Political Gridlock Threatens Economy

[george]

WORST-CASE SCENARIO

Political gridlock threatens economy

Confidence and growth at risk, say observers

BANGKOK: -- Should the political situation descend to the worst-case scenario, business confidence and growth will suffer, some market observers warned yesterday.

"The latest gathering by the People's Alliance for Democracy (PAD) to oppose government attempts to amend the Constitution supports our view that the political situation is shifting towards a worst-case scenario," said Citigroup Thailand's Investment Daily report yesterday.

The gridlock faced in the months prior to the September 2006 coup is again clearly visible, it said.

Fiscal Policy Office director-general Pannee Sathavarodom also expressed concern about fallout from the political situation at a time when the local economy appears to be enjoying a strong growth momentum.

Based on value-added tax (VAT) collection by the Revenue Department, the economy showed it was experiencing a pick-up in both consumption and investment.

Pannee said that last month VAT collection grew 12.2 per cent. Investment, particularly in real estate and machinery, also showed expansion, while taxes collected from business investment grew 44.6 per cent.

"We're quite concerned about inflationary pressures, the political situation and the higher oil prices," said Pannee.

The University of the Thai Chamber of Commerce predicts the local economy could grow at less than 4.5 per cent if the worst-case scenario is realised.

Thanawat Polvichai, director of the university's Economic and Business Forecasting Centre, said: "Growth this quarter and next could be worse if political instability persists. We believe there will be a recovery in the fourth quarter if the government approves the next fiscal budget and implements mega-projects," he said.

The university maintains its growth projection of 5.1 per cent and its range of economic growth at 4.5-5.5 per cent.

The university study showed the Central region enjoying the highest economic growth of 7.7 per cent in the first quarter, thanks to rising prices for rice and other cash crops, along with industrial investments, said lecturer Wachira Khuntaweetep.

Growth in the gross domestic product expanded 5.6 per cent in Bangkok and the surrounding provinces, 4.8 per cent in the Northeast, 4.7 per cent in the South and 4.4 per cent in the North.

Thanawat also predicted average growth could ease to 5 per cent this quarter in terms of lower consumption, fewer investments and a reduced employment rate.

"Despite rising crop prices, farmers must cope with skyrocketing oil prices and raw materials. Exporters still worry about the baht's appreciation. If possible, the government should keep the baht's foreign-exchange rate at 32 to the US dollar," said Thanawat.

The university is also cooperating with the Comptroller-General's Department to estimate the country's grain situation. It predicts the price of rice will drop slightly at the end of the year, because more supply will enter the global market.

For Thailand, the price level for crops like rice, tapioca, corn and rubber continues to jump.

However, farmers have not gained as many benefits from the rising price as traders have, because of their high costs for fertiliser and oil.

--The Nation 2008-05-29

[TAWP]

Yes...megaprojects will save the day...

[Plus]

Unfortunately Deputy PM in charge of Tranport Ministry and Transport Minister himself have quite different ideas on what to build - how many lines and where.

Maybe they have never talked about it, but once they sorted that out, the rest is easy. Will take just another couple of hundred years at the present speed.

[h90]

Yes...megaprojects will save the day...

At least it will fix the financial problems of some minister......

[jayjayjayjay]

Yes...megaprojects will save the day...

At least it will fix the financial problems of some minister......

personally I dont care, if it means my daily travel could be halved, I'm all for it!!!!!!!!!!!!

[Seneque]

growth might be on track (that is what we are told ... or brainwashed) but debt are growing at a faster rate ... and with inflation brewing, it is not good news.

[Nampeung]

Today in Guardian.co.uk

Thailand tense as top general speaks of coup

* Ian MacKinnon in Bangkok

* The Guardian,

* Friday May 30 2008

* Article history

Thailand's most senior military commander yesterday refused to rule out a fresh coup, five months after elections restored democracy. Fears of a new coup have reached a pitch not seen since September 2006, when the army left its barracks and took to the streets of Bangkok to grab power, deposing the then prime minister, Thaksin Shinawatra.

Concern is growing that a mass anti-government demonstration planned for today could spiral out of control and turn deadly, giving the army an excuse to step in, after police failed to quell violence at another rally last weekend. But a police decision last night to formally charge a senior minister, Jakrapob Penkair, with lèse majesté for allegedly insulting Thailand's revered King Bhumibol Adulyadej may calm the tense atmosphere.

One of the demands of demonstrators was that the police take action against Jakrapob, a minister in the office of the prime minister, Samak Sundarvej, for remarks he made last August.

The protesters are also fighting plans by the coalition government led by the People Power party, a direct descendant of Thaksin's Thai Rak Thai party, to amend the constitution. Critics say the government wants to prevent Thaksin being prosecuted on corruption charges and consolidate its hold on power.

"No soldier wants to stage a coup, but I cannot guarantee there will be no more coups," said the supreme commander, General Boonsang Niempradit, as he urged Jakrapob to resign from his cabinet post. Later he claimed he had been misinterpreted. He said no coup was in the offing, just as the leaders of the 2006 coup had said before their putsch. "I simply said anyone plotting a coup would not tell you in advance," he said. "I believe there will not be any coup."

However, the commander of the army units based in Bangkok was summoned back from a European trip, amid alarm over today's demonstration.

[geriatrickid]

More mindless spastic running in circles. As much as the Thai "leadership" is responsible for this, I do have to wonder as to the intelligence of the foreign lenders providing massive tranches of funding. Some of it is pension and mutual funds lured by the prospect of chewy interest rates. Another part is from sovereign governments seeking to facilitate the purchase of their products to be used in the construction of these mega projects (aka hidden subsidies). Over all, a stupid greedy strategy.

Everyone would be better off if the focus was on small projects like helping farmers upgrade equipment or building basic infrastructure like fiber optic communication cables etc.

[miruph]

Aljazeera today:

Thai PM vows to put down protests

Samak Sundaravej, the prime minister of Thailand, has said he will crack down on mounting anti-government protests.

"I will not yield to you," Samak told demonstrators in a speech on national television on Saturday.

"You have broken the law. I have a duty to deal with you," he said, adding police and soldiers were prepared to end the protests.

Samak's comments came a day after Jakrapob Penkair, a minister attached to the prime minister's office, resigned after being accused of insulting Thailand's king, who is widely revered throughout the country. Protesters led by the People's Alliance Democracy (PAD) had been demanding the minister's resignation in addition to their calls for the overthrow of the government. "I am resigning because there is too much pressure on the prime minister and the government," he told a press conference in Bangkok. "I had no intention of insulting the monarchy." Accusations The demonstrators accuse Samak of trying to illegally change the military-backed constitution to cling to power and allow Thaksin Shinawatra, a former prime minister, to evade corruption charges against him. The protests are similar to demonstrations in October 2006 that led to the overthrow of the government in a military coup. The head of Thailand's army has sought to allay fears of the military stepping in. General Boonsrang Niumpradit, who has a largely ceremonial role, said the army would only enforce law and order if the current protests escalate.

Samak, who is widely viewed as a proxy of Thaksin, has accused the PAD - an anti-Thaksin party which has vowed to step up the protests - of damaging the country. Since the end of the absolute monarchy in 1932, Thailand has seen at least 18 coups or coup attempts.

http://english.aljazeera.net/NR/exeres/514...83F98857A8A.htm

[Nampeung]

Strange how little attention this has... are we in the wrong thread Miruph ?

[Nampeung]

And Geriatrickid, I know you are a young man and I would have thought that the use of the word 'spastic' would not be in your vocabulary... you let yourself down with this ...

Edited May 31, 2008 by Nampeung

[chiang mai]

And Geriatrickid, I know you are a young man and I would have thought that the use of the word 'spastic' would not be in your vocabulary... you let yourself down with this ...

It's all in the interpretation and the origin of the user: "In the UK it can be considered highly abusive and taboo, while in the US it is more closely associated with hyperactivity or clumsiness and carries few offensive connotations".

[AGareth2]

As long as the pound strengthens against the baht I am happy

Edited June 1, 2008 by AGareth2

[Gravelrash]

As long as the pound strengthens against the baht I am happy

It must indeed be a peacefull existence to have a mind unimpared by any matters bar financial self interest.

[bangkokrick]

BBC today

By Apornrath Phoonphongphiphat Reuters - Sunday, June 1 07:16 amBANGKOK (Reuters) - A Thai opposition group vowed on Sunday to hold more anti-government street rallies in Bangkok in a bid to force the government of Prime Minister Samak Sundaravej to step down.

(Advertisement)

"We will stay here until the government resigns," Somsak Kosaisuk, one of the People's Alliance for Democracy (PAD) leaders, told Reuters by telephone from the rally at the Makawan Rangsan bridge near the Grand Palace in the heart of Bangkok.

His remarks came a day after Samak appeared to back off from a threat to crack down on the protests that have ignited fears of a military coup.

The PAD, a coalition of civic groups, and the opposition Democrat Party accuse Samak's government of being a puppet of former Prime Minister Thaksin Shinawatra.

The rallies which began a week ago are similar to the PAD's street campaign against Thaksin before he was ousted in a 2006 coup. The protests two years ago started small but grew to 100,000-strong crowds before the military intervened.

Saturday's rally swelled to 6,500 protesters watched by several hundred police with shields and batons.

The crowd had thinned to around 400-500 by Sunday morning, but PAD leader Somsak said he expected numbers to grow later and they would be alert to any attempt to break up the rally.

In an address to the nation on Saturday morning, Samak had threatened to crack down on the protests and several hundred riot police were deployed along with hundreds more in reserve.

But as night fell, Interior Minister Chalerm Yubamrung said police would not move against the mainly middle-class crowd, who appeared in a festive mood.

On Sunday, Samak said on his weekly television program that he had never intended to disperse the crowd by force and he accused the media of distorting his remarks made a day earlier.

"I made no threatening words. You (the media) all interpreted what I said wrongly," Samak said on his regular one-hour program, where he takes on a range of topics and often attacks his critics.

But Samak maintained that the PAD had broken the law and must move away from the Makawan Rangsan bridge where the gathering has caused traffic congestion and shut a 1 km stretch of a six-lane road for nearly a week.

Police said they have issued no ultimatum to the protesters.

"We will talk peacefully to them about when they should move. We will not cause any violence," deputy police spokesman Surapol Thuanthong said.

Violence stemming from a clampdown on the rally could add to concerns about the army being drawn back into the political fray, particularly after scuffles broke out between pro- and anti-Thaksin protesters at a rally last Sunday.

Thailand's top military commander, who last week denied rumours the army was plotting a coup, said on Saturday soldiers were unlikely to be used to quell the protests.(Writing by Ed Davies; Editing by Darren Schuettler and Valerie Lee)

Having read this i predict a coup this weekend because they said that last time.

Cheers, Rick

[Scott]

I think Thai democracy has a ways to go before it can be considered a mature democracy. In general, the country doesn't handle differing opinions very well--it seems to cause undue stress. I hope it gets settled peacefully.

[Prakanong]

As long as the pound strengthens against the baht I am happy

I suppose you want the economy to tank as well so more girls are forced into the bar's for you.

[ando]

A country with so much potential. Yet they continually throw it away for short term gain for the rich elite class.

Amazing Thailand! Ho Hum, another coup on the horizon, -- as normal. At least it keeps the cost of living down for the ex-pats.

[whatsoever]

As long as the pound strengthens against the baht I am happy

I am with you! A lot of people worry about the negative aspects to much. I have recently heard a lot of people express concerns about the sharp rise in the cost of a barrel of oil. When do most people ever buy more than a litre of oil anyhow. I bought 1 litre a bout 6 months ago to top up my car and i still have about half left

[terryp]

[bangkokrick]

As long as the pound strengthens against the baht I am happy

Good to hear things from a deep thinking unselfish angle. For your information it is not the pound that is weak it's the baht that is too strong, but don't see what this has to do with a political gridlock.

Another coup so soon after the previous one will affect investment in Thailand and may also have a negative effect on the farang that have already invested in Thailand. This will not be good for the Thais or the farang for the future.

Cheers, Rick

[miruph]

Samaks and US theatrics:

Thai military 'must back democracy'

The US defence secretary has warned Thailand's armed forces against trying to seize power through a coup.

In a meeting with senior officials in Bangkok on Sunday, Robert Gates said adherence to democracy formed the foundation of bilateral relations.

The message follows a week of anti-government protests and escalating political tensions that have unnerved stock markets and sparked rumours the military may stage a coup.

Two years ago a similar street campaign against Thaksin Shinawatra, the then prime minister, led to a coup against him.

At Sunday's meeting with Samak Sundaravej, Thailand's prime minister, and a dozen senior military officers, Gates said America's relationship with Thailand was "based upon shared democratic values".

An unnamed official travelling with the US defence secretary told reporters the message was "not hectoring" but was "clear, and respectful".

In February the US lifted restrictions on aid to Thailand after Samak's democratically elected government took power.

Washington suspended about $35m in annual assistance, including funds designed to promote military professionalism, after the 2006 coup that topped Thaksin.

Thailand has seen at least 18 coups or attempted coups since the end of rule by absolute monarchy in 1932.

Protests

The weekend meanwhile saw further street protests against Samak's government, in defiance of government threats to use for to break up demonstrations.

On Saturday Samak had threatened to use the police to break up a rally of 6,500 anti-government protesters.

But police did not move against them after an apparent reversal by the prime minister, who accused the media of misreporting his remarks.

Protests continued on Sunday but with numbers down to the hundreds rather than thousands.

Analysts say violence stemming from a clampdown on protests could add to concerns about the army being drawn back into the political fray.

Last week Thailand's military commander denied reports that he had implied the unrest could trigger a coup attempt.

Supreme Commander Boonsrang Niumpradit had been quoted as saying that he could not guarantee members of the armed forces would not launch a coup, but he later said his remarks had been taken out of context.

http://english.aljazeera.net/NR/exeres/8C1...EAB829C22E57.ht

corrupt economics.

the coup,whichever weekend Rick?

within this month,may be.

Cheerio

Edited June 2, 2008 by miruph

[learnthaipodcast]

Sounds like its all same same as last time. How many coups happened in the last 20 years? 14.. ?

I think one of the worst things might be that the ones in power now try to make themselves rich in a short time because they expect to get booted.

[Plus]

How many coups happened in the last 20 years? 14.. ?

Actually 2. Surprised?