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Market |
Defence |
Report Type |
Market Research |
Country |
Thailand |
Published |
3 February 2010 |
Number of Pages |
66 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Thailand, in Q409, avoided outright violence in its ongoing political stand-off between the ‘red-shirts’, broadly supporters of exiled former prime minister, Thaksin Shinawatra, and the royalist-backed Peoples Alliance for Democracy, the ‘yellow-shirts’. but tensions continued to run high. Rallies planned initially by the red-shirts for November/December were delayed until January 2010, to avoid clashing with the King’s birthday. They will be a key test to government stability.
Violence along the Malaysian border has, if anything, worsened with nearly daily bombings continuing to claim lives. Prime Minister, Abhisit Vejjajjiva, rejected an opposition suggestion to set up a region of limited autonomy there, despite the proposal meeting approval in Kuala Lumpur.
Relations with Cambodia hit a new low in Q409, when Thaksin took up the post of economic adviser to the Phnom Penh government. Diplomats were recalled and accusations flew from both sides, setting back negotiations over the disputed Preah Vihear temple in the border region and shelving talks and agreements on maritiime borders. The situation in Q110 remains extremely tense.
Political stability is fragile with Prime Minister, Abhisit, sharing power in an uneasy coalition of fractious parties, made possible only by continued dealings with Newin Chidchob, an old-style up-country politician. Abhisit also came to power with the approval of the so-called People’s Alliance for Democracy (PAD) – the ‘yellow shirts’ – the largely royalist group that shut down Bangkok’s international airports for a week in late 2008, and wants most members of parliament appointed rather than elected.
Economically, conditions are improving marginally. We now expect – barring serious violence on the streets of Bangkok – Thailand's real GDP growth to reach 3.0% in 2010, from -3.8% in 2009, buoyed by strong domestic demand. Although net exports are likely to play a smaller role in contributing to growth, a continued recovery in the global economy is still crucial for Thailand's medium-term outlook.
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