Thai Government Approves Defense Budget Draft for 2020

Thailand’s government has given its stamp of approval to a defense budget proposal for 2020 that will see topline spending rise to THB233.35 billion ($7.6 billion). The draft figure marks a 2.7 percent increase over the allocation for 2019, which amounts to THB227.12 billion ($7.4 billion).

Under the 2020 proposal, the defense earmark will amount to roughly 7 percent of total government spending and equal around 1.4 percent of national GDP.  This year defense spending comes to around 6.2 percent of national expenditure and 1.3 percent of GDP.

Under the outlines of the budget draft, the bulk of investment is earmarked for the Royal Thai Army at 49 percent, or THB113.67 billion ($3.7 billion). This is unsurprising, as the RTA has traditionally dominated the distribution ratio for the three main service branches of the military. The RTA continues to conduct a standing military operation in the three southernmost provinces of the country against the insurgents from within the Malay Muslim population. The insurgency erupted in January 2004, and since then successive Thai governments have militarized the situation, with nearly 60,000 troops currently deployed to the region.

In recent years, the ruling military junta, led by retired general and current Prime Minister Prayuth Chan-ocha, has sought to bring the defense budget up to 2 percent of GDP over the near term. But this appears likely to prove a case of wishful thinking.  Instead, annual defense outlays remain roughly on a parallel track with economic expansion or recession, much as it has for two decades.

The main thrust of Thai defense investment beyond personnel and operational costs is the nation’s latest military modernization effort, titled “Modernization Plan: Vision 2026.”  This plan seeks to upgrade each capability domain (air, land and sea) while assisting local defense industry through offset requirements and technology transfer within foreign-sourced procurements.  The Vision 2026 plan thereby complements the Master Plan for the Defense Industry (2015-2020) in a multi-pronged effort to advance the indigenous military-technological industrial base by utilizing procurement funding as a bargaining chip with foreign vendors as a means of supporting industrial development.

How effective this initiative will be remains to be seen, as Thailand allocates roughly 15 percent of annual defense expenditure toward military procurement.

Photo via Nicolas Raymond Flickr

About Daniel Darling

Dan Darling is a senior analyst covering both the Europe and Asia-Pacific regions for Forecast International's International Military Markets group.

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