Thaksin's Policies Will Finally Bankrupt Economy

[george]

Policies 'will finally bankrupt economy'

BANGKOK: -- Democrat Party executives admit the populist programme of Prime Minister Thaksin Shinawatra may be a shrewd political move as it has energised the public as never seen before.

But they warn such policies could bankrupt the economy in the long run.

At a meeting of foreign editors last week, Democrat MP Surin Pitsuwan said the populist programme had worked very well so far but was a double-edged sword.

"For the first time, the Thai electorate feels energised and is holding onto the political party. This is the change in the essence," he said.

"The other dilemma - this populist approach is working through emotion, sentiment or desire, with the urge to consume more, to achieve more, to possess more, which is in the short run tantalising and attractive."

Therein lies the problem. "How long can you go on tantalising the public and the electorate with desire to consume and possess more?"

Over the past three years, the Thaksin government has reinvigorated the electorate by pouring money into populist projects, using state-controlled financial institutions to inject money into the grassroots economy, with little regard for risks, he said.

"The logical contraction of the populist policy is the limitation of your resources,'' he said. "People have never felt like this before or been inspired like this before - to think of acquiring more, possessing more, consuming more. Or as the great leader [Thaksin] said, 'You won't get rich if you don't get into debt'.

"Not every farmer gets rich by getting into debt," Surin added.

Due to the populist policies, the country had accumulated a high level of debt that may threaten the Kingdom's future economic stability, Democrat party-list MP Sansern Samalapa said.

Government debt has not only increased to close to 50 per cent of gross national product, but loans at state-owned financial institutions have ballooned by 185 per cent from Bt350 billion three years ago to Bt1 trillion as of last December. This off-budget spending was not reported as government debt.

"The government has used future budgets to subsidise budget spending," Sansern said.

Populist programmes such as the Bt1-million village fund and stimulus packages that had encouraged more consumption, resulting in average household debt swelling from Bt60,000 to Bt80,000 in two years, he said.

--The Nation 2004-05-26

[CMguy]

lets get to selling those wonderful Thai elite cards and pay off that debt.

[maerim]

Are there any credit checks here?

Does anyone get knocked back for credit?

Does having a mortgage foreclosed stop you getting another one.

In the U.K. if you get a CCJ ( county court judgment) against you for bad debt it is on your credit reference checks for 6 years.

If you get one for a mortgage foreclosure its on for 12 years so you can forget about home ownership for a while.

I have have relations here with good jobs who have their houses taken from them it doesn't seem to bother them.

A chap from the bank was pestering my missus to get a credit card or two when she said "Its O.K. I use his" he never bothered again.obviously he was on commission.

I thought lending was out of control in the U.K. until I saw this mob.

A woman I know has a motor that cost more than three times the value of her house, it cost her( or more to the point, cost the bank) one point four million baht.

The last time this sort of thing happened I was getting about 40 baht to the pound it's anyones guess what I will be getting when the ordure hits the cooling device.

[englishoak]

IMHO The brown stuff will hit the fan in the future for sure. Question is when?

[roamer]

Re credit checks. Thai law does'nt allow agencies such as Equifax oe Experian to operate. Apparently its illegal under Thai law to collect credit information as they do in other countries. So any credit checks can only be rudimentary and offer no centralised check.

[plachon]

At last the grim reality is starting to seep into the collective conscience of the opposition, that this is a hundred mile and hour juggernaut hurtling down a slope and the brakes are on the verge of failing. Only a miracle can save this sip-law from overturning now!

For any long-term members, they may recall that the impending crash was being strongly argued by myself and a certain guy called Butterfly, who eventually got banned (for reasons I'm still not to sure of) about a year back and it led to some very long and convoluted threads which are probably still back there for the finding if anyone can be arsed. We were in a small minority for the derailing theory on the not-too-distant horizon, and I went so far as to predict it would occur in the next 2-5 years. Well, in the light of events in the Mid-East and oil prices not doing what they were supposed to do following the US invasion of Iraq, and even more liberal spending policies domestically, the inside limit stays unchanged at 2-1 years, but the outer limit would now seem to be too optimistic. I would now say 3 years at the very longest for a massive credit squeeze, recall of debt and subsequent nose-dive of the Thai economy in every quarter. That gives those with major assets here 1-3 years to party-on!

[ASIC]

My friend just got housing loan at the bank. They told him... if you can't pay back this year... never mind... you can pay the year after or the year after that.

ASIC

[maerim]

Re credit checks. Thai law does'nt allow agencies such as Equifax oe Experian to operate. Apparently its illegal under Thai law to collect credit information as they do in other countries. So any credit checks can only be rudimentary and offer no centralised check.

From what I have seen here this is probably the case, it is also a recipe for financial disaster.

As for buildings it will only be a matter of time before there are more empty ones than occupied ones.

[astral]

Well the value of my UK pounds is appreciating nicely.

Hit 74baht on Friday!!