Asia Defense

The Truth About Thailand’s 2017 Defense Budget ‘Hike’

The increase in defense spending needs to be put into proper perspective.

The Truth About Thailand’s 2017 Defense Budget ‘Hike’
Credit: Flickr/Prachatai

On September 8, Thailand’s National Assembly approved a modest hike for defense spending for 2017.

The 2017 defense budget, which comes into effect in October and runs up till September 2017, amounted to 210.7 billion Thai baht ($6.1 billion). The figure is a modest increase of 220 million Thai baht over the 2016 defense budget, or about 2 percent.

This amount is about 7 percent of the total government expenditure and around 1.5 percent of the country’s GDP. Both numbers are in line with the general trend over the past decade or so, where Thailand, despite having one of Southeast Asia’s highest levels of defense spending, has lagged behind the regional average percentage-wise on both counts.

Some have compared the budget hike in the defense realm to cuts in other areas, such as the 4.7 percent decrease in education to 493 billion baht in the budget. This reflects a more general concern that years after military coups in Thailand tend to see boosts in the defense budget at the expense of other priorities. That in turn feeds into scrutiny about certain purchases that have been mulled over the past few years under the junta (as just one example, there are still no shortage of voices in the country questioning why it needs submarines).

That said, what is more notable about the 2017 defense budget is the fact that it constitutes the lowest level of increase since the coup in May 2014. The 2 percent increase in the 2017 defense budget constitutes a decline relative to the numbers seen in 2015 (5 percent) and 2016 (7 percent). It is also slightly lower than the 214 billion Thai baht figure that the defense ministry had requested earlier this year.

That should perhaps come as no surprise considering the country’s economic woes. The second-quarter growth figure of 3.5 percent in Southeast Asia’s second-largest economy, while better than estimated, still lags significantly behind its regional peers. And official figures indicate that foreign direct investment has sunk to just 11.8 billion baht in the first six months of the year, down nearly 90 percent compared with the previous period and the lowest level since 2011 when severe flooding hit the country.