Cabinet approves 100 billion baht economic compensation for Gripen jet purchase

Air Marshal Praphat Sonjaidee, Spokesperson for the Royal Thai Air Force (RTAF), revealed on Tuesday (August 19), the results of the Cabinet meeting held on the same day regarding the "Replacement of Fighter Jets for the RTAF and Defence Offset." 

The key points are as follows:

• The Cabinet has approved the continuation of the RTAF's fighter jet procurement project, which includes "Defence Offset" compensation from Saab AB.
• This procurement aims not only to enhance military security capabilities but also serves as a vital mechanism for national development in the areas of economy, society, education, and technology.

Key points of the discussion include:

• Compliance with the law: The government and relevant agencies have thoroughly reviewed the regulations and procedures to ensure transparency and legality.
• Multidimensional benefits: The compensation from Saab AB will strengthen security, support industries, enhance technology, and improve education in Thailand.
• Collaborative efforts: The RTAF will work closely with relevant government agencies to ensure the project achieves maximum benefit for society.
• Focus on the public: This security investment will directly contribute to national development and improve the quality of life for Thai citizens.

The spokesperson also added that the RTAF is committed to conducting the fighter jet procurement with transparency, care, and collaboration across all sectors to ensure the project not only strengthens national defence but also serves as an investment in the future of all Thai people.

Air Chief Marshal Panpakdee Pattanakul, Commander of the RTAF, is scheduled to travel to Sweden to sign the Gripen purchase agreement on August 25.

The Defence Offset or Offset Policy, an economic compensation package, will see Thailand receive approximately 100 billion baht from the purchase of 12 Gripen E/F fighter jets worth 60 billion baht.

The Offset Policy is a strategic economic arrangement where a purchasing country receives economic benefits or compensation in return for acquiring defence equipment or military goods.

This typically involves agreements with the defence supplier, where the seller commits to investments, technology transfers, or other contributions that benefit the buyer’s economy.

These benefits can include job creation, industrial development, technological advancement, or educational programs.

The purpose of such a policy is to ensure that the country making the defence purchase not only enhances its security but also gains economic, technological, and social advantages from the transaction, making the deal more beneficial beyond just the procurement of military equipment.