Head of Asia analysis and forecasting at IHS Country Risk, Omar Hamid, looks at the impact of the latest protests to hit Thailand
Over the past year, the Puea Thai Party (PTP) government has been under increasing pressure from farmers over government subsidies. The PTP came to power on the back of several populist policies, which included subsidy programmes. However, as government debt has increased (from 38.2% in December 2008 to 44.3% in June 2013), the PTP has considered limiting its spending, particularly with regards to subsidies.
On 23 September, Nakhon Si Thammarat police increased security at checkpoints along the route of a planned protest by rubber farmers at Ban Khuan Nong Hong intersection. Rubber farmers are the latest to have protested to demand more government subsidies. These protests are likely to continue in the next three months, increasing risks to cargo in the south and to property in Bangkok.
The rubber farmer protests started in August. They were in part motivated by the success of the rice farmers in reversing the government’s plan to reduce rice subsidies. Rubber farmers have demanded that the government guarantee a price of $3.84 per kilogram of sheet rubber, compared with the market price of $2.56. Rubber farmers in the south have been most restive, with protests in Nakhon Si Thammarat province becoming violent, unlike the largely peaceful rice farmer protests.
Rubber farmers have blocked several highways, including Highway 41, and railway tracks. In response, on 10 September the cabinet approved a plan to double subsidies to the rubber farmers to $659m. While most accepted the deal, rubber farmers in the south continued their protests. This is where a large number of rubber farms are based, and it is the stronghold of the opposition Democrat Party.
Rice farmers are predominantly based in the north and support the PTP. As such, the PTP government is unlikely to feel the same pressure it did with the rice farmers’ demands, whose support it needs in the 2015 general election. As a result, there will be an increased risk of protests in Bangkok and the south over the next three months (see the areas shaded red in map).
As rubber protesters feel that they are being unfavourably treated, these protests are likely to be violent, with an elevated risk of arson attacks on government buildings and offices in central Bangkok. However, the attacks are unlikely to spread to the tourist belt and districts of Pathumwan, Ploenchit, Silom and Bangrak.
Beyond the three-month outlook, other farmer groups are likely to stage similar protests to either demand more or to reverse decisions to reduce government subsidies.
More articles, discussions and interviews from our series of country-focused risk reports are available at our Asia Risk Report hub, with a Thailand report coming soon.