easing is likely to induce asset price inflation.
The stock market may be the first to react. Ironically, this could lead to more capital inflows in the short run, requiring even more monetary easing in the hope of dampening the rise of the baht. Subsequently, real estate prices would rise together with an air of exuberance, as positive wealth effect and inflationary expectations take hold. By then (say a year or two from now), headline and core inflation will be rising, bringing up production costs and wages.
Once this occurs, there will be no more worries about a strong baht. Rising domestic production costs will make exports difficult. Indeed, exporters will voluntarily turn inward to supply the domestic market because prices are rising faster here than world markets. Imports will likely surge for the same reason. Thus, Thailand would be able to cut back on its current account deficit through the creation of domestic inflation. For obvious reasons, those on fixed income (the majority in Thailand) will suffer the most from this option. They will see their cost of living go up and eventually a sharp rise in nominal interest rates in order to keep real interest rates positive. Income tax burdens will rise as inflated wages creep up towards higher tax rates. Entrepreneurs, bankers and stock brokers are likely to fare much better in times of inflation.
Conclusion
Thailand is at an important crossroads. Reducing the country's dependency on exports as the sole engine of growth is necessary and inevitable. Procrastination can only further damage the balance sheet of the BoT, making monetary policy management more difficult.
Taking the easy way out by inflating the domestic economy risks diluting Thailand's monetary policy credibility and is likely to hurt the majority through greater inflation risks. The baht's appreciation should be seen for what it is _ an increase in Thailand's purchasing power which needs to be put to good use. The challenge for the government is to create growth opportunities in the domestic economy to facilitate the reallocation of manpower and resources away from the export sector.
Dr Supavud Saicheua is managing director and head of research for Phatra Securities. The views expressed are his own.
The crux of the 'baht problem' lies in Thailand's persistent current account surplus and the continued focus on export as the main engine driving the economy
By SUPAVUD SAICHEUA
I am surprised that the recent baht appreciation is now referred to as a crisis in the making. I recall numerous occasions in the past in which the United States' Treasury Secretary saw a strengthening US dollar as a reflection of US economic strength and wellbeing. A baht appreciation raises Thailand's purchasing power, enabling us to buy more of anything we want from the rest of the world. Yet, the Bank of Thailand (BoT) is being criticised for incompetently allowing the baht to appreciate. It has also been suggested that the BoT intervene more heavily and immediately cut rates by 1.0-1.5% in order to reverse the baht's appreciation, thus enabling exporters to survive.
I am sure that the Thai public is worried because the prime minister and top ministers are worried. Exporters, who account for 70% of Thailand's GDP, have made it clear that they want the baht weakened. Industry sources point out that thousands of Thai SMEs have already closed down. If the baht strengthens to Bt32/US$1, they said that half of Thailand's SMEs would have to close down and 2.5 million jobs would be immediately threatened.
Indeed, exports have been Thailand's sole engine of growth for the past 18 months. For example, in the first quarter of this year, if net exports were to be zero, then our GDP would have shown no growth at all.
I would argue that the crux of the ''baht problem'' is Thailand's persistent current account surplus that is now no longer needed. This surplus was essential during 1997-2004 when Thailand had to generate excess dollars to repay foreign debt, repay the IMF and build up international reserves lost during the 1997 economic crisis.
Once all the excessive debts had been repaid, Thailand began to attract a moderate level of capital inflow which began since 2004. We suddenly faced a situation in which we had surpluses in both the current and capital accounts _ except for 2005, when misguided diesel subsidies helped incur a current account deficit of $8 billion (267 billion baht).
It is likely that Thailand will see a current account surplus of $10 billion (333.3 billion baht) and capital inflows worth $5-6 billion (200 billion baht).
The point is, we are generating a surplus of dollars, possibly with no end in sight as the dollar itself is also expected to depreciate vis-a-vis all currencies, not just the baht. This is because the US continues to run a current account deficit of about $2 billion (67 billion baht) a day.
Thailand's options
Faced with an unending stream of surpluses, either the BoT absorbs this excess or the baht appreciates in order for the market to clear.
Thailand has been doing a bit of both in recent years. Note that a typical developing country attracts a moderate level of capital inflow which means that it simultaneously runs an offsetting current account deficit which would enable its currency to stabilise.
Looked at another way, a developing country should not have net capital outflows (which means that it is investing in the rest of the world rather than investing in itself) which would have meant an offsetting current account surplus.
It would now appear that the BoT is tiring of accumulating more reserves than it needs, for obvious reasons. First, given the consensus that the dollar would depreciate further, such accumulation can only lead to more forex losses. Second, the need to sterilise the intervention has increased the BoT's baht-denominated debt in excess of one trillion baht versus Thailand's base money of only 800 billion baht. In addition, the $10.5 billion (350 billion baht) in forward dollar position is also a growing burden requiring continuing rollover and added losses to the BoT as the dollar depreciates further.
Option 1: Accumulate dollars
One option (apparently supported by many) is to force the BoT to continue this reserve accumulation indefinitely as a way of stabilising the baht. This would, however, require Thailand to make the legislative changes for excess reserves to be set aside under, say, a government investment corporation of Thailand (GICT) to spend/invest these excess dollars.
The legislative changes will be a challenge, especially accepting the possibility that some of GICT's investments could face losses.
This option is not ideal for two main reasons. First, persistent balance of payments surpluses arising from a policy of undervalued exchange rates would only force the GICT to get bigger, pushing it to eventually make risky investments. If it does not, and returns are low, then the opportunity cost to the Thai economy and people would be large. Second, excess reserves can be seen as a tax on imports. In other words, if the baht was allowed to appreciate, Thai consumers and investors would have enjoyed cheaper imports.
Option 2: Let baht appreciate and reallocate resources
The second choice is to let the baht appreciate and intervene only when the volatility is considered excessive. Here, the idea is to err on the side of caution and intervene modestly, given the already excess reserves and sterilisation burdens.
This option is hardest on exporters and faces the most serious political resistance. Yet, it is likely to be the best solution for the long run since, at the end of the day, there is a need to reallocate resources away from the export sector into the domestic economy.
Thailand's export was 35% of GDP in 1996. It is now twice that because of the need to generate excess dollars as mentioned above. Now that such is no longer needed, an equilibrium can only be restored by a contraction of exports and an expansion of imports, which can be achieved by a nominal baht appreciation. This means that the government and the BoT cannot afford to send out ''false'' signals that it is committed to keeping the baht weak. To do so would only incentivise exporters to stay put. Current criticisms of the BoT (and the Minister of Finance) for inaction are sending such signals to exporters who would be waiting for the baht to be ''defended'' at the level that allows exports to grow, continuing current account surpluses.
This does not mean, however, that the government and BoT should do nothing more. First of all, it is a lesson that too much dependence on exports and too little overall growth is risky. The government seemed contented with 4% growth but this leaves little room for economic shocks such as the baht appreciation. It would be much better to make it a policy target for growth to be around 6%, allowing a cushion to absorb unforeseen shocks.
Second, the BoT has been multi-tasking and this may have come at the expense of core policy objectives. It was keen to prevent property bubbles and set a ceiling on credit-card interest rates. These can be eased to create domestic spending opportunities.
In 2004, the BoT raised fears that mega-projects could have caused excessive current account deficits (which would ironically be much welcomed at the moment).
Third, the government needs to quickly come up with a set of policies and measures that would facilitate the reallocation of resources out of the export sector. This means looking to liberalise domestic sectors in order to create growth and investment opportunities. Of course, the notion that mega-projects are a priority must be more than just talk.
The appreciation of the baht must be seen for what it is: an increase in Thailand's purchasing power which presents us with the opportunity buy the many things we need from the world market.
Option 3: Create domestic inflation
I am afraid that this may be the most enticing option because it minimises the pains of adjustment and may even create euphoria, but there will be payback several years down the road. Calling for massive interest rate cuts would be classified as option 3.
Large interest rate cuts would necessarily mean significant easing of monetary policy since it is necessary to inject more liquidity to bring down interest rates. This monetary easing is likely to induce asset price inflation.
The stock market may be the first to react. Ironically, this could lead to more capital inflows in the short run, requiring even more monetary easing in the hope of dampening the rise of the baht. Subsequently, real estate prices would rise together with an air of exuberance, as positive wealth effect and inflationary expectations take hold. By then (say a year or two from now), headline and core inflation will be rising, bringing up production costs and wages.
Once this occurs, there will be no more worries about a strong baht. Rising domestic production costs will make exports difficult. Indeed, exporters will voluntarily turn inward to supply the domestic market because prices are rising faster here than world markets. Imports will likely surge for the same reason. Thus, Thailand would be able to cut back on its current account deficit through the creation of domestic inflation. For obvious reasons, those on fixed income (the majority in Thailand) will suffer the most from this option. They will see their cost of living go up and eventually a sharp rise in nominal interest rates in order to keep real interest rates positive. Income tax burdens will rise as inflated wages creep up towards higher tax rates. Entrepreneurs, bankers and stock brokers are likely to fare much better in times of inflation.
Conclusion
Thailand is at an important crossroads. Reducing the country's dependency on exports as the sole engine of growth is necessary and inevitable. Procrastination can only further damage the balance sheet of the BoT, making monetary policy management more difficult.
Taking the easy way out by inflating the domestic economy risks diluting Thailand's monetary policy credibility and is likely to hurt the majority through greater inflation risks. The baht's appreciation should be seen for what it is _ an increase in Thailand's purchasing power which needs to be put to good use. The challenge for the government is to create growth opportunities in the domestic economy to facilitate the reallocation of manpower and resources away from the export sector.
Dr Supavud Saicheua is managing director and head of research for Phatra Securities. The views expressed are his own.
Playing into insurgents' hands
Shocking conduct by the military
Bangkok Post, 19 July 2007
At first she was shocked. Then she was angry. Now she is more determined to tell the stories of small people in the deep South who are sandwiched between the Muslim militants and security personnel, both ready to kill suspected enemies and the innocent for their own causes. Bangkok Post journalist Supara Janchitfah was on her way back from Kolo Balae, a village in Yala's Bannang Sata district, when a group of armed soldiers surrounded her car, forced her to get out, took her picture and ID card, searched the car and tried to confiscate her documents and camera.
The human rights lawyers in the group and a Japanese reporter in another car also faced the same harassment _ an apparent effort by the military to intimidate the media and human rights activists and to prevent them from giving voice to southern Muslims' grievances. The harassment they faced might have been a small incident in the larger picture of daily killings in the deep South.
But it shows the growing militarisation of the region that has given the men in green a free hand to abuse their power.
The intimidation took place early this week amid the military's operations to get rid of suspected terrorists and their sympathisers through mass arrests and _ as accused by many villagers _ through extrajudicial killings.
In the past few weeks, the military has stepped up its offensive in the three southernmost provinces, leading to the round-up of some 400 ethnic Muslims now detained at various military centres.
It must be pointed out that the military has just closed down one of its intelligence units after it was revealed that many villagers were tortured there for confessions and secret information.
The clean-up operations followed a string of street demonstrations which culminated in a massive protest in Pattani last month. One of their grievances involved the accusation of a rape murder by a group of soldiers.
Due to the media's portrayal of the angry demonstrators as law breakers, the Buddhist majority accused the military of being too soft amid the militants' daily bombings, arson and the killing of innocents. To rescue its image, the military's offensives have been widely advertised as an effective move to curb violence in the restive South.
Many news organisations readily buy the military's story. Not because it is true, but because it is the story we want to hear. But what is really happening down there? The military wants us to believe that all the problems will go away if those believed to be terrorist cells are eliminated.
But can violence end violence when the exploitative structures that nurture local resentment remain intact?
The media cannot answer these questions by following the troops to report on their activities or through reducing the complex southern problems into a black-and-white situation, in which the good soldiers are fighting against the Muslim baddies.
That is why Supara was in Kolo Balae. Nearly 80 villagers there have been arrested; one of them who was separately captured was shot dead during detention. The military reportedly insisted he was shot during a gun battle with a group of militant Muslims who attacked the military convoy. Forensics examination, however, showed he was beaten to death before he was shot.
This is the story that needs to be told.
If we are appalled by the cruelty of Muslim terrorists, we should also be appalled by state-sponsored terrorism. If we are not, we must ask ourselves why?
The South is exploding because two racist nationalisms are clashing head-on. If peace is our goal, the media needs to make both sides understand this by exposing the truth. By impeding the media's efforts to tell the truth, or by manoeuvring the media to tell only one side of the story, the military is itself obstructing peace.
Sanitsuda Ekachai is Assistant Editor (Outlook), Bangkok Post.
Bangkok Post, 19 July 2007
At first she was shocked. Then she was angry. Now she is more determined to tell the stories of small people in the deep South who are sandwiched between the Muslim militants and security personnel, both ready to kill suspected enemies and the innocent for their own causes. Bangkok Post journalist Supara Janchitfah was on her way back from Kolo Balae, a village in Yala's Bannang Sata district, when a group of armed soldiers surrounded her car, forced her to get out, took her picture and ID card, searched the car and tried to confiscate her documents and camera.
The human rights lawyers in the group and a Japanese reporter in another car also faced the same harassment _ an apparent effort by the military to intimidate the media and human rights activists and to prevent them from giving voice to southern Muslims' grievances. The harassment they faced might have been a small incident in the larger picture of daily killings in the deep South.
But it shows the growing militarisation of the region that has given the men in green a free hand to abuse their power.
The intimidation took place early this week amid the military's operations to get rid of suspected terrorists and their sympathisers through mass arrests and _ as accused by many villagers _ through extrajudicial killings.
In the past few weeks, the military has stepped up its offensive in the three southernmost provinces, leading to the round-up of some 400 ethnic Muslims now detained at various military centres.
It must be pointed out that the military has just closed down one of its intelligence units after it was revealed that many villagers were tortured there for confessions and secret information.
The clean-up operations followed a string of street demonstrations which culminated in a massive protest in Pattani last month. One of their grievances involved the accusation of a rape murder by a group of soldiers.
Due to the media's portrayal of the angry demonstrators as law breakers, the Buddhist majority accused the military of being too soft amid the militants' daily bombings, arson and the killing of innocents. To rescue its image, the military's offensives have been widely advertised as an effective move to curb violence in the restive South.
Many news organisations readily buy the military's story. Not because it is true, but because it is the story we want to hear. But what is really happening down there? The military wants us to believe that all the problems will go away if those believed to be terrorist cells are eliminated.
But can violence end violence when the exploitative structures that nurture local resentment remain intact?
The media cannot answer these questions by following the troops to report on their activities or through reducing the complex southern problems into a black-and-white situation, in which the good soldiers are fighting against the Muslim baddies.
That is why Supara was in Kolo Balae. Nearly 80 villagers there have been arrested; one of them who was separately captured was shot dead during detention. The military reportedly insisted he was shot during a gun battle with a group of militant Muslims who attacked the military convoy. Forensics examination, however, showed he was beaten to death before he was shot.
This is the story that needs to be told.
If we are appalled by the cruelty of Muslim terrorists, we should also be appalled by state-sponsored terrorism. If we are not, we must ask ourselves why?
The South is exploding because two racist nationalisms are clashing head-on. If peace is our goal, the media needs to make both sides understand this by exposing the truth. By impeding the media's efforts to tell the truth, or by manoeuvring the media to tell only one side of the story, the military is itself obstructing peace.
Sanitsuda Ekachai is Assistant Editor (Outlook), Bangkok Post.
Balancing Security and Liberty
A fine article by The Nation's Kavi.
Regional perspective: Our next trick: balancing security and liberty
Over the weekend, Prime Minister Surayud Chulanond tried to quell the growing outcry from civil society organisations over the new national security law, which was passed by the Cabinet recently
Published on July 16, 2007
He said the law would not proceed if all contentious points were not settled. For the Buddha's sake, he should have said that a long time ago. It is hard to understand why the government has to wait until matters reach boiling point before it tries to cool things down.
Essentially it boils down to a need for trust and a mutually binding consultative process between the government and the people, which is lacking at the moment. Surayud is trying to reassure the public that there is a need for a new security law to replace the existing martial law, emergency decrees and other security related laws. Sad but true, the government should have known full well that such draconian security legislation would need widespread and transparent public debate before it could be decided.
If the law is implemented as is, it would literally turn the country into a banana republic under the control of the Army - the image we often see in cheap Hollywood movies. This will further reinforce the current widespread belief that the coup leaders are not different from other Third World military leaders, that they are power-hungry generals whose real motive is to usurp and maintain power.
As it turns out, the new law has been pushed hard for by the Council for National Security (CNS) as it is a veil to embed the army in running national affairs, with or without emergencies. It combines two separate proposed laws. One, drafted by the National Security Council (NSC), has been pending since the previous government and deals mainly with measures and official power to counter terrorist activities and threats inside the country. The other draft was prepared by the Internal Security Operations Command (ISOC) to cope with issues affecting so-called national security. The ISOC draft trumpeted concerns over counter-terrorism measures. In this case, all security concerns are local. At it stands today, the bill could become an all encompassing security law. It empowers the Army chief, in his capacity as director of the ISOC, to pre-empt any plan or perceived action affecting national security - something which has never been tried before. It completely ignores the due process of law and parliamentary process. Previously, the prime minister served as the internal security chief.
It is interesting to note the surge of ISOC activities in recent years. This once most-feared organisation has been under scrutiny for decades since communist insurgents no longer pose a threat. In the 1990s, it was reassigned to do counter-narcotics work along the northern frontiers. However, under the Thaksin government, the ISOC network was reactivated and reoriented to serve political tasks assigned by the prime minister, including security in the three southernmost provinces.
After the Constitution Tribunal dissolved Thai Rak Thai, retired general Pallop Klinmanee, the former deputy chief of ISOC, was abruptly called in to help General Sonthi Boonyaratglin, the current ISOC chief, to neutralise anti-government political forces. He did well, and so did ISOC, in containing the public rallies in Bangkok and the provinces. ISOC, which has a widespread network of 700,000 in every village, has suddenly come in from the cold and is prospering in the post-coup period. Just imagine what the ISOC can do in both security and non-security areas. It is the latter in which ISOC is finding a new resilience.
The CNS thought mistakenly that the public would be more supportive of the expanding mandate and role of the Army and ISOC this time around. Unfortunately, this is not the case. Past experiences of ISOC, including numerous atrocities it is alleged to have committed, remain scars on the Thai political memory. Indeed, the Thai Army is learning from Singapore and Malaysia, with their long-standing and draconian internal security acts dating from the 1960s, that these laws are quite useful in quieting dissenting voices.
Of course, every country needs a security law, as does Thailand. But we need a balanced one that provides security for the people and guarantees civil liberty. The government has so far failed to explain the reasoning behind its move. At the very least, the public should be given the opportunity to debate such an important law, which will affect everyone's lives and families. Open public forums, as in past deliberations on people-oriented projects, must be encouraged. After all, the government and CNS must be willing to face the public and explain in detail their rationale. They have done that concerning the coup. What should prevent them from doing so in this case?
The government must delay the implementation of this law as it will further tarnish the country's reputation. If it is enacted, all the government's past efforts in promoting political reform, openness and respect for human rights will ring hollow. It will go against the current public diplomacy that seeks to promote democracy and human rights within Asean and internationally. Thailand's international standing has already suffered irreparable damage, with the ongoing and senseless online censorship and proliferating media self-censorship. The country can no longer afford to violate human rights and civil liberties.
After all, we must not forget Thomas Jefferson: "When the government fears the people, you have liberty. When the people fear the government, you have tyranny."
Kavi Chongkittavorn
Regional perspective: Our next trick: balancing security and liberty
Over the weekend, Prime Minister Surayud Chulanond tried to quell the growing outcry from civil society organisations over the new national security law, which was passed by the Cabinet recently
Published on July 16, 2007
He said the law would not proceed if all contentious points were not settled. For the Buddha's sake, he should have said that a long time ago. It is hard to understand why the government has to wait until matters reach boiling point before it tries to cool things down.
Essentially it boils down to a need for trust and a mutually binding consultative process between the government and the people, which is lacking at the moment. Surayud is trying to reassure the public that there is a need for a new security law to replace the existing martial law, emergency decrees and other security related laws. Sad but true, the government should have known full well that such draconian security legislation would need widespread and transparent public debate before it could be decided.
If the law is implemented as is, it would literally turn the country into a banana republic under the control of the Army - the image we often see in cheap Hollywood movies. This will further reinforce the current widespread belief that the coup leaders are not different from other Third World military leaders, that they are power-hungry generals whose real motive is to usurp and maintain power.
As it turns out, the new law has been pushed hard for by the Council for National Security (CNS) as it is a veil to embed the army in running national affairs, with or without emergencies. It combines two separate proposed laws. One, drafted by the National Security Council (NSC), has been pending since the previous government and deals mainly with measures and official power to counter terrorist activities and threats inside the country. The other draft was prepared by the Internal Security Operations Command (ISOC) to cope with issues affecting so-called national security. The ISOC draft trumpeted concerns over counter-terrorism measures. In this case, all security concerns are local. At it stands today, the bill could become an all encompassing security law. It empowers the Army chief, in his capacity as director of the ISOC, to pre-empt any plan or perceived action affecting national security - something which has never been tried before. It completely ignores the due process of law and parliamentary process. Previously, the prime minister served as the internal security chief.
It is interesting to note the surge of ISOC activities in recent years. This once most-feared organisation has been under scrutiny for decades since communist insurgents no longer pose a threat. In the 1990s, it was reassigned to do counter-narcotics work along the northern frontiers. However, under the Thaksin government, the ISOC network was reactivated and reoriented to serve political tasks assigned by the prime minister, including security in the three southernmost provinces.
After the Constitution Tribunal dissolved Thai Rak Thai, retired general Pallop Klinmanee, the former deputy chief of ISOC, was abruptly called in to help General Sonthi Boonyaratglin, the current ISOC chief, to neutralise anti-government political forces. He did well, and so did ISOC, in containing the public rallies in Bangkok and the provinces. ISOC, which has a widespread network of 700,000 in every village, has suddenly come in from the cold and is prospering in the post-coup period. Just imagine what the ISOC can do in both security and non-security areas. It is the latter in which ISOC is finding a new resilience.
The CNS thought mistakenly that the public would be more supportive of the expanding mandate and role of the Army and ISOC this time around. Unfortunately, this is not the case. Past experiences of ISOC, including numerous atrocities it is alleged to have committed, remain scars on the Thai political memory. Indeed, the Thai Army is learning from Singapore and Malaysia, with their long-standing and draconian internal security acts dating from the 1960s, that these laws are quite useful in quieting dissenting voices.
Of course, every country needs a security law, as does Thailand. But we need a balanced one that provides security for the people and guarantees civil liberty. The government has so far failed to explain the reasoning behind its move. At the very least, the public should be given the opportunity to debate such an important law, which will affect everyone's lives and families. Open public forums, as in past deliberations on people-oriented projects, must be encouraged. After all, the government and CNS must be willing to face the public and explain in detail their rationale. They have done that concerning the coup. What should prevent them from doing so in this case?
The government must delay the implementation of this law as it will further tarnish the country's reputation. If it is enacted, all the government's past efforts in promoting political reform, openness and respect for human rights will ring hollow. It will go against the current public diplomacy that seeks to promote democracy and human rights within Asean and internationally. Thailand's international standing has already suffered irreparable damage, with the ongoing and senseless online censorship and proliferating media self-censorship. The country can no longer afford to violate human rights and civil liberties.
After all, we must not forget Thomas Jefferson: "When the government fears the people, you have liberty. When the people fear the government, you have tyranny."
Kavi Chongkittavorn
Saturday, July 14, 2007
A Coup by Stealth?
Law would be 'a coup by stealth'
Academic slams draft legislation; ex-senators to petition their peers
The Nation, July 15, 2007
The military junta is quietly staging yet another coup d'้tat, turning Thailand into its notorious neighbour, Burma, by trying to pass the draconian internal security bill while the public is preoccupied with debating whether to approve or reject the new draft charter, says a political scientist.
Some former senators are trying to collect the signatures of their peers against the bill.
"This law will give great power to the Internal Security Operation Command [Isoc] and in effect pass the power of government and politicians to the Army. It's a quiet coup and poses the question whether it will lead to Thailand becoming a military state," Chulalongkorn University political scientist Surachart Bamrungsuk said yesterday at a symposium on the proposed Internal Security Act organised by a group of former senators in cooperation with the Matichon newspaper group.
Surachart decried fellow academics who have mostly been quiet about the bill and said the peculiar silence on the part of Thai academics was "very strange". He added that if the bill, which has already been approved by the junta-appointed Cabinet, is approved by the junta-appointed National Legislative Assembly (NLA), human-rights violations by the military will become easy, and this will turn Thailand into another Burma.
Former Tak senator Panas Tasneeyanond, who is representing the Club of Former Senators who served from 2000 to 2006, said the bill was not unlike the anti-communist law during the Cold War and was in itself a "threat to national security".
He said the basic rights of citizens would be curbed under the law. "The law gives immense power to the military and restricts the democratic rule of law. It seeks to re-establish a long-defunct military state," Panas said, referring to the Cold War period when Thailand was run by successive military regimes.
The former senator added that the club would shortly issue a statement opposing the bill and petition Prime Minister Surayud Chulanont, the National Security Council and the Chairman of the National Legislative Assembly.
The former dean of Thammasat University's Law Faculty, Kamchai Chongchakphan, concurred and warned that the right of assembly would be curtailed under the new act and anyone could be put under house arrest by the Isoc director, a post traditionally occupied by the Army chief. Other draconian powers under the law include search and arrest without warrant, intervention in the judicial process to appoint joint police interrogators and the subpoenaing of police investigation documents without being answerable to a court of law and with no legal redress by those affected.
"I can scarcely believe that this law is to be passed for national security or for the people's well-being; it's interesting to speculate whose 'security' it is intended for," Kamchai said, adding that the existing power of the Cabinet to declare a state of emergency granted enough power to deal with any national problem.
Another speaker, human-rights commissioner Jaran Dittha-apichai, said such a law would be unconstitutional, considering that both the Cabinet and the NLA were appointed by the Council for National Security itself. He added that it contravened international treaties on citizens' rights to which Thailand was a signatory and would cause diplomatic problems.
Meanwhile the caretaker leader of the now disbanded Thai Rak Thai Party, Chaturon Chaisang, said the bill would perpetuate military rule because the Army chief would become "all-powerful" and it would no longer be of any relevance whether future prime ministers or cabinets were elected or whether there was a constitution, because everything would be up to the Army, which could order the arrest of any person on a whim.
Chaturon said the law would empower any Army chief to tear up the constitution at a moment's notice and pave the way for a coup.
Academic slams draft legislation; ex-senators to petition their peers
The Nation, July 15, 2007
The military junta is quietly staging yet another coup d'้tat, turning Thailand into its notorious neighbour, Burma, by trying to pass the draconian internal security bill while the public is preoccupied with debating whether to approve or reject the new draft charter, says a political scientist.
Some former senators are trying to collect the signatures of their peers against the bill.
"This law will give great power to the Internal Security Operation Command [Isoc] and in effect pass the power of government and politicians to the Army. It's a quiet coup and poses the question whether it will lead to Thailand becoming a military state," Chulalongkorn University political scientist Surachart Bamrungsuk said yesterday at a symposium on the proposed Internal Security Act organised by a group of former senators in cooperation with the Matichon newspaper group.
Surachart decried fellow academics who have mostly been quiet about the bill and said the peculiar silence on the part of Thai academics was "very strange". He added that if the bill, which has already been approved by the junta-appointed Cabinet, is approved by the junta-appointed National Legislative Assembly (NLA), human-rights violations by the military will become easy, and this will turn Thailand into another Burma.
Former Tak senator Panas Tasneeyanond, who is representing the Club of Former Senators who served from 2000 to 2006, said the bill was not unlike the anti-communist law during the Cold War and was in itself a "threat to national security".
He said the basic rights of citizens would be curbed under the law. "The law gives immense power to the military and restricts the democratic rule of law. It seeks to re-establish a long-defunct military state," Panas said, referring to the Cold War period when Thailand was run by successive military regimes.
The former senator added that the club would shortly issue a statement opposing the bill and petition Prime Minister Surayud Chulanont, the National Security Council and the Chairman of the National Legislative Assembly.
The former dean of Thammasat University's Law Faculty, Kamchai Chongchakphan, concurred and warned that the right of assembly would be curtailed under the new act and anyone could be put under house arrest by the Isoc director, a post traditionally occupied by the Army chief. Other draconian powers under the law include search and arrest without warrant, intervention in the judicial process to appoint joint police interrogators and the subpoenaing of police investigation documents without being answerable to a court of law and with no legal redress by those affected.
"I can scarcely believe that this law is to be passed for national security or for the people's well-being; it's interesting to speculate whose 'security' it is intended for," Kamchai said, adding that the existing power of the Cabinet to declare a state of emergency granted enough power to deal with any national problem.
Another speaker, human-rights commissioner Jaran Dittha-apichai, said such a law would be unconstitutional, considering that both the Cabinet and the NLA were appointed by the Council for National Security itself. He added that it contravened international treaties on citizens' rights to which Thailand was a signatory and would cause diplomatic problems.
Meanwhile the caretaker leader of the now disbanded Thai Rak Thai Party, Chaturon Chaisang, said the bill would perpetuate military rule because the Army chief would become "all-powerful" and it would no longer be of any relevance whether future prime ministers or cabinets were elected or whether there was a constitution, because everything would be up to the Army, which could order the arrest of any person on a whim.
Chaturon said the law would empower any Army chief to tear up the constitution at a moment's notice and pave the way for a coup.
Wednesday, July 11, 2007
Draft Internal Security Act
Draft Internal Security Act
Unofficial translation by Chris Baker
The Internal Security Bill, approved in principle by the Cabinet and now under scrutiny by the Council of State, has following important points are:
1. The bill appears to create an institution or revive an old one (ISOC). That's an illusion. What it does is give lots of extra powers to the army, especially to the army chief.
In the past, the head of ISOC was a separate post with its own secretariat and organization. In this bill, the army chief becomes head of ISOC, his chief of staff heads the secretariat, the regional army chiefs head the branches. The whole point of the bill is to give more powers to the army and especially the army chief.
2 The power are considerable. Look especially at Sections 25 and 26.
Section 25 is a subset of the State of Emergency Decree, cut-and-pasted in here. These powers are supposed to be used only in something like an emergency. Section 26 does not have even that condition. These powers can be used all the time. Most need no warrant, and no reporting.
3. There is almost no check or monitor on the use of these powers. The ISOC head reports to the PM, but there is no mechanism for oversight. The regional and provincial committees are nominally given a monitoring role, but they are all appointed by the army anyway.
4. The officials using these powers are insulated from any liability or prosecution, see sections 36 and 37. Again, these clauses are scissored out of the State of Emergency Decree.
Draft Internal Security Act, June 2007
(unofficial translation, 5 July 2007)
Note: This is the full draft of the Act on Internal Security of… (year) which the Cabinet
approved in principle on 19 June and submitted to the Council of State for scrutiny prior
to further consideration by the National Legislative Assembly
The principle for having an Act on Internal Security
Rationale: At present there are security problems caused by various people or groups of
people. These problems are violent, and may quickly expand to a point they have broad
and complex impact that may affect the independence and integrity of the realm, give rise
to disorder within country, and threaten the peace and contentment of the people. In order
to protect against such threats and to resolve them promptly and completely, it is
appropriate to designate a principal agency with responsibility for internal security,
including integrating and coordinating actions among all government offices, and
promoting participation by people in preserving security and strengthening their own
localities. It is necessary to enact this law in order to guard against threats which may
arise in times of normalcy, and to lay down measures and mechanisms for use at times
when a security threat has arisen in any area in order to regulate the use of power for the
specific purpose according to the level of seriousness of the situation, so that the situation
may be resolved efficiently and with unity.
As it is appropriate to have a law on internal security to maintain public safety and the
security of the nation-state and people.
Section 1. This law is called the Act on Internal Security of … (year)
Section 2. This Act comes into force on the day following its announcement in the
Government Gazette.
Section 3. In this Act 'the maintenance of internal security' means
(1) procedures to ensure that people have a normal way of life, take pride in being Thai,
have love and concern for the Thai culture and realm, uphold independence and the
democratic system with the king as head of state, and that people and all organizations
have unity, strength, and readiness to confront threats to state security that are expected to
arise in both normal and abnormal circumstances;
(2) preventive and suppressive procedures to control situations arising from actions
threatening internal security, and to restore normalcy
'action threatening internal security' means
any action with intent to cause destruction, loss of life, injury, or damage to the property
of the people or the state, including espionage, sabotage, terrorism, transnational crime,
subversion, propaganda, provocation, or incitement to use violence with the intention to
create disorder for the lives of people, or undermine the security of the state.
'government agency' means an office of government, state enterprise, public organization,
local government body, or other agency under the supervision of the state
'government official' means a government servant or employee of a government agency
'competent officer' means a person that the director of internal security appoints to carry
out duties under this Act
Section 4. The maintenance of internal security requires unity of operations among
government agencies, staged procedures to overcome problems according to the severity
of the situation in each area in an appropriate manner, and systems to monitor the use of
power and evaluate the results of operations in order to maintain the happiness of the
people and society, and the security of the country.
Section 5. The prime minister shall take care of the execution of this Act.
Chapter 1. The Internal Security Operations Committee
Section 6. There shall be an Internal Security Operations Committee consisting of the
prime minister as chairman, the minister of defence and minister of the interior as vice
chairmen, the permanent secretary of defence, the permanent secretary of interior, the
permanent secretary of justice, the permanent secretary of foreign affairs, the permanent
secretary of finance, the permanent secretary of social development and human security,
the secretary of the National Security Council, the director of the National Intelligence
Agency, the attorney general, the supreme commander, the commander-in-chief of the
army, the commander-in-chief of the navy, the commander-in-chief of the air force, the
commissioner general of police as members, and the chief of staff of the army as member
and secretary.
Section 7. The Internal Security Operations Committee shall have powers and duties as
follows:
(1) to set the direction of operations in accordance with policies and strategies for internal
security as assigned by the National Security Council, Cabinet, or prime minister;
(2) to assess the situation and propose to the Cabinet measures and operating procedures
relating to the maintenance of internal security;
(3) to prescribe methods to monitor and evaluate operations of the Internal Security
Operations Command according to the master plan and operational plan for the
maintenance of internal security;
(4) to oversee the preparation of an annual report of the Internal Security Operations
Command for submission to the Cabinet;
(5) to issue regulations for operations under this Act;
(6) to appoint Regional Internal Security Operations Committees;
(7) to appoint a person or group of persons as advisers in the conduct of work by
competent officers, or as assistants to competent officers in the conduct of duty under this
Act;
(8) to appoint subcommittees or working groups to undertake duties as assigned;
(9) to undertake other actions which law places within the powers and duties of the
committee.
Section 8. To aid the operations of the committee, subcommittees, or working groups, the
director of internal security may request any government agency, person, or juristic
person to submit documents and information, or provide explanation of facts for
consideration according to necessity.
Chapter 2. The Internal Security Operations Command
Section 9. There shall be an Internal Security Operations Command, known in short as
ISOC, established as an agency under the Prime Minister's Office and reporting directly
to the prime minister, with the commander-in-chief of the army as the director of internal
security with power and responsibility to command government officials to implement
the work of the Internal Security Operations Command, and to approve a master plan and
operational plan for internal security.
Section 10. The Internal Security Operations Command shall have a role as the central
organization for the direction and coordination of policy and strategy for internal security,
and for the restoration of normalcy in times of national emergency.
The internal division of work within the Internal Security Operations Command shall be
arranged by ministerial regulations.
Section 11. The Internal Security Operations Command shall have the duty to draw up
plans, to direct, coordinate, and supervise operations according to the policy and strategy
for internal security, and to resolve problems relating to internal security as assigned by
the National Security Council, Cabinet, or prime minister.
Section 12. The Internal Security Operations Command shall have powers and responsibilities as follows:
(1) to monitor and evaluate threats to internal security in order to help formulate practical
solutions;
(2) to direct, coordinate, oversee, and support actions of related government agencies to
set up security procedures in areas throughout the country, both on land and sea, to
ensure lasting security;
(3) to strengthen loyalty to the monarchy, to create love and unity among the people of
the nation by uniting the power of the masses, and to promote people's participation in
the prevention and solution of various problems which affect internal security, peace and
order in areas within the regions of the country;
(4) to undertake any other actions as assigned by the National Security Council, Cabinet,
or prime minister.
Section 13. There shall be an Internal Security Operations Command Secretariat, known
for short as ISOCS, established as an office within the Internal Security Operations
Command, to serve as the executive office for preparing execution plans, coordinating
and supervising operations within the competence of the Internal Security Operations
Command, with a secretary of the Internal Security Operations Command, known for
short as SISOC, as head of the directorate responsible for overseeing the operations of the
Internal Security Operations Command Secretariat. The chief of the army general staff
shall be the secretary of the Internal Security Operations Command.
Section 14. The director of internal security shall have power to undertake juristic acts,
conduct lawsuits, and perform any actions in connection with lawsuits which are related
to the duty of the Internal Security Operations Command, acting in the name of the
Office of the Undersecretary of the Prime Minister's Office.
Chapter 3. Regional Internal Security Operations Committees
Section 15. There shall be Regional Internal Security Operations Committees in the
regional armies with the regional army commander as chairman and members consisting
of representatives of the attorney general's office or other agencies as the regional army
commander sees fit, not exceeding fifteen members in total.
Section 16. Regional Internal Security Operations Committees shall have powers and
duties as follows:
(1) to make operational plans concerning the maintenance of internal security at the
regional level;
(2) to monitor and evaluate the operations of the Internal Security Operations Command
in the region;
(3) to study proposals and determine upon procedures to resolve situations which affect security in an area, and submit them to the Internal Security Operations Committee;
(4) to set out directions to promote and develop people's participation in maintaining
internal security at the regional level;
(5) to appoint internal security operations committees in the provinces and in Bangkok;
(6) to appoint a person or group of persons as advisers in the conduct of work by
competent officers, or as assistants to competent officers in the conduct of duty;
(7) to appoint subcommittees or working groups to carry out duties as assigned;
(8) to undertake other actions as assigned by Internal Security Operations Command.
Section 17. There shall be a Regional Internal Security Operations Command, known for
short as RISOC, established in each regional army, reporting directly to the Internal
Security Operations Command, with the regional army commander as director of regional
security, known for short as DRISOC, with responsibility for the government work of the
Regional Internal Security Operations Committee, and with power and responsibility to
command government officials in operations of the Regional Internal Security Operations
Command, together with power and duty to study, analyze, research, recommend and
submit reports on results of operations, to make operational plans for the maintenance of
internal security within the area of responsibility, and to undertake other actions as
assigned by the director of internal security.
Chapter 4. Provincial Internal Security Operations Committees
Section 18. There shall be a Provincial Internal Security Operations Committee in each
province with the provincial governor as chairman, and with members comprising
representatives of civilian government agencies, police, army, local government bodies,
the attorney general's office, and up to three expert members recommended by the
provincial governor for appointment by the regional director of internal security, total not
exceeding 15 persons.
Section 19. Provincial Internal Security Operations Committees shall have powers and
duties as follows:
(1) to make operational plans concerning the maintenance of internal security at the
provincial level;
(2) to monitor and evaluate the operations of the Internal Security Operations Command
in the province;
(3) to study proposals and determine upon procedures to resolve situations which affect
security in an area, and submit them to the Regional Internal Security Operations
Committee;
(4) to set out directions to promote and develop people's participation in maintaining
internal security at the provincial level;
(5) to propose the name of a person or group of persons as advisers in the conduct of
work by competent officers, or as assistants to competent officers in the conduct of their
duty, for appointment by the regional director of internal security;
(6) to appoint subcommittees or working groups to carry out duties as assigned;
(7) to undertake other actions as assigned by the Regional Internal Security Operations
Committee.
Chapter 5. Bangkok Internal Security Operations Committee
Section 21. There shall be a Bangkok Internal Security Operations Committee in the
Greater Bangkok area with the governor of Bangkok as chairman, and with members
comprising representatives of civilian government agencies, police, army, local
government bodies, the attorney general's office, and up to three expert members
recommended by the governor of Bangkok for appointment by the regional director of
internal security for region 1, total not exceeding 15 persons.
Section 22. The Bangkok Internal Security Operations Committees shall have powers and
duties as follows:
(1) to make operational plans concerning the maintenance of internal security in the
Greater Bangkok area;
(2) to monitor and evaluate the operations of the Internal Security Operations Command
in the Greater Bangkok area;
(3) to study proposals and determine upon procedures to resolve situations which affect
security in an area, and submit them to the Regional Internal Security Operations
Committee of region 1;
(4) to set out directions to promote and develop people's participation in maintaining
internal security in the Greater Bangkok area;
(5) to propose the name of a person or group of persons as advisers in the conduct of
work by competent officers, or as assistants to competent officers in the conduct of their
duty, for appointment by the regional director of internal security of region 1;
(6) to appoint subcommittees or working groups to carry out duties as assigned;
(7) to undertake other actions as assigned by the Regional Internal Security Operations
Committee of region 1.
Chapter 6. Resolving situations which threaten internal security
Section 24. When an action threatening internal security arises, the Internal Security
Operations Command shall have the duty to maintain internal security and shall have
powers to command government agencies specifically in connection with prevention, suppression, and eradication of actions threatening internal security, for the relief and
assistance of the people.
The director of internal security shall have power to appoint persons as competent
officers to carry out duties of maintaining internal security, and may issues orders to
appoint a person or group or persons as advisers in the conduct of work by competent
officers or as assistants to competent officers in the conduct of their duty to maintain
internal security.
The director of internal security may assign the regional director of security, or the
provincial director of internal security, or the Bangkok director of internal security to
execute the powers under paragraph 2 on his behalf, and be considered the commander of
the relevant competent officers.
Government agencies, government officials, and people in the area shall provide help,
support, and perform any action when called upon by competent officers.
Section 25. In the event of urgent necessity to combat action threatening internal security,
or to prevent a situation becoming worse, the director of internal security may issue
orders as follows:
(1) to prohibit any person taking a weapon, as defined in ministerial regulations, outside a
dwelling place;
(2) to prohibit the use of communication routes or vehicles, or to impose conditions on
the use of communication routes or vehicles;
(3) to prohibit meetings, gatherings, staging of entertainments, or publicity when there
are grounds for suspicion of incitement to any action which contravenes the law;
(4) to prohibit any person from leaving a dwelling place within a designated period,
unless that person has permission from a competent officer or is a person who has been
granted exemption;
(5) to require any person to hand over a weapon, as defined in ministerial regulations, for
temporary safekeeping according to necessity, with the procedures for the handover and
safekeeping of the aforesaid weapon to be governed by appropriate rules;
(6) to require business owners or managers or those responsible for a business or illegal
activity that has employees or other persons involved in the business or activity, to keep a
history and to provide information on comings and goings and dismissals, and to report
on the behavior of the aforesaid persons to competent officers;
(7) to issue an order that the sale, purchase, use, or possession of weapons, articles,
pharmaceuticals, consumer goods, chemicals, or any other equipment that might be used
in action threatening internal security, must be reported or must receive permission from
a competent officer or must comply with conditions laid down by the director of internal
security;
(8) to issue an order for the use of military force to assist civilian officials or police to
resolve a serious incident or to bring a situation under control and rapidly restore peace.
In the conduct of such duty, military officers shall have the same powers and duties as competent officers under this Act, and shall exercise their powers as adequate for the
conditions and within a time period prescribed by the director of internal security, but not
exceeding what is provided under martial law.
An order under paragraph 1 shall specify the duration of the order or conditions
governing the action of competent officers, or may assign competent officers to define
the area and additional details, so as not to inconvenience people more than is appropriate
to resolve the situation.
When an action threatening internal security has ended, the director of internal security
shall promptly cancel orders under this section.
Section 26. For efficiency in the conduct of duty under this Act, the director of internal
security shall issue a notification that competent officers have powers as follows:
(1) to arrest and detain a person under suspicion of being involved in actions threatening
internal security, or of being employed for such, or of publicizing or supporting such
action, or of concealing information about actions threatening internal security, to the
extent necessary to prevent that person taking any action or participating in any action
which will threaten internal security, or to create participation in bringing an end to such
action;
(2) to conduct suppressive operations against a person or group of persons or
organization which give rise to actions threatening internal security;
(3) to issue a letter of inquiry or summons to any person to report to a competent officer,
or appear to give testimony, submit documents or any evidence, when there is reason for
suspicion of action threatening internal security;
(4) to investigate any person, vehicle, dwelling place, edifice or location as necessary
when there is suitable reason for suspicion that there is property kept there which is
illegal or which came from an illegal action or which has been used or will be used in an
action threatening internal security.
(5) to enter any dwelling place or location to investigate in case of suspicion there is a
person who will cause action threatening internal security in hiding, or there is property
kept there which is illegal or which came from an illegal action or which has been used or
will be used in such action or which may be used as evidence to bring charges against
any wrongdoer, when there is reason to believe that without quick action that person will
escape, or that property will be moved, concealed, destroyed or changed from its former
condition.
(6) to seize or confiscate property, documents, or evidence related to action threatening
internal security.
In inquiries under (4) or (5), a civilian government official from grade 3 upwards, or
military officer ranked from second lieutenant, ensign, or second lieutenant (air force)
upwards, or police officer ranked from police sub-lieutenant upwards, shall head the
investigation. If unfinished the inquiry may be carried out at night or outside the normal
operating time of that location, as necessary in order to terminate an action threatening
internal security, or to prevent such an action taking place.
In inquiries under (4) or (5), the competent officer shall demonstrate he is clean before
starting the search, make a report on the result of the search, submit a written report to the
commanding officer, and submit a written report to the person in charge of the dwelling
place or location searched. If there is nobody in charge of the location at the time of the
search, the competent officer shall send a copy of the report to the person in charge as
quickly as possible.
In inquiries under (4), the competent officer must not do anything to exert duress, and
must act in accordance with the Code of Criminal Investigation.
In inquiries under (5), the competent officer shall apply to the court of competent
jurisdiction or to the criminal court to request permission to proceed, except when there is
sufficient reason to believe that, unless action is taken urgently, a document or evidence
connected with wrongdoing will be moved, concealed, destroyed, or changed from its
former condition. A competent officer may seize or confiscate documents or any related
evidence without warrant, but must proceed in accordance with procedures for search in
the Code of Criminal Investigation, and may not proceed at night, except when this is the
normal working time of the location. The conduct of army officers shall conform to laws,
regulations and orders on the use of military force.
Section 27. In the arrest and detention of a suspect under clause 26(1), the competent
officer must apply to the court of competent jurisdiction or the criminal court to request
permission to proceed. When permission is received from the court, the competent officer
shall arrest and detain the suspect for no longer than 7 days. Persons must be detained in
a designated location which is not a police station, detention centre, penal institution or
jail, and not be treated as criminals. In the event it is necessary to detain further to aid the
resolution of an action threatening internal security, the competent officer shall apply to
the court to extend the period of detention for a further 7 days, but not longer than 30
days in total. At the end of that time, any further detention must proceed according to the
Code of Criminal Procedure.
In proceedings under paragraph 1, the competent officer shall make a report on the arrest
and detention of such persons to the court which gave permission under paragraph 1, and
deposit a copy of this report in the office of the competent officer, so that relatives of the
person may request to see the aforesaid report throughout the period the person is
detained.
The application to the court for permission under paragraph 1 will follow the provisions
on the issue of a warrant under the Code of Criminal Procedure mutatis mutandis (with
necessary changes).
Section 28. Regulations, notifications, and orders issued under sections 25, 26, and 27
shall be announced in the Government Gazette on coming into force.
Section 29. When an action threatening internal security has a tendency to become more
violent, or when an action threatening internal security arises from terrorist violence or
international terrorism, the director of internal security shall report the situation to the
prime minister and the prime minister shall immediately assign the duty of resolving the situation to relevant government agencies.
Section 30. To aid the gathering of information or the prevention of actions threatening
internal security, the regional director of internal security, provincial director of internal
security, or Bangkok director of internal security shall have power to appoint competent
officers to attend an interrogation, or to call for a record of the interrogation of a criminal
case.
In proceedings under paragraph 1, if the case is under the jurisdiction of the Department
of Special Investigation, the director of internal security shall have power to appoint
competent officers to attend an interrogation, or to call for a record of the interrogation of
a criminal case.
Section 31. In the event of an action threatening internal security, if the investigating
officer believes that the accused committed the aforesaid crime by mistake or out of
ignorance, or if there is cause not to proceed with the case against any accused, the
investigating officer shall submit records about that accused along with his opinion to the
director of internal security.
If the director of internal security concurs with the opinion of the investigating officer not
to proceed with the case against the accused, the director of internal security shall
prescribe conditions that, in lieu of being charged, the aforesaid accused shall undergo
training at a designated place for a period not exceeding 6 months, and may after the
training have to report to a competent officer from time to time as specified, but for a
period not exceeding one year.
The conditions imposed on an accused in lieu of being charged under paragraph 2 can
only be carried out after the accused has agreed to comply with the conditions. Once the
accused complies completely with all conditions, the accused cannot be charged again for
the same offence.
Section 32. The maintenance of internal security shall use measures with minimum effect
on the rights and freedoms of the individuals involved, with due regard to the protection
and maintenance of the rights, freedoms, peace and order of the general population.
Section 33. The use of power by competent officers under this Act shall not nullify the
power of the military under martial law or under rules, regulations and orders already
announced.
Section 34. In the event that the behaviour of a government official is a threat to internal
security, the director of internal security, regional director of internal security, provincial
director of internal security, or Bangkok director of internal security, with the approval of
the director of internal security, shall exclude the aforesaid government official from a
designated area and prohibit the official from entering and carrying out duty for a
designated time period or under prescribed conditions. The Internal Security Operations
Command shall inform the government office to which the official is attached, with
reasons.
A government official who is ordered excluded from an area under paragraph 1 shall
report to the government agency to which he is attached. That government agency shall
then issue an order dismissing the aforesaid official from his post, or excluding him from
carrying out his duty in the area under paragraph 1.
Section 35. On the appearance of any action affecting internal security, or a criminal
action which may be related or linked to action threatening internal security, competent
officers shall inform the relevant government agencies or government officials to prevent
and suppress the aforesaid action.
Section 36. Regulations, notifications, orders and actions under this Act are not subject to
the law on administrative procedures, or the law on the establishment of the
Administrative Court and procedure for administrative cases.
Section 37. A competent officer or person with the same powers and duties as a
competent officer under this Act is not subject to civil, criminal, or disciplinary liability
arising from the conduct of duty for the resolution or prevention of illegal actions,
provided that the conduct is honest, not discriminatory, not beyond what is appropriate to
the situation, and not beyond what is necessary; but with no abrogation of the rights of
any person who suffers loss to petition for compensation from government according to
the law on liability of officials for wrongful acts.
Section 38. The conduct of competent officers in suppression under this Act is a duty to
protect the nation, religion and king, and is necessary for the security of the nation. In the
event of injury, death, disability, or loss of body parts, apart from benefits already
provided under law, there shall be benefits according to regulations, notifications, and
orders of the Internal Security Operations Command with approval of the Ministry of
Finance.
Chapter 7. Penalties
Section 39. Any person who violates a regulation, notification, or order issued under
sections 25, 26, or 27, or obstructs the conduct of competent officers under sections 26 or
27, is liable to imprisonment not exceeding 2 years, or a fine not exceeding 40,000 baht,
or both.
Unofficial translation by Chris Baker
The Internal Security Bill, approved in principle by the Cabinet and now under scrutiny by the Council of State, has following important points are:
1. The bill appears to create an institution or revive an old one (ISOC). That's an illusion. What it does is give lots of extra powers to the army, especially to the army chief.
In the past, the head of ISOC was a separate post with its own secretariat and organization. In this bill, the army chief becomes head of ISOC, his chief of staff heads the secretariat, the regional army chiefs head the branches. The whole point of the bill is to give more powers to the army and especially the army chief.
2 The power are considerable. Look especially at Sections 25 and 26.
Section 25 is a subset of the State of Emergency Decree, cut-and-pasted in here. These powers are supposed to be used only in something like an emergency. Section 26 does not have even that condition. These powers can be used all the time. Most need no warrant, and no reporting.
3. There is almost no check or monitor on the use of these powers. The ISOC head reports to the PM, but there is no mechanism for oversight. The regional and provincial committees are nominally given a monitoring role, but they are all appointed by the army anyway.
4. The officials using these powers are insulated from any liability or prosecution, see sections 36 and 37. Again, these clauses are scissored out of the State of Emergency Decree.
Draft Internal Security Act, June 2007
(unofficial translation, 5 July 2007)
Note: This is the full draft of the Act on Internal Security of… (year) which the Cabinet
approved in principle on 19 June and submitted to the Council of State for scrutiny prior
to further consideration by the National Legislative Assembly
The principle for having an Act on Internal Security
Rationale: At present there are security problems caused by various people or groups of
people. These problems are violent, and may quickly expand to a point they have broad
and complex impact that may affect the independence and integrity of the realm, give rise
to disorder within country, and threaten the peace and contentment of the people. In order
to protect against such threats and to resolve them promptly and completely, it is
appropriate to designate a principal agency with responsibility for internal security,
including integrating and coordinating actions among all government offices, and
promoting participation by people in preserving security and strengthening their own
localities. It is necessary to enact this law in order to guard against threats which may
arise in times of normalcy, and to lay down measures and mechanisms for use at times
when a security threat has arisen in any area in order to regulate the use of power for the
specific purpose according to the level of seriousness of the situation, so that the situation
may be resolved efficiently and with unity.
As it is appropriate to have a law on internal security to maintain public safety and the
security of the nation-state and people.
Section 1. This law is called the Act on Internal Security of … (year)
Section 2. This Act comes into force on the day following its announcement in the
Government Gazette.
Section 3. In this Act 'the maintenance of internal security' means
(1) procedures to ensure that people have a normal way of life, take pride in being Thai,
have love and concern for the Thai culture and realm, uphold independence and the
democratic system with the king as head of state, and that people and all organizations
have unity, strength, and readiness to confront threats to state security that are expected to
arise in both normal and abnormal circumstances;
(2) preventive and suppressive procedures to control situations arising from actions
threatening internal security, and to restore normalcy
'action threatening internal security' means
any action with intent to cause destruction, loss of life, injury, or damage to the property
of the people or the state, including espionage, sabotage, terrorism, transnational crime,
subversion, propaganda, provocation, or incitement to use violence with the intention to
create disorder for the lives of people, or undermine the security of the state.
'government agency' means an office of government, state enterprise, public organization,
local government body, or other agency under the supervision of the state
'government official' means a government servant or employee of a government agency
'competent officer' means a person that the director of internal security appoints to carry
out duties under this Act
Section 4. The maintenance of internal security requires unity of operations among
government agencies, staged procedures to overcome problems according to the severity
of the situation in each area in an appropriate manner, and systems to monitor the use of
power and evaluate the results of operations in order to maintain the happiness of the
people and society, and the security of the country.
Section 5. The prime minister shall take care of the execution of this Act.
Chapter 1. The Internal Security Operations Committee
Section 6. There shall be an Internal Security Operations Committee consisting of the
prime minister as chairman, the minister of defence and minister of the interior as vice
chairmen, the permanent secretary of defence, the permanent secretary of interior, the
permanent secretary of justice, the permanent secretary of foreign affairs, the permanent
secretary of finance, the permanent secretary of social development and human security,
the secretary of the National Security Council, the director of the National Intelligence
Agency, the attorney general, the supreme commander, the commander-in-chief of the
army, the commander-in-chief of the navy, the commander-in-chief of the air force, the
commissioner general of police as members, and the chief of staff of the army as member
and secretary.
Section 7. The Internal Security Operations Committee shall have powers and duties as
follows:
(1) to set the direction of operations in accordance with policies and strategies for internal
security as assigned by the National Security Council, Cabinet, or prime minister;
(2) to assess the situation and propose to the Cabinet measures and operating procedures
relating to the maintenance of internal security;
(3) to prescribe methods to monitor and evaluate operations of the Internal Security
Operations Command according to the master plan and operational plan for the
maintenance of internal security;
(4) to oversee the preparation of an annual report of the Internal Security Operations
Command for submission to the Cabinet;
(5) to issue regulations for operations under this Act;
(6) to appoint Regional Internal Security Operations Committees;
(7) to appoint a person or group of persons as advisers in the conduct of work by
competent officers, or as assistants to competent officers in the conduct of duty under this
Act;
(8) to appoint subcommittees or working groups to undertake duties as assigned;
(9) to undertake other actions which law places within the powers and duties of the
committee.
Section 8. To aid the operations of the committee, subcommittees, or working groups, the
director of internal security may request any government agency, person, or juristic
person to submit documents and information, or provide explanation of facts for
consideration according to necessity.
Chapter 2. The Internal Security Operations Command
Section 9. There shall be an Internal Security Operations Command, known in short as
ISOC, established as an agency under the Prime Minister's Office and reporting directly
to the prime minister, with the commander-in-chief of the army as the director of internal
security with power and responsibility to command government officials to implement
the work of the Internal Security Operations Command, and to approve a master plan and
operational plan for internal security.
Section 10. The Internal Security Operations Command shall have a role as the central
organization for the direction and coordination of policy and strategy for internal security,
and for the restoration of normalcy in times of national emergency.
The internal division of work within the Internal Security Operations Command shall be
arranged by ministerial regulations.
Section 11. The Internal Security Operations Command shall have the duty to draw up
plans, to direct, coordinate, and supervise operations according to the policy and strategy
for internal security, and to resolve problems relating to internal security as assigned by
the National Security Council, Cabinet, or prime minister.
Section 12. The Internal Security Operations Command shall have powers and responsibilities as follows:
(1) to monitor and evaluate threats to internal security in order to help formulate practical
solutions;
(2) to direct, coordinate, oversee, and support actions of related government agencies to
set up security procedures in areas throughout the country, both on land and sea, to
ensure lasting security;
(3) to strengthen loyalty to the monarchy, to create love and unity among the people of
the nation by uniting the power of the masses, and to promote people's participation in
the prevention and solution of various problems which affect internal security, peace and
order in areas within the regions of the country;
(4) to undertake any other actions as assigned by the National Security Council, Cabinet,
or prime minister.
Section 13. There shall be an Internal Security Operations Command Secretariat, known
for short as ISOCS, established as an office within the Internal Security Operations
Command, to serve as the executive office for preparing execution plans, coordinating
and supervising operations within the competence of the Internal Security Operations
Command, with a secretary of the Internal Security Operations Command, known for
short as SISOC, as head of the directorate responsible for overseeing the operations of the
Internal Security Operations Command Secretariat. The chief of the army general staff
shall be the secretary of the Internal Security Operations Command.
Section 14. The director of internal security shall have power to undertake juristic acts,
conduct lawsuits, and perform any actions in connection with lawsuits which are related
to the duty of the Internal Security Operations Command, acting in the name of the
Office of the Undersecretary of the Prime Minister's Office.
Chapter 3. Regional Internal Security Operations Committees
Section 15. There shall be Regional Internal Security Operations Committees in the
regional armies with the regional army commander as chairman and members consisting
of representatives of the attorney general's office or other agencies as the regional army
commander sees fit, not exceeding fifteen members in total.
Section 16. Regional Internal Security Operations Committees shall have powers and
duties as follows:
(1) to make operational plans concerning the maintenance of internal security at the
regional level;
(2) to monitor and evaluate the operations of the Internal Security Operations Command
in the region;
(3) to study proposals and determine upon procedures to resolve situations which affect security in an area, and submit them to the Internal Security Operations Committee;
(4) to set out directions to promote and develop people's participation in maintaining
internal security at the regional level;
(5) to appoint internal security operations committees in the provinces and in Bangkok;
(6) to appoint a person or group of persons as advisers in the conduct of work by
competent officers, or as assistants to competent officers in the conduct of duty;
(7) to appoint subcommittees or working groups to carry out duties as assigned;
(8) to undertake other actions as assigned by Internal Security Operations Command.
Section 17. There shall be a Regional Internal Security Operations Command, known for
short as RISOC, established in each regional army, reporting directly to the Internal
Security Operations Command, with the regional army commander as director of regional
security, known for short as DRISOC, with responsibility for the government work of the
Regional Internal Security Operations Committee, and with power and responsibility to
command government officials in operations of the Regional Internal Security Operations
Command, together with power and duty to study, analyze, research, recommend and
submit reports on results of operations, to make operational plans for the maintenance of
internal security within the area of responsibility, and to undertake other actions as
assigned by the director of internal security.
Chapter 4. Provincial Internal Security Operations Committees
Section 18. There shall be a Provincial Internal Security Operations Committee in each
province with the provincial governor as chairman, and with members comprising
representatives of civilian government agencies, police, army, local government bodies,
the attorney general's office, and up to three expert members recommended by the
provincial governor for appointment by the regional director of internal security, total not
exceeding 15 persons.
Section 19. Provincial Internal Security Operations Committees shall have powers and
duties as follows:
(1) to make operational plans concerning the maintenance of internal security at the
provincial level;
(2) to monitor and evaluate the operations of the Internal Security Operations Command
in the province;
(3) to study proposals and determine upon procedures to resolve situations which affect
security in an area, and submit them to the Regional Internal Security Operations
Committee;
(4) to set out directions to promote and develop people's participation in maintaining
internal security at the provincial level;
(5) to propose the name of a person or group of persons as advisers in the conduct of
work by competent officers, or as assistants to competent officers in the conduct of their
duty, for appointment by the regional director of internal security;
(6) to appoint subcommittees or working groups to carry out duties as assigned;
(7) to undertake other actions as assigned by the Regional Internal Security Operations
Committee.
Chapter 5. Bangkok Internal Security Operations Committee
Section 21. There shall be a Bangkok Internal Security Operations Committee in the
Greater Bangkok area with the governor of Bangkok as chairman, and with members
comprising representatives of civilian government agencies, police, army, local
government bodies, the attorney general's office, and up to three expert members
recommended by the governor of Bangkok for appointment by the regional director of
internal security for region 1, total not exceeding 15 persons.
Section 22. The Bangkok Internal Security Operations Committees shall have powers and
duties as follows:
(1) to make operational plans concerning the maintenance of internal security in the
Greater Bangkok area;
(2) to monitor and evaluate the operations of the Internal Security Operations Command
in the Greater Bangkok area;
(3) to study proposals and determine upon procedures to resolve situations which affect
security in an area, and submit them to the Regional Internal Security Operations
Committee of region 1;
(4) to set out directions to promote and develop people's participation in maintaining
internal security in the Greater Bangkok area;
(5) to propose the name of a person or group of persons as advisers in the conduct of
work by competent officers, or as assistants to competent officers in the conduct of their
duty, for appointment by the regional director of internal security of region 1;
(6) to appoint subcommittees or working groups to carry out duties as assigned;
(7) to undertake other actions as assigned by the Regional Internal Security Operations
Committee of region 1.
Chapter 6. Resolving situations which threaten internal security
Section 24. When an action threatening internal security arises, the Internal Security
Operations Command shall have the duty to maintain internal security and shall have
powers to command government agencies specifically in connection with prevention, suppression, and eradication of actions threatening internal security, for the relief and
assistance of the people.
The director of internal security shall have power to appoint persons as competent
officers to carry out duties of maintaining internal security, and may issues orders to
appoint a person or group or persons as advisers in the conduct of work by competent
officers or as assistants to competent officers in the conduct of their duty to maintain
internal security.
The director of internal security may assign the regional director of security, or the
provincial director of internal security, or the Bangkok director of internal security to
execute the powers under paragraph 2 on his behalf, and be considered the commander of
the relevant competent officers.
Government agencies, government officials, and people in the area shall provide help,
support, and perform any action when called upon by competent officers.
Section 25. In the event of urgent necessity to combat action threatening internal security,
or to prevent a situation becoming worse, the director of internal security may issue
orders as follows:
(1) to prohibit any person taking a weapon, as defined in ministerial regulations, outside a
dwelling place;
(2) to prohibit the use of communication routes or vehicles, or to impose conditions on
the use of communication routes or vehicles;
(3) to prohibit meetings, gatherings, staging of entertainments, or publicity when there
are grounds for suspicion of incitement to any action which contravenes the law;
(4) to prohibit any person from leaving a dwelling place within a designated period,
unless that person has permission from a competent officer or is a person who has been
granted exemption;
(5) to require any person to hand over a weapon, as defined in ministerial regulations, for
temporary safekeeping according to necessity, with the procedures for the handover and
safekeeping of the aforesaid weapon to be governed by appropriate rules;
(6) to require business owners or managers or those responsible for a business or illegal
activity that has employees or other persons involved in the business or activity, to keep a
history and to provide information on comings and goings and dismissals, and to report
on the behavior of the aforesaid persons to competent officers;
(7) to issue an order that the sale, purchase, use, or possession of weapons, articles,
pharmaceuticals, consumer goods, chemicals, or any other equipment that might be used
in action threatening internal security, must be reported or must receive permission from
a competent officer or must comply with conditions laid down by the director of internal
security;
(8) to issue an order for the use of military force to assist civilian officials or police to
resolve a serious incident or to bring a situation under control and rapidly restore peace.
In the conduct of such duty, military officers shall have the same powers and duties as competent officers under this Act, and shall exercise their powers as adequate for the
conditions and within a time period prescribed by the director of internal security, but not
exceeding what is provided under martial law.
An order under paragraph 1 shall specify the duration of the order or conditions
governing the action of competent officers, or may assign competent officers to define
the area and additional details, so as not to inconvenience people more than is appropriate
to resolve the situation.
When an action threatening internal security has ended, the director of internal security
shall promptly cancel orders under this section.
Section 26. For efficiency in the conduct of duty under this Act, the director of internal
security shall issue a notification that competent officers have powers as follows:
(1) to arrest and detain a person under suspicion of being involved in actions threatening
internal security, or of being employed for such, or of publicizing or supporting such
action, or of concealing information about actions threatening internal security, to the
extent necessary to prevent that person taking any action or participating in any action
which will threaten internal security, or to create participation in bringing an end to such
action;
(2) to conduct suppressive operations against a person or group of persons or
organization which give rise to actions threatening internal security;
(3) to issue a letter of inquiry or summons to any person to report to a competent officer,
or appear to give testimony, submit documents or any evidence, when there is reason for
suspicion of action threatening internal security;
(4) to investigate any person, vehicle, dwelling place, edifice or location as necessary
when there is suitable reason for suspicion that there is property kept there which is
illegal or which came from an illegal action or which has been used or will be used in an
action threatening internal security.
(5) to enter any dwelling place or location to investigate in case of suspicion there is a
person who will cause action threatening internal security in hiding, or there is property
kept there which is illegal or which came from an illegal action or which has been used or
will be used in such action or which may be used as evidence to bring charges against
any wrongdoer, when there is reason to believe that without quick action that person will
escape, or that property will be moved, concealed, destroyed or changed from its former
condition.
(6) to seize or confiscate property, documents, or evidence related to action threatening
internal security.
In inquiries under (4) or (5), a civilian government official from grade 3 upwards, or
military officer ranked from second lieutenant, ensign, or second lieutenant (air force)
upwards, or police officer ranked from police sub-lieutenant upwards, shall head the
investigation. If unfinished the inquiry may be carried out at night or outside the normal
operating time of that location, as necessary in order to terminate an action threatening
internal security, or to prevent such an action taking place.
In inquiries under (4) or (5), the competent officer shall demonstrate he is clean before
starting the search, make a report on the result of the search, submit a written report to the
commanding officer, and submit a written report to the person in charge of the dwelling
place or location searched. If there is nobody in charge of the location at the time of the
search, the competent officer shall send a copy of the report to the person in charge as
quickly as possible.
In inquiries under (4), the competent officer must not do anything to exert duress, and
must act in accordance with the Code of Criminal Investigation.
In inquiries under (5), the competent officer shall apply to the court of competent
jurisdiction or to the criminal court to request permission to proceed, except when there is
sufficient reason to believe that, unless action is taken urgently, a document or evidence
connected with wrongdoing will be moved, concealed, destroyed, or changed from its
former condition. A competent officer may seize or confiscate documents or any related
evidence without warrant, but must proceed in accordance with procedures for search in
the Code of Criminal Investigation, and may not proceed at night, except when this is the
normal working time of the location. The conduct of army officers shall conform to laws,
regulations and orders on the use of military force.
Section 27. In the arrest and detention of a suspect under clause 26(1), the competent
officer must apply to the court of competent jurisdiction or the criminal court to request
permission to proceed. When permission is received from the court, the competent officer
shall arrest and detain the suspect for no longer than 7 days. Persons must be detained in
a designated location which is not a police station, detention centre, penal institution or
jail, and not be treated as criminals. In the event it is necessary to detain further to aid the
resolution of an action threatening internal security, the competent officer shall apply to
the court to extend the period of detention for a further 7 days, but not longer than 30
days in total. At the end of that time, any further detention must proceed according to the
Code of Criminal Procedure.
In proceedings under paragraph 1, the competent officer shall make a report on the arrest
and detention of such persons to the court which gave permission under paragraph 1, and
deposit a copy of this report in the office of the competent officer, so that relatives of the
person may request to see the aforesaid report throughout the period the person is
detained.
The application to the court for permission under paragraph 1 will follow the provisions
on the issue of a warrant under the Code of Criminal Procedure mutatis mutandis (with
necessary changes).
Section 28. Regulations, notifications, and orders issued under sections 25, 26, and 27
shall be announced in the Government Gazette on coming into force.
Section 29. When an action threatening internal security has a tendency to become more
violent, or when an action threatening internal security arises from terrorist violence or
international terrorism, the director of internal security shall report the situation to the
prime minister and the prime minister shall immediately assign the duty of resolving the situation to relevant government agencies.
Section 30. To aid the gathering of information or the prevention of actions threatening
internal security, the regional director of internal security, provincial director of internal
security, or Bangkok director of internal security shall have power to appoint competent
officers to attend an interrogation, or to call for a record of the interrogation of a criminal
case.
In proceedings under paragraph 1, if the case is under the jurisdiction of the Department
of Special Investigation, the director of internal security shall have power to appoint
competent officers to attend an interrogation, or to call for a record of the interrogation of
a criminal case.
Section 31. In the event of an action threatening internal security, if the investigating
officer believes that the accused committed the aforesaid crime by mistake or out of
ignorance, or if there is cause not to proceed with the case against any accused, the
investigating officer shall submit records about that accused along with his opinion to the
director of internal security.
If the director of internal security concurs with the opinion of the investigating officer not
to proceed with the case against the accused, the director of internal security shall
prescribe conditions that, in lieu of being charged, the aforesaid accused shall undergo
training at a designated place for a period not exceeding 6 months, and may after the
training have to report to a competent officer from time to time as specified, but for a
period not exceeding one year.
The conditions imposed on an accused in lieu of being charged under paragraph 2 can
only be carried out after the accused has agreed to comply with the conditions. Once the
accused complies completely with all conditions, the accused cannot be charged again for
the same offence.
Section 32. The maintenance of internal security shall use measures with minimum effect
on the rights and freedoms of the individuals involved, with due regard to the protection
and maintenance of the rights, freedoms, peace and order of the general population.
Section 33. The use of power by competent officers under this Act shall not nullify the
power of the military under martial law or under rules, regulations and orders already
announced.
Section 34. In the event that the behaviour of a government official is a threat to internal
security, the director of internal security, regional director of internal security, provincial
director of internal security, or Bangkok director of internal security, with the approval of
the director of internal security, shall exclude the aforesaid government official from a
designated area and prohibit the official from entering and carrying out duty for a
designated time period or under prescribed conditions. The Internal Security Operations
Command shall inform the government office to which the official is attached, with
reasons.
A government official who is ordered excluded from an area under paragraph 1 shall
report to the government agency to which he is attached. That government agency shall
then issue an order dismissing the aforesaid official from his post, or excluding him from
carrying out his duty in the area under paragraph 1.
Section 35. On the appearance of any action affecting internal security, or a criminal
action which may be related or linked to action threatening internal security, competent
officers shall inform the relevant government agencies or government officials to prevent
and suppress the aforesaid action.
Section 36. Regulations, notifications, orders and actions under this Act are not subject to
the law on administrative procedures, or the law on the establishment of the
Administrative Court and procedure for administrative cases.
Section 37. A competent officer or person with the same powers and duties as a
competent officer under this Act is not subject to civil, criminal, or disciplinary liability
arising from the conduct of duty for the resolution or prevention of illegal actions,
provided that the conduct is honest, not discriminatory, not beyond what is appropriate to
the situation, and not beyond what is necessary; but with no abrogation of the rights of
any person who suffers loss to petition for compensation from government according to
the law on liability of officials for wrongful acts.
Section 38. The conduct of competent officers in suppression under this Act is a duty to
protect the nation, religion and king, and is necessary for the security of the nation. In the
event of injury, death, disability, or loss of body parts, apart from benefits already
provided under law, there shall be benefits according to regulations, notifications, and
orders of the Internal Security Operations Command with approval of the Ministry of
Finance.
Chapter 7. Penalties
Section 39. Any person who violates a regulation, notification, or order issued under
sections 25, 26, or 27, or obstructs the conduct of competent officers under sections 26 or
27, is liable to imprisonment not exceeding 2 years, or a fine not exceeding 40,000 baht,
or both.
History about to repeat itself?
Gen Sonthi eyes political role
By Wassana Nanuam
Bangkok Post, 12 July 2007
The Army chief and coup-maker aims to prevent the return of Thaksin. Long gone is the promise to stay out of politics for two years as history, it seems, is about to repeat itself.
As army chief Gen Sonthi Boonyaratkalin moves closer to retirement on Sept 30, his move into politics is becoming more certain.
Gen Sonthi told a press conference on Sept 20 last year, one day after ousting then-prime minister Thaksin Shinawatra, that the coup makers would not prolong their hold on power.
"We will note in the interim charter that the CDR [Council for Democratic Reform] will not get involved in politics for two years," he said. However, the interim charter, when it was completed, did not contain such a clause.
The CDR later changed its name to the Council for National Security.
Nine months later, Gen Sonthi signalled his intention to enter the race for parliament. Although he never made his plans clear, he also never denied the possibility of a political career.
"I have not made a decision. We'll talk about it when the time is right," is a typical reply.
His remarks have led to the emergence of opponents who believe the military leaders will try to prolong their hold on power, with Gen Sonthi aiming for the prime ministership.
Gen Sonthi is not alone in quietly making plans for his political life. His partners in the junta are active on his behalf too.
Gen Winai Phatthiyakul, the CNS secretary-general and his pre-cadet classmate, is busy persuading former Thai Rak Thai MPs to abandon their old boss Thaksin Shinawatra.
This is a bid to weaken the former ruling party, which controlled the country for five years with solid political support from grassroots voters, especially in the North and Northeast.
Sources revealed that Gen Sonthi also asked assistant army chief and CNS deputy secretary-general Gen Saprang Kalayanamitr to find political allies, along with financiers who can come up with the few billion baht needed to realise his political future. Gen Sonthi's political priority is to prevent Mr Thaksin and the old power clique from coming back and taking their revenge on him.
He doubts the Democrat party, which now has the advantage going into the general election, can cope with the sophisticated and financially robust Mr Thaksin and his followers.
He is following the path of the National Peace-Keeping Council (NPKC) which staged a coup in 1991 and triggered the pro-democracy uprising in May 1992.
He is looking to emulate NPKC key figure Gen Suchinda Kraprayoon, the army chief who led the previous coup on Feb 23, 1991, and then became prime minister.
Gen Saprang, the assistant army chief, is following in the footsteps of Gen Issarapong Noonpakdi.
Gen Issarapong succeeded Gen Suchinda as the army chief. Gen Issarapong was securing the army while Gen Suchinda was securing politics.
History, it seems, is about to repeat itself.
By Wassana Nanuam
Bangkok Post, 12 July 2007
The Army chief and coup-maker aims to prevent the return of Thaksin. Long gone is the promise to stay out of politics for two years as history, it seems, is about to repeat itself.
As army chief Gen Sonthi Boonyaratkalin moves closer to retirement on Sept 30, his move into politics is becoming more certain.
Gen Sonthi told a press conference on Sept 20 last year, one day after ousting then-prime minister Thaksin Shinawatra, that the coup makers would not prolong their hold on power.
"We will note in the interim charter that the CDR [Council for Democratic Reform] will not get involved in politics for two years," he said. However, the interim charter, when it was completed, did not contain such a clause.
The CDR later changed its name to the Council for National Security.
Nine months later, Gen Sonthi signalled his intention to enter the race for parliament. Although he never made his plans clear, he also never denied the possibility of a political career.
"I have not made a decision. We'll talk about it when the time is right," is a typical reply.
His remarks have led to the emergence of opponents who believe the military leaders will try to prolong their hold on power, with Gen Sonthi aiming for the prime ministership.
Gen Sonthi is not alone in quietly making plans for his political life. His partners in the junta are active on his behalf too.
Gen Winai Phatthiyakul, the CNS secretary-general and his pre-cadet classmate, is busy persuading former Thai Rak Thai MPs to abandon their old boss Thaksin Shinawatra.
This is a bid to weaken the former ruling party, which controlled the country for five years with solid political support from grassroots voters, especially in the North and Northeast.
Sources revealed that Gen Sonthi also asked assistant army chief and CNS deputy secretary-general Gen Saprang Kalayanamitr to find political allies, along with financiers who can come up with the few billion baht needed to realise his political future. Gen Sonthi's political priority is to prevent Mr Thaksin and the old power clique from coming back and taking their revenge on him.
He doubts the Democrat party, which now has the advantage going into the general election, can cope with the sophisticated and financially robust Mr Thaksin and his followers.
He is following the path of the National Peace-Keeping Council (NPKC) which staged a coup in 1991 and triggered the pro-democracy uprising in May 1992.
He is looking to emulate NPKC key figure Gen Suchinda Kraprayoon, the army chief who led the previous coup on Feb 23, 1991, and then became prime minister.
Gen Saprang, the assistant army chief, is following in the footsteps of Gen Issarapong Noonpakdi.
Gen Issarapong succeeded Gen Suchinda as the army chief. Gen Issarapong was securing the army while Gen Suchinda was securing politics.
History, it seems, is about to repeat itself.
Thursday, June 28, 2007
Worrying precedent for Thai democracy
Amnesty for junta wins full support
And new clause enables NLA to act as Senate until upper house picked
Article 299 - the controversial part of the draft charter which grants de-facto amnesty to the military junta for staging the coup - won unanimous backing from the Constitution Drafting Assembly (CDA) yesterday without debate.
The assembly also approved the Transitional Provision Article 288, which terminates the power of both the Council for National Security and the Surayud Chulanont government once a new Cabinet is formed after the election.
The assembly also approved in principle a contentious new clause in the Transitional Provisions.
It agreed to extend the life-span of the junta-appointed National Legislative Assembly (NLA) after the election - to allow it to become part of the ad-hoc Senate until a "real" Senate is selected and appointed under rules set by the new charter.
The decision means members of the ad-hoc Senate, appointed by the junta, will play a crucial role in selecting and approving some members of the so-called independent organisations under the constitution - and possibly even in selecting the future Constitution Court judges.
Details of the wording of the extension and transformation of NLA duties beyond the election will be adopted today.
Reacting to this, Sukhum Nualsakul, former rector of Ramkhamhaeng University, said it was normal to appoint a caretaker Senate during a transition period. The country could not function without legislation due to the lack of a Senate.
"It is only during a transition period. There should be no problem," he said.
But Campaign for Popular Democracy secretary-general Suriyasai Katasila felt the idea was "unacceptable". It could be seen as a power extension for the coup-makers, who appointed the NLA members.
"If we arrange a proper time for the election, we can form both the House of Representatives and the Senate around the same time," he said.
Article 299 was passed in a controversial manner - swiftly and without comment. This was despite the fact some concerned citizens said it would set a bad precedent, that it would make the draft charter undemocratic and spur future coups and the abolition of constitutions.
A few CDA members normally vocal on many issues, such as Chirmsak Pinthong, Karun Sai-ngam and Pichian Amnajvoraprasert, kept silent and gave the article a resounding nod.
Article 299 says: "All that is recognised in the Constitution of the Kingdom of Thailand 2006 (temporary version) is legitimate and constitutional; any associated act and action before or after this Constitution is promulgated shall be deemed constitutional."
Only about 10 articles are left to be approved, although all eyes will be on the issue of whether Buddhism will be recognised by the draft charter as the national religion or not. The reading on the issue is likely to take place today.
Pravit Rojanaphruk,
Kornchanok Raksaseri
The Nation
And new clause enables NLA to act as Senate until upper house picked
Article 299 - the controversial part of the draft charter which grants de-facto amnesty to the military junta for staging the coup - won unanimous backing from the Constitution Drafting Assembly (CDA) yesterday without debate.
The assembly also approved the Transitional Provision Article 288, which terminates the power of both the Council for National Security and the Surayud Chulanont government once a new Cabinet is formed after the election.
The assembly also approved in principle a contentious new clause in the Transitional Provisions.
It agreed to extend the life-span of the junta-appointed National Legislative Assembly (NLA) after the election - to allow it to become part of the ad-hoc Senate until a "real" Senate is selected and appointed under rules set by the new charter.
The decision means members of the ad-hoc Senate, appointed by the junta, will play a crucial role in selecting and approving some members of the so-called independent organisations under the constitution - and possibly even in selecting the future Constitution Court judges.
Details of the wording of the extension and transformation of NLA duties beyond the election will be adopted today.
Reacting to this, Sukhum Nualsakul, former rector of Ramkhamhaeng University, said it was normal to appoint a caretaker Senate during a transition period. The country could not function without legislation due to the lack of a Senate.
"It is only during a transition period. There should be no problem," he said.
But Campaign for Popular Democracy secretary-general Suriyasai Katasila felt the idea was "unacceptable". It could be seen as a power extension for the coup-makers, who appointed the NLA members.
"If we arrange a proper time for the election, we can form both the House of Representatives and the Senate around the same time," he said.
Article 299 was passed in a controversial manner - swiftly and without comment. This was despite the fact some concerned citizens said it would set a bad precedent, that it would make the draft charter undemocratic and spur future coups and the abolition of constitutions.
A few CDA members normally vocal on many issues, such as Chirmsak Pinthong, Karun Sai-ngam and Pichian Amnajvoraprasert, kept silent and gave the article a resounding nod.
Article 299 says: "All that is recognised in the Constitution of the Kingdom of Thailand 2006 (temporary version) is legitimate and constitutional; any associated act and action before or after this Constitution is promulgated shall be deemed constitutional."
Only about 10 articles are left to be approved, although all eyes will be on the issue of whether Buddhism will be recognised by the draft charter as the national religion or not. The reading on the issue is likely to take place today.
Pravit Rojanaphruk,
Kornchanok Raksaseri
The Nation
Thursday, June 21, 2007
Can Thais Handle the Truth?
Another great article by Don Sambandaraksa (below).
Don, there is indeed something fundamentally wrong with Thai society. Remember the massacre on 6 October 1976, on the grounds of one of the top universities of Thailand? To this day, the murderers who lynched the students at Thammasat University have never been brought to justice. The police didn't even look for them, although their faces were clear enough in the photos taken by foreign journalists.
The Thai public has never come to terms with the events of that day, preferring to avert its eyes from an aspect of itself it would rather not recognize. Thai society has never done any soul-searching, never called for a truth-finding effort on that day of national shame. "Forget it and move on" seems to be the attitude.
All very well and good, except that it leaves open the possibility that the monstrous rage behind the Thai smile may yet again be unleashed should the necessary circumstances once again arise.
The problems with censorship
DON SAMBANDARAKSA
Bangkok Post Database, Wednesday June 20, 2007
A while back I sat down to talk with someone I respect who was actually pro-censorship - he felt that the situation justified the action. His reasoning was simple: if the ICT Ministry had allowed the video in question to be publicly available, it would lead to so much anger and hatred that people would try and attack, harm and quite probably kill those who created the video. Thus, the authorities had no choice but to try their best to maintain peace and stability in the country by doing what they did. It was not really a question of honour or propriety, but simply one aimed at keeping civil society from falling apart.
Strange. If society is so fragile that one video, no matter how insulting, can turn people into crazed, axe-wielding murderers, then something is fundamentally wrong. Pretending that everything is peaceful is akin to an alcoholic in denial.
The question is, did it work, or did it merely postpone the inevitable? Society seems pretty much in decline today if the antics of some people next to Thammasat university are anything to go by. Thailand is at war. Information warfare, and with lies, half-truths and accusations flying, trust is one of the most difficult items to find. The way governments (note the plural) have long tried to silence dissenting opinion and present the people with only happy thoughts has resulted in a breeding ground of mistrust and suspicion.
I remember one of the first web sites to be censored in Thailand was that of PULO, the terror group down south trying to set up a separate state. Back then, I voiced my opposition to it, not so much from a freedom of speech perspective, but from a pragmatic perspective. By leaving the site up and running, it would be much easier to quietly monitor the activities of the group as well as keep an eye on the nature of public reaction to it, essentially a barometer to gauge the public's opinion of the South. With these sites closed down, people and policy makers alike are left guessing.
The very act of trying to silence a group through heavy handed means gives them an air of credibility that they would not otherwise have. Better let their points of view be aired in public, so that they can be verified or disproved, than to pretend nothing is wrong.
After all, the British government silenced the leaders of the Irish Republican Army for years. Only when this veil was lifted and dialogue began were people able to make an informed decision for themselves and things moved on.
Had this government embarked on a mission of disclosure and truth from day zero, things would not have come to this. By trying to control information - and in a much more ham-fisted way than the previous government at that - the government has only themselves to blame for the lack of trust among the people of Thailand it faces today.
The reason often given, that is it a cultural thing that foreigners do not understand, is simply not good enough. Many Thais, born and bred here, do not understand it either. Why is being honest such a difficult thing? I myself am often left confused by the logic disconnect I face when interviewing individuals of power, and if I, someone with first hand access to these leaders, come away wondering what it was they meant, it is unsurprising that most of the people of Thailand do not have any idea which direction we are heading.
My most recent interview with our esteemed communications and IT leader and his comment on how we will focus on becoming a centre for open source was conspicuous in the silence it generated from the open source community. Not a peep. Not a single comment emailed to me on that, which probably means that nobody took that comment seriously.
Nor does anyone today seem to take the official stance on censorship seriously any more for that matter. The Freedom Against Censorship Thailand (FACT) group puts the number of censored websites at around 11,000 to 17,000 depending on how they are counted. They also claim that the previous government blocked only 2,400 sites prior to the September 19 coup. While this would not have been a disastrous figure in itself, the problem is compounded (or completed) by the way nobody seems to be responsible for it.
In my most recent interview, the ICT minister admitted to around 30 blocks and blamed the rest on either the previous regime or on censors doing censorship without proper authorisation. If anything, the answer was more worrying than the question. Being an authoritarian regime is bad enough, but being in one where nobody is at the helm is arguably even worse. After all, where would you rather live if forced to choose between Cuba and Iraq?
On a side note, FACT held a civil disobedience day recently at Pantip Plaza where activists gave out CDs with the latest MICT blocklist and 41 different programs that can be used to circumvent the Thai government's block. Most of the software can also be downloaded from FACT's web site and in itself should be perfectly legal.
It is also interesting to see security experts in denial when I point out that the censorship has made things much worse and harder to control. Some children I talked to recently told me that TOR (the onion router, a particularly popular and quite zippy way to hide one's identity and avoid censorship) is now everywhere and "everyone" has it installed. Perhaps by not censoring so much, censorship would still be effective, as nobody would have the reason to install this circumventing, anonymising software on their machines in the first place.
I am starting to wonder if things will actually begin to get better; if the next government we have will continue to control the flow of information or if they, like the government we are encumbered with today, continue on autopilot to block, control and censor, and blame everything on their predecessors.
Don, there is indeed something fundamentally wrong with Thai society. Remember the massacre on 6 October 1976, on the grounds of one of the top universities of Thailand? To this day, the murderers who lynched the students at Thammasat University have never been brought to justice. The police didn't even look for them, although their faces were clear enough in the photos taken by foreign journalists.
The Thai public has never come to terms with the events of that day, preferring to avert its eyes from an aspect of itself it would rather not recognize. Thai society has never done any soul-searching, never called for a truth-finding effort on that day of national shame. "Forget it and move on" seems to be the attitude.
All very well and good, except that it leaves open the possibility that the monstrous rage behind the Thai smile may yet again be unleashed should the necessary circumstances once again arise.
The problems with censorship
DON SAMBANDARAKSA
Bangkok Post Database, Wednesday June 20, 2007
A while back I sat down to talk with someone I respect who was actually pro-censorship - he felt that the situation justified the action. His reasoning was simple: if the ICT Ministry had allowed the video in question to be publicly available, it would lead to so much anger and hatred that people would try and attack, harm and quite probably kill those who created the video. Thus, the authorities had no choice but to try their best to maintain peace and stability in the country by doing what they did. It was not really a question of honour or propriety, but simply one aimed at keeping civil society from falling apart.
Strange. If society is so fragile that one video, no matter how insulting, can turn people into crazed, axe-wielding murderers, then something is fundamentally wrong. Pretending that everything is peaceful is akin to an alcoholic in denial.
The question is, did it work, or did it merely postpone the inevitable? Society seems pretty much in decline today if the antics of some people next to Thammasat university are anything to go by. Thailand is at war. Information warfare, and with lies, half-truths and accusations flying, trust is one of the most difficult items to find. The way governments (note the plural) have long tried to silence dissenting opinion and present the people with only happy thoughts has resulted in a breeding ground of mistrust and suspicion.
I remember one of the first web sites to be censored in Thailand was that of PULO, the terror group down south trying to set up a separate state. Back then, I voiced my opposition to it, not so much from a freedom of speech perspective, but from a pragmatic perspective. By leaving the site up and running, it would be much easier to quietly monitor the activities of the group as well as keep an eye on the nature of public reaction to it, essentially a barometer to gauge the public's opinion of the South. With these sites closed down, people and policy makers alike are left guessing.
The very act of trying to silence a group through heavy handed means gives them an air of credibility that they would not otherwise have. Better let their points of view be aired in public, so that they can be verified or disproved, than to pretend nothing is wrong.
After all, the British government silenced the leaders of the Irish Republican Army for years. Only when this veil was lifted and dialogue began were people able to make an informed decision for themselves and things moved on.
Had this government embarked on a mission of disclosure and truth from day zero, things would not have come to this. By trying to control information - and in a much more ham-fisted way than the previous government at that - the government has only themselves to blame for the lack of trust among the people of Thailand it faces today.
The reason often given, that is it a cultural thing that foreigners do not understand, is simply not good enough. Many Thais, born and bred here, do not understand it either. Why is being honest such a difficult thing? I myself am often left confused by the logic disconnect I face when interviewing individuals of power, and if I, someone with first hand access to these leaders, come away wondering what it was they meant, it is unsurprising that most of the people of Thailand do not have any idea which direction we are heading.
My most recent interview with our esteemed communications and IT leader and his comment on how we will focus on becoming a centre for open source was conspicuous in the silence it generated from the open source community. Not a peep. Not a single comment emailed to me on that, which probably means that nobody took that comment seriously.
Nor does anyone today seem to take the official stance on censorship seriously any more for that matter. The Freedom Against Censorship Thailand (FACT) group puts the number of censored websites at around 11,000 to 17,000 depending on how they are counted. They also claim that the previous government blocked only 2,400 sites prior to the September 19 coup. While this would not have been a disastrous figure in itself, the problem is compounded (or completed) by the way nobody seems to be responsible for it.
In my most recent interview, the ICT minister admitted to around 30 blocks and blamed the rest on either the previous regime or on censors doing censorship without proper authorisation. If anything, the answer was more worrying than the question. Being an authoritarian regime is bad enough, but being in one where nobody is at the helm is arguably even worse. After all, where would you rather live if forced to choose between Cuba and Iraq?
On a side note, FACT held a civil disobedience day recently at Pantip Plaza where activists gave out CDs with the latest MICT blocklist and 41 different programs that can be used to circumvent the Thai government's block. Most of the software can also be downloaded from FACT's web site and in itself should be perfectly legal.
It is also interesting to see security experts in denial when I point out that the censorship has made things much worse and harder to control. Some children I talked to recently told me that TOR (the onion router, a particularly popular and quite zippy way to hide one's identity and avoid censorship) is now everywhere and "everyone" has it installed. Perhaps by not censoring so much, censorship would still be effective, as nobody would have the reason to install this circumventing, anonymising software on their machines in the first place.
I am starting to wonder if things will actually begin to get better; if the next government we have will continue to control the flow of information or if they, like the government we are encumbered with today, continue on autopilot to block, control and censor, and blame everything on their predecessors.
Saturday, June 9, 2007
Thailand's economic outlook
Hardest hit will be the grassroots
The state of Thailand's economy appears rather worrisome and the near-term prospects do not look promising. The following is the first of a three-part article on the major economic problems and weaknesses
By CHET CHAOVISIDHA
Bangkok Post, 7-9 June 2007
On the face of it, the current situation pertaining to the economy of Thailand is not as severe as the 1997 financial meltdown and the economic collapse that followed. But the present predicament seems to be wider in scope. Why? Because in the 1997 crisis the real, financial and external sectors collapsed or were near collapse, and yet the public sector was reasonably strong and able to come to the rescue, pulling the whole economy back up on its feet, albeit with the financial assistance of a certain international financial institution. This time, all four sectors are simultaneously plagued with their own particular ills, some more serious than others, although the degree of severity in each individual sector may not be as great as those associated with the three troubled sectors in the previous 1997 crisis; yet some problems appear to be policy-resistant in nature (as will be elucidated).
Nevertheless, the situation has given rise to a great deal of concern, as it has already begun to affect the livelihood of a large portion of the Thai citizenry.
Of major significance is the political instability, manifest by incidents of rallies and protest demonstrations staged by various political and economically-affected groups, and the constant shaping of public opinion abroad against the present administration.
These destabilising activities undoubtedly contribute to the undermining of business and the general public's confidence. They give rise to the concomitant loss of investment incentives, which lead to deferrment of planned direct investment by foreign and domestic investors alike.
Adding to this, the impending general election, tentatively to be held at the end of the year, will bring with it probable changes in economic policy. The unknown factor, combined with the present government's misfiring of several policy actions, represents uncertainty and business risks which would prompt astute investors to put their long-term investment decisions on hold, at least for the time being.
Consequently, only a portion of replacement investment is being undertaken, along with the continuing investment committed earlier.
In the real sector, we are confronted with a number of difficulties. The farm sector is stricken with declining income and a corresponding fall in spending. In addition, it is saddled with a huge amount of household debt, a legacy from the consumption-driven growth policy of the previous administration which relied primarily on debt-creation, geared towards the farm sector and the lower middle class.
The platform was supported by government-owned banks and financial institutions in the form of debt-suspension, liberal lending and policy loans. It has led to the present situation, in which members of the farm sector are clamouring for higher prices for their produce, not only to cover their cost of production but also the burden of interest servicing and repayment of outstanding debts.
The previous government's free-spending and giveaway policy might have been appropriate at the beginning, during which time the economy required an exceptionally strong stimulative policy package to get it back on its feet. Unfortunately, overdoing it by continuing to pursue consumption-driven expansion in economic activities over the next several years of its tenure is the main reason for the farm sector's potential collapse of personal finance. And this will happen soon, as is generally expected, unless proper remedial policy actions are applied in time _ a task which, short of a vigorous support from the public sector's financial resources, cannot be accomplished simply by relying on income generated by current market-determined prices of farm products alone. On top of this, a number of local farm products have succumbed to intense competition from foreign farm imports, to the further detriment of farm income and spending and general economic activities in the farm sector. Saddled with huge debts coupled with declining earnings and slim prospects of future improvement in the economic conditions, the local farm sector will inevitably suffer severe economic hardship.
Aside from this, an increasing number of farm communities has been brought down to earth. They are becoming disillusioned; the realisation has gradually sunk in that they are being reduced to a poverty-stricken and debt-ridden class, in the wake of the departure of the previous administration along with its populist, giveaway policies. They are becoming distraught. All these factors can be seen as a potential incubator for widespread social unrest and political discontent, as already evidenced by the mounting incidence of protests by various local agriculture-related groups _ which can only add to foreign as well as local investment jitters.
The collateral damage associated with household debt has to do with salaried workers in the non-farm sectors, many of whom had previously overextended themselves financially by excessive borrowing and lavish spending.
This bad habit was made possible by the increasingly widespread use of bank and non-bank credit card facilities _ the number of credit cards jumped from 1.6 million to 8.2 million between 2000 and 2005 and to over 10 million in 2007.
These individuals are compelled to languish under constant pressure to meet their monthly interest servicing and partial loan repayments on time. The offshoot is that their workplace productivity and their employers' business performance suffers.
Some household debtors have turned to refinancing their outstanding debts by resorting to new sources of funds, usually at more restrictive terms. This practice is generally deemed undesirable and unsustainable, as there are limited sources of finance available and once these have become exhausted, refinancing must come to an end and the process will reverse itself, with legal proceedings and bankruptcies following suit.
In the manufacturing sector, numerous business units, especially the small and medium-sized, have already felt the impact of the declining overall economic activity and a sizeable number have gone belly up. Many more are expected to follow suit.
Only the large-scale industrial and commercial enterprises have so far managed to endure the currently unfavourable economic conditions and withstand the onslaught of foreign competition.
---------------
OPINION / THAILAND'S ECONOMIC PROBLEMS _ PART II
The trouble with the strong baht phenomenon
This second of a three-part article on the Thai economy deals with the troubles in the financial system and the effects of a strong baht
By CHET CHAOVISIDHA
Bangkok Post, 7-9 June 2007
Continuing from the first instalment on the state of the Thai economy published yesterday, we carry on with our investigation of the causes for the current state of economic malaise: The large-scale industrial and commercial enterprises are primarily supported by their superior technical know-how, strong financial position and more efficient management and operations, in a spirit congruous with the modern, knowledge-based business world.
The local retailing sector has virtually been clobbered by the foreign retailing chainstore giants, as witnessed by the disapperance of countless traditional local mom-and-pop stores all over the country.
While long-term merits and defects of this continuing displacement of the local small shops by the foreign retailing chainstore giants are still being debated, and further evidence is required to substantiate the claim that this situation will eventually lead to a long-term increase in efficiency in the retailing sector as a whole, with net positive benefits ultimately accruing to the economy _ the short-term prospect is quite clear, as evidenced by the loss of business, jobs and livelihood of a substantial proportion of the local retailing community previously engaged in this sector.
The tourism industry is also suffering a setback, as growth in this sector has not met earlier expectations, partly as a consequence of insurgency in the South, arson activities against schools in the Northeast and the threat of sporadic bombings in the central region and the capital.
Besides, this sector has also been most acutely plagued by the ''expansion without employment'' phenomenon, which ascribes expansion in output and income to increased productivity attributed to an advancement in technology and the utlisation of modern, labour-saving machinery and telecommunications equipment, especially in the high-technology service activities.
Hence the past several years have witnessed the expansion in service activities with correspondingly little or much less than a proportionate increase in employment in this sector _ a troublesome tendency, considering that this sector has traditionally been the most progressive and dynamic in its employment-creation capacity and ability to absorb new entrants into the labour force.
On top of all this, the real sector is also inflicted with the so-called ''household debt'' problem. Over the past several years, induced by the previous government's populist policies, household debts have increased tremendously.
On average, they exceed household income earnings by a staggering margin. Since most of these indebted households belong to the lower- and middle-income class and the grassroots echelon of society _ and their income-earning potential is well below the level required to meet their debt obligations _ the situation presents a serious problem for policy-makers.
Why? Because by its nature, this kind of problem becomes increasingly more difficult to deal with under recessionary conditions, as the current economic downturn tends to further aggravate the debtors' situation by putting their job security, income and livelihood at risk.
As an increasing number of households falls into this category, and as their debt burden accumulates with no prospect of improvement of income in sight, they will be likely to start calling upon the authorities to come up with the necessary funds to bail them out.
Unfortunately, such a policy action is unlikely to materialise, on account of the government's precarious fiscal and financial position.
Finally, there is also a genuine concern relating to the long-term growth of the Thai economy.
The growth in GDP is largely attributable to the quantity and quality of labour input and investment or capital accumulation. In the case of Thailand, the investment in new plants and more productive machnery and equipment is the chief contributor to our GDP growth. As reported by a government agency, contribution by a rise in productivity remains rather limited. In this respect, an additional important statistic can give a broader and more relevant perspective: the average rate of economic growth of the past years since 1997 has been consistently below that of the similar interval leading up to the 1997 crisis.
This suggests that the Thai private sector has become more conservative and cautious about over-investing in the same reckless fashion as it did during the years prior to the 1997 crisis.
In this day and age, various countries strive for a high rate of growth and lower cost of production through an increase in productivity. Raise their competitive edge, to be precise. They recognise that the innovation and investment to raise productivity and competitiveness are today's only answer to tomorrow's sustainable growth.
Thailand is an open economy with exports making up roughly 60% of the GDP.
As our competitive edge used to lie in cheap labour, a factor which no longer holds true today, the country's relatively low rate of investment plus slow rise in productivity under the existing, competitive global conditions almost translates to dying a slow economic death. Other emerging countries will soon sweep past Thailand in the economic race to world markets.
The financial sector has, over the past several years, assumed a new complexion in its structure, organisation, and operation.
Since the 1997 financial crisis and the tragedy that followed, a number of local commercial banks and major non-bank financial institutions have fallen into foreign ownership. These foreign majority-owned financial institutions tend to follow modern banking principles and, more often than not, lend on the bases of project feasibility, management ability and good corporate governance, as opposed to traditional banking practices which tend to extend loans to borrowers on the basis of personal relationship and collateral-asset availability.
As a result, the existing financial system is characterised by a situation in which most large-scale enterprises with superior technical know-how, efficient and prudent financial management and operations, a strong financial position and accurate perception of the current and future economic and business outlook, generally find themselves needing less credit from financial institutions. This is despite the latter's willingness to lend to them as they are attracted by their appearance of efficiency and superior performance.
On the contrary, medium- and small-sized business find themselves less able to obtain additional credit for their cash-strapped operations. Potential lenders, with the exception of government-owned financial institutions, look unfavourably on their traditional-style management and operation and are unwilling to extend additional credit, be it asset-based or otherwise.
Another aspect of the financial system is that although technically these foreign majority-owned financial institutions are subject to the same regulation and supervision of the central bank, in practice, they are obligated to attain the objectives and follow the policy guidelines of their overseas parent banks.
Hence the existence of several foreign majority-owned financial institutions signifies a tacit understanding that the existing financial system has become less amenable to the central bank's control. As a result, monetary policy actions have been rendered less effective than previously.
The public sector is currently plagued with a wobbling fiscal position, an inevitable outcome of a weakening economy and declining tax revenues. Additionally, most of the state-owned banks and so-called semi-financial institutions have been seriously weakened by the financial burden imposed upon them by the previous government's free spending and giveaway campaigns.
The upshot is that fiscal policy is subject to a rigid constraint, as a severe limitation has been imposed upon them by the relative scarcity of fiscal and financial resources available.
Inflation has not been a serious threat over the past years, in spite of soaring energy prices and rises in transport and distribution costs. The situation could have been worse had it not been for the working of the strong exchange rate of the baht, which operates to prevent domestic energy prices from going up as high as they could, and would, have. Against the generally unpromising economic backdrop, this could almost be regarded as a bright spot.
Lately though, inflation has begun to rear its ugly head once again. The external sector is at present undergoing a painful experience of the strong-baht phenomenon.
The trouble with the strong baht is that it tends to make for a decline in our exports of goods and services and a rise in imports. This has the effect of depressing our domestic income, production, output and employment.
The reduction, in turn, leads to a fall in consumption and investment expenditure as a result of lower household income and business profitability, thus setting off further rounds of decline in income, production, output, employment, and consumption and investment, until the process finally comes to an end through the income-expenditure interacting mechanism.
This situation has been the outcome of many complex circumstances and an interplay of a host of variables. In the first place, we are being squeezed by a weak dollar as well as a weak yen. Historically, the dollar and the yen moved in opposite directions. As a result, the adverse effect of the former on the performance of our external sector, in terms of exports and imports, was usually and, to a large extent, negated by the latter, and vice versa.
Strangely, the current situation is one in which dollar is weak against the baht and the yen is weak against the dollar and also against the baht. So, conceptually, our exports are supposed to be discouraged while imports encouraged.
Fortunately, Japan's economy has been recovering from its lengthy doldrums. Its increasingly more robust economy has prevented the growth of our exports from decelerating as much as they would have.
---------------
OPINION / THAILAND'S ECONOMIC PROBLEMS _ PART III
Like small fish in a big pond
Thailand will simply have to do its best to cope with a difficult situation, brought about by the actions of major players on the economic scene like China, Japan and the United States
By CHET CHAOVISIDHA
Bangkok Post, 7-9 June 2007
After the 1997 global financial conflagration, several countries have become fearful of the spectre of another financial meltdown _ memories of the pain and hardship their economies went through during that time remain vivid. Understandably, since then most countries have been accumulating foreign exchange reserves with almost reckless abandon. China, in particular, has amassed foreign exchange reserves to the tune of over US$1 trillion.
Such an exorbitant amount of dollars in the hands of a single country _ and many more with substantial amounts in their foreign reserve portfolios _ naturally makes every other country with substantial dollar holdings jittery.
They realise that sooner or later China, faced with the continued prospect of further increases in foreign exchange reserves over the next few years, will relinquish part of these reserves and invest them in other forms of income-earning assets abroad (China actually has already done so recently, though on a relatively small scale) instead of keeping them in non-earning assets at its central bank.
When that occurs, especially on a substantial scale, these other countries will be faced with potentially huge losses on their own dollar holdings.
Thus various dollar-holders are impelled to diversify, or to be ready to diversify, their foreign reserve portfolios into overseas real and financial investment.
Also, they must always be on the alert for potential dollar-unloading action by other foreign dollar holders. This set of circumstances will exert a continuing downward pressure on the dollar to remain weak, so long as the above conditions remain intact.
Additional complications arise because even though Thailand's physical volume and dollar values of exports have increased, the nominal baht values have decreased, a consequence of conversion from the weak dollar to strong domestic currency. The upshot is that a certain proportion of local exporters and producers suffer a fall in profits and others have actually incurred losses. This will invariably trigger off a depressive effect on our economy through an income-induced decline in investment and consumption spending, eventually giving rise to a negative effect on employment, especially in the export and industrial sectors in the longer run.
The strong baht can be expected to stay with us for some time to come. The United States' continuing trade and current account deficits and weak dollar, its sluggish economy, struggling automobile industry and slumping property development and housing activities will continue to exert a contractionary influence on the United States' demand for Thai exports.
This condition normally should have served to weaken the baht but that has not happened because it is more than counter-balanced by more telling influences which pull the baht in the upward direction, as outlined earlier.
Furthermore, the yen is also likely to remain weak as Japan continues to pour a huge volume of investment into China and proceeds to import products thus produced in China as well as other Chinese-produced merchandise for Japan's domestic consumers.
As the Japan-China trade volume has been surging continuously over time and is expected to outstrip the Japan-United States transactions soon, it works to the advantage of the Japanese private sector to maintain a weak yen because under such a circumstance its exports to both the United States and China will keep expanding.
Since expectation is generally self-realising, predictably the self-serving actions of Japan's private sector will continue to keep the yen weak for the foreseeable future.
The conclusion here is that a persistently weak dollar and a comparatively even weaker yen will continue to bode ill for Thailand's external balance sheet and income statement, and make for a sustained strong baht.
There is also a further disturbing prospect for the baht, which is associated with oil money.
The high and rising price of crude over the past few years has flushed the oil-producing and exporting countries with an enormous amount of cash. The Gulf states have spent close to US$1 trillion on investment projects at home and have been shopping around for the best bargains and mopping up assets in the United States, their primary investment destination.
Now they are looking to further diversify their portfilios in the European Community markets and emerging markets in the Southeast Asian region.
In the process, some portion of this money will likely find its way into the hands of the hedge funds and other financial institutions which are well known for their perceived investment skills and speculative expertise, and which are always looking out for opportunities to make profits in any kind of market conditions.
To them the emerging markets in Southeast Asia present an opportunity that cannot be passed up _ most of these countries have attained relatively high rates of economic growth in recent years, with strong foreign reserve positions built up after the recovery from the 1997 financial crisis.
These countries boast securities markets with relatively small market capitalisations, as well as relatively unrestricted foreign exchange market transactions _ a condition which can be influenced by the hedge funds and the like, to secure financial gain. Their operation needs to be more subtle these days though, as they have to make allowance for the spontaneous corrective adjustment inherent in the flexible exchange rate system now practised by most of these countries.
The combination of direct investment from the Middle East oil-rich states and financial investment and speculation by international institutional investors is expected to, in the main, further strengthen the baht and, in the process, create more volatility and wider amplitude of fluctuations in the foreign exchange market.
As long as crude prices stay high, this scenario will endure and the foreign cash inflow will intensify.
For the time being, the oil cash and oil cash-related inflows have been going on in trickles. When this inflow will hit us on a massive scale, with either investment or speculative motives, and how detrimental it will be to the Thai economy, remains to be seen. Meanwhile, we should be making plans to cope with this possible eventuality.
If one has to rank these weaknesses and problems according to their severity and intractability, the top three on the list would be the ''household debts'', ''strong baht'' and ''slow improvement in productivity in the agricultural and industrial sectors'', though not necessarily in that order.
The reason is that although the impact of each factor on the economy is different, all these factors possess important common characteristics with respect to policy actions.
The first two are relatively unamenable to corrective policy actions. In one case, the potentially effective remedial measure is constrained by insufficient fiscal and financial resources available, and the other is subject to an interplay of external circumstances, predominantly uncontrollable by us.
As for the third, it is a long-term imbalance which has to do with scores of structural and institutional factors, needing changes and reforms, such as improvement in education, logistics, communication, transportation, port facilities, beaureaucratic machinery, etc. In effect, these problems and imbalances are likely to persist over time.
And Thailand will just have to do its best to cope with such a difficult situation.
The Constitution Tribunal's recent verdict may have served to clear up political uncertainty and curb the perception of economic risks to a certain extent. Still, the basic economic weaknesses and problems remain and demand effective policy actions.
Chet Chaovisidha is an economist, a former MP for Bangkok, and an economics adviser to several past governments.
The state of Thailand's economy appears rather worrisome and the near-term prospects do not look promising. The following is the first of a three-part article on the major economic problems and weaknesses
By CHET CHAOVISIDHA
Bangkok Post, 7-9 June 2007
On the face of it, the current situation pertaining to the economy of Thailand is not as severe as the 1997 financial meltdown and the economic collapse that followed. But the present predicament seems to be wider in scope. Why? Because in the 1997 crisis the real, financial and external sectors collapsed or were near collapse, and yet the public sector was reasonably strong and able to come to the rescue, pulling the whole economy back up on its feet, albeit with the financial assistance of a certain international financial institution. This time, all four sectors are simultaneously plagued with their own particular ills, some more serious than others, although the degree of severity in each individual sector may not be as great as those associated with the three troubled sectors in the previous 1997 crisis; yet some problems appear to be policy-resistant in nature (as will be elucidated).
Nevertheless, the situation has given rise to a great deal of concern, as it has already begun to affect the livelihood of a large portion of the Thai citizenry.
Of major significance is the political instability, manifest by incidents of rallies and protest demonstrations staged by various political and economically-affected groups, and the constant shaping of public opinion abroad against the present administration.
These destabilising activities undoubtedly contribute to the undermining of business and the general public's confidence. They give rise to the concomitant loss of investment incentives, which lead to deferrment of planned direct investment by foreign and domestic investors alike.
Adding to this, the impending general election, tentatively to be held at the end of the year, will bring with it probable changes in economic policy. The unknown factor, combined with the present government's misfiring of several policy actions, represents uncertainty and business risks which would prompt astute investors to put their long-term investment decisions on hold, at least for the time being.
Consequently, only a portion of replacement investment is being undertaken, along with the continuing investment committed earlier.
In the real sector, we are confronted with a number of difficulties. The farm sector is stricken with declining income and a corresponding fall in spending. In addition, it is saddled with a huge amount of household debt, a legacy from the consumption-driven growth policy of the previous administration which relied primarily on debt-creation, geared towards the farm sector and the lower middle class.
The platform was supported by government-owned banks and financial institutions in the form of debt-suspension, liberal lending and policy loans. It has led to the present situation, in which members of the farm sector are clamouring for higher prices for their produce, not only to cover their cost of production but also the burden of interest servicing and repayment of outstanding debts.
The previous government's free-spending and giveaway policy might have been appropriate at the beginning, during which time the economy required an exceptionally strong stimulative policy package to get it back on its feet. Unfortunately, overdoing it by continuing to pursue consumption-driven expansion in economic activities over the next several years of its tenure is the main reason for the farm sector's potential collapse of personal finance. And this will happen soon, as is generally expected, unless proper remedial policy actions are applied in time _ a task which, short of a vigorous support from the public sector's financial resources, cannot be accomplished simply by relying on income generated by current market-determined prices of farm products alone. On top of this, a number of local farm products have succumbed to intense competition from foreign farm imports, to the further detriment of farm income and spending and general economic activities in the farm sector. Saddled with huge debts coupled with declining earnings and slim prospects of future improvement in the economic conditions, the local farm sector will inevitably suffer severe economic hardship.
Aside from this, an increasing number of farm communities has been brought down to earth. They are becoming disillusioned; the realisation has gradually sunk in that they are being reduced to a poverty-stricken and debt-ridden class, in the wake of the departure of the previous administration along with its populist, giveaway policies. They are becoming distraught. All these factors can be seen as a potential incubator for widespread social unrest and political discontent, as already evidenced by the mounting incidence of protests by various local agriculture-related groups _ which can only add to foreign as well as local investment jitters.
The collateral damage associated with household debt has to do with salaried workers in the non-farm sectors, many of whom had previously overextended themselves financially by excessive borrowing and lavish spending.
This bad habit was made possible by the increasingly widespread use of bank and non-bank credit card facilities _ the number of credit cards jumped from 1.6 million to 8.2 million between 2000 and 2005 and to over 10 million in 2007.
These individuals are compelled to languish under constant pressure to meet their monthly interest servicing and partial loan repayments on time. The offshoot is that their workplace productivity and their employers' business performance suffers.
Some household debtors have turned to refinancing their outstanding debts by resorting to new sources of funds, usually at more restrictive terms. This practice is generally deemed undesirable and unsustainable, as there are limited sources of finance available and once these have become exhausted, refinancing must come to an end and the process will reverse itself, with legal proceedings and bankruptcies following suit.
In the manufacturing sector, numerous business units, especially the small and medium-sized, have already felt the impact of the declining overall economic activity and a sizeable number have gone belly up. Many more are expected to follow suit.
Only the large-scale industrial and commercial enterprises have so far managed to endure the currently unfavourable economic conditions and withstand the onslaught of foreign competition.
---------------
OPINION / THAILAND'S ECONOMIC PROBLEMS _ PART II
The trouble with the strong baht phenomenon
This second of a three-part article on the Thai economy deals with the troubles in the financial system and the effects of a strong baht
By CHET CHAOVISIDHA
Bangkok Post, 7-9 June 2007
Continuing from the first instalment on the state of the Thai economy published yesterday, we carry on with our investigation of the causes for the current state of economic malaise: The large-scale industrial and commercial enterprises are primarily supported by their superior technical know-how, strong financial position and more efficient management and operations, in a spirit congruous with the modern, knowledge-based business world.
The local retailing sector has virtually been clobbered by the foreign retailing chainstore giants, as witnessed by the disapperance of countless traditional local mom-and-pop stores all over the country.
While long-term merits and defects of this continuing displacement of the local small shops by the foreign retailing chainstore giants are still being debated, and further evidence is required to substantiate the claim that this situation will eventually lead to a long-term increase in efficiency in the retailing sector as a whole, with net positive benefits ultimately accruing to the economy _ the short-term prospect is quite clear, as evidenced by the loss of business, jobs and livelihood of a substantial proportion of the local retailing community previously engaged in this sector.
The tourism industry is also suffering a setback, as growth in this sector has not met earlier expectations, partly as a consequence of insurgency in the South, arson activities against schools in the Northeast and the threat of sporadic bombings in the central region and the capital.
Besides, this sector has also been most acutely plagued by the ''expansion without employment'' phenomenon, which ascribes expansion in output and income to increased productivity attributed to an advancement in technology and the utlisation of modern, labour-saving machinery and telecommunications equipment, especially in the high-technology service activities.
Hence the past several years have witnessed the expansion in service activities with correspondingly little or much less than a proportionate increase in employment in this sector _ a troublesome tendency, considering that this sector has traditionally been the most progressive and dynamic in its employment-creation capacity and ability to absorb new entrants into the labour force.
On top of all this, the real sector is also inflicted with the so-called ''household debt'' problem. Over the past several years, induced by the previous government's populist policies, household debts have increased tremendously.
On average, they exceed household income earnings by a staggering margin. Since most of these indebted households belong to the lower- and middle-income class and the grassroots echelon of society _ and their income-earning potential is well below the level required to meet their debt obligations _ the situation presents a serious problem for policy-makers.
Why? Because by its nature, this kind of problem becomes increasingly more difficult to deal with under recessionary conditions, as the current economic downturn tends to further aggravate the debtors' situation by putting their job security, income and livelihood at risk.
As an increasing number of households falls into this category, and as their debt burden accumulates with no prospect of improvement of income in sight, they will be likely to start calling upon the authorities to come up with the necessary funds to bail them out.
Unfortunately, such a policy action is unlikely to materialise, on account of the government's precarious fiscal and financial position.
Finally, there is also a genuine concern relating to the long-term growth of the Thai economy.
The growth in GDP is largely attributable to the quantity and quality of labour input and investment or capital accumulation. In the case of Thailand, the investment in new plants and more productive machnery and equipment is the chief contributor to our GDP growth. As reported by a government agency, contribution by a rise in productivity remains rather limited. In this respect, an additional important statistic can give a broader and more relevant perspective: the average rate of economic growth of the past years since 1997 has been consistently below that of the similar interval leading up to the 1997 crisis.
This suggests that the Thai private sector has become more conservative and cautious about over-investing in the same reckless fashion as it did during the years prior to the 1997 crisis.
In this day and age, various countries strive for a high rate of growth and lower cost of production through an increase in productivity. Raise their competitive edge, to be precise. They recognise that the innovation and investment to raise productivity and competitiveness are today's only answer to tomorrow's sustainable growth.
Thailand is an open economy with exports making up roughly 60% of the GDP.
As our competitive edge used to lie in cheap labour, a factor which no longer holds true today, the country's relatively low rate of investment plus slow rise in productivity under the existing, competitive global conditions almost translates to dying a slow economic death. Other emerging countries will soon sweep past Thailand in the economic race to world markets.
The financial sector has, over the past several years, assumed a new complexion in its structure, organisation, and operation.
Since the 1997 financial crisis and the tragedy that followed, a number of local commercial banks and major non-bank financial institutions have fallen into foreign ownership. These foreign majority-owned financial institutions tend to follow modern banking principles and, more often than not, lend on the bases of project feasibility, management ability and good corporate governance, as opposed to traditional banking practices which tend to extend loans to borrowers on the basis of personal relationship and collateral-asset availability.
As a result, the existing financial system is characterised by a situation in which most large-scale enterprises with superior technical know-how, efficient and prudent financial management and operations, a strong financial position and accurate perception of the current and future economic and business outlook, generally find themselves needing less credit from financial institutions. This is despite the latter's willingness to lend to them as they are attracted by their appearance of efficiency and superior performance.
On the contrary, medium- and small-sized business find themselves less able to obtain additional credit for their cash-strapped operations. Potential lenders, with the exception of government-owned financial institutions, look unfavourably on their traditional-style management and operation and are unwilling to extend additional credit, be it asset-based or otherwise.
Another aspect of the financial system is that although technically these foreign majority-owned financial institutions are subject to the same regulation and supervision of the central bank, in practice, they are obligated to attain the objectives and follow the policy guidelines of their overseas parent banks.
Hence the existence of several foreign majority-owned financial institutions signifies a tacit understanding that the existing financial system has become less amenable to the central bank's control. As a result, monetary policy actions have been rendered less effective than previously.
The public sector is currently plagued with a wobbling fiscal position, an inevitable outcome of a weakening economy and declining tax revenues. Additionally, most of the state-owned banks and so-called semi-financial institutions have been seriously weakened by the financial burden imposed upon them by the previous government's free spending and giveaway campaigns.
The upshot is that fiscal policy is subject to a rigid constraint, as a severe limitation has been imposed upon them by the relative scarcity of fiscal and financial resources available.
Inflation has not been a serious threat over the past years, in spite of soaring energy prices and rises in transport and distribution costs. The situation could have been worse had it not been for the working of the strong exchange rate of the baht, which operates to prevent domestic energy prices from going up as high as they could, and would, have. Against the generally unpromising economic backdrop, this could almost be regarded as a bright spot.
Lately though, inflation has begun to rear its ugly head once again. The external sector is at present undergoing a painful experience of the strong-baht phenomenon.
The trouble with the strong baht is that it tends to make for a decline in our exports of goods and services and a rise in imports. This has the effect of depressing our domestic income, production, output and employment.
The reduction, in turn, leads to a fall in consumption and investment expenditure as a result of lower household income and business profitability, thus setting off further rounds of decline in income, production, output, employment, and consumption and investment, until the process finally comes to an end through the income-expenditure interacting mechanism.
This situation has been the outcome of many complex circumstances and an interplay of a host of variables. In the first place, we are being squeezed by a weak dollar as well as a weak yen. Historically, the dollar and the yen moved in opposite directions. As a result, the adverse effect of the former on the performance of our external sector, in terms of exports and imports, was usually and, to a large extent, negated by the latter, and vice versa.
Strangely, the current situation is one in which dollar is weak against the baht and the yen is weak against the dollar and also against the baht. So, conceptually, our exports are supposed to be discouraged while imports encouraged.
Fortunately, Japan's economy has been recovering from its lengthy doldrums. Its increasingly more robust economy has prevented the growth of our exports from decelerating as much as they would have.
---------------
OPINION / THAILAND'S ECONOMIC PROBLEMS _ PART III
Like small fish in a big pond
Thailand will simply have to do its best to cope with a difficult situation, brought about by the actions of major players on the economic scene like China, Japan and the United States
By CHET CHAOVISIDHA
Bangkok Post, 7-9 June 2007
After the 1997 global financial conflagration, several countries have become fearful of the spectre of another financial meltdown _ memories of the pain and hardship their economies went through during that time remain vivid. Understandably, since then most countries have been accumulating foreign exchange reserves with almost reckless abandon. China, in particular, has amassed foreign exchange reserves to the tune of over US$1 trillion.
Such an exorbitant amount of dollars in the hands of a single country _ and many more with substantial amounts in their foreign reserve portfolios _ naturally makes every other country with substantial dollar holdings jittery.
They realise that sooner or later China, faced with the continued prospect of further increases in foreign exchange reserves over the next few years, will relinquish part of these reserves and invest them in other forms of income-earning assets abroad (China actually has already done so recently, though on a relatively small scale) instead of keeping them in non-earning assets at its central bank.
When that occurs, especially on a substantial scale, these other countries will be faced with potentially huge losses on their own dollar holdings.
Thus various dollar-holders are impelled to diversify, or to be ready to diversify, their foreign reserve portfolios into overseas real and financial investment.
Also, they must always be on the alert for potential dollar-unloading action by other foreign dollar holders. This set of circumstances will exert a continuing downward pressure on the dollar to remain weak, so long as the above conditions remain intact.
Additional complications arise because even though Thailand's physical volume and dollar values of exports have increased, the nominal baht values have decreased, a consequence of conversion from the weak dollar to strong domestic currency. The upshot is that a certain proportion of local exporters and producers suffer a fall in profits and others have actually incurred losses. This will invariably trigger off a depressive effect on our economy through an income-induced decline in investment and consumption spending, eventually giving rise to a negative effect on employment, especially in the export and industrial sectors in the longer run.
The strong baht can be expected to stay with us for some time to come. The United States' continuing trade and current account deficits and weak dollar, its sluggish economy, struggling automobile industry and slumping property development and housing activities will continue to exert a contractionary influence on the United States' demand for Thai exports.
This condition normally should have served to weaken the baht but that has not happened because it is more than counter-balanced by more telling influences which pull the baht in the upward direction, as outlined earlier.
Furthermore, the yen is also likely to remain weak as Japan continues to pour a huge volume of investment into China and proceeds to import products thus produced in China as well as other Chinese-produced merchandise for Japan's domestic consumers.
As the Japan-China trade volume has been surging continuously over time and is expected to outstrip the Japan-United States transactions soon, it works to the advantage of the Japanese private sector to maintain a weak yen because under such a circumstance its exports to both the United States and China will keep expanding.
Since expectation is generally self-realising, predictably the self-serving actions of Japan's private sector will continue to keep the yen weak for the foreseeable future.
The conclusion here is that a persistently weak dollar and a comparatively even weaker yen will continue to bode ill for Thailand's external balance sheet and income statement, and make for a sustained strong baht.
There is also a further disturbing prospect for the baht, which is associated with oil money.
The high and rising price of crude over the past few years has flushed the oil-producing and exporting countries with an enormous amount of cash. The Gulf states have spent close to US$1 trillion on investment projects at home and have been shopping around for the best bargains and mopping up assets in the United States, their primary investment destination.
Now they are looking to further diversify their portfilios in the European Community markets and emerging markets in the Southeast Asian region.
In the process, some portion of this money will likely find its way into the hands of the hedge funds and other financial institutions which are well known for their perceived investment skills and speculative expertise, and which are always looking out for opportunities to make profits in any kind of market conditions.
To them the emerging markets in Southeast Asia present an opportunity that cannot be passed up _ most of these countries have attained relatively high rates of economic growth in recent years, with strong foreign reserve positions built up after the recovery from the 1997 financial crisis.
These countries boast securities markets with relatively small market capitalisations, as well as relatively unrestricted foreign exchange market transactions _ a condition which can be influenced by the hedge funds and the like, to secure financial gain. Their operation needs to be more subtle these days though, as they have to make allowance for the spontaneous corrective adjustment inherent in the flexible exchange rate system now practised by most of these countries.
The combination of direct investment from the Middle East oil-rich states and financial investment and speculation by international institutional investors is expected to, in the main, further strengthen the baht and, in the process, create more volatility and wider amplitude of fluctuations in the foreign exchange market.
As long as crude prices stay high, this scenario will endure and the foreign cash inflow will intensify.
For the time being, the oil cash and oil cash-related inflows have been going on in trickles. When this inflow will hit us on a massive scale, with either investment or speculative motives, and how detrimental it will be to the Thai economy, remains to be seen. Meanwhile, we should be making plans to cope with this possible eventuality.
If one has to rank these weaknesses and problems according to their severity and intractability, the top three on the list would be the ''household debts'', ''strong baht'' and ''slow improvement in productivity in the agricultural and industrial sectors'', though not necessarily in that order.
The reason is that although the impact of each factor on the economy is different, all these factors possess important common characteristics with respect to policy actions.
The first two are relatively unamenable to corrective policy actions. In one case, the potentially effective remedial measure is constrained by insufficient fiscal and financial resources available, and the other is subject to an interplay of external circumstances, predominantly uncontrollable by us.
As for the third, it is a long-term imbalance which has to do with scores of structural and institutional factors, needing changes and reforms, such as improvement in education, logistics, communication, transportation, port facilities, beaureaucratic machinery, etc. In effect, these problems and imbalances are likely to persist over time.
And Thailand will just have to do its best to cope with such a difficult situation.
The Constitution Tribunal's recent verdict may have served to clear up political uncertainty and curb the perception of economic risks to a certain extent. Still, the basic economic weaknesses and problems remain and demand effective policy actions.
Chet Chaovisidha is an economist, a former MP for Bangkok, and an economics adviser to several past governments.
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