Thailand

Redazione published in Culture and society, Thailand

Securing a lifeline for the people

By Dr. Sumet Tantivejkul

Secretary-General of the Chaipattana Foundation

Fresh water is not only essential for life, but key to agricultural production and food security. Crop production, livestock farming, and food processing all need clean water in sufficient quantities. According to the World Bank, about 70 percent of the total water withdrawn worldwide is used to irrigate crops. But the reality of the supply side does not correspond to these needs. Although an astonishing 71 percent of the earth’s surface is covered with water, only 2.5 percent of that is fresh and one percent of that, accessible.

For a predominantly agricultural country like Thailand, therefore, a high premium has always been placed on fresh water. More significantly, a lot of efforts have been invested in how to manage those resources to ensure that the people and the nation have the means to thrive.

It is little wonder therefore, why successive Thai monarchs have consistently expressed a keen interest on the issue. In fact, they have been personally and heavily engaged in advancing different methods – given the varied circumstances – of securing this ‘lifeline’ for their people.

Prior to 1857, it was about managing people to suit the water conditions – either moving people away from or closer to water sources. The conclusion of the Bowring Treaty in 1855 led to demands for rice exports that required enough water for irrigation. Therefore, King Mongkut focused on developing canal systems in the Chao Phraya river delta for both irrigation and transportation. King Chulalongkorn, or Rama V, followed suit by upgrading them into more systematic irrigation and drainage systems, which led to the establishment of the Canals Department in 1902. Under King Vajiravudh, the Canals Department became the Barrages Department in 1914, as it expanded its work to construct the first large-scale barrage across the Pasak River in Ayutthaya, named the Rama VI Barrage.
 

Photo: Rama VI Barrage/Dam, which began construction in late 1915 and was completed in December 1924. Its function is to supply water to 680,000 Rai of agricultural land in every part of the Rangsit canal area. 

(Source: Touronthai.com)

 

Post 1932, when Thailand became a Constitutional Monarchy, work in all areas was pursued slightly differently as the King no longer had executive power over state administration. This did not necessarily mean that the people’s interests had suddenly changed overnight. Moreover, the work of the monarchs prior to this change spoke for itself. The Thai monarchs had built up a strong bond between the monarchy and the people and fostered a genuine trust in an institution that had for centuries, spared no effort to develop and advance the nation into the future. So the monarchy was able to rally and retain full public support for their public interest endeavours, in a manner that was complementary to the government’s efforts, without being tied to party politics or factional interests.

Indeed, when King Bhumibol acceded to the throne in 1946, Thailand was already a leading rice exporter and rice farmers accounted for around 80 percent of the country’s 17 million people. But by that time, the impact of the perennial paradox of experiencing both drought and flood seasons had become more severe due to excessive and uncontrolled timber logging. For farmers, dealing with dry and cracked land that was unsuitable for growing crops was just as painful as having crops almost ready for cultivation completely submerged under flood water.

When the King and Queen visited the Isan region in 1955, the Northeastern region of Thailand was plagued with drought. Rainfall could only support one single annual rice crop. The King witnessed the problems experienced by the farmers firsthand and it inspired him to devote his attention and energy to achieving effective water resource management for Thai farmers everywhere. He would go on to instill water conservation and awareness in his children.

For the rest of his 70-year reign, the King engaged in countless projects related to water in different aspects. He spent almost 15 years developing a working formula for artificial rain to address drought and improve water resource management. He also invented the patented Chaipattana Aerator, a low-cost mechanical device for treating wastewater.

In the North, the King focused on preserving watershed areas and creating check dams, such as the Mae Kuang Udom Thara Dam in Chiang Mai. In the northeast, the work was concentrated more on setting up a water network system, such as the 740-meter long water delivery system that siphons water from Huai Pai Reservoir in Mukdahan to Lam Payang Reservoir in Kalasin. This project benefited 736 hectares of irrigable area, increased glutinous rice production from 270 kilogrammes per rai to 480 kilogrammes per rai and made year-round farming possible. In the south, projects such as the Bang Nara River Basin Development in Narathiwat effectively addressed the problem of drought, flood, saline, and acidic water.

Having traveled throughout the country, no one understood better than the King that there was never one formula or one solution to address all needs. So he dedicated his time to studying each locality in depth in order to come up with a tailor-made solution for different regions, and placed local residents at the centre of his approach. He considered the social geography of the area, the culture, traditions and lifestyles of the local people. Most importantly, the people had to be included in whatever solution was pursued in order to nurture a sense of ownership. The King was convinced this was the only way to ensure the solution was sustainable and he passed on these lessons to his children.

Since he was Crown Prince, King Maha Vajiralongkorn learned about the importance of water resource management from his late father, and has continued to treasure, preserve and build on the Royal Development Projects initiated by King Bhumibol. He completed several of them, including the construction of 7 reservoirs around Pa Sak Jolasid Dam, as well as expanded the irrigation network to cover more agricultural areas. In Chanthaburi, the King alleviated water problems petitioned by the villagers with the Royally-Initiated Weir Construction Project at Khao Daeng Pattana Village, which increased water supply for 320 hectares of farm land. In 2017, the King also commissioned the Royal Guard Units, related government agencies and teams of volunteers to remove garbage and weeds clogging the canals in various communities, which was essential for flood water drainage in the Bangkok and Metropolitan area.

Photo: Weir at Khao Daeng Pattana Village.

(Source: salika.co)

 

Princess Bajrakitiyabha, the King’s first born, has also taken an interest in complementing water management through her ‘Friends in Need (of “PA”) Volunteers Foundation’ – PA being her nickname. Through this foundation, she set up telemetering systems in 80 watershed areas in 11 provinces, using a comprehensive management approach involving the local community. The new telemetry collects data from real time sensors, processes the information, and provides warnings. This timely warning enables reservoir operators to reduce water levels, people to reinforce their homes, and authorities to be prepared. The Foundation plans to install another 510 telemetering systems across Thailand.

Photo: (from left to right) Automated Telemetry Station in Pongyeang sub-district, Mae Rim District, Chiang Mai Province and interface of ThaiWater mobile-application that has been integrated for general use.

(Source: Matichon)

To this day, the lifeline of the people continues to occupy an important place in the work of the Thai monarchy, as out of 4,877 Royal Development Projects, nearly 70% of them, or 3,386, are water resource development projects.

But the work is far from done. According to the Global Climate Risk Index, Thailand ranks 9th in countries most affected by extreme weather events between 2000 – 2019. Furthermore, research conducted by Thammasat University found that the 6 provinces of Loei, Udon Thani, Sakon Nakorn, Nakhon Phanom, Roi Et and Ubon Ratchathani are at the risk of repeated severe floods, while Khon Kaen, Mukdahan, Chaiyaphum, Nakhon Ratchasima and Surin are prone to repeated drought. Thailand’s current efforts on preventing floods and drought will not be enough. Every year, drought affects about 9.71 million people and 411,360 hectares of irrigable land, causing about 20.34 million USD of damage. Floods, on the other hand, cause damage to 1.2 million hectares of farmland worth 167 million USD annually, with 4.5 million people in 63 provinces affected.

All sectors in Thailand have to work together and harder on sustainable and effective water resource management, and look into using new technology. Indeed, the King has already commissioned further studies into utilising the full potential of the river basin. Some agencies and academic institutions have already begun looking into how to use water for irrigation more efficiently. Indeed, it is equally important to raise public awareness of the issue, so that every person living in Thailand may use water and water ways sensibly and sustainably, and help to nurture this lifeline for generations to come. 

 

* * * * * * *

 

*Dr. Sumet Tantivejkul
Dr. Sumet Tantivejkul is the Secretary-General of the Chaipattana Foundation, which was established by His Majesty King Bhumibol Adulyadej The Great with the vision to provide prompt, timely and necessary responses to problems affecting the Thai people through various development projects. He is often seen in photographs of King Bhumibol as he served the King closely for 18 years at the Office of the Royal Development Projects from 1981 until 1999, when he resigned and continued to serve His Majesty as Secretary-General of the Chaipattana Foundation—where chaipattana means “Victory of Development.” Dr. Sumet is also an adviser to the government’s water management committee and has advised the committee to follow His Majesty’s guidance in understanding both the geographical and social landscape of the country to best respond to the development needs of each locality. chaipattana letteralmente significa “vittoria dello sviluppo”. Il dott. Sumet è anche consigliere del comitato governativo della gestione dell’acqua, e in quanto tale ha suggerito al comitato di seguire la guida di Sua Maestà per comprendere la struttura geografica e sociale del Paese così da rispondere al meglio alle necessità di sviluppo di ciascuna località.

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Redazione published in Culture and society, Thailand

The Grand Tour That Saved a Nation

Thai king Chulalongkorn’s European sojourn as a lesson in soft power

The author is Kitti Wasinondh, Senator and former career diplomat with a distinguished career in many roles at the Ministry of Foreign Affairs. He served as the Director-General of the Department of ASEAN Affairs and the Department of Information, as well as Ambassador Extraordinary and Plenipotentiary to the Court of St James’s

At this year’s United Nations General Assembly, the world witnessed the unrelenting force of South Korean soft power, as members of the K-Pop sensation BTS performed their megahit “Permission to Dance” at the General Assembly Hall. In spreading the message about the UN Sustainable Development Goals to millions of their fans worldwide, BTS did their part in boosting South Korea’s image as a global leader of sustainability, complementing the country’s role as convener of the Partnering for Green Growth and the Global Goals 2030 (P4G) summits.

“Soft power”, perhaps less tangible than “hard power”, has become an important source and tool of influence for countries seeking to elevate their status in world affairs. Rather than using military force or economic clout to coerce others to give into your wants, it is much less expensive to make yourself liked by others and get them to do as you please. The term, as coined by Joseph Nye, helped explain the triumph of democracy over communism in the late 1980s. At that time, blue jeans, smuggled Bruce Springsteen cassette tapes, and Voice of America broadcasts traversed the Iron Curtain and spread the idea of freedom and democracy.

Today, Thailand performs rather well on the soft power scale, coming in at number 33 out of 100 nations surveyed by Global Soft Power Index 2021. But what is perhaps more remarkable is that this concept of soft power had much earlier applications in Thailand, and offers a very plausible response to the often posed question of why Thailand was able to remain the only country in Southeast Asia that was never colonized.

When Siam faced colonialist pressure that threatened its independence in the nineteenth century, its king had the foresight that improving the national image and winning over influential friends was far more cost-effective in safeguarding the nation’s sovereignty than going to war.  

Indeed, since the early days of his reign, King Chulalongkorn understood that modernization was essential for Siam to escape the onslaught of colonialism. Modernization was carried out not only to improve Siam’s infrastructure, governance, and its people’s quality of life, but also to improve the country’s image and stature. The King employed several western advisors and professionals to assist him in carrying out several impressive projects, from government, education and social reforms, to modernization of transports and telecom, intent on bringing Siam up to standard with “civilized” nations.

Still, the rapid modernization of Siam was not enough to counter the mounting expansionist threats from the European powers. During 1886-1896, Siam had to face a number of crises. In 1893, France sent gunboats up the Chao Phraya River, demanding compensation from Siam for skirmishes that resulted in the death of French troops. Siam painfully ceded substantial territories, east of the Mekong River, paid 3 million francs, and handed over temporary control of the port of Chanthaburi to France as collateral. Three years later in 1896, Britain and France signed the Anglo-French Agreement, essentially making Siam a “buffer” between French and British colonial interests in Southeast Asia. However, the terms of the agreement merely stated that France and Britain would not violate Siam’s sovereignty without the prior consent of the other party. This declaration did not offer a firm guarantee for independence, but rather indicated that France and Britain would not go to war over Siam.

In the following year, King Chulalongkorn embarked on his first historic European sojourn. It was uncustomary for the King to go abroad, so palace officials told the Thai public that the King was traveling to cultivate diplomatic ties and learn about western civilization. However, the European press had a different take on his visit and reported extensively that the King was seeking supports from major European powers to maintain Siam’s sovereignty.

As one of the first Asian monarchs, along with the Ottoman Sultan and the Shah of Persia, to visit all of the important capitals of Europe, King Chulalongkorn and his trip were the subject of much curiosity and fascination. His affable manner and fluency in the English language made him well-respected and admired among the European nobility and aristocracy. European newspapers and magazines followed his movements closely and reported on his every engagement at both official and social events.

The King was not an inexperienced traveller. In his youth, he first travelled abroad at the age of 18 to Singapore and Java in 1871. He later visited India in 1872, where he was given the highest honour and was invited to observe a large-scale military exercise outside of Delhi. His itinerary was closely chronicled in the press of the time. Newspapers even discussed minutiae, such as the excitement of shopkeepers keen on displaying their wares to the King’s entourage.

The flurry of press interest during his visit to India did not go unnoticed. For his first trip to Europe, the King’s visit was carefully and strategically planned to create the right impressions, putting the Thai monarchy on par with European dynasties, and also to send a direct message to those who threatened Siam’s sovereignty.

King Chulalongkorn made sure to call on his powerful and sympathetic friends, Kaiser Wilhelm II of Prussia and Tsar Nicholas II of Russia, well before his visit to France and Britain. He also paid a visit to the elderly European statesman Otto von Bismarck at his residence, which generated much media attention throughout the continent. The King’s trust in his friendly relations with Prussia led to the employment of many Germans in strategic sectors in the modernization of Siam. Among them were Karl Bethge, the first Governor of the State Railway of Thailand and Theodor Collmann, the first inspector of the Post and Telegraph Department of Thailand. Such appointments should have raised eyebrows under the watchful gaze of the British and the French.

Meanwhile, the king’s close personal ties with the Royal House of Russia, where he sent one of his sons, Prince Chakrabongse, to study for eight years, directly helped Siam vis-a-vis French and British colonialist ambitions. The Franco-Russian alliance also worked well in Siam’s favour. After establishing diplomatic ties with Siam during King Chulalongkorn’s visit to St. Petersburg in 1897, Tsar Nicholas II sent one of his best envoys to Bangkok. Alexander Olarovsky, who served as the first Consul-General of Russia to Siam, was instrumental in mending Franco-Siamese relations and persuaded France to return Chanthaburi to Siam. Furthermore, as Russia was at odds with Britain in the Afghan ‘Great Game’, the former also had a direct interest in preventing Siam from falling under Britain’s sphere of influence.

In Europe, King Chulalongkorn soon became widely recognized as one of the most prominent monarchs of the world in his days. Despite the difficult relations that Siam had with Britain and France, King Chulalongkorn took great care to project an image of amity with their heads of state, thereby creating favourable sentiments among the general public. In England, he was hosted at Buckingham Palace and had lunch with Queen Victoria at Osborne House, her private residence on the Isle of Wight. In republican France, he was received with all the pomp and circumstance befitting a visiting European monarch, despite initial doubts that there could be protests staged against the Siamese sovereign.

Although King Chulalongkorn could not win over the powerful colonists with any resources of “hard power”, he showed the world that, with the right combination of diplomatic acumen and effective public communication, he could attract influential European leaders, and even the Western public, to support his cause. On the other hand, the King’s efficacious diplomacy played a pivotal role in securing Thailand’s stature as an independent nation throughout history, and apparently, has brought about a timeless lesson that attests to the value and effectiveness of “soft power”.

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Michelle Cabula published in Culture and society, Thailand

Thai Cinema as an instrument of ASEAN soft power

The pandemic has had a dual effect on the film industry in Southeast Asia. While it has caused a freeze in domestic theater screenings and given way to new consumer trends, it has also confirmed the resilience of the more traditional culture of cinema in physical theatres.

Recently, Southeast Asian cinema has made an appearance on international screens, demonstrating how the region's dynamism also finds expression in a vibrant film production. Back in 2017, on the occasion of the 50th anniversary of the founding of the regional organization, Vongthep Arthakaivalvatee, Deputy Secretary General for the ASEAN Sociocultural Community, extolled the role of the film industry as a “vehicle to promote ASEAN awareness and intercultural understanding regionally and internationally”.

In this panorama, Thai cinema stands out. Domestic production amounts to 40-50 films per year and normally represents about one fifth of the total box office of the entire sector, while the remaining market share is occupied by foreign imported films, mostly from the United States. In the past two years, however, the domestic film industry has managed to secure a larger share of the market, benefiting from the delays and complications in the distribution of foreign blockbusters caused by the pandemic. In 2020, the local comedy "Riam, Fighting Angel" (2020) even beat out "Tenet" (2020) and "Mulan" (2020), both U.S. films nominated for the latest Oscars, at the box office.

But it is on international screens that the most significant successes have been recorded. Despite competing with the well-established film industries of Japan and South Korea, Thai productions have recently made their way onto the circuit of the major international festivals, receiving praise from foreign critics and audiences. This summer alone, Thai director Apichatpong Weerasetakul, already a Palme d'Or winner in 2010 with "Uncle Boonmee who can recall his past lives" (2010), won the Jury Prize at the Cannes Film Festival with his latest film "Memoria" (2021), as well as the Grand Prix d’Honneur at the Marseille International Film Festival. The film "One For The Road" (2021), produced by renowned filmmaker Wong Kar-Wai and directed by Baz Poonpiriya from Thailand, was awarded for its "creative vision" at Sundance 2021, the most important international kermesse for independent cinema, while the black-and-white family drama "The Edge of Daybreak" (2021) won a Critics' Award at the International Film Festival in Rotterdam.

However, along with the wave of international attention, the challenges imposed by the pandemic have also intensified. Most of the Thai titles that made their world premieres have not yet been able to debut in their home countries. In April, a third wave of COVID-9 prompted semi-lockdown measures that not only forced the entire industry to shut down, but also triggered significant changes in social and viewing habits. Forced to spend more time in their homes, consumers have shifted significantly toward video streaming services and, as a result, some production companies are rethinking distribution strategies by repurposing them for on-demand platforms.

On the other hand, some professionals in the sector are more reluctant to say goodbye to cinema culture in its more traditional version and are ready to wait for theaters to reopen so that they can continue with in-person screenings. Banjong Pisanthanakun, who directed the Thai-South Korean horror co-production "The Medium" (2021), underlined that the most passionate cinephiles will hardly give up on the irreplaceable atmosphere that only the big screen can give. Therefore, the successes collected during the international events will not be enough to raise the economic fortunes of Thai cinema. According to the chief operating officer of the country’s second largest multiplex chain, Suwannee Chinchiawsharn, "the cinemas will have to work hard to offer not just content, but experience, to give something to the audience that they cannot have at home. We will come back, but even after the pandemic, I believe the battle will continue”. The forthcoming reopenings represent an unmissable opportunity for the authorities of South-East Asia to relaunch the cultural and entertainment sector, in line with the hope to see in the movies a powerful tool to "connect people and promote the ASEAN identity to the world".

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Anna Affranio published in Economy and trade, Thailand

Thailand, a land route over the Kra Isthmus

As the idea of constructing the canal is (for now) gradually discarded, new options arise. Here is why.

For centuries, Thailand has dreamed of a passage across the Kra Isthmus, which divides the Malay Peninsula in two, separating the Andaman Sea from the Gulf of Thailand.

The isthmus, in its narrowest part, is only 44 km long and building an east-west route across the isthmus would reduce by about 1,200 km the distance that merchant ships must travel in transporting goods from Asia to the Middle East and Europe. Currently, the only option is to sail south to the Strait of Malacca, the busiest strait in the world, extending the journey by two days. In fact, more than 94,000 ships cross this strait every year, and it is estimated that about a quarter of the goods exchanged worldwide pass through it, including 80% of oil and gas imports of China, Japan, and South Korea.

The idea of ​​digging a canal across the Malay Peninsula has been revived several times over the centuries. In 1677, Narai, the sovereign from the Kingdom of Ayutthaya, asked France to conduct a feasibility study for a canal and Ferdinand de Lesseps, the French diplomat involved in the construction of Suez Canal, personally visited the Kra Isthmus in 1882. More recently, the Prime Minister Thaksin Shinawatra had taken over this project, but the idea vanished with the 2006 coup. There was also a mounting pressure from China to continue the project and incorporate it into the Belt and Road Initiative given Beijing’s interest in solving the so-called “Malacca Dilemma” and strengthening its political and economic position within the region. Consequently, although the Chinese government refrained from making official claims, China and Thailand signed a Memorandum of Understanding (MoU) canal project in Guangzhou in 2015.

However, despite several proposals and studies on the feasibility of the canal, the idea was gradually discarded given its prohibitive cost (estimated at about 30 billion dollars) and the technical difficulties in connecting the two seas, which differ by several meters in elevation. Moreover, concerns emerged on the possible environmental and political repercussions. More specifically, it should not be underestimated that an infrastructural project of this size involves serious disruptions to local ecosystems, and the consequences that the excavation of the isthmus would produce in the Indo-Pacific dynamics following the opening of a new connection are not yet certain. Finally, the southern part of the proposed country has seen the mounting tension between the Buddhists and Muslims ethnicities, and it is feared that the construction of the Kra Canal could endanger national cohesion, creating a further division, even physical, within the country.

Acknowledging these problems but not giving up the idea of ​​a passage between the Gulf of Thailand and the Andaman Sea, the government has decided to change its strategy and what was once the dream of a canal is being transformed into the project of a land bridge. This new proposal, which appears technically and economically more feasible than the previous one, would include the construction of a deep-sea port in the province of Chumphon, on the Gulf of Thailand, and the expansion of the existing port of Ranong, on the Andaman Sea. The two ports would then be connected by a double-track railway and a motorway. According to a report published in January 2021 by the ISEAS-Yusof Ishak Institute, the construction of the land bridge would cost 60 billion baht (1.85 billion dollars), or just 3% of what the canal would require.

Hence, Prime Minister Prayuth Chan-Ocha and Transport Minister Saksayam Chidchob seem increasingly leaning towards this option. Furthermore, at a time of economic uncertainty caused by the COVID-19 pandemic, the government hopes to be able to use this infrastructure to revive the economy and attract private capitals. Moreover, the project would fit perfectly into the East Economic Corridor (EEC) strategy and studies have been commissioned to also evaluate the possible connection between the new route and the high-speed China-Laos-Thailand, the signature project made possible from the funds allocated in the country under the Belt and Road Initiative.

Therefore, it followed that already in September 2020 the executive ordered a feasibility study of the land bridge and the related complementary infrastructures, to be completed in 2023. The eyes of the whole region, and of China, are on this potential future megaproject, which has been long yearned for, yet remains very delicate given the fragile balance of the Indo-Pacific.

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Anna Affranio published in Culture and society, Thailand

COVID-19 Vaccine Rollout in Thailand is threatening recovery

Lack of vaccines, skepticism, and discontent towards the management of the pandemic are slowing the restart.

Thailand was one of the few countries that managed to keep the coronavirus under control during the first phase of the pandemic, but more contagious variants such as the Delta have caused a surge in new cases and deaths since last April. According to data from Johns Hopkins University, since the beginning of the third wave, the total cases recorded in the country have risen exponentially in less than six months (from just 30,000 at the beginning of April 2021, to more than a million in mid-September), as well as the number of total deaths (from 95 to 15,000 in the same period), putting pressure on the already fragile health system. The situation has plummeted to such an extent that Bangkok has plunged to the 118th place in the Nikkei Asia post-COVID-19 economic recovery index, ahead only of Myanmar, the Philippines and Vietnam. Among the main causes of this new situation of emergency we find the difficulties encountered during the vaccination campaign: according to official government data as of September 20, only 40% of the population received at least one dose of the vaccine, and just 20% both doses.

 According to the government plan, the country would aim to achieve herd immunity by 2021 but given the lack of doses and the growing skepticism of Thai citizens towards the vaccines proposed by the executive, the goal seems to be far off. Currently, the only two vaccines available to most of the population are Astrazeneca and the Chinese Sinovac, towards which Thais remain quite mistrustful. The government has not ordered stocks of mRNA vaccines (such as Pfizer and Moderna), considered by much of the scientific community to be more effective and with fewer side effects. However, the situation could change in the coming months, as private hospitals are autonomously procuring Pfizer and Moderna vaccines and the country itself is about to start human trials of its own first COVID-19 mRNA vaccine, developed by Chulalongkorn University in Bangkok. 

At the start of the pandemic in 2020, the Thai government announced that it had reached an agreement with AstraZeneca to obtain the vaccine and transfer the technology of the Anglo-Swedish company to Siam Bioscience, owned by King Vajiralongkorn, to ensure local production. At the same time, Bangkok has not considered entering contracts with any other pharmaceutical company and has even decided not to be part of the COVAX collective distribution program. However, putting all the eggs in one basket did not prove to be a winning strategy: the doses of AstraZeneca obtained were far fewer than originally planned and, by the time the situation got out of control, it was too late to find other effective vaccines on the market. For this reason, the government was forced to continue the vaccination campaign with the Chinese vaccine Sinovac, available in huge quantities. 

So far AstraZeneca, despite being the priority vaccine according to the national plan, accounts only for about 40% of the total inoculations, while Sinovac, which is relatively less effective against the Delta variant, 60%. The local population itself is very wary of the Chinese vaccine, as popular hashtags on social media and polls conducted by YouGov have shown. The reasons for this skepticism can be found both in recent reports of thousands of cases infected with COVID-19 despite the Sinovac vaccinations, and because there are fears the presence of political interests behind the adoption of the Chinese vaccine (starting from unverified rumors on links between the Thai conglomerate Charoen Pokphand and the vaccine producers). Finally, general dissatisfaction with the difficulties encountered during the vaccination campaign has only aggravated the discontent towards the military-backed government, generating large and continuous demonstrations against the executive, thus breaking a long-lasting truce.

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Redazione published in Culture and society, Thailand

From Poppy to Coffee: Thailand a Model for Alternative Development

The model initiated by the Royal Project Foundation has been recognised by the United Nations Office on Drugs and Crime as a successful undertaking in sustainably replacing narcotic crops with alternative means to generate income..

By Chutintorn Gongsakdi

Deputy Permanent Secretary of the Ministry of Foreign Affairs of Thailand

When their bright red petals fall away, farmers would slit open the egg-shaped seed pods of Papaver somniferum or opium poppy. Milky ‘poppy tear’ would then ooze out from these open wounds, starting the extraction of the crudest form of opium. This method of poppy cultivation can be traced back to at least five millennia ago in the texts of the Sumerians, who called the plant Hul Gil, or the ‘plant of joy’.

Joy is exactly the reason why this plant spread all over the world so quickly. Originally used for pain relief, opium was later introduced as a recreational drug in Europe and Asia. Highly addictive, it dominated international trade and politics in the 19th century. It was only after World War II that its harmful effects were widely acknowledged, and opium suppression became a global agenda. 

In Southeast Asia, opium poppies have been cultivated for centuries. Possibly brought in from southern China, the use of opium was integrated into the culture of indigenous communities such as the Hmong and Karen. Their usage of poppy seeds was in moderation and in their traditional medicine and religious ceremonies, and even had been used as a currency. 

The arrival of migrants and ethnic groups during the Chinese Civil War in the 1940s led to an exponential increase of opium production in the mountains of Thailand, Myanmar and Lao PDR. As the only available cash crop, the new highlanders had little choice but to cultivate poppy to escape poverty, despite it did not receive high returns. The network of illegal trade in the Golden Triangle, an area where the borders of the three countries meet, peaked during the 1960s with an estimated 145 tons of opium produced in Thailand annually. 

The Thai government banned opium in 1958. However, insufficient resources and the lack of understanding among the highland peoples resulted in an unsuccessful campaign to restrict poppy cultivation. As the locals resented the government’s efforts to resettle them in the lowlands, Thai officials started to look for an alternative method to reduce opium production. 

In 1969, while visiting Chiang Mai province, His Majesty King Bhumibol Adulyadej The Great learned that some poppy growers could earn a comparable amount of money from selling local peaches. That was when he developed the idea that growing an improved peach variety could possibly generate more income than opium poppy, minus the risk of being involved in criminal activities, and therefore, opium cultivation could organically wither away from existence.

This concept of crop substitution and genetic improvement was swiftly translated into actions that have created an environment of human security and a sustainable livelihood for villagers -a holistic approach to security. The concept would eventually be called alternative development model, whereby the people are empowered to pursue the development path of their choice rather than being forced to surrender to prevailing conditions. The King deployed his knowledge on geography and botany to sponsor the research on alternative crops. He instituted the ‘Royal Project,’ a private charitable organisation to support alternative development in Northern Thailand. The Royal Project ran its first training programme with the highlanders in 1970, while the King set up development stations in the area. 

In tandem with the Royal Project, members of the Royal Family supported several other initiatives to address illiteracy, poverty and public health in the remote mountains. Many of them were frequent visitors to the villages to organise medical check-ups through the Princess Mother’s Medical Volunteer Foundation, and to provide assistance to schools in need. All these concerted efforts took decades of perseverance to bear fruit. However the yield, as proven today, is worth the wait. 

Since the beginning, the Royal Project worked with the Thai government and international organisations to conduct research and development, and to provide seeds, fertilizer, training, and supporting infrastructure. In 1971, the Royal Project and the Thai Narcotics Control Board partnered with the United Nations Fund for Drug Abuse Control (UNFDAC) to establish the Crop Replacement and Community Development Project. Since then, the Royal Project and relevant agencies have introduced more than 150 new crops to poppy growers, including arabica coffee, tea, cabbage, apple, and decorative flowers.   

Nevertheless, poppy eradication did not begin until 1985. The officials recognised that radical measures could lead to counterproductive results. They waited until the projects could generate sufficient income for poppy farmers, and eradication was mostly negotiated to ensure a sustainable outcome. As a result, poppy cultivation in Thailand fell by 97 percent from 1985 to 2015 and has never relapsed. 

Today, the Royal Project is a public foundation with 39 development centers and research stations. Under the patronage of His Majesty King Maha Vajiralongkorn, the foundation continues to expand its work with the opening of Ler Tor Development Center in Tak province in 2016, which is assisting more than 300 Karen farmers. The Royal Project products are currently processed and distributed in supermarkets under the brand Doi Kham. Some products, such as dried fruit and juice, are available in Japan, China and Russia.

Coffee beans of Doi Tung, another brand of alternative development products from Mae Fah Luang Foundation, created by Princess Srinagarindra, the Princess Mother in Chiang Rai province, has been selected by Japan Airlines and Japanese retailer Muji for their catering service.

The works of the Royal Project were realised through synchronised efforts of all key players. For instance, the Thai government provided human capital development by extending healthcare services and developing schools in former opium-producing villages, as well as the provision of Thai citizenship. The highland communities now have access to rights as a Thai citizen, such as the right to own land, non-farming work and qualifications to apply for bank loans. This would not have been possible had it not been for the monarchy’s subtle but effective support to steer collaboration that has bound all stakeholders together, from policy makers to villagers, towards the same direction. Considering the local villagers’ skepticism of government officials at the time, the face of the institution was the only one that was received with genuine respect and trust by all parties. 

The Alternative Development model or AD initiated by the Royal Project Foundation has been recognised by the United Nations Office on Drugs and Crime as a uniquely successful undertaking in sustainably replacing narcotic crops with alternative means to generate income. Not only did the Royal Project contribute to the security- building process by reducing illicit crop and crimes, it also succeeded in bolstering economic, food, and environmental security for the ethnic communities who were living on the edge of poverty. It has since gone the extra mile to collaborate with UN agencies by introducing similar programmes in countries such as Lao PDR, Myanmar, Colombia, Peru and even Afghanistan, to name a few. Aiming to be the learning institute for sustainable development, the Royal Project Foundation continues to empower and dignify the livelihoods of local communities in Thailand and beyond.

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Redazione published in Editorials, Thailand

Editorial | Thailand, Made in Italy relaunched

Editorial by Lorenzo Galanti, Ambassador of Italy to Bangkok

Thailand and most of ASEAN countries are facing an epidemic wave mainly due to the Covid-19 Delta variant with the inevitable measures that limit economic activity and mobility, with a negative impact on growth prospects for 2021. At the same time, the governments are trying to accelerate the vaccine supply. Thailand, which has a very high capacity of inoculation but does not participate in COVAX, is multiplying sources of supply and diversifying vaccines, originally confined to Sinovac and AstraZeneca. It aims to reopen at least partially the Kingdom by October and to vaccinate 70% of the population (about 50 million people) by December.

Meanwhile, the growth estimates of the Thai economy have been revised downwards by the Bank of Thailand which now predicts a modest 0.7% for 2021 and a rebound of 3.7% next year. The recovery of tourism will not be rapid, due to the restrictions on international travel still in force in the main countries of provenance such as China. It is important to increase efforts to attract investments in innovative sectors, thanks to IT infrastructure and 5G. The Bank of Thailand is developing a prototype of digital currency to facilitate transaction and consumption, the Retail Central Bank Digital Currency. On the consumption side, the market has moved a lot online, on digital platforms.

The ICE office Agency in Bangkok, in collaboration with the Italian Embassy, has launched a program with Lazada Thailand, the e-commerce platform controlled by Alibaba, for a virtual pavilion of authentic Italian products. The initiative starts these days on LazMall (the portal of quality brands) and in a first phase is dedicated to food, but it will expand to the non-food sector. At the same time, an offline campaign is being promoted by ICE Agency at the stores of Central Department stores (the main Thai retail group that controls La Rinascente in Italy) to promote Italian products, food and non-food, on the shelves. A first relaxation of the lockdown in Bangkok decided these days will stimulate a recovery in consumption. The first half of the year saw an increase of Thai exports thanks to the traction of the main markets (China and the US) and the weakening of the currency, Thai Baht, but also an increase in imports, which benefited the Italian export that has returned to the levels of 2018. 

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Pierfrancesco Mattiolo published in Economy and trade, Thailand

Wide-open doors to IPOs in Thailand (and ASEAN)

The IPO market is extraordinarily vital around the world, and ASEAN is no exception. The Thai stock exchange is attracting the most capital and it is not going to stop.

While the real global economy has yet to fully recover from the COVID crisis, financial markets are experiencing a period of euphoric expansion. In particular, the IPO market is on fire and investors of all types and sizes have recently become more willing to buy the shares of companies that decide to go public. This may also have been favoured by COVID: central banks have injected a huge amount of liquidity into the market to stimulate economic recovery and the 'new normal' has encouraged the birth and growth of innovative companies, hungry for capital to finance their expansion. The ASEAN stock exchanges are also following a positive trend in terms of the number of IPOs and volume of investments attracted. The Stock Exchange of Thailand (SET) is the fastest-growing stock market in the region and looks set to accelerate even further.

First of all, the IPO is the process by which a private company goes public: by offering its shares to the public on a stock market, the company raises capital to support its growth and its private investors can make huge profits. The company can also seek capital through private equity, remaining private and without having to deal with the compliance (and risks) associated with the IPO, or simply postpone it. In recent years, emerging companies have tended to prefer private equity to the public one. When a company decides to go ahead with the IPO, it has to carefully prepare it. Not only all the requirements set by the stock exchange where the offering will take place and by the relevant regulator must be met, but the company should also seize the moment, enter the market at a favourable time, when it is easier to attract the attention of investors and stand out from other IPOs. For these reasons, companies wishing to go public meticulously prepare their IPOs with the help of investment banks. The whole process also involves a twofold choice. The choice of the company, which has to identify the most favourable stock market on which to bid and list its shares, and the choice of the investors, who have to decide on which stock exchange to focus their attention. The governance of the various stock exchanges can therefore seek to encourage companies to list on their exchange and provide the infrastructure to facilitate investors.

The growth of SET should be seen in this light. The Thai stock exchange is the second largest in ASEAN by capitalisation, after Singapore, but it is also the one that recorded the highest average daily turnover last May and attracted the most capital through IPOs in 2020. In an interview with Nikkei Asia in early July, SET chairman Pakorn Peetathawatchai outlined his strategy and goals for the years ahead. The Thai bourse has made listing requirements more accessible in certain sectors, so as to encourage particularly attractive companies, including foreign ones, and SMEs to go public. It has also worked with the Bangkok government to put together a substantial tax incentive package. In this way, SET intends to attract between 30 and 50 IPOs and almost 8 billion dollars each year, competing with Singapore to be the main ASEAN financial market. Looking at the early 2021 results, SET's ambitions seem within reach.

The Thai stock exchange seems to be so attractive because of the variety of players on it. The SET listing includes companies from almost every sector of the economy; companies that attract a balanced mix of investors. Almost 50% of the investors are from Thailand and retail. SET intends to facilitate the transactions of this group by using fintech tools: by the end of 2021, it will launch an online platform for the exchange of assets through digital tokens. This initiative should be seen in the overarching process of "democratisation" of the global investment market, made possible by new fintech platforms. Other stock exchanges in the region, such as those of Singapore and Indonesia, have adopted a different strategy, following a model that has been successful in the US: favouring SPACs (special purpose acquisition companies), companies that attract the funds of several investors, usually through the sponsorship of a well-known and influential entrepreneur, to merge with one (or more) companies at the time of the IPO. SPACs require special conditions to be successful but can allow companies to go public more quickly. SET is cautious about this practice, as are European stock exchanges. This caution should be applied to the IPO market as a whole, according to many observers: the huge success of IPOs in recent years may not last and the great results of certain listings take turns with surprising and unexpected thuds (such as Deliveroo's IPO on the London Stock Exchange). Investors are becoming much more cautious and selective in their choices, and this may slow down, but also stabilise, the race of companies towards listing.

Other ASEAN financial markets are outperforming themselves with their IPOs too, and are trying in various ways to make themselves even more attractive. Singapore is proving particularly inviting for the listing of foreign companies and even tech start-ups and has managed to bring home some major unicorns of the sector. The Indonesian stock exchange has seen an even higher number of IPOs than the Thai one, albeit with a lower value of capital attracted, reaping the benefits of Omnibus Law and the privatisation of some former state-owned enterprises. Vietnam, too, is catching up, thanks to greater coordination between the Hanoi and Ho Chi Minh City stock exchanges and the momentum of its economy, which is among the least affected by COVID in the region. The COVID is perhaps the main shadow cast on the future growth of ASEAN financial markets: the health crisis does not seem under control yet in some countries and certain sectors have not fully recovered - first, tourism, a fundamental sector for Thailand.

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Michelle Cabula published in Culture and society, Thailand

With Jareeporn Jarukornsakul logistics becomes a women’s business

By Michelle Cabula

Jareeporn Jarukornsakul, the 53-year-old businesswoman heading the WHA Group, is listed as one of the 50 richest citizens in Thailand in 2020 by Forbes. Her success story combines women entrepreneurship, attention to sustainability and virtuous synergy between public and private sectors.

After a Bachelor's Degree in Health Science from Mahidol University and a Master's Degree in Business Administration from Bangkok University, aged just 26, Jareeporn Jarukornsakul made her entrance into the field of logistics and in 2003 she co-founded the WHA Group with her husband Somyos Anantaprayoon. Today, she simultaneously holds the positions of Chairman of the Board of Directors and Chairman of the Executive Committee (CEO) of a Thai leading company in the field of integrated logistics, warehousing and industrial facilities.

Besides the US$480 million net worth (which has earned her 48th place in the Forbes’ ranking of her country’s 50 wealthier people), what is surprising is the presence of Jarukornsakul among the most influential figures in a field that is still considered to be predominantly male-oriented. Despite the divorce from her husband has cost her a fall in the ranking (they were ranked 32nd together in 2015), the businesswoman has been able to make a decisive impact on business since she took it over six years ago, intending to turn it into a multinational company within three to five years. Already in 2016, on the occasion of the acquisition of Hemaraj Land And Development Plc. (operating as a real estate developer), Jarukornsakul was determined to expand its business both in the domestic market and in foreign markets, focusing on an increasingly articulated and complete expertise.

Under the leadership of Jarukornsakul, the activities of the WHA Group have been intertwined with the Eastern Economic Corridor (ECC) initiative, the Thai government pilot project aiming to convert the Eastern coastal provinces - Chachoengsao, Chonburi and Rayong - into a regional technological and industrial innovation hub through the development of public transportation and logistics infrastructure. The company is committed to meet the needs of high-tech industries on different levels, being ready to operate in advance in those commercial districts designated to become increasingly attractive to investors in the future.

With an investment plan of 43 billion THB (approximately US$1.4 million) announced in August 2016, the Chairman has also made clear the company’s intention to become the leading provider for comprehensive logistics, real estate and industrial solutions in the Asian Economic Community (AEC). “Through Hemaraj, we play an instrumental role in the development of the automotive, electronics and petrochemical clusters, and we are now committed to being an active partner in the development of future industries”, she declared.

The launch of the WHA Industrial Zone – Nghe An in February 2017 represented "a firm statement of the company’s commitment to the country and the Southeast Asian region", to the point that the company is already thinking of replicating the experience. Future plans include the realization of another industrial zone near Hanoi that would become a new production base for Chinese, Japanese and Taiwanese companies and ASEAN investors looking to relocate their businesses to escape economic damages originating from the US-China trade war.

Jarukornsakul has defined Vietnam as "the new bright star" of the area, stressing that its geographical location, its rapidly expanding economy, the availability of an educated workforce and its involvement in numerous free trade agreements make it a privileged destination for investment by the company, which already has 30 years of experience in Thailand. According to the company’s website, the WHA Industrial Zone - Nghe An takes advantage of existing infrastructure to contribute to economic expansion and the creation of new job opportunities in the Nghe An region, in the respect of social, cultural and environmental aspects. 

At the end of last year, the WHA Group was awarded the "Thailand Sustainability Investment 2020", an award granted by the Stock Exchange of Thailand (SET) to companies that pay particular attention to environmental, social and governance issues (ESG). The group has proven sensitive to sustainability issues, in the awareness that "growth and progress must come with responsibility", as stated by Vivat Jiratikarnsakul, Chief Operating Officer Industrial and International for the company.

The WHA Group’s attention to social issues was concretely reflected in the virtuous project Clean Water for Planet. The initiative launched in 2016 consists of a series of collaborations with various educational institutions and government agencies aimed at raising awareness of the importance of proper management and protection of water resources and at providing clean water to local communities. The program also provides wastewater management services to customers: in 2019, the company announced the completion of a facility in the Pluak Daeng district in Rayong Province designed to treat wastewater through biological purification processes.

The initiative embodies the principles of the Sufficiency Economy Philosophy (SEP) conceived by the late King Bhumibol Adulyadej, father of the current ruler of Thailand. This innovative approach to development "implies that we act with moderation and reasonableness and that we always seek knowledge and morality in proposing and implementing development projects". The business model promoted by Jarukornsakul fits in perfectly with the strategies developed at the national level: a perfect example of how state and enterprise can work in unison. Not surprisingly, in 2021 the Bangkok Post has chosen her as the "woman of the year" for the industrial sector, celebrating her leadership skills and strategic vision.

Jarukornsakul’s story resonates well beyond Thailand, as shown by the numerous international awards that the entrepreneur can boast. Among others, her name appears on Asia’s Power Businesswomen 2020 list, in which Forbes staff brings together those Asian women in leadership positions who, in the face of the pandemic challenge, have been able to show resilience and that are conceivably preparing to lead the enterprises towards the recovery.

In addition to portraying a successful entrepreneur, the story of Jareeporn Jarukornsakul heading the WHA Group tells us about some virtuous corporate social responsibility practices that are taking hold in the area of Southeast Asia. More and more companies are engaged in a shared effort alongside government authorities and regional organisations to generate local development and improve connectivity in the ASEAN area. The pioneering experience of Jarukornsakul also becomes a source of inspiration for future generations of young women and men entrepreneurs who, increasingly sensitive to sustainability issues, will be well disposed to embrace the values of inclusive entrepreneurship and responsible business conduct.

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Stefano Rinaldi published in Economy and trade, Thailand

Surfing the wave at the right time: Flash Group’s case

Although in a sea of giants, the Thai scale-up aims to be the logistics leader for ASEAN e-commerce

Southeast Asian e-commerce is now booming with rosy growth prospects: the trend has already been analysed previously and is now a widespread belief among financial analysts. With a 46% growth rate for 2021, an annual business volume of $80 billion, ASEAN e-commerce has strong prospects for sustained growth, mainly due to the massive increase of online consumers in a few years, with over 350 million more in just 2021.

However, it is important to analyse how the e-commerce industry in ASEAN is changing and to highlight new trends that may lead to new opportunities, both present and future.

For example, a crucial factor that enabled the shift from offline to online retail was the necessary - but sudden and unexpected - increase in logistics traffic in the region's commercial hubs. This happened not only in the larger ports but also and above all in the smaller realities, where people used to live 'on the street' to get commodities.

We must indeed note that Asia is the second most integrated commercial system globally, second only to the European Union. In addition, the regional intra-trade volume here exceeds 58% of the total. It is not surprising that a region that was already best in class for commercial traffic management has managed to evolve and prosper, despite the emergency caused by the pandemic.

In general, many countries in the region (Thailand in particular) are accelerating the implementation of fifth-generation infrastructure networks, intending to reduce disruption during potential lockdown periods.

In this sense, entrepreneurs often refer to the action of ‘surfing the wave when is high, at the right spot and in a favourable wind’. This is this philosophy that has led Flash Group, a Thai scale-up, to attract more than $150 million in its first financing round.

Flash operated in the logistics sector, and in specific in e-commerce logistics. Kosman Lee, its founder, started the company at age 29 and with $1 million, but with the explicit goal of becoming a guiding light for logistics for the ASEAN online sector.

Although ambitious, the project has conquered the hearts of regional institutional investors such as Siam Bank, PTT Oil (Thai oil leader) and Buer capital, a Singaporean fund.

As a result, in the immediate future, the group expects to handle 2 million goods per day in its warehouses, increasing traffic 10-fold compared to the current volume.

However, competition is extremely tough here: industry players such as Best Inc. (China) and Kerry Express (Hong Kong SAR) make Flash’s goal extremely difficult to reach, especially for the short term. In addition, Flash Group wants to develop an in-house e-commerce platform, so as to enter a promising but exceptionally competitive market: it not only would compete with JD (the leader in Thailand), but also with regional conglomerates such as Sea, Grab and Tokopedia.

Such obstacles could discourage any entrepreneur. However, a golden rule of international trade must be remembered: if the pie gets bigger (or it is made bigger) everybody grows with it, and no one can lose in the immediate future. There is no industry in which this phenomenon is as clear-cut as in international logistics traffic.

 

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Niccolò Camponi published in Economy and trade, Thailand

The sufficiency economy philosophy

Thailand has designed an economic theory of development envisioned by the late King Bhumibol Adulyadej to modernize the country

Thailand is one of the countries that has benefited most from economic development since the 1990s, but the foundations of this development can also be traced back to the Sufficiency Economy Philosophy (SEP) conceived by King Bhumibol Adulyadej. Over the past three decades, the king has always spurred his people towards a gradual and balanced approach to development, that is, towards an economy of sufficiency that could guarantee basic needs for everyone without blindly pursuing economic growth as an end in itself. After the 1997 economic crisis, the king revised the SEP, to be interpreted also as a path through which to guarantee economic recovery and build a more resilient and sustainable development, able to face the challenges deriving from globalization. In 1999, the National Economic and Social Development Board gave the following definition of SEP: National Economic and Social Development Board ha dato la seguente definizione della SEP: 

"Sufficiency Economy" is a philosophy that stresses the middle path as an overriding principle for appropriate conduct by the populace at all levels. This applies to conduct starting from the level of the families, communities, as well as the level of a nation in development and administration to modernize in line with the forces of globalization… Sufficiency means moderation, reasonableness, and the need for a self-immunity mechanism for sufficient protection from impact arising from internal and external changes… In addition, a way of life-based on patience, perseverance, diligence, wisdom and prudence is indispensable to create balance and be able to cope appropriately with critical challenges arising from extensive and rapid socioeconomic, environmental, and cultural changes in the world.

SEP is a guiding principle to be applied at all levels, from the single individual to relations between states and the natural world. In the long run, it aims to build a socially balanced Thailand capable of responding to rapid and extensive changes in society, in the environment and in culture due to globalization. To achieve this result, SEP implies acting with moderation and reasonableness, seeking knowledge and morality in proposing and implementing development projects.

The most practical example of SEP implementation is in the proper management of land and water resources. This new approach to agriculture is commonly known in Thailand as New Theory Agriculture, which is based precisely on sustainable agriculture that guarantees self-sufficiency for rural families and a life in harmony with nature. The New Theory is divided into three phases: 1) sufficiency at the family level, 2) sufficiency at the community level, 3) sufficiency at the national level. In practice, it is a matter of guaranteeing access to food and increasing the income of rural families; increasing cooperation between farmers within the community and the creation of a social safety net within it; finally, reaching national sufficiency thanks to corporate social responsibility towards rural communities and the support of the public sector which facilitates trust between rural actors through institutional agreements.

In 2003, the NESDB launched a movement in favour of SEP to make it better known within and outside the country. Authorities hope that a better understanding of the concept among people will lead to a wider recognition of SEP, its greater application on a larger scale and potentially even its possible expansion outside the country. The movement also plans to create a network to facilitate understanding about SEP in all sectors and at all levels of society. It is composed of four distinct implementation programs: 1) development and coordination of the learning network, 2) creation of new knowledge through study and research, 3) production of new curricula and review of the learning process, 4) dissemination of information and knowledge to the public.

The purpose of establishing this propaganda movement in favour of SEP is to allow Thailand to pursue balanced and sustainable development in the globalized world. The promoters are aware that the theory will help build and develop solid foundations for society and improve the ability to adapt to any internal or external change and shock. Ultimately, the ultimate goal is to achieve the welfare of the Thai people as a whole.

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Agnese Ranaldi published in Economy and trade, Thailand

Lack of tourism in Thailand causes baht depreciation

Public intervention does not seem to be enough to rescue the national economy from the pandemic

“A perfect storm is engulfing Thailand’s baht and the one group of people who can save it are stuck in lockdown, thousands of kilometers from the arrivals lounges of Bangkok, Phuket and Chiang Mai.” A un articolo di Bloomberg article opens in these terms, noticing how the absence of tourists in Thailand translated into a depreciation of the national currency. Indeed according to the author, baht is currently the worst performing currency in Asian emerging markets. Several factors contributed to this decline: deficit in the balance of payments, the contextual increase of the dollar and the seasonal repatriation of dividends by Japanese investors. But the dire outlook on tourism is the real weak link in the national recovery.

In general, emerging economies of Southeast Asia are deeply embedded in the webs of globalization, which is why the consequences of the Covid-19 crisis were quickly transmitted from one country to another. The entire region based its economic growth on exports, attraction of foreign direct investments and global value chains - hardly hit by the pandemic. The contraction in global trade has strongly affected the economic stability of these countries, even though ASEAN maintained positive growth rates in 2020. In short, the picture is not the brightest: a series of systemic contributing causes afflict the region.

As argued by Victoria Kwakwa, Vice President of the World Bank for East Asia and the Pacific, political and health performances of ASEAN countries are commendable, but this is not enough for countries that heavily rely on the one sector that cannot be digitized: tourism.

ASEAN has pledged to do everything in its power to remedy the situation. It promoted the Development Framework, the 2020-2030 Work Plan and the White Paper for the implementation of intra-regional and international tourism. But in 2019 in Thailand tourism-driven services contributed to the 62% balance of payments surplus, and the situation has dramatically worsened since then. The current account deficit recorded in the first quarter of 2021 overwhelmed the Thai baht, which fell by 3% in March. According to economist Prakash Sakpal, an Asia’s expert, the current deficit of $ 1.7 billion in the first two months of 2021 compared with the surplus of $ 8.8 billion in the same months of 2020 clearly describes the situation. The Bank of Thailand hoped that a depreciation could have revived the economy, making Thai exports more competitive and favoring tourism. However, while most ASEAN countries have experienced a vigorous recovery in exports since mid-2020, Thailand has maintained a negative trend, declining 1.2% year-on-year in February last year.

According to Forbes, the country hopes that easing restrictions on intra-regional tourism will encourage people to travel more. The Center for Economic Situation Administration is considering welcoming vaccinated visitors without quarantining them for some destinations, starting in July 2021. However, different variants of Covid-19 could further slow the recovery of tourism, and perhaps the recovery for the whole country will be slower than expected. A rapid distribution of vaccines is crucial in this sense, especially with regard to international tourism - which is why the slowness of Europe, the third country of origin of tourists visiting Thailand after East Asia and Southeast Asia, does not bode well.

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