UNCLAS BANGKOK 001036

SIPDIS

SIPDIS

DEPARTMENT FOR PM/DTCC (TWATKINS)

E.O. 12958: N/A
TAGS: ETTC KOMC TH BLUE LANTERN
SUBJECT: BLUE LANTERN CHECK ON ROYAL THAI GOVERNMENT AND
BARTER PAYMENTS FOR DEFENSE ARTICLES

REF: A. SECSTATE 26844


B. BANGKOK 700

C. BANGKOK 524

D. BANGKOK 500

E. BANGKOK 350

F. 05 BANGKOK 7529

G. 05 BANGKOK 5729

H. 05 BANGKOK 3436


1. Reftel A requests post to determine whether the Royal
Thai Government (RTG) is conducting barter trade for defense
articles and seeks examples. The RTG does/does seek barter
deals for defense items. Reftels B through H provide details
about a proposed barter transaction under which Thailand
wishes to procure new fighter aircraft to replace its aging
F-5 fleet. Lockheed Martin, Sukhoi and Saab have offered to
participate in a barter/countertrade transaction with the RTG
in order to win the contract. Other recent examples include
a proposed sale of Chinese APCs to Thailand in exchange for
Thai longan fruit. Details of that transaction are readily
available on the Internet. Thai military contacts have
confirmed that the Royal Thai Army is interested in acquiring
light armored vehicles.


2. Reftel A asks post to speculate why the RTG seeks to
pursue barter trade for defense articles. PM Thaksin
Shinawatra has recently announced that an offer of barter
trade of Thai agricultural products is essential for all
future "mega-projects." Most experts associate this
announcement with Thaksin's desire to curry favor with
agricultural voters. He has said he wants to open more
markets for Thai agricultural products. Background
information on this matter was prepared for PM Thaksin's
September meeting with President Bush and may be useful for
PM.


3. JUSMAGTHAI normally meets most representatives of U.S.
firms doing military sales business in Thailand. JUSMAGTHAI
officials have no record of Mr. Dov Hyman or of Dolin
International Trade & Capital LLC. If PM has contact
information for Mr. Hyman, we can follow up with him directly.
BOYCE