The Thai Economy Is In Crisis

[chinthee]

Thaigoon, hope you're not workin for bucks, cause they don't buy much here anymore!

[ThaiGoon]

It might be worth recalling the words in the title come from TNA based on an interview with Supavut Saichua, president of Phatra Securities Plc on 27th April 2007.

This is a [reset] button post.

Regards

It might be worth recalling that the interview was translated into English from Thai.

[A_Traveller]

It might be worth recalling the words in the title come from TNA based on an interview with Supavut Saichua, president of Phatra Securities Plc on 27th April 2007.

This is a [reset] button post.

Regards

It might be worth recalling that the interview was translated into English from Thai.

Assuming that is true, why not do something useful and find the Thai original?

Regards

[ThaiGoon]

Thaigoon, hope you're not workin for bucks, cause they don't buy much here anymore!

Good thing I'm on here to get a degree, not to accumulate enough money so that I could live happily ever after in Thailand without ever having to work seriously again.

[ThaiGoon]

Assuming that is true, why not do something useful and find the Thai original?

Regards

Why don't we just look at what's really happening?

[highdiver]

Thaigoon, hope you're not workin for bucks, cause they don't buy much here anymore!

Good thing I'm on here to get a degree, not to accumulate enough money so that I could live happily ever after in Thailand without ever having to work seriously again.

[canadiangirl]

Gov't urged to stimulate investment for economic survival

here's the cliff notes ,

as democracy declines so does the economy .

I'm not sure that's quite true, although I guess the jury it out about what will happen with Thailand.

What is actually remarkable about Asia as an economic region is that, in the last century or so, it has had incredible economic growth without having much democracy at all. Just look at China. There is no doubt about China's economic growth, whatever we think of Thailand, and China can hardly be described as a democracy. And in most cases where there has been rather miraculous economic growth -- South Korea, post-war Japan, Singapore, the government has taken a strong authoritarian stance, and a very interventionist position in the economy, at least initially.

[Master Chief]

http://www.fenews.com/fen50/fe-in-asia/fe-in-asia.html

Where are the bonds covering the fiscical balance taken from? Moving around balance makes it short somewere else right? Large gains and profits do not exist in a governments, right? Large marginal profits , are generally placed in new gov projects or returned to tax payers in public wellfare?

Have you seen in the news about any growing public wellfare, guess NO! Larger projects exept the suv airport has been taken on, is costing mega over budget already, BTS scrapped for now?

There is no real profit and the gov is scrapping project after project, to cover up this hidden public dept. How can this country be the highest runner in asia, is the question? With ongoing crises in government system and strong baht?

In rest of the world where there are governmental crises, their currency strenght goes down, but in Thailand it goes up? Why you must ask?

Yesterday the government said that Thailands baht reserve is strong, who can confirm that? Junta advised governor of the Bank of Thailand assuring this, good?

Thailand has a exporter market surplus due to the very strong baht in the bank reserve the government says , whilst the exporters are complaining hard to the government that they are having mayor problems selling their products for export, or maybe the thai market is buying their products despite the low consumer spendings? How does this work, tell me?

http://www.bloomberg.com/apps/news?pid=206...&refer=asia.

Now the bank of thailand wants to lock the high baht in its current level by regulating currency sales terms? Why, tell me? To improve losses in exports as to rice, seafood, cars, tourism, chicken, cement witch are all hard hit by the strong baht and are losing accounts?

A new government is to be elected this year or next, when is the question.

Will the junta prem hold his word.

http://www.thaigov.go.th/en/government/new...520&M_CODE=

http://etna.mcot.net/query.php?nid=30046

Some parties are now desolved are now establising them selves in new parties, but by thai law they are not able to compite for this election, the EC is moving in to allow for a 30 day mandate to the referendum in august. If this is not approved then there will be near zero competition in the election

While the government aids sprint between the capital of Burma and Bangkok, does that not make one think larger?

Are the protester been aloud to voice them selfs, will the growds behave or is the junta forced to sheed blood this time?

Thousands of people are just now stopped from travelling to the capital from the far regions, why you must ask?

Well you can figure out alot with tables and other statistics, but does that tell you what is really going on?

I can give you more and more to read, but I think you are hard to convince, guess you did not see the other incidents coming neigther, mentioned earlier in my post ?

MC

[ThaiGoon]

I was skimming through what you wrote but stopped it when I read this, "the government said that Thailands baht reserve is strong, who can confirm that?" I just saw why there's no need to bother.

[Master Chief]

Just read the posts you guys managed to click in, see that you are university hunks. Nice, hope you all will conquere the biz world with good moral and commen sense. democracy is a presiuos tool and must be handed carefully. Good luck from someone whom has already done it!

[soundman]

This current regime is not really on the ball especially with the economic side of things. It wouldn't surprise me if K. Tharissa thinks that printing more money will solve Thailand's economic problems.

Soundman.

[chinthee]

Ah, yes. Youth is wasted on the young, isn't it?

[wolfmanjack]

This current regime is not really on the ball especially with the economic side of things. It wouldn't surprise me if K. Tharissa thinks that printing more money will solve Thailand's economic problems.

Soundman.

You might be on to something there. Printing more money will probably make the baht stronger. Everything else seems to be working the opposite of what it should be.

[soundman]

This current regime is not really on the ball especially with the economic side of things. It wouldn't surprise me if K. Tharissa thinks that printing more money will solve Thailand's economic problems.

Soundman.

You might be on to something there. Printing more money will probably make the baht stronger. Everything else seems to be working the opposite of what it should be.

You could just see it. Boardroom meeting discussing how to pay all the debts that are not public knowledge, & not wanting to upset the figures allready published, or the international ratings agencies.

"Lets just print a few trillion baht & pay everybody quietly. No one will ever know."

[PeaceBlondie]

You could just see it. Boardroom meeting discussing how to pay all the debts that are not public knowledge, & not wanting to upset the figures allready published, or the international ratings agencies.

"Lets just print a few trillion baht & pay everybody quietly. No one will ever know."

I thought only Allen Greenspan and his successor were doing that.

[soundman]

Sometimes you have to wonder where the Thai government came up with the 40 Billion Dollars that the IMF loaned them after the '97 currency debacle. The only cost saving measure I can remember was the removal of subsidies on energy products.

Soundman.

[bingobongo]

that is a lot of people unable to service their debt............so BOT lowers rate to encourage more loans and debt.......pure genius, i tell you, pure genius

SME Bank to put its loans on the market

The Small and Medium Enterprise Development Bank of Thailand (SME Bank) will soon put its non-performing loans (NPLs) on sale to reduce their size from 43 per cent to 26 per cent of all loans, said Somchai Sujjapongse, executive chairman of the bank.

NPLs are currently estimated at Bt19 billion or 43 per cent of outstanding loans.

With the economic slowdown, re-entry and new NPLs come to between Bt400 million and Bt600 million each month, he said.

http://www.nationmultimedia.com/2007/07/02...ss_30038890.php

Edited July 2, 2007 by bingobongo

[LaoPo]

that is a lot of people unable to service their debt............so BOT lowers rate to encourage more loans and debt.......pure genius, i tell you, pure genius

SME Bank to put its loans on the market

The Small and Medium Enterprise Development Bank of Thailand (SME Bank) will soon put its non-performing loans (NPLs) on sale to reduce their size from 43 per cent to 26 per cent of all loans, said Somchai Sujjapongse, executive chairman of the bank.

NPLs are currently estimated at Bt19 billion or 43 per cent of outstanding loans.

With the economic slowdown, re-entry and new NPLs come to between Bt400 million and Bt600 million each month, he said.

http://www.nationmultimedia.com/2007/07/02...ss_30038890.php

Mr. Somchai* is a funny man....

"Somchai said he would shake up the management at SME Bank by requiring 40 managers to sign employment contracts every year. If senior managers cannot meet performance benchmarks, the bank will not extend their contracts, he warned."

He should start 'shaking up' himself I would say, instead blaming the staff he hired......

* "executive chairman of the bank."

LaoPo

[Steely Dan]

Here's one about the Bank of Thailands independence. Lot's of mentions of 1997 I note.

OPINION / MANAGING THE ECONOMY

The Bank of Thailand then and now

Recent changes have put the central bank back in the precarious position of

being subject to political pressures

By THITINAN PONGSUDHIRAK

A decade after its debacle in mismanaging the baht, from a century-long peg

to a forced flotation that brought on the infamous and contagious economic

crisis in 1997, the Bank of Thailand has come full circle. Legal efforts

after the 1997 crisis to free the central bank from political interference

by amending the Bank of Thailand Act have come to naught. Recent BoT

interest rate cuts in response to blatant government preferences to boost

growth are an indication that the central bank's macro-policy autonomy and

management has been reversed back to its pre-1997 position.

It is an ironic turn of events because the finance minister behind the

reversal is none other than Chalongphob Sussangkarn, a pro-market career

academic economist and a would-be technocrat who is in office during an

interim, unelected government under military rule. Mr Chalongphob, in

effect, is supposed to be a technocrat on the side of the BoT, but instead

he has practically put the central bank back into the hands of elected

politicians who will come to power after the election.

The impact of this move is far-reaching. Without policy-making autonomy at

the BoT, monetary policy and financial sector supervision and regulation

will be increasingly guided and controlled by the finance minister and

swayed by government and cabinet preferences and policy objectives.

Such an outcome will make monetary policy prone to political machinations

and politicisation, much as we saw prior to 1997, when democratisation in

the late 1980s empowered elected politicians to shunt aside a

five-decades-old technocracy, which comprised the National Economic and

Social Development Board, the Budget Bureau and the Ministry of Finance,

with the BoT as anchor.

The politicisation along with the penetration and capture of the technocracy

by vested interests represented by elected politicians led to the financial

sector mismanagement that culminated with the insolvency of the Bangkok Bank

of Commerce, the over-leveraged crises and shoddy credit culture in the

banking and non-bank sector, and the disastrous and demoralising defence of

the baht's peg.

Previously the pre-eminent gatekeeper of Thailand's sustained economic

growth, the BoT suddenly became the chief institutional culprit for all that

went wrong in 1997.

For the past 10 years, the central bank has tried to restore its lost

prestige and credibility by codifying its legal independence from the

finance ministry, similar to central banking models in developed economies

such as the United Kingdom's and New Zealand's. Because BoT governors in the

past were answerable to the finance minister, as long as the finance

ministry was headed by a like-minded technocrat as opposed to an elected

politician, the central bank governor's functional autonomy was assured,

even if legal independence was not stipulated.

Two governors over the nine years after the crisis, MR Chatumongol Sonakul

and MR Pridiyathorn Devakula, laid the groundwork for legal central bank

independence and inflation-targeting. Both had strong personalities and

considerable domestic stature who had been appointed from outside the BoT.

MR Pridiyathorn, in particular, made much headway in formalising central

bank independence after the military coup last September when he became

finance minister. But Mr Chalongphob, his successor, has just set the BoT

back a decade.

That Mr Chalongphob has reasserted control over the central bank governor is

attributable to several factors. First, he needs maximum command of

macro-policy at this time as the government of Gen Surayud Chulanont is

embattled owing partly to the economic slowdown and sagging consumer and

investor sentiments. Government pressure on Mr Chalongphob, and in turn on

BoT Governor Tarisa Watanagase, is too much to resist. Second, Ms Tarisa has

been a weak governor. More a run-of-the-mill bureaucrat than an effective,

staunch central banker who brooks no political interference, she has little

stature domestically, and is thus in no position to stand her ground as BoT

chief. Ms Tarisa also has received little support from Prime Minister

Surayud or other senior cabinet members.

Third, the BoT is still reeling from its controversial capital controls

imposed last December in a vain attempt to stem the baht's appreciation. As

a macro-policy institution, the BoT was hard-hit by its ineffectual exchange

rate management. Finally, Mr Chalongphob has argued his case on the grounds

of democratic accountability and the government's need to synchronise fiscal

and monetary policies. These are the two principal limitations of legal

central bank independence. But in countries with inflation-targeting and

independent governors, such drawbacks are more than compensated by stable

monetary policy and price stability free from political meddling.

Due to the public's lack of sophistication and knowledge on the subject and

to the myriad contentious issues and problems that have diverted attention

away from the BoT's legal setback, Mr Chalongphob's reversal of central bank

independence has incurred few criticisms. As an interim finance minister in

a supposedly technocratic cabinet, Mr Chalongphob has missed an opportunity

to fortify the BoT's institutional integrity. His argument on the BoT's

democratic accountability is dubious.

If Mr Chalongphob is willing to defer other legal measures, such as the

proposed land and inheritance taxes, to the next elected government, why

does he have to axe central bank independence at this time? His rollback of

central bank independence will further bureaucratise the BoT, which will

increasingly resemble just another bureaucratic agency rather than a

once-vaunted bastion of Thailand's famous but faded technocracy. It is

unlikely that future elected politicians will grant legal independence to

the central bank. When macroeconomic pressures gather force again, as they

did in the early 1980s and mid-1990s, the BoT will hardly be better equipped

to handle them.

The most salient positive outcome of the 1997 crisis is the baht's costly

flotation, which has shifted much of the tricky burden of currency

management from the BoT to the market. But financial sector management

remains susceptible to poor prudential supervision and regulation. When the

next bout of financial sector challenges takes place, the Surayud government

may well be seen as having bungled opportunities to set things right for

Thailand's macro-policy management.

The writer is director of the Institute of Security and International

Studies, in the faculty of political science at Chulalongkorn University.

[highdiver]

steely dan

good article. thanks for posting.

[ThaiGoon]

http://www.bangkokpost.com/breaking_news/b...s.php?id=119874

Thai stock market passes 800 mark

(dpa) - Thailand's stock market index Tuesday morning shot past the 800 psychological barrier point hitting a 41-month high.

Brokers were expecting the SET index to pass the 800 point later this week on an influx of foreign investment in regional bourses and rising confidence in the Thai economy.

Bank of Thailand data released last week indicated that the Thai economy was heading for higher growth in the second half of 2007, and could exceed an earlier growth target of 4 to 4.5 per cent for this year.

Edited July 3, 2007 by ThaiGoon

[highdiver]

Last Change Value (M.Baht)

SET Index 813.80 +21.09 24,423.12

SET100 Index 1,261.21 +38.33 18,452.17

SET50 Index 581.45 +18.46 15,238.01

mai Index 234.99 +1.30 227.22

and the forigners

Foreign 7,875.29 5,336.71 2,538.58

this morning it seems all those forigners could not care less about the junta and the dooms day predictions ... they just dont stop buying.

[Jai Dee]

Govt to boost foreign investments and consumer spending

Private sector suggests the government to promote foreign investments into the country and boost consumer spending by relaxing its laws concerning businesses.

An Advisor of investment department of Lehman Brother Plc, Thailand, Mr. Krissada Kaweeyan (นายกฤษดา กวีญาณ), remarks the government should revise the 30% of reserve fund for foreign businesses and place more concrete measures on Foreign Business Act. He says it would help create investment-friendly environment. He views that the foreign investors are looking into whether Thailand is prepared for liberal trading or not.

Mr. Krissada views that foreign investors would like to consider economic policies of the new government before pumping money into Thailand.

Source: Thai National News Bureau Public Relations Department - 03 July 2007

[thedude]

http://www.bangkokpost.com/breaking_news/b...s.php?id=119874

Thai stock market passes 800 mark

(dpa) - Thailand's stock market index Tuesday morning shot past the 800 psychological barrier point hitting a 41-month high.

Brokers were expecting the SET index to pass the 800 point later this week on an influx of foreign investment in regional bourses and rising confidence in the Thai economy.

Bank of Thailand data released last week indicated that the Thai economy was heading for higher growth in the second half of 2007, and could exceed an earlier growth target of 4 to 4.5 per cent for this year.

i have a sneaking suspicion Thaksin is behind this.

think about it, his funds were frozen.

and this comes on the day following a closed door meeting involving over 100 of his TRT faithful.

they need funds to fight the draft constitution.

they need funds for thaksin to fight the AEC.

i wonder who holds those "foreign" funds being invested in the SET.

i'm sure experts like Plus and SJ will be along shortly to provide the irrefutable proof.

[Old Man River]

http://www.bangkokpost.com/breaking_news/b...s.php?id=119874

Thai stock market passes 800 mark

(dpa) - Thailand's stock market index Tuesday morning shot past the 800 psychological barrier point hitting a 41-month high.

Brokers were expecting the SET index to pass the 800 point later this week on an influx of foreign investment in regional bourses and rising confidence in the Thai economy.

Bank of Thailand data released last week indicated that the Thai economy was heading for higher growth in the second half of 2007, and could exceed an earlier growth target of 4 to 4.5 per cent for this year.

i have a sneaking suspicion Thaksin is behind this.

think about it, his funds were frozen.

and this comes on the day following a closed door meeting involving over 100 of his TRT faithful.

they need funds to fight the draft constitution.

they need funds for thaksin to fight the AEC.

i wonder who holds those "foreign" funds being invested in the SET.

i'm sure experts like Plus and SJ will be along shortly to provide the irrefutable proof.

Fund managers, fleeing out of a weakening USD, have been investing short term funds all over Asia. I doubt Thaksin and his cronies are behind this.

[xbusman]

First of all, let us all agree that stock markets are really a poor economic indicator particularly of future events. Every great crash in every market was proceeded by a run up beyond fundamentals. Right now in the US there is a massive subprime bubble that will need to be swallowed in the near term and yet the stock market continues to climb.

I think GDP is much better indicator and arguing over 4.1 versus 5.2% is somewhat irrelevant in the long term. In a closed society with strong savings, the real estate market is mostly irrelevant as well.

I think the key issues for Thailand remain exports which are consistently reported as somewhere over 60% of GDP. If exports fall off, the impact on Thai society will be dramatic and far reaching. With the baht so strong and the US about to go through a rather painful correction I think there are some people in the know who are seriously worried.

[chinthee]

First of all, let us all agree that stock markets are really a poor economic indicator particularly of future events. Every great crash in every market was proceeded by a run up beyond fundamentals. Right now in the US there is a massive subprime bubble that will need to be swallowed in the near term and yet the stock market continues to climb.

I think GDP is much better indicator and arguing over 4.1 versus 5.2% is somewhat irrelevant in the long term. In a closed society with strong savings, the real estate market is mostly irrelevant as well.

I think the key issues for Thailand remain exports which are consistently reported as somewhere over 60% of GDP. If exports fall off, the impact on Thai society will be dramatic and far reaching. With the baht so strong and the US about to go through a rather painful correction I think there are some people in the know who are seriously worried.

Xbusman, you are the smartest man(?) I've seen on this forum in a long time. Exports from Thailand are in jeopardy with the strong baht, and teetering. IF the US goes through a correction it could have devastating consequences. If not, all should be ok but at a sustained lower GDP growth rate.

Pundit Chinthee

[LaoPo]

First of all, let us all agree that stock markets are really a poor economic indicator particularly of future events. Every great crash in every market was proceeded by a run up beyond fundamentals. Right now in the US there is a massive subprime bubble that will need to be swallowed in the near term and yet the stock market continues to climb.

I think GDP is much better indicator and arguing over 4.1 versus 5.2% is somewhat irrelevant in the long term. In a closed society with strong savings, the real estate market is mostly irrelevant as well.

I think the key issues for Thailand remain exports which are consistently reported as somewhere over 60% of GDP. If exports fall off, the impact on Thai society will be dramatic and far reaching. With the baht so strong and the US about to go through a rather painful correction I think there are some people in the know who are seriously worried.

Xbusman, you are the smartest man(?) I've seen on this forum in a long time. Exports from Thailand are in jeopardy with the strong baht, and teetering. IF the US goes through a correction it could have devastating consequences. If not, all should be ok but at a sustained lower GDP growth rate.

Pundit Chinthee

Hmmmm....yes....

Thai business concerned over appreciating baht

"Although Thailand exported about 7.4 million tonnes of rice last year, earnings in terms of the baht currency dropped, Mr. Chukiat said, adding that he is concerned about exports of agricultural products which depend on locally-priced raw materials at more than 80 per cent may not be able to compete against other countries' products.

Thai Frozen Food Association president Poj Aramwattananont said exports of shrimp, rice, cassava, and other commodities which relied on local raw materials would be affected if the baht continued to be strong."

From: TNA English news.

note: one doesn't have to be a rocket scientist to see that the strong Baht will seriously damage the complete exports sector. And who will [again] have to suffer most?....Yes the farmers.... ...and since agriculture 'serve' more than 50% of the total Thai labour-forces...guess what ....

LaoPo

[chinthee]

First of all, let us all agree that stock markets are really a poor economic indicator particularly of future events. Every great crash in every market was proceeded by a run up beyond fundamentals. Right now in the US there is a massive subprime bubble that will need to be swallowed in the near term and yet the stock market continues to climb.

I think GDP is much better indicator and arguing over 4.1 versus 5.2% is somewhat irrelevant in the long term. In a closed society with strong savings, the real estate market is mostly irrelevant as well.

I think the key issues for Thailand remain exports which are consistently reported as somewhere over 60% of GDP. If exports fall off, the impact on Thai society will be dramatic and far reaching. With the baht so strong and the US about to go through a rather painful correction I think there are some people in the know who are seriously worried.

Xbusman, you are the smartest man(?) I've seen on this forum in a long time. Exports from Thailand are in jeopardy with the strong baht, and teetering. IF the US goes through a correction it could have devastating consequences. If not, all should be ok but at a sustained lower GDP growth rate.

Pundit Chinthee

Hmmmm....yes....

Thai business concerned over appreciating baht

"Although Thailand exported about 7.4 million tonnes of rice last year, earnings in terms of the baht currency dropped, Mr. Chukiat said, adding that he is concerned about exports of agricultural products which depend on locally-priced raw materials at more than 80 per cent may not be able to compete against other countries' products.

Thai Frozen Food Association president Poj Aramwattananont said exports of shrimp, rice, cassava, and other commodities which relied on local raw materials would be affected if the baht continued to be strong."

From: TNA English news.

note: one doesn't have to be a rocket scientist to see that the strong Baht will seriously damage the complete exports sector. And who will [again] have to suffer most?....Yes the farmers.... ...and since agriculture 'serve' more than 50% of the total Thai labour-forces...guess what ....

LaoPo

Good to have you on board the Realistic Magical Mystery Tour Bus LaoPo. Who else can we get to get on board??? Don't suppose Thaigoon will get on board.

[LaoPo]

Good to have you on board the Realistic Magical Mystery Tour Bus LaoPo. Who else can we get to get on board???

Don't suppose Thaigoon will get on board.

Ah yes, TG.....

Well, in a way I can understand his optimistic views on the Thai economical situation but his views are not always realistic. The optimistic news he's bombarding us with all the time has more to do with the medium-to-large industries which are 'fed' with foreign money; Japanese money (which is deadly cheap) strongly amongst them.

Nothing wrong with that but what irritates me is the complete neglect about the rest of the news....mainly agricultural news, and, as shown in the previous article, Thai business leaders are very worried about the same agriculture which strongly (mainly) depends on exports.

And, although the figures show that exports are UP in the first half of 2007, the earnings drop.....because of the strong Baht.

And that.....is worrying me.

In my eyes Thailand has 2 completely different economies:

1. the industry, including service-industry, tourism etc.

2. agriculture; but that's exactly where the vast majority of the Thai have to make a living....

Nr. 1 is doing reasonably well...Nr. 2 is suffering and going down [in earnings] and that's a drama, but as I expressed my concerns before on other topics, the Thai elite doesn't really care since most of their assets, money and interests are in Nr. 1.

That says it all, I'm afraid.

LaoPo