Thailand’s fight with the coronavirus

  • Economy
  • Monday, 20 Jul 2020

Thailand's ambassador Narong Sasitorn: Domestic tourism has sprung back to action. Given the sizable domestic tourism market, this goes a long way in supporting tourism operators and related businesses in Thailand. Most domestic airlines have put their planes up in the air now in Thailand."

Thai Ambassador to Malaysia Narong Sasitorn speaks to StarBiz on his government’s response to Covid-19 and the socioeconomic impact of the pandemic

Following an early scare with the Covid-19 pandemic, Thailand is opening up again.

On Jan 12, Thailand’s first coronavirus case was detected. This is believed to be the first coronavirus case which occurred outside China.

When the news hit, uneasiness spread among the population and many thought the worst of it.

But as events of the past few months have shown, Thailand reacted quickly and managed to control the spread of the disease, with the authorities gaining a foothold on the pandemic.

Masked crowds are now filling Bangkok’s famed Chatuchak Market, one of the largest in South-East Asia.

The country could not afford mass screening so contact tracing was deemed to be more effective, with more than 1,000 epidemiological teams investigating cases and monitoring them.

Public co-operation has played a key role in containing the epidemic. According to one study, 95% of Thais are wearing masks in public during the pandemic, the highest rate in South-East Asia. The Thai government has been credited for not just the public health measures taken, but also the economic packages launched to assist the business sector.

Q: The Thai National Security Council set July 1 for the lifting of all business and activity lockdowns imposed earlier to cope with the Covid-19 pandemic. But the state of emergency has been extended for a third time, until July 31. Can you explain this?

A: The efforts to cope with the Covid-19 pandemic involves several agencies at the national and provincial levels. The National State of Emergency allows speedy, prompt and effective coordination. The situation in Thailand has started to improve markedly following the State of Emergency coming into force. For almost two months, Thailand has reported zero Covid-19 local transmissions. I must add that the state of emergency decree does not in any way curtail the rights of Thai citizens safeguarded under the Constitution.

Q: Can you tell us more about the relaxation of measures and easing of restrictions on the coronavirus lockdown? When will Thailand fully reopen for business, encompassing all business sectors?

A: Starting from July 1, we are at Phase 3 of the Relaxation of Measures and Easing Restrictions. Most economic activities are now allowed to operate, which includes malls, convention centres, exhibition halls, beauty salons, nurseries, gyms, health spa and traditional Thai massage, and movie theatres (with a limit of not more than 200 people).

We will continue to calibrate our measures to strike a good balance between protecting lives and the livelihood of Thai people.

PM Prayut Chan-O-Cha has held several discussions with business leaders in the manufacturing, tourism and banking sectors. As a result, we have proceeded to ease many restrictions and allow most businesses to open, with agreed SOPs. Domestic tourism has sprung back to action. Given the sizable domestic tourism market, this goes a long way in supporting tourism operators and related businesses in Thailand. Most domestic airlines have put their planes up in the air now in Thailand.

Q: And what about pubs, bars and other nightlife spots?

A: They are now back in business. Pubs and bars are allowed to sell alcoholic beverages but can open only until midnight. All customers have to check in at “ThaiChana” (Thais win) application and go through temperature checks. Operators must ensure safe spacing is strictly observed, and hand sanitisers provided.

Q: Like in Malaysia, many of your shopping malls have already been allowed to re-open, with the operating hours also extended. Shopping is said to be more exuberant in Thailand!

A: Our shopping malls are open until 10pm. SOPs - temperature check, QR code, safe spacing and hand sanitisers are now the norm everywhere in Thailand. Certainly this is a challenging time for retail industry everywhere. Retail operators in Thailand have invested in reinventing themselves to provide confidence and ensuring a safe environment.

They have adopted new technology, such as robots checking temperatures, touchless lifts, QR code registration and machines spraying disinfectant at shoppers’ feet, etc.

Q: Thailand has a much lower Covid-19 infection and fatality rate than Malaysia. On some days, you had no new cases and no deaths. What would you attribute this to?

A: First, we need to get people informed and we have done this since the early days of the pandemic. The people need to be informed of the situation and how to keep themselves and their families safe.

We have a high degree of public compliance.

Another reason is we have very able and dedicated health professionals.

In fact over the past 20 years, the health industry in Thailand has developed and expanded to a great degree.

Before Covid-19, Thailand ranked among the top destinations for medical tourism because of its high standard and value for money medical treatment. At the moment, we have made real progress in the development of Covid-19 vaccine.

Our researchers at Chulalongkorn University have been working closely with Pennsylvania University to develop the mRNA type vaccine - CU-Cov19.

We are about to start the first stage of human tests following successful tests with animals. Discussions have been made with the world’s leading pharmaceutical companies for vaccine production at a later stage.

Q: What is unique about the public health safety measures being observed in Thailand?

A: We have strong and committed Village Volunteers. There are approximately 1,040,000 volunteers who have played a very important role in supporting the government’s efforts to curb the spread of Covid-19.

They work very closely with local public health authorities. They knocked on doors to give advice on personal hygiene, how to observe social distancing, provide supply of surgical masks and sanitisers, and to identify people at risk. Whenever there are visitors, they would visit those households and conduct interviews, give advice on isolation and home quarantine. They are our heroes.

Q: Can you give us a sense of how the Covid-19 pandemic has affected the Thai economy? How many million jobs were lost?

A: The Thai economy is fully integrated with the world economy. Our exports account for 72%, tourism over 15%. Our manufacturing industry is being hit by supply chain disruptions and drop in demand for our products. Tourism perhaps is the hardest hit sector. We had 40 million visitors last year and this year it is expected to drop by almost 70%. Millions have lost their jobs or have their salaries cut.

For a crisis like this, the government has to step in and play a leading role. Our macroeconomics is in a very strong position with relatively low public debt to GDP ratio.

Thailand is among the top in terms of the size of our foreign reserves. This gives the Thai government and the Central Bank policy options to lead our economy out of the crisis.

Q: On your government’s economic stimulus measures, what is the impact so far?

A:TheThi government already announced three stimulus packages worth around 2.4 trillion baht (US$75bil) or around 15% of the GDP. Like Malaysia, the main measures are direct fiscal injection into the economy, soft loans for businesses and SMEs and various tax incentives and measures. They are to ease cash flow for businesses, sustain employment in the country and provide relief for certain groups of people.

We don’t provide wage subsidy like in Malaysia. But we provide direct cash relief of 3,000 to 5,000 baht to the self-employed, freelancers, disabled and elderly. We also provide cash relief of 15,000 baht per household to farmers for three months. These schemes are to benefit 27 million people and 10 million households around the country.

Apart from the cash relief, the Bank of Thailand also makes available a fund of around 500 billion baht for the SMEs. Particular focus is given to SMEs in tourism related sectors as they are the hardest hit by Covid-19.

Currently, 55 billion baht in soft loans have already been approved. We are continuing to make sure that businesses and individuals are able to easily access these facilities.

Like Malaysia, we also have a debt moratorium for three to six months and interest rate reduction over six to 12 months on existing loans to give businesses and individuals some breathing space.

Reduction of contributions to provident funds, tax holiday and tax reduction are also given to ease their burden as well as to encourage employers to continue employing their workers.

And just last month, the Thai government issued stimulus packages worth 22.4 billion baht (US$718mil) to revitalise the tourism industry.

The packages, named “We Travel Together’ and ‘Moral Support’, are designed to boost domestic travel by providing an array of travel perks such as subsidised flights, car rental fees, and bus fares. There are also subsidies available for hotel accommodation, food, and facilities provided at tourist destinations.

Q: Can you tell us about the measures taken to resuscitate the SME sector? It was your smaller-sized businesses that were really hard hit?

A: Of course, our focus is on SMEs. Not only are they the hardest hit in the Covid-19 situation, SMEs also account for 80% of our total employment.

We allow SMEs to get loan repayment holiday on both principal and interest for three to six months. And for the tourism-related sector, the loan repayment holiday can be up to two years.

They also get income tax reduction to 1.5% this year.

SME employers are now also able to deduct three times of their salary expenses from their income tax.

SMEs can also apply for different soft loans which are made available to them.

Commercial banks also give certain SMEs a six-month debt moratorium on principal and interest.

PM Prayut has given instructions to help the SME sector by setting up a quota system to ensure a fixed volume of government procurements are from SMEs, particularly local SMEs.

The government also set up a budget of 100 billion baht to support projects which help improve the quality of SMEs products. The PM also encourages large corporations to consider purchasing goods and services from Thai SMEs.

Since May 3 2020, Thailand has gradually relaxed certain restrictions to allow businesses to reopen. The first groups were SMEs businesses such as restaurants, food stalls, street vendors and hair salons.

Q: Onto Malaysia-Thai affairs. Almost a year ago, you spoke with optimism on creating what you termed as “seamless connectivity” between our countries. With the unprecedented events of late, does that dream look like a bridge too far?

A: The pandemic and growing trade friction between the US and China even further underscore the need for Thailand, Malaysia and all Asean countries to double our efforts to fulfil our connectivity master plan.

Why? Because Thailand, Malaysia and the whole Asean region are considered to be a destination for international investors who seek to diversify their production bases. Of course, we can always come up with all kinds of incentives for foreign investors. But, if Asean as a region wants to be on the map, we need to improve logistics connectivity.

Connectivity is the key enabler. On this, Thailand and Malaysia, given our locations, should make the first move.

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