Thai Military Coup – Investment and Operational Issues
BANGKOK – As has been widely reported elsewhere, Thailand has just come under a Military coup following months of unrest between political parties and the resignation of the Prime Minister, Yingluck Shinawatra, earlier this month. The situation had been compounded by opposition forces and the Deputy PM refusing to negotiate or stand down.
Thailand is no stranger to such coups, which occur on a somewhat regular, if peaceful basis. Coups have occurred on average every decade since the end of WWII, with the most recent prior to this being in 2006, 1991, and 1977. They have mainly tended to be bloodless, and typically aimed at restoring order amongst what is today a politically divided country.
Thailand is a monarchy, with an aging and sadly unwell King, while the Crown Prince as successor is generally regarded as unsuitable. There are rumors he is also unwell, suffering from a “blood” disease. The Crown Prince’s wife, who would become Queen upon the current Kings death, has additionally scandalized the typically conservative Thai public by appearing scantily dressed in a leaked private video.
There are political factions in the country who wish to abandon the Monarchy and install a republic, hence the divided opinions. In an earlier announcement, the country’s army chief General Prayuth Chan-ocha proclaimed he has taken control of the government to restore order. “In order for the situation to return to normal quickly and for society to love and be at peace again … and to reform the political, economic and social structure, the military needs to take control of power,” Prayuth said. The previous 2006 coup saw the military in power for twelve months before they handed the reins back to a democratically elected government.
The practical issues concerning Thailand, and Bangkok in particular right now, have seen the imposition of a curfew between 10 pm and 5 am. It is important to note this is a national curfew and not just restricted to Bangkok. No-one is allowed on the streets during this time, which are being patrolled by the military. This means all bars, evening restaurants and social areas are closed. Individuals breaking curfew may be subject to 12 months imprisonment. It also means that to beat Bangkok and other cities notorious traffic problems, staff are advised to leave for home by 5 pm latest in order to deal with rush hour traffic and be home prior to the curfew imposition each evening.
In addition, all TV and Radio stations are currently closed, with information and programming being solely disseminated by the military. When channels are reopened, this will mean a diet of non-political local and Hollywood films and music for the interim period, together with news broadcasts under military supervision. Political content for the time being has been banned, pending future military attempts to try and install viable elections.
While such measures may seem drastic to many in the West, Thai citizens are not unfamiliar with these constraints, which have in the past been a way for Thailand to allow tempers to simmer down and to enforce a period of calm and reflection – a situation not at odds with what remains a strongly Buddhist nation. Businesses are able to operate normally, although as mentioned, office workers are advised to leave by 5 pm latest. Some, travelling on what has become even more congested rush hour travel, may not arrive in at work on time. Foreign nationals planning holidays in Thailand this year are advised to choose alterative destinations at this time, although business meetings and travel may still be scheduled, although executives need to bear in mind the applicable curfew hours and the impact on operational staff and facilities. .
Mattaya Deejingjing, Managing Partner of the Dezan Shira Asian Alliance practice in Bangkok, reports the local situation as quiet and of people behaving normally. Chris Devonshire-Ellis, Dezan Shira & Associates‘ Managing Partner for Asia comments: “As the summer heat and rains are coming, I would expect the impositions in Bangkok and Thailand to last for several months until the weather cools down, and political parties and the Monarchy have time to discuss required reforms with the military. The timing of these events may also be in part to head off any news concerning the King.”
“I see this break from the democratic process in Thailand as an advisable temporary step to allow the populace some breathing space and to gather their thoughts at this time. I would expect to see the formation of an interim government sometime in the autumn with possible elections early next year, and see no major cause for alarm,” he further remarked. “Businesses will continue to function, albeit with curfew considerations, while immediate foreign investment plans may be put on hold. Otherwise, the intention will be to see Thailand come out of this period better united and functioning as normal. If this transition is a success, Thailand may well yet have the potential for an impressive 2016. The fundamentals for growth in Thailand remain strong once this political hurdle is overcome. We all wish the best for the Monarchy and a successful outcome for Thailand during these difficult times.”
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com.
Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.