The Thai Economy Is In Crisis

[Carmine6]

Thai businesses advised to invest in Vietnam

Last updated: 15:55 - September 13, 2007

Thailand's Economic-Industrial Office have advised Thai businesses involved in textile operations to move their investment to Vietnam to reduce production costs and increase competitiveness in the international market.

The advice was the result of the office's recent study on Thailand's competitiveness between Vietnam, China, Malaysia, Indonesia, India, Pakistan and the Philippines.

The study showed that production costs in Vietnam were 19.48% lower than those in Thailand, due to factors like import-duty exemptions for raw material, low-cost labour and lower energy costs.

According to the study, average workers' wage in Thailand is about US $14 per day, the highest rate among the countries studied, while salaries of workers in Vietnam and Pakistan are much lower, averaging US $3.68 per day. (VNA)

nhandan.com.vn

This kind of stuff is just so bizarre as to boggle the mind. I cant ever remember a governmental agency recommending that businesses move out the country, much less to a major competitor. This has got to be tied in with the proposal to provide tax benefits for companies that would like to leave Thailand. I cant imagine why any country to actively work to push core businesses away. I can understand protecting home industries from outsiders, even if its wrong for the consumer, governments after all dont really work in the best interest of the public. But this is something completely new and outside the normal strange behavior.

Anyone have any ideas at all of why Thailand wants to divest itself of the garment industry instead of getting competitive. I mean, dont you think normally a government might try to fix the problems of the import export corruption taxes and energy problems instead of evicting an industry that probably employs a huge number of Thais? What in the world could they be thinking?

If they are throwing in the towel on garments, how much longer before they throw the towel in on jewelry and furniture, and after that, electronics and autos?

Pure speculation, but maybe 2 reasons:

1) If the business is going out of Thailand anyway, it is better for a Thai company to be doing it in that foreign country. With a $10/employee per day advantage, even zero energy costs and zero taxes might not be enough on commodity type, low skill manufacturing. Those subsidies would be better spent elsewhere or not at all.

2) It could help the baht exchange rate as Thai companies invest in the startup of the factories.

[xbusman]

Are you seriously telling me that Singapore actively works to evict or facilitate the exit of industries from Singapore. Investing sovereign funds elsewhere is entirely different thing, money chases returns regardless of borders, but local industry is local employment and tax revenue.

Prakanong, can you think of any country working to export their local businesses? I can think of a few cases that might apply slightly, i.e. the chroming industry in the US. Still, the US government does not "recommend" or actively support chromers to leave the economy, instead they make it so onerous with regulations that eventually the home industry succumbs to the inevitable. So there might be some industries so detrimental that evicting from your soil is worth the governmental effort. I can think of gambling as one of those industries.

We are talking about garments here. Long a staple and underpinning for employment in Thailand. Perhaps you could give an example of the type of industry that Singapore is actively exporting to neighboring countries.

[Old Man River]

If they are throwing in the towel on garments, how much longer before they throw the towel in on jewelry and furniture, and after that, electronics and autos?

They threw in the towel on the garments industry a number of years ago, although some of the better run companies have, admirably, been able to hang on. The garment industry is a sunset industry in Thailand and the sun is now setting.

X, I know you know the difference between labor intensive and capital intensive industries, so I would imagine your comment on the electronics and auto industry was a throw away comment. The jewelry industry here is value added. I don't know have a clue about the competitiveness of Thailand's furniture export industry.

[xbusman]

Carmine, I think your speculations are viable but they both point to very ominous signs for the Thai economy. I would like to discount both out of fear of the ramifications.

1. They are going to lose the industry anyway, salvage what they can. That assumes that they are unable to fix the key factors that are killing that business. They cannot be competitive on energy or the corruption costs encountered at ports, two costs that effect about every product here except rice and shrimp (okay, you know what I mean). As anything else of any value in the export market also has to deal with this, they are also indicating its only a matter of time before Vietnam takes our electronics, our autos, our value added products until we are back to a Laos economy in relation to our competitors.

Lets talk about labor. $10 a day versus $5 a day. Lets say a worker can make 100 shirts a day, that a $.05 cost differential per shirt. We cant make that up in differences of infrastructure, freight, or even just reduced profit? Labor is getting very expensive here and is a problem but not an insurmountable one. There is a fix for high labor costs as well, the US automotive and steel industries have been taught that lesson by Mittal and Toyota. I think Airbus is currently in school as well. Those are bad times for everybody and should be the last resort after other attempts are made to correct the imbalances such as getting energy and customs competitive. This assumed reason puts the onus strictly on the increasing amount of future unemployed thais while protecting the wealth of the factory owners. Sounds viable.

2. Closing down garments and putting 100,000 or so Thais out of work will probably adjust the baht in ways I dont think anyone wants to see.

If the economic-industrial office is using either of these as a rational for what they are doing I would be horrified. This is some pretty painful medicine as apposed to doing their job in Customs and EGAT. Unfortunately, this is sick enough to be exactly right.

[soundman]

Prakanong, can you think of any country working to export their local businesses? I can think of a few cases that might apply slightly, i.e. the chroming industry in the US. Still, the US government does not "recommend" or actively support chromers to leave the economy, instead they make it so onerous with regulations that eventually the home industry succumbs to the inevitable. So there might be some industries so detrimental that evicting from your soil is worth the governmental effort. I can think of gambling as one of those industries.

Just for my own knowledge, why is the US pushing the chrome industry outside their borders?

[xbusman]

If they are throwing in the towel on garments, how much longer before they throw the towel in on jewelry and furniture, and after that, electronics and autos?

They threw in the towel on the garments industry a number of years ago, although some of the better run companies have, admirably, been able to hang on. The garment industry is a sunset industry in Thailand and the sun is now setting.

X, I know you know the difference between labor intensive and capital intensive industries, so I would imagine your comment on the electronics and auto industry was a throw away comment. The jewelry industry here is value added. I don't know have a clue about the competitiveness of Thailand's furniture export industry.

A bit throw away, but not entirely. I do know the difference between labor intensive and capitol intensive industries but the reality is that almost all manufacturing is a blend of the two. Still takes labor to make a car, just a much much smaller portion of the pie. The article states that Thailand has lost competitiveness on energy, labor and what I call the corruption tax which is the extortion game at the port. Because garments are labor intensive, they are the first to get hit but all the rest are losing competitiveness in the same areas, just to a different degree. If they dont fix it now, and allow the dislocation in costs to get worse, how much longer until the capital industries are effected. How is it affecting the decision of new capital investment? Is the answer to new automotive investment concerned about energy, labor and corruption "move to Vietnam"?

By the way, the furniture industry has been hit just as hard as garments from competition from Vietnam.

[A_Traveller]

Just for my own knowledge, why is the US pushing the chrome industry outside their borders?

I maybe wrong but I believe the costs associated with the health issues {chrome plating runs the risk of releasing carcinogenic material} have made it increasingly difficult for manufacturers to compete against other less regulated locations.

Regards

[Mid]

carcinogenic

I was just waiting for someone who could spell it ........................

[Old Man River]

Carmine, I think your speculations are viable but they both point to very ominous signs for the Thai economy. I would like to discount both out of fear of the ramifications.

1. They are going to lose the industry anyway, salvage what they can. That assumes that they are unable to fix the key factors that are killing that business. They cannot be competitive on energy or the corruption costs encountered at ports, two costs that effect about every product here except rice and shrimp (okay, you know what I mean). As anything else of any value in the export market also has to deal with this, they are also indicating its only a matter of time before Vietnam takes our electronics, our autos, our value added products until we are back to a Laos economy in relation to our competitors.

Lets talk about labor. $10 a day versus $5 a day. Lets say a worker can make 100 shirts a day, that a $.05 cost differential per shirt. We cant make that up in differences of infrastructure, freight, or even just reduced profit? Labor is getting very expensive here and is a problem but not an insurmountable one. There is a fix for high labor costs as well, the US automotive and steel industries have been taught that lesson by Mittal and Toyota. I think Airbus is currently in school as well. Those are bad times for everybody and should be the last resort after other attempts are made to correct the imbalances such as getting energy and customs competitive. This assumed reason puts the onus strictly on the increasing amount of future unemployed thais while protecting the wealth of the factory owners. Sounds viable.

2. Closing down garments and putting 100,000 or so Thais out of work will probably adjust the baht in ways I dont think anyone wants to see.

If the economic-industrial office is using either of these as a rational for what they are doing I would be horrified. This is some pretty painful medicine as apposed to doing their job in Customs and EGAT. Unfortunately, this is sick enough to be exactly right.

Michael Porter's presentation is several years old, but you will find that much of what he said is still the issue today. Thailand has not moved forward in its competitiveness. It will continue to lose out unless it does. Issues like the FBA only exacerbate the problem. If you can't access the report below, you can find it on google under "Michael Porter Thailand".

www.nesdb.go.th/Portals/0/tasks/dev_ability/report/data14.pdf

[ray23]

The Thai Chamber of Commerce spoke at a meeting as well, this what they had to say.

"

Chamber of Commerce outlook gloomy

(Agencies) - Thailand's economy is expected to stay sluggish even after the general election is held late this year unless the confidence in the country's political stability is restored, according to the Thai Chamber of Commerce on Thursday.

Speaking at a seminar on "Driving Thai Economy with Morality," the Thai News Agency (TNA) quoted TCC chairman Pramon Sutheewong, as saying that he believed a new coalition government will be formed in the post-election period.

Under the circumstances, he believes, the economy will not pick up until the new government wins investor confidence, which needs to take some time.

Pramon said he personally wanted to see a good person nominated as the next prime minister to administer the country.

He added that the country needs a new generation of businesspersons with high standards of morality.

They must be adaptable to the changing business environment that both gives importance to protecting the environment and provides adequate healthcare for all the people.

Should players in the business sector manage to achieve this, Mr Pramon suggested, they could outpace their rivals to a certain extent.

He said the adoption of a strong moral code in business practice should begin with companies listed on the Stock Exchange of Thailand."

[LaoPo]

I posted this in the 'subprime' topic as well, as I thought it could be of -positive- interest for Thailand as well:

GOOD NEWS

For a change, since we all need it, there's good news:

Giant General Motors closed at a spectacular +10.05%, after the DJIA closed, up from $ 31.74 to $ 33,29. This after Citigroup gave a 'buy' signal.

A staggering 50 Million shares were traded and that's the highest number in over 10 months since November 30, 2006 (mostly sell off with 84 Million shares).

A figure of $ 1,184,870,895,10 changed hands....(yes, 1 Billion, 184 Million and something)

DJIA: up +1,00% at 13,424

S&P500 up +0,8% at 1,483

NASDAQ up +0,3% at 2,601

I think that's good news for the 'normal' US economy, outside the plagued subprime mess, and a promising signal that the economy isn't infected too much from the subprime crisis; let's hope so anyway!

Laopo

[Prakanong]

Are you seriously telling me that Singapore actively works to evict or facilitate the exit of industries from Singapore. Investing sovereign funds elsewhere is entirely different thing, money chases returns regardless of borders, but local industry is local employment and tax revenue.

Prakanong, can you think of any country working to export their local businesses? I can think of a few cases that might apply slightly, i.e. the chroming industry in the US. Still, the US government does not "recommend" or actively support chromers to leave the economy, instead they make it so onerous with regulations that eventually the home industry succumbs to the inevitable. So there might be some industries so detrimental that evicting from your soil is worth the governmental effort. I can think of gambling as one of those industries.

We are talking about garments here. Long a staple and underpinning for employment in Thailand. Perhaps you could give an example of the type of industry that Singapore is actively exporting to neighboring countries.

No they encourage investment oversea's by Singapore companies but not moving current business oversea's. I am thinking here about the PSA (Ports), Keppel, CapitalLand and resort owners most of whose resorts are oversea's anyway.

Slightly diferent to your case.

Maybe the Thai economy needs re-structuring like the British one did away from coal, steel and shipbuilding in the 80's? Maggie the bitch could have employed the money from privataisation to speed up re-training etc instead of buying votes with it or giving it to cronies - oops political

[Prakanong]

Carmine, I think your speculations are viable but they both point to very ominous signs for the Thai economy. I would like to discount both out of fear of the ramifications.

1. They are going to lose the industry anyway, salvage what they can. That assumes that they are unable to fix the key factors that are killing that business. They cannot be competitive on energy or the corruption costs encountered at ports, two costs that effect about every product here except rice and shrimp (okay, you know what I mean). As anything else of any value in the export market also has to deal with this, they are also indicating its only a matter of time before Vietnam takes our electronics, our autos, our value added products until we are back to a Laos economy in relation to our competitors.

Lets talk about labor. $10 a day versus $5 a day. Lets say a worker can make 100 shirts a day, that a $.05 cost differential per shirt. We cant make that up in differences of infrastructure, freight, or even just reduced profit? Labor is getting very expensive here and is a problem but not an insurmountable one. There is a fix for high labor costs as well, the US automotive and steel industries have been taught that lesson by Mittal and Toyota. I think Airbus is currently in school as well. Those are bad times for everybody and should be the last resort after other attempts are made to correct the imbalances such as getting energy and customs competitive. This assumed reason puts the onus strictly on the increasing amount of future unemployed thais while protecting the wealth of the factory owners. Sounds viable.

2. Closing down garments and putting 100,000 or so Thais out of work will probably adjust the baht in ways I dont think anyone wants to see.

If the economic-industrial office is using either of these as a rational for what they are doing I would be horrified. This is some pretty painful medicine as apposed to doing their job in Customs and EGAT. Unfortunately, this is sick enough to be exactly right.

Michael Porter's presentation is several years old, but you will find that much of what he said is still the issue today. Thailand has not moved forward in its competitiveness. It will continue to lose out unless it does. Issues like the FBA only exacerbate the problem. If you can't access the report below, you can find it on google under "Michael Porter Thailand".

www.nesdb.go.th/Portals/0/tasks/dev_ability/report/data14.pdf

Its what I have been saying ad nauseum for a while on here but the rose tinted glasses brigade can not see nor understand these basic principles.

Its like the rich landowner in S America looking round and saying everything is wonderful while the peasants starve outside the ranch.

Just what is the unemployment in Thaiand these days - it wil rise if the growth is not 5%++ will it not.

Lets not even speak about under-employment as we all know that is ridiculous in Thailand and productivity (As a whole) must follow.

[Prakanong]

Carmine, I think your speculations are viable but they both point to very ominous signs for the Thai economy. I would like to discount both out of fear of the ramifications.

1. They are going to lose the industry anyway, salvage what they can. That assumes that they are unable to fix the key factors that are killing that business. They cannot be competitive on energy or the corruption costs encountered at ports, two costs that effect about every product here except rice and shrimp (okay, you know what I mean). As anything else of any value in the export market also has to deal with this, they are also indicating its only a matter of time before Vietnam takes our electronics, our autos, our value added products until we are back to a Laos economy in relation to our competitors.

Lets talk about labor. $10 a day versus $5 a day. Lets say a worker can make 100 shirts a day, that a $.05 cost differential per shirt. We cant make that up in differences of infrastructure, freight, or even just reduced profit? Labor is getting very expensive here and is a problem but not an insurmountable one. There is a fix for high labor costs as well, the US automotive and steel industries have been taught that lesson by Mittal and Toyota. I think Airbus is currently in school as well. Those are bad times for everybody and should be the last resort after other attempts are made to correct the imbalances such as getting energy and customs competitive. This assumed reason puts the onus strictly on the increasing amount of future unemployed thais while protecting the wealth of the factory owners. Sounds viable.

2. Closing down garments and putting 100,000 or so Thais out of work will probably adjust the baht in ways I dont think anyone wants to see.

If the economic-industrial office is using either of these as a rational for what they are doing I would be horrified. This is some pretty painful medicine as apposed to doing their job in Customs and EGAT. Unfortunately, this is sick enough to be exactly right.

Michael Porter's presentation is several years old, but you will find that much of what he said is still the issue today. Thailand has not moved forward in its competitiveness. It will continue to lose out unless it does. Issues like the FBA only exacerbate the problem. If you can't access the report below, you can find it on google under "Michael Porter Thailand".

www.nesdb.go.th/Portals/0/tasks/dev_ability/report/data14.pdf

I will read through it properly later but just browsing through it confirms a lot we have been saying.

Maybe a couple of years out of date but some of the worrying trends and figures have probably got worse since then and especially over the last year.

Not to worry though, the sun is out, the lawn is green and the roses are blooming in my back yard!

[Mid]

Its like the rich landowner in S America looking round and saying everything is wonderful while the peasants starve outside the ranch.

absolutely .

[Heng]

And why didn't those peasants show up when overtime was on offer?

[Mid]

And why didn't those peasants show up when overtime was on offer?

and once again , Heng confirms he's ok with people starving .................................

[stumonster]

Heng,

your family has interests in the pawn and loan business - what has been happening there ? general trends for pawning of items and loan defaults ?

[highdiver]

Carmine, I think your speculations are viable but they both point to very ominous signs for the Thai economy. I would like to discount both out of fear of the ramifications.

1. They are going to lose the industry anyway, salvage what they can. That assumes that they are unable to fix the key factors that are killing that business. They cannot be competitive on energy or the corruption costs encountered at ports, two costs that effect about every product here except rice and shrimp (okay, you know what I mean). As anything else of any value in the export market also has to deal with this, they are also indicating its only a matter of time before Vietnam takes our electronics, our autos, our value added products until we are back to a Laos economy in relation to our competitors.

Lets talk about labor. $10 a day versus $5 a day. Lets say a worker can make 100 shirts a day, that a $.05 cost differential per shirt. We cant make that up in differences of infrastructure, freight, or even just reduced profit? Labor is getting very expensive here and is a problem but not an insurmountable one. There is a fix for high labor costs as well, the US automotive and steel industries have been taught that lesson by Mittal and Toyota. I think Airbus is currently in school as well. Those are bad times for everybody and should be the last resort after other attempts are made to correct the imbalances such as getting energy and customs competitive. This assumed reason puts the onus strictly on the increasing amount of future unemployed thais while protecting the wealth of the factory owners. Sounds viable.

2. Closing down garments and putting 100,000 or so Thais out of work will probably adjust the baht in ways I dont think anyone wants to see.

If the economic-industrial office is using either of these as a rational for what they are doing I would be horrified. This is some pretty painful medicine as apposed to doing their job in Customs and EGAT. Unfortunately, this is sick enough to be exactly right.

Michael Porter's presentation is several years old, but you will find that much of what he said is still the issue today. Thailand has not moved forward in its competitiveness. It will continue to lose out unless it does. Issues like the FBA only exacerbate the problem. If you can't access the report below, you can find it on google under "Michael Porter Thailand".

www.nesdb.go.th/Portals/0/tasks/dev_ability/report/data14.pdf

Its what I have been saying ad nauseum for a while on here but the rose tinted glasses brigade can not see nor understand these basic principles.

Its like the rich landowner in S America looking round and saying everything is wonderful while the peasants starve outside the ranch.

Just what is the unemployment in Thaiand these days - it wil rise if the growth is not 5%++ will it not.

Lets not even speak about under-employment as we all know that is ridiculous in Thailand and productivity (As a whole) must follow.

Thailand has fallen behind in efficiency and cost-effectiveness, experts said at the Thailand Focus investors' seminar yesterday. Thai businesses' procurement is far less efficient than the international standard, said Phanit Laosirirat, executive director for Thailand Productivity Institute.

He said the country's competitiveness based on the IMD rankings had been falling steadily due to a lack of skilled labour, and poor management.

On the corporate level, local firms use more personnel in procurement than foreign companies. On average, 20 employees are used to procure one billion baht, compared to 4.31 internationally.

so while you are right that thailand needs to improve.. this improvement that you seek will be creating unemployment..

[Mid]

arr 'diver , just who I was lookin for ,

would this be good news from a credible source ?

Foreign investors set to boost investment after 'Thailand Focus'

Friday 14 September 2007 10:42:01 AM (GMT+7:00)

BANGKOK, Sept 14 (TNA) – Foreign investors are expected to increase their investment in Thailand upon acknowledgement of corporate information presented by listed companies at the Third Thailand Focus event, according to a leading economist.

Phatra Securities president Supavud Saichue said the information presented at the international investment seminar should be useful for investors deciding on their future investment decisions.

Mr. Supavud said he believed Thailand would regain foreign investor confidence following the general election to be held late this year.

He said that foreign investors had in particular paid attention to blue-chip stocks in banking, telecommunications, property, and the medical service sectors because they believed these stocks would benefit from additional public spending in the post-election period.

snip

etna.mcot.net

[highdiver]

ECONOMY / THAILAND FOCUS CONFERENCE

Foreigners bullish on blue chips

http://www.bangkokpost.com/Business/14Sep2007_biz02.php

those forigners must know something that our dooms day brigade dont know...

I know what it is ..... there is no crisis....

[Mid]

Phatra Securities president Supavud Saichue

specifically this guy "diver , does he know what he's on about ?

[highdiver]

arr 'diver , just who I was lookin for ,

[

oHH I am touched... you looking for me ???

[Prakanong]

Carmine, I think your speculations are viable but they both point to very ominous signs for the Thai economy. I would like to discount both out of fear of the ramifications.

1. They are going to lose the industry anyway, salvage what they can. That assumes that they are unable to fix the key factors that are killing that business. They cannot be competitive on energy or the corruption costs encountered at ports, two costs that effect about every product here except rice and shrimp (okay, you know what I mean). As anything else of any value in the export market also has to deal with this, they are also indicating its only a matter of time before Vietnam takes our electronics, our autos, our value added products until we are back to a Laos economy in relation to our competitors.

Lets talk about labor. $10 a day versus $5 a day. Lets say a worker can make 100 shirts a day, that a $.05 cost differential per shirt. We cant make that up in differences of infrastructure, freight, or even just reduced profit? Labor is getting very expensive here and is a problem but not an insurmountable one. There is a fix for high labor costs as well, the US automotive and steel industries have been taught that lesson by Mittal and Toyota. I think Airbus is currently in school as well. Those are bad times for everybody and should be the last resort after other attempts are made to correct the imbalances such as getting energy and customs competitive. This assumed reason puts the onus strictly on the increasing amount of future unemployed thais while protecting the wealth of the factory owners. Sounds viable.

2. Closing down garments and putting 100,000 or so Thais out of work will probably adjust the baht in ways I dont think anyone wants to see.

If the economic-industrial office is using either of these as a rational for what they are doing I would be horrified. This is some pretty painful medicine as apposed to doing their job in Customs and EGAT. Unfortunately, this is sick enough to be exactly right.

Michael Porter's presentation is several years old, but you will find that much of what he said is still the issue today. Thailand has not moved forward in its competitiveness. It will continue to lose out unless it does. Issues like the FBA only exacerbate the problem. If you can't access the report below, you can find it on google under "Michael Porter Thailand".

www.nesdb.go.th/Portals/0/tasks/dev_ability/report/data14.pdf

Its what I have been saying ad nauseum for a while on here but the rose tinted glasses brigade can not see nor understand these basic principles.

Its like the rich landowner in S America looking round and saying everything is wonderful while the peasants starve outside the ranch.

Just what is the unemployment in Thaiand these days - it wil rise if the growth is not 5%++ will it not.

Lets not even speak about under-employment as we all know that is ridiculous in Thailand and productivity (As a whole) must follow.

Thailand has fallen behind in efficiency and cost-effectiveness, experts said at the Thailand Focus investors' seminar yesterday. Thai businesses' procurement is far less efficient than the international standard, said Phanit Laosirirat, executive director for Thailand Productivity Institute.

He said the country's competitiveness based on the IMD rankings had been falling steadily due to a lack of skilled labour, and poor management.

On the corporate level, local firms use more personnel in procurement than foreign companies. On average, 20 employees are used to procure one billion baht, compared to 4.31 internationally.

so while you are right that thailand needs to improve.. this improvement that you seek will be creating unemployment..

Higher productivity does not always lead to long term higher unemployment - there may be frictional unemployment initially but the goal is a higher value, higher wage economy for all.

The future for thailand should not be low wage, low productivity, low skill jobs competing on price - thats a race to the bottom in this region as others do that better.

Have a look at the Porter paper re Thailand above - it looks interesting but I have only glanced at it as yet.

[Mid]

yep , couple of questions above ...............

edit to add specifically #'s 1850 & 1852

Edited September 14, 2007 by Mid

[highdiver]

Phatra Securities president Supavud Saichue

specifically this guy "diver , does he know what he's on about ?

and those people as well...

Anders Wihlborn, the managing director of Merrill Lynch Asia Pacific.

SET president Patareeya Benjapolchai

[Prakanong]

ECONOMY / THAILAND FOCUS CONFERENCE

Foreigners bullish on blue chips

http://www.bangkokpost.com/Business/14Sep2007_biz02.php

those forigners must know something that our dooms day brigade dont know...

I know what it is ..... there is no crisis....

It was a beauty paegent - no different from the meet the anaylsts different companies have daily in most countries.

Here they got them together at once - the reason probably being the unceertan political and economic situation as expressed by many of them

Most analysts do agree there is still "value" in certain stocks in the thai market - its not secret and anyone reading the serious business press (Not the Bangkok Post) would know that.

This sounbdbite could be said of almost any index and of course he is going to give a nice one - why would he not as its not in his interest

"Mr Wihlborn said that while foreign investors were mostly bullish on the Thai market, interest was mostly focused on large-cap stocks.

Companies that could draw the greatest interest included those with low price-to-earnings ratios, strong dividend performance and a market capitalisation that exceeds $1 billion, Mr Wihlborn added."

Yes the economy is not in crisis but it is in could do better mode and while it is like that others are not standing still.

[highdiver]

Carmine, I think your speculations are viable but they both point to very ominous signs for the Thai economy. I would like to discount both out of fear of the ramifications.

1. They are going to lose the industry anyway, salvage what they can. That assumes that they are unable to fix the key factors that are killing that business. They cannot be competitive on energy or the corruption costs encountered at ports, two costs that effect about every product here except rice and shrimp (okay, you know what I mean). As anything else of any value in the export market also has to deal with this, they are also indicating its only a matter of time before Vietnam takes our electronics, our autos, our value added products until we are back to a Laos economy in relation to our competitors.

Lets talk about labor. $10 a day versus $5 a day. Lets say a worker can make 100 shirts a day, that a $.05 cost differential per shirt. We cant make that up in differences of infrastructure, freight, or even just reduced profit? Labor is getting very expensive here and is a problem but not an insurmountable one. There is a fix for high labor costs as well, the US automotive and steel industries have been taught that lesson by Mittal and Toyota. I think Airbus is currently in school as well. Those are bad times for everybody and should be the last resort after other attempts are made to correct the imbalances such as getting energy and customs competitive. This assumed reason puts the onus strictly on the increasing amount of future unemployed thais while protecting the wealth of the factory owners. Sounds viable.

2. Closing down garments and putting 100,000 or so Thais out of work will probably adjust the baht in ways I dont think anyone wants to see.

If the economic-industrial office is using either of these as a rational for what they are doing I would be horrified. This is some pretty painful medicine as apposed to doing their job in Customs and EGAT. Unfortunately, this is sick enough to be exactly right.

Michael Porter's presentation is several years old, but you will find that much of what he said is still the issue today. Thailand has not moved forward in its competitiveness. It will continue to lose out unless it does. Issues like the FBA only exacerbate the problem. If you can't access the report below, you can find it on google under "Michael Porter Thailand".

www.nesdb.go.th/Portals/0/tasks/dev_ability/report/data14.pdf

Its what I have been saying ad nauseum for a while on here but the rose tinted glasses brigade can not see nor understand these basic principles.

Its like the rich landowner in S America looking round and saying everything is wonderful while the peasants starve outside the ranch.

Just what is the unemployment in Thaiand these days - it wil rise if the growth is not 5%++ will it not.

Lets not even speak about under-employment as we all know that is ridiculous in Thailand and productivity (As a whole) must follow.

Thailand has fallen behind in efficiency and cost-effectiveness, experts said at the Thailand Focus investors' seminar yesterday. Thai businesses' procurement is far less efficient than the international standard, said Phanit Laosirirat, executive director for Thailand Productivity Institute.

He said the country's competitiveness based on the IMD rankings had been falling steadily due to a lack of skilled labour, and poor management.

On the corporate level, local firms use more personnel in procurement than foreign companies. On average, 20 employees are used to procure one billion baht, compared to 4.31 internationally.

so while you are right that thailand needs to improve.. this improvement that you seek will be creating unemployment..

Higher productivity does not always lead to long term higher unemployment - there may be frictional unemployment initially but the goal is a higher value, higher wage economy for all.

The future for thailand should not be low wage, low productivity, low skill jobs competing on price - thats a race to the bottom in this region as others do that better.

Have a look at the Porter paper re Thailand above - it looks interesting but I have only glanced at it as yet.

on this point i agree with you..

however thailand is moving the economy as the paper and you yourself suggested from a low labour to a higher skilled labour force.

this is a transition period that will take time and where the education and know how investment are the most important. the stages o this transition are clealy visible allready with the move on electronic and car manufactoring. there are high tech investment heavily supported by the BOI.

in the this transition time many will loose jobs and many will gain new ones.

[Mid]

Phatra Securities president Supavud Saichue

specifically this guy "diver , does he know what he's on about ?

and those people as well...

Anders Wihlborn, the managing director of Merrill Lynch Asia Pacific.

SET president Patareeya Benjapolchai

so lets get this straight ,

Khun Supavud Saichue the President of Phatra Securities is a good judge of the economic status of Thailand , who has advise worthy of attention ?

[highdiver]

ECONOMY / THAILAND FOCUS CONFERENCE

Foreigners bullish on blue chips

http://www.bangkokpost.com/Business/14Sep2007_biz02.php

those forigners must know something that our dooms day brigade dont know...

I know what it is ..... there is no crisis....

It was a beauty paegent - no different from the meet the anaylsts different companies have daily in most countries.

Here they got them together at once - the reason probably being the unceertan political and economic situation as expressed by many of them

Most analysts do agree there is still "value" in certain stocks in the thai market - its not secret and anyone reading the serious business press (Not the Bangkok Post) would know that.

This sounbdbite could be said of almost any index and of course he is going to give a nice one - why would he not as its not in his interest

"Mr Wihlborn said that while foreign investors were mostly bullish on the Thai market, interest was mostly focused on large-cap stocks.

Companies that could draw the greatest interest included those with low price-to-earnings ratios, strong dividend performance and a market capitalisation that exceeds $1 billion, Mr Wihlborn added."

Yes the economy is not in crisis but it is in could do better mode and while it is like that others are not standing still.

that could be said on just about any country... everyone wants to get better.

As you said it is not in crisis..

As this thread was dealing with the fact that some members thought it was...

I am glad to see that you are aware that it is not.

the steps to improve the economy even better need to be adreesed by the new goverment are in my view.. education, education and more education.