Thailand Defence and Security Report Q4 2010
Includes 3 FREE quarterly updates
The security situation in Thailand remains an ongoing concern from several points of view. Most publicly, the political situation is unresolved. Thailand’s period of emergency rule was extended for another three months on July 7. Our view is that Prime Minister Abhisit Vejjajiva will not call elections until he has a chance of victory at the polls and this means there will not be an election this year. Despite the successful actions in May that put an end to the very public demonstrations against the government, there have still been recurring incidents of anti-government attacks. The risk of a successful high profile attack remains real. Such an incident would threaten confidence in the economy. The extension of emergency rule risks creating divisions within the military. While we do not foresee an imminent risk of a military coup, a delay in reconciliation efforts may exacerbate existing tensions within the military.
Not unexpectedly, the crucial tourism sector has suffered badly as a result of the violence. Tourist arrivals fell by more than half form 1.8m in December 2009 to just 0.m in May 2010 and the extension to emergency rule is a threat to Thailand’s long term image within the tourism market. Less in the public eye internationally than the events in Bangkok, but still a major issue, attacks linked to Muslim separatists continue in the southern part of the country. More than 3,500 people have been killed in these attacks since 2004. At the same time insurgencies in neighbouring Myanmar, Cambodia and Laos all impinge on Thailand’s border areas.
In terms of a local defence industry, most of the companies involved have their main focus on commercial operations and only a partial involvement in defence manufacture.
Economically, Thailand recovered from the impact of the global financial crisis with an impressive 12.9% y-o-y growth in real GDP in Q110. However, much of this was attributable to inventory rebuilding. Partly due to softening export earnings, especially but not only from tourism, we are maintaining our forecast for real GDP growth to come in at 3.6% for 2010 and increase only very marginally to 3.7% in 2011. While we believe the Bank of Thailand may begin to raise interest rates we do not see them doing so aggressively. Instead we see what might be called a ‘normalisation’ of rates following the cuts made in response to the global financial crisis.
The security situation in Thailand remains an ongoing concern from several points of view. Most publicly, the political situation is unresolved. Thailand’s period of emergency rule was extended for another three months on July 7. Our view is that Prime Minister Abhisit Vejjajiva will not call elections until he has a chance of victory at the polls and this means there will not be an election this year. Despite the successful actions in May that put an end to the very public demonstrations against the government, there have still been recurring incidents of anti-government attacks. The risk of a successful high profile attack remains real. Such an incident would threaten confidence in the economy. The extension of emergency rule risks creating divisions within the military. While we do not foresee an imminent risk of a military coup, a delay in reconciliation efforts may exacerbate existing tensions within the military.
Not unexpectedly, the crucial tourism sector has suffered badly as a result of the violence. Tourist arrivals fell by more than half form 1.8m in December 2009 to just 0.m in May 2010 and the extension to emergency rule is a threat to Thailand’s long term image within the tourism market. Less in the public eye internationally than the events in Bangkok, but still a major issue, attacks linked to Muslim separatists continue in the southern part of the country. More than 3,500 people have been killed in these attacks since 2004. At the same time insurgencies in neighbouring Myanmar, Cambodia and Laos all impinge on Thailand’s border areas.
In terms of a local defence industry, most of the companies involved have their main focus on commercial operations and only a partial involvement in defence manufacture.
Economically, Thailand recovered from the impact of the global financial crisis with an impressive 12.9% y-o-y growth in real GDP in Q110. However, much of this was attributable to inventory rebuilding. Partly due to softening export earnings, especially but not only from tourism, we are maintaining our forecast for real GDP growth to come in at 3.6% for 2010 and increase only very marginally to 3.7% in 2011. While we believe the Bank of Thailand may begin to raise interest rates we do not see them doing so aggressively. Instead we see what might be called a ‘normalisation’ of rates following the cuts made in response to the global financial crisis.
Contents
Executive SummarySWOT Analysis
Thailand Security SWOT
Thailand Defence Industry SWOT
Thailand Political SWOT
Thailand Economic SWOT
Thailand Business Environment SWOT
Global Political Outlook
Global Hotspots
Table: Election Timetable, H210-2011
United States: Obama To Be Tested By Mid-Term Elections
Latin America: Beyond Lula
Western Europe: All About Austerity
Central Europe: New Governments To Be Tested
South-East Europe: Turkey's Ongoing Evolution
Russia And The Former Soviet Union: Focus On Security
Middle East: Ongoing Challenges
Sub-Saharan Africa: The Election Conundrum
Asia: The Usual Risks Prevail
Wild Cards To Watch
South East Asia Security Overview
The Strategic Outlook For The 2010s
South East Asia in the Global Context
Main Islamist Militant Groups in South East Asia
Other Regional Threats
Political Overview
Domestic Politics
Long-Term Political Outlook
Security Risk Ratings
BMI’s Security Ratings
Table: Asia Pacific Regional Security Ratings
Table: Asia Pacific State Vulnerability To Terrorism Index
Thailand’s Security Risk
City Terrorism Rating
Table: BMI’s Asia City Terrorism Index
Security Overview
Internal Security Situation
Southern Thai Muslim Insurgency
BRN-K
GMIP/PULO
Table: Thai Muslim Insurgents
Bilateral And Multilateral Security Relations
Drugs Trade
Armed Forces and Government Spending
Armed Forces
Table: Regional Armed Forces, 2010 Forecast (including conscripted, ‘000 personnel)
International Deployments
Weapons Of Mass Destruction
Market Overview
Arms Trade Overview
Procurement Trends and Developments
Competitive Landscape
Table: Thailand’s Military Key Players
Industry Forecast Scenario
Table: Thailand’s Armed Forces, 2007-2014 (‘000 personnel unless otherwise stated)
Table: Thailand’s Government Defence Expenditure, 2007-2014
Macroeconomic Outlook
Thailand – Economic Activity, 2007-2014
Company Profiles
Loxley
Minebea
Thai-Italian Interarms Company
Country Snapshot: Thailand Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Non-Agricultural Wages, 2001-2012
BMI Methodology
How We Generate Our Industry Forecasts
Defence Industry
City Terrorism Rating
Table: Methodology
Sources
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