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Factba.se: Australia DFAT Country Briefs - Thailand
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COUNTRY BRIEFS


POLITICAL OVERVIEW

Recent Political Developments in Thailand

On July 3, 2011, Thailand's Pheu Thai party won a majority 265 of 500 seats in Thailand's general election. With the inclusion of several minor parties, Pheu Thai controls 300 seats in parliament. On August 5, 2011, Ms. Yingluck Shinawatra became Thailand's 28th prime minister and its first female prime minister. Yingluck is the sister of former Prime Minister Thaksin Shinawatra who was ousted in a September 2006 coup.

His Majesty King Bhumibol Adulyadej is the world's longest reigning monarch and celebrated the 65th anniversary of his accession on 9 June 2011.

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ECONOMIC OVERVIEW

Thailand's economy suffered during the global financial crisis of 2008-9, but rebounded strongly. Economic growth was 7.8% in 2010, making Thailand one of the fastest growing economies in Asia. Growth is expected to have slowed to between 1.5 - 2.0% in 2011 due to large-scale flooding that swept the country from July through November, but a recovery to 4 to 5 per cent growth is expected for 2012. Thailand's export sector, which accounts for around 70 per cent of the country's GDP, is growing rapidly. The National Economic and Social Development Board is aiming for export growth of 16.5 per cent in 2011, but exports may weaken going forward as markets in developed countries continue to struggle.

The new Thai Government has announced a series of large-scale infrastructure projects and populist spending plans that should support private consumption and stimulate domestic demand. The policies are designed to launch the Thai economy to a higher level of growth that relies less on exports. However, the additional spending raises the risk of more rapid inflation, a possibility the Bank of Thailand will be watching closely.

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BILATERAL RELATIONSHIP

Australia and Thailand have longstanding and deep connections, and cooperate in a broad range of areas of mutual interest, including trade and investment, law enforcement, counter-terrorism, education, security, migration and tourism. Formal diplomatic relations were established between Australia and Thailand in 1952, and 2012 marks the 60th anniversary of relations. The bilateral relationship is facilitated by mutual membership of bodies such as the EAS, APEC, the ASEAN PMC, and the Cairns Group.

His Majesty King Bhumibol Aduljadej visited Australia in 1962 and the Thai Crown Prince, His Royal Highness Maha Vajiralongkorn, studied at secondary school and military college in Australia, subsequently completing training with the Australian Army's Special Air Service Regiment in Perth.

Our strong bilateral relations are reflected in extensive people-to-people links. Australia continues to be a leading destination for Thai students, while Thailand attracts large numbers of Australians for tourism and business. Prior to Thailand's decision in 2003 to decline development assistance Australia was a major aid partner. Many Thais studied in Australia under the Colombo Plan and other programs.

Australia's trade and economic relationship with Thailand has grown strongly since the entry into force of the Thailand-Australia Free Trade Agreement (TAFTA) (http://www.dfat.gov.au/trade/negotiations/aust-thai/) Thailand-Australia Free Trade Agreement (TAFTA) on 1 January 2005. Thailand is now Australia's ninth-largest trading partner measured by two-way trade. Two-way merchandise trade was worth over $16 billion in 2010, up from $7 billion in 2004. Two-way services trade with Thailand was worth nearly $3 billion in 2010. TAFTA has also improved business mobility, strengthened transparency, encouraged international best practice, and promoted bilateral cooperation in a range of areas including customs procedures, government procurement, competition policy and intellectual property protection.

Australia continues to work with Thailand on the implementation of TAFTA, with Australia hosting the second TAFTA Joint Commission (JC) in Canberra on 3 February 2011. The JC resulted in the convening of several working groups, which met in July 2011 to address implementation issues and market access concerns, and will report their findings at the third TAFTA JC due in June 2012. Australia and Thailand are also parties to the ASEAN-Australia-New Zealand Free Trade Agreement, which entered into force on 1 January 2010.

A treaty-level Agreement on Bilateral Cooperation entered into force on 27 July 2005. It complements TAFTA by providing a framework for future bilateral cooperation in non-trade areas, including security and law enforcement, environment and heritage, science and technology, telecommunications, civil aviation, public administration, energy, immigration, education, culture and social development. In addition, a Memorandum of Understanding (MOU) on 'Work and Holiday' visas allows nationals of both countries to undertake 12-month working holidays in the other country. The inaugural meeting of the Joint Commission on Bilateral Cooperation, as established under the Agreement, was convened by the former Australian Minister for Foreign Affairs, the Hon Stephen Smith, MP and Thai Minister for Foreign Affairs, HE Mr Kasit Piromnya, on 8 May 2009 in Perth.

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SECURITY AND COUNTER-TERRORISM COOPERATION

Regional stability is a key area of mutual interest and the two countries undertake regular high-level dialogues on regional security. Thailand was one of the first countries with which Australia concluded a bilateral MOU on Counter-Terrorism in October 2002. This was followed by MOUs on police cooperation (June 2003), mutual assistance in customs matters (December 2003), and money-laundering (June 2004), and a Mutual Legal Assistance Treaty (July 2006). Thailand is also a key player with Australia in efforts to strengthen regional cooperation against people smuggling and trafficking and has extradited accused people smugglers to stand trial in Australia in recent years.

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DEVELOPMENT ASSISTANCE

In November 2003, the Royal Thai Government expressed its wish to transition from being an aid recipient to being an aid donor. Australia continues to provide limited support to Thailand as part of efforts to strengthen the capacity of regional organisations such as ASEAN and APEC. Thailand also participates in Australia's efforts to improve regional responses to shared transboundary challenges such as people trafficking, pandemic preparedness and emerging infectious diseases.

In May 2009, the former Minister for Foreign Affairs, the Hon Stephen Smith, MP, approved an assistance package of $1 million to assist in improving education in southern Thailand.

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Last Updated: February 2012

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