The Russia-Ukraine crisis has continued to impact Thailand’s import and export trade, with both manufacturers and consumers being affected by rising oil prices that have caused a spike in inflation.
According to Deputy Prime Minister and Commerce Minister Jurin Laksanawisit, a close analysis of downward trends in trade volumes since the fighting broke out has revealed a correlation that most experts attribute to volatility in the value of the Russian ruble. As a result, Thai businesses have reduced volumes of trade to mitigate against the increased risk of price fluctuations, a trend that is being repeated all around the world.
The Prime Minister has met his advisor team and discussed economic woes stemming from the global fuel price hike and the conflict between Russia and Ukraine.
Prime Minister General Prayut Chan-o-cha instructed officials to quickly find solutions to alleviate people’s hardship from rising energy costs. These may include more subsidies for fuel, cooking gas, and power bills.
General Prayut also ordered authorities to look into establishing a unit to help people manage debts, preventing them from losing essential assets, such as houses and cars.
Jurin said all ministries are now working on ways to dampen the rising costs of energy products and consumer goods to spare both producers and consumers the worst of the economic fallout resulting from the conflict. He added that the administration is also putting extra resources into enforcing laws prohibiting price gouging for all products.
The minister further noted that the government will continue its policy of strict price controls on vital consumer staples, which have been grouped into 18 categories regardless of how the situation in eastern Europe plays out.
Jurin also defended caps placed on the prices of various electric home appliances, such as refrigerators and rice cookers, as being guided by their universal necessity and the impact that changes in more expensive items can have on the overall cost of living among the public.
Thailand has historically maintained friendly relations with Russia, a relationship that dates back to King Chulalongkorn’s personal friendship with Tsar Nicholas II. But whether it is possible for business as usual to go on between Thailand and Russia is an open question. It will also impact Thailand’s international obligations: as Kavi Chongkittavorn points out, Russia’s presence at the APEC Summit in November, which Prime Minister Prayut Chan-o-cha is keen to preside over, could disrupt the scheduled meetings.
In addition, there will be domestic repercussions from Russia’s invasion of Ukraine in Thai politics.
Some of the fallout for Thailand will be straightforward. The Russian economy is buckling under the weight of unprecedented sanctions, which will mean that the recovery of Thailand’s tourism industry will likely have to happen without Russian tourists. (Russian tourists also dropped after Putin’s seizure of Crimea in 2014.) Rising gas prices will increase the cost of living, increasing problems for a government already under siege as it prepares for an election no later than next year. The most recent decision taken by Western capitals to boot Russian banks out of the SWIFT system will also undoubtedly have economic ramifications, especially for Thai businesses who do business with Russia.
The Prime Minister said his administration is urgently expediting its mega projects, to increase the economic activities. These programs include initiatives in the Eastern Economic Corridors, infrastructure projects, and railways construction projects, to name a few.
The Eastern Economic Corridor is a special economic zone of three provinces in eastern Thailand. Collectively, these provinces occupy an area of 13,266 km2 (5,122 sq mi), and in 2016 had an estimated population of over 2.8 million.