Thailand bids for stronger regional role

Thai Prime Minister Yingluck Shinawatra's recent South Asia tour signals the kingdom's intention to deepen economic and commercial ties with the region.

By Udayan Namboodiri for Khabar in New Delhi

June 20, 2013
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Thailand, long regarded as an easygoing tourist's paradise with a low-cost production base, is becoming an increasingly visible presence on the regional stage as it seeks to widen its sphere of influence. Its emerging role was highlighted in recent weeks as Prime Minister Yingluck paid back-to-back visits to Sri Lanka and the Maldives between May 31st and June 2nd, shortly after talks in Bangkok with Indian Prime Minister Manmohan Singh.

  • Thailand's Prime Minister Yingluck Shinawatra (front right) attends an ASEAN summit in Brunei in April. Her recent official visits to Sri Lanka and Maldives show Thailand's aspirations to widen its economic and diplomatic role in the region, analysts say. [Philippe Lopez/AFP]

    Thailand's Prime Minister Yingluck Shinawatra (front right) attends an ASEAN summit in Brunei in April. Her recent official visits to Sri Lanka and Maldives show Thailand's aspirations to widen its economic and diplomatic role in the region, analysts say. [Philippe Lopez/AFP]

Yingluck's Sri Lanka visit ended a decade-long hiatus. In 2003 her brother, former prime minister Thaksin Shinawatra, paid a visit to the island nation and laid down new foundations for bilateral trade. Sri Lanka is currently the third biggest economic partner of Thailand in the South Asia region, after India and Bangladesh.

The Maldives, meanwhile, has never before hosted a Thai head of government. Yingluck's trip was seen as an historic event in a country that, like her own, is associated deeply with tourism.

Observers from across the ASEAN region followed the prime minister's South Asia tour with interest. "Ms. Shinawatra is a leader of great vision who is taking firm strides to develop a linkage between her country and the emerging economies of South Asia," Indian Minister of State for External Affairs E. Ahamed told Khabar South Asia. "There is lot to learn from Thailand and this is the kind of economic diplomacy which will ensure lasting peace and stability."

Jason Chen, an expert on ASEAN Regional Forum affairs at Singapore National University, said Thai firms are seeking new regional markets, while also helping to set a high standard.

"Thai companies are now acquiring great credibility for leading the ASEAN countries in corporate governance and observance of best practices," he told Khabar. "Now these companies are looking to becoming multinationals and the emerging markets of South Asia are perceived by them as ideal for trying their luck. The Thai prime minister pushed for them at Colombo and New Delhi and we expect to see more such tours in the near future."

Pisan Manawapat, the Thai ambassador to India, said regional relations are a priority for his country.

"Our Prime Minister attaches high importance to smooth trade ties with South Asian countries," he told Khabar. "We are strategically placed at the meeting point of the ASEAN and South Asia Region, and wish to take the fullest advantage."

Meanwhile, both Sri Lanka and the Maldives stand to gain from a broadening of economic links. Sri Lanka is trying to keep its economic momentum going following the end of a brutal war with Tamil separatists, while the Maldives has seen its own economy shaken by political instability and worries over rising Islamist fundamentalism.

Sri Lanka looks to "wider networks"

The Thai prime minister arrived in Colombo with representatives of 30 large companies. She became the second leader from her country to address the Sri Lankan parliament; her brother did the same during his 2003 visit.

"We are looking for business, trade and investment opportunities in the hotel and tourism, renewable energy, food processing, medical tourism, construction and gem and jewellery sectors," Yingluck told the Sri Lankan MPs. "This is not a one-shot event and we will continue the dialogue aimed at expanding bilateral trade and investment."

Sri Lankan business leader S. Dias told Khabar that his country hopes to see wider economic avenues open up as a result of strengthened bilateral ties.

"The biggest takeaway as far as Sri Lanka is concerned is the expectation that trade links with Thailand will lead to the opening of wider networks for our businessmen in the ASEAN region," he said.

Yingluck and Sri Lankan President Mahinda Rajapaksa both reiterated their concern about economic prosperity in the Bay of Bengal Rim region, of which Thailand and Sri Lanka are both components. "This regional focus was earlier missing in the relationship but now a larger vision seems to have taken over which is good for both countries," Dias said.

As the two leaders looked on, officials of the two countries signed agreements on tourism co-operation, science and technology; on a visa waiver for officials and diplomatic passport holders; and on establishing a special subcommittee to discuss trade issues, including tariffs.

The two respective chambers of commerce, meanwhile, signed a memorandum of understanding to expand investment and business relations between the two countries.

Maldives: a stronger economy will deter fundamentalism

In the Maldives, Yingluck met with President Mohamed Waheed, who took office in February 2012 following the controversial resignation of his predecessor, Mohamed Nasheed. Political unrest and concerns over the rising influence of hardline Islamists have threatened to undermine the small island nation's economy, which is heavily dependent on tourism.

Analysts say strengthening the trade links between Maldives and the rest of the region could help repair the damage.

"The Thai offer to double bilateral trade in two years from the present level of only $100m would go a long way in easing the poverty of Maldives and combat the influence of Islamic fundamentalism, the former Indian Ambassador to the Maldives, H.S. Sathe, told Khabar,

During the visit, Yingluck and Waheed discussed the possibility of a free trade agreement in the future, while cementing present ties with seven agreements, mostly relating to trade and economic co-operation.

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