Commentary | Sek Sophal, Scrapping the Submarine Deal? Domestic Politics and Regional Security in Thailand
The visit of the German Brandenburg-class warship, Bayern, to Tokyo on November 6, 2021 to participate in two days of joint exercises with the Japanese Maritime Self-Defense Force called attention to increasingly complex security and defense arrangements in the Pacific, along with their implications for domestic politics in the region. Even as this event marked Germany’s first naval visit in 20 years to Japan, the German media ARD and the Welt am Sonntag newspaper greeted the visit by releasing investigative reports revealing close ties between two German manufacturers and the Chinese military. For years, MTU in Friedrichshafen and the French branch of the Volkswagen subsidiary MAN, have supplied engines for several types of Chinese navy warships, including Luyang-class destroyers and Song-class submarines.
While the findings were not new, the revelations caused negative repercussions for a surprising bystander: Thailand Prime Minister Prayut Chan-o-cha.
But what do German engines for the Chinese Navy have to do with Thai domestic politics? It is crucial to recall that the EU imposed an arms embargo on China after the People's Liberation Army violently cracked down on a peaceful demonstration at the Tiananmen Square in 1989. Since then, according to Stockholm International Peace Research Institute, the EU has never had a common position on what exactly the arms embargo should cover. This ambiguity means the so-called arms embargo is subject to different interpretations by different EU member states. Despite the 2009 adoption off the Council of the European Union Council Regulations No 428 setting up a community regime for the control of exports, transfer, brokering, and transit of dual-use items, the EU still has no clear policy guidelines to deal with situations where software and technologies legally exported as commercial items are modified and used for military purposes. Several Chinese destroyers and frigates, for instance, are equipped with sonar, fire control radar, anti-submarine warfare helicopters, and surface-to-air missiles imported from France, while Chinese fighter bombers and surveillance aircrafts are empowered by British jet engines and airborne early warning radars.
Now, with China exploiting the gray zone of the EU’s dual-use technology to modernize its military, China’s growing military aggressiveness in the South China Sea has in reverse posed a major threat to Germany’s policy guidelines for the Indo-Pacific region, which emphasize freedom of navigation, peace and security, and regional economic cooperation. As a result, Germany has banned MTU from exporting cutting-edge MTU396 diesel engines to China.
This brings us back to Thailand, where the German ban on exporting engines to China has threatened to scrap a deal where China would sell submarines powered by those engines to Thailand. Thai Prime Minister General Prayut Chan-o-cha downplayed the issue ahead of a no-confidence debate in the parliament (re-scheduled to take place in late June or early July), to buy time to stay in office long enough to host the Asia Pacific Economic Cooperation (APEC) in November.
Losing the submarine procurement project would be a costly embarrassment for Prayut and the Thai military elites, particularly those in the Royal Thai Navy (RTN). The $402 million project has been spearheaded by Deputy Prime Minister General Prawit Wongsuwan since he was the Minister of Defense after the military coup in 2014. Yet it is not only the tremendous investment in the 3 submarines the RTN is in danger of losing. According to Paul Chambers, the RTN generally receives only 22% of the total annual defense budget, while the Royal Thai Army (RTA) receives about 50%. With the cancellation of the submarine project, the Thai navy would lose an opportunity to obtain a bigger share of the defense budget.
Yet, the costs of losing the submarine project are not limited to defense budgets. From the beginning, the RTN’s desire for submarines was driven not by Thai maritime security concerns, but by national prestige. Thailand was the first and the only country in Southeast Asia to possess an aircraft carrier HTMS Chakri Naruebet in the 1990s. Although designed with a short flight deck specifically for AV-8s Harrier ground attack aircraft capable of vertical or short takeoff and landing, all Harriers were decommissioned several years ago. Now, the aircraft carrier has rarely sailed away from the Sattahip naval base in Chonburi province. Still, the RTN, has always been proud of its status as the only Southeast Asian navy to have an aircraft carrier.
Scrapping the submarine deal with China does not necessarily mean an end to Thailand’s submarine ambitions, and there have been signs that the RTN is committed to acquiring the submarines at any cost. As many Southeast Asian countries like Vietnam, Singapore, Malaysia, Indonesia and Myanmar are operating submarines, the RTN is also eager to join the submarine club. It is important to note that even during the height of COVID-19 in 2021 when Thailand and its people were suffering from the disease and economic crisis, the RTN still tried in vain to proceed with buying the submarines at least 3 times. In this regard, it is highly unlikely that the Thai navy is willing to scrap its submarine project easily. Thailand would have a legitimate reason to cancel the contract without hurting Sino-Thai diplomatic relations, if MTU could not supply the Chinese shipyard with engines for the submarines. Thailand can still look for alternative suppliers for submarines. It is important to recall that Thailand used to look for possibilities to buy submarines from Germany, Sweden, Russia and South Korea.
The submarine procurement deal is not the only political problem confronting Prayut, nor even the only controversial military procurement deal. According to Suthin Klungsang, chief opposition whip and deputy leader of the Pheu Thai Party, a new parliamentary session will begin on May 22, aiming at putting a no-confidence vote in motion and debating the Budget Bill for the fiscal year 2023. In addition to the controversial submarine project, Phue Thai plans to bring several military hardware procurements into the spotlight, including the purchase of Israeli-made unmanned aircraft vehicles (UAVs).
Besides the controversial military expenditures, the Thai economy has been hit hard by the Covid-19 pandemic. Of all economic sectors, small and medium sized enterprises (SMEs), particularly those in the field of tourism, have suffered the most. Before the pandemic, tourism alone accounted for 12% of Thailand’s gross domestic product (GDP). Extended lockdown and mismanagement of the pandemic by the Thai government, however, have plunged the country into a deep economic crisis. In September 2021, the Export-Import Bank of Thailand estimated that one-third of the country’s 3 million SMEs were about to go bankrupt due to the pandemic. By November, however, a survey by the University of the Thai Chamber of Commerce, found that more than half of the Thai SMEs were on the verge of closing their businesses.
To make matters worse, the unemployment rate continues to grow amid a sharp rise in living costs generated by the increases of food and gasoline prices as Thais turn to the government for solutions. Spending on military hardware procurement, of course, is not what the government has to prioritize when it comes to the issues of economic recovery. Unfortunately, there is not much Prayut can do.
The political threats against Prayut come not only from the opposition parties but also from his ruling party, the Palang Pracharath Party (PPRP). Although the PPRP managed to form and lead the coalition government after the election in 2019, endless internal power struggles and corruption scandals have weakened the party. Several PPRP senior leaders even defected to create their own parties. Amid the growing political uncertainty, the latest departure in January by Thamanat Prompow, the PPRP secretary-general, along with 21 MPs in his political faction, has severely shaken the PPRP’s political stability and credibility in the eyes of the coalition government. It is not clear if Prayut will be able to secure the minimum 260 votes needed to survive the upcoming no-confidence parliamentary vote. Thammanat Prompao, however, wonders if it is just a dream. As Rangsiman Rome, a Move Forward Party list-MP and the party's deputy secretary-general, claimed “The government is uncertain of its position and unsure if it has the votes it needs to survive its next grilling.”
As the political tensions continue to grow amid the economic devastation driven by the pandemic, Prayut’s political future is in acute danger. It is critically important that he needs to downplay some of the most controversial issues for his political survival. Scrapping the submarine deal with China is just one of his political tactics to survive the upcoming no-confidence parliament debate set to take place in late June or July and buy time to stay in office to host the APEC summit in November. The RTN ambition to own submarines, however, is highly unlikely to go away.
Sek Sophal is a researcher at the Democracy Promotion Centre, Ritsumeikan Asia Pacific University in Beppu, Japan. He is also a writing contributor to The Bangkok Post and Southeast Asia Globe.
To cite this essay, please use the entry suggested below:
Sek Sophal, “Scrapping the Submarine Deal? Domestic Politics and Regional Security in Thailand,” criticalasianstudies.org Commentary Board, May 5, 2022; https://doi.org/10.52698/UXDT8199.