Politicians' Power Games Are Pulling The Thai Economy Backwards

[webfact]

STREET WISE

Politicians' power games are pulling the economy backwards

By Achara Deboonme

Economics guru Narongchai Akrasanee hit the nail on the head at a seminar yesterday when he said that political turmoil is distracting the government from solving economic problems.

Take Map Ta Phut as an example. Some 76 projects planned for the industrial estate in Rayong were suspended in September 2009. To date, 65 projects accounting for more than Bt200 billion in investment remain suspended, with a huge workforce left waiting to take up jobs. The first anniversary of this crisis is approaching, but project owners are still clueless as to when the official green light to kick-start operations will be given.

To be fair, the project owners should also take some blame for the crisis. The expansion in Map Ta Phut was done at top speed and though some companies launched programmes in response to health and environmental concerns, many neglected local people's feelings.

"They couldn't have been more imaginative," one activist told me wryly. "Much of their effort was concentrated on making donations that had their names firmly attached. Signs have sprung up at local schools - all with the names of the donors very visible."

Shaken by the suspension of their operations, some of these companies have come up with more helpful strategies.

Big corporations such as PTT, Siam Cement and Dow Chemical are today announcing a joint effort to improve living conditions for Map Ta Phut communities.

The brainstorming of ideas has an important role to play in any such initiative, enabling valuable inputs from different areas of expertise.

As we are way behind industrialised countries in tackling environmental problems, we can also learn from them. Yesterday, Japan's New Energy and Industrial Technology Development Organisation (Nedo) handed over an energy-efficient furnace to UMC Steel in Chon Buri. It's part of a pilot project that will reduce energy consumption by 29 per cent and carbon emissions by 28 per cent and should encourage the wide use of this furnace in Thailand's industrial sector.

Nedo chairman Seiji Murata, during his discussion with Industry Minister Chaiwuti Bannawat, also proposed the introduction of new technology to manage the power supply at industrial estates, as well technology to support Thailand's Eco Industrial Town planning, aimed at the harmonious coexistence of industrial activity and local communities.

Indeed, people quick to point the finger of blame at the Democrat-led government should remember that this crisis could have been prevented by a more forward-looking vision on the part of its predecessors.

Taking Narongchai's comment, we could say that politics are pulling the economy backwards. In a world where the engine of the global economy runs at full speed, Thailand has a problem catching up with the train because its politicians are busy with their own power games.

It makes you wonder, would we be better off without politicians?

-- The Nation 2010-06-23

[taurus88]

No difference between a big corporation performing badly. The chief executive takes the wrap. The country is under the watch of Ahbisit and his cabinet. Failure of MTP under his watch is a failure of the present government and should take full responsibilities. If you can't work under pressure, then you simply lack leadership qualities.

[thaihome]

No difference between a big corporation performing badly. The chief executive takes the wrap. The country is under the watch of Ahbisit and his cabinet. Failure of MTP under his watch is a failure of the present government and should take full responsibilities. If you can't work under pressure, then you simply lack leadership qualities.

The problem with your diatribe against the Abhisit government is it fails to recognize the fact that the PPP governments had over a year to setup the required panel, but did nothing. The current government has actually done something and the author of the OP seems to have not noticed that the committee Abhisit appointed to get things moving released its findings and actions yesterday. Things will get moving now, something the PPP was unable to do.

TH

Edited June 23, 2010 by thaihome

[Samuian]

As China is next to the US one of the largest importer of Thaigoods are suffering heavy under the "World Economic Crisis", facing a strong Baht are facts which are rather difficlut to tackle and have nothing to do with "simply lack leadership qualities", nill!

It's anti-government rant, non else!

The continuing "protests", specially the violence in Bangkok and Chiang Mai are another factor weighing heavy on the tourism sector, but so is the strong baht, the weak world economic situation/outlook, predictions are that it will pick up momentum around end of this year.

And imho it's over with violent "protests".... for some time to come.

[kuffki]

Gee really?! because i thought all the turmoil was really good for the country and looking at the stock market and currency before, during and after the conflict you would think i am living in the strongest and best economy in the world-basically not on Planet earth

[thaihome]

Gee really?! because i thought all the turmoil was really good for the country and looking at the stock market and currency before, during and after the conflict you would think i am living in the strongest and best economy in the world-basically not on Planet earth

I guess you haven't bothered to research how the Thai economy is actually doing, have you? Did you know that exports in the first 5 months are up 34% from 2009 and are at the highest since July 2008. Do you know that unemployment is almost zero and there is actually a labor shortage? Do you know consumer confidence is up, despite the political troubles?

All these things, in addition to some 140 billion USD in reserves are the reason the baht is strong and the SET continues to rise.

So, yes, Thailand is in a very strong position economically and people that do real analysis know that,

TH

[Extraterrestrial]

So, yes, Thailand is in a very strong position economically and people that do real analysis know that,

TH

I know people want to believe things are fine, but they simply are not fine.

Thailand's economy has been declining in real terms for a long time (ever since a certain person got elected PM).

The long term trend is not good..............this if for Thailand.............massive decline (remember, it takes time for crazy economic policies to be reflected in data).

Also note (not shown) there have been huge upward trends in neighboring countries, especially Cambodia and Vietnam.

But even they are showing slight declines.

The real issue is the long term decline in Thailand and the real probability that recent events will make the figures worse, not better.

YearGDP - real growth rateRankPercent ChangeDate of Information20035.20 %34 2002 est.20046.70 %3128.85 %2003 est.20056.10 %46-8.96 %2004 est.20064.50 %107-26.23 %2005 est.20074.80 %1106.67 %2006 est.20084.80 %1170.00 %2007 est.20092.60 %141-45.83 %2008 est.2010-2.80 %159-207.69 %2009 est.

Edit: that did now show up, so here is the link:

http://www.indexmundi.com/thailand/gdp_real_growth_rate.html

Edited June 23, 2010 by Extraterrestrial

[kuffki]

Gee really?! because i thought all the turmoil was really good for the country and looking at the stock market and currency before, during and after the conflict you would think i am living in the strongest and best economy in the world-basically not on Planet earth

I guess you haven't bothered to research how the Thai economy is actually doing, have you? Did you know that exports in the first 5 months are up 34% from 2009 and are at the highest since July 2008. Do you know that unemployment is almost zero and there is actually a labor shortage? Do you know consumer confidence is up, despite the political troubles?

All these things, in addition to some 140 billion USD in reserves are the reason the baht is strong and the SET continues to rise.

So, yes, Thailand is in a very strong position economically and people that do real analysis know that,

TH

No sorry i have not done the research, i like to live it up to people like yourself.

Unemployment almost 0-LMAO, sorry could not help myself but laugh

May i suggest you do some light study of economics to see why Thb is strong and how SET runs itself, better yet read some recent articles done by Japanese stock brokers then you will actually post something that is worth reading.

While you doing some reading, see if you can find an article by German Institute which is also confirmed by Thai government official that Thai government will go bankrupt in less then 2 years unless some major changes are made.

According to your post, soon enough the exchange would US$33 for 1 THB.(not a misspell)

Wohooo go Thailand!

PS. www.linmark.com Send them an email or give them a call and ask why world second largest supply company is pulling out from Thailand after almost 15 years in operation in Thailand

Edited June 23, 2010 by kuffki

[eggomaniac]

As China is next to the US one of the largest importer of Thaigoods are suffering heavy under the "World Economic Crisis", facing a strong Baht are facts which are rather difficlut to tackle and have nothing to do with "simply lack leadership qualities", nill!

It's anti-government rant, non else!

The continuing "protests", specially the violence in Bangkok and Chiang Mai are another factor weighing heavy on the tourism sector, but so is the strong baht, the weak world economic situation/outlook, predictions are that it will pick up momentum around end of this year.

And imho it's over with violent "protests".... for some time to come.

Did you write this before or after the bomb went off near the offices of that political party? [meant to kill, but they guy had moved the cart because it was raining.]

I will be ever so glad and relieved if your analysis is correct, but it seems so clear that 'for some time to come' Taliban style attacks will begin, which curfews and CRES can do nothing to stop. Any future elections look like a fuse to me, in the tribal war Thailand is embroiled in. Try to imagine what a red out for revenge might do. My guess is RR bridges, next.

THINK about if it wasn't raining and that bomb killed some of those politicians! What yho have been then? Just remember there are bargains to had in chaos. It's just knowing when 'the chaos is going to happen'. hint 'going to'

=============

There WERE those who warned of this stuff. The FT Article of mid Jan 2010 "Faded Smiles", now, reads like a prophesy.

excerpts > This stuff was written 6 months ago, so Today's article smacks of johnny came later

'''The sputterings of Thai democracy have also become intimately bound up with analysis of the country’s economic development. In 1995, after a decade of growth that outstripped even China’s, commentators began to chatter excitedly about Thailand joining the ranks of the world’s top 10 economies within a generation. The reality has been otherwise. Thailand’s development has stalled. Income inequalities have widened.

True, the economy has regained a modicum of traction since the Asian financial crisis of 1997 slashed 15 per cent off its gross domestic product in 18 disastrous months. But even before last year’s global crisis lopped off a further 3.5 per cent, it had been struggling to grow above 4-5 per cent a year. That puts it towards the bottom of regional league tables, outstripped by countries such as Vietnam and Singapore, let alone China. Thai GDP per capita, at some $3,850 (£2,360, €2,640), remains less than one-quarter of that of Taiwan, an economy with which not long ago it was being compared.

Tarisa Watanagase, governor of Thailand’s central bank, lays the blame clearly on political turmoil. Private investment, growing at 12 per cent a year earlier this decade, has ground to a halt, she says. Bank lending to businesses languishes at two-thirds of 1990s levels, while the economy has become far more dependent on exports than it was before the 1997 crisis. “The biggest problem is the political situation,” she says. “With that, neither the private nor the public sector can really focus on what needs to be done.”

Foreign investment

After the airports paralysis, ground is fast lost to regional rivals

Thailand’s political turmoil

has come at a high price, with foreign direct investment tumbling in the short term. But given the worries for investors, FDI has been notably resilient over the longer term.

“It is still coming in,” says Tarisa Watanagase, governor of the Bank of Thailand, the country’s central bank. “We thought that last year, with the global situation and the political situation, FDI would dry up, but it still came in.”

The fall was steep, however. In the first 11 months of 2009, FDI disbursements were some Bt266bn ($7.7bn, €5.6, £5bn), down 43 per cent on the same 2008 period. The slide was much greater than Vietnam’s full-year fall of 13 per cent or Indonesia’s 28 per cent drop.

Analysts are reluctant to attribute the entire fall to political turmoil, pointing out that Vietnam has benefited from being a low-cost producer and Indonesia from its natural resources. Another factor in the mix was that Japan and Europe, Thailand’s main foreign investors, were themselves hit disproportionately hard, with Japanese FDI falling 75 per cent.

Long-term investors in Thailand are a hardy bunch, acclimatised to the unpredictable rise and fall of governments and the enthusiastic participation of the military in running the country. In the past, these upheavals had little practical effect on the business environment.

That changed in December 2008, when thousands of anti-government protesters took over Bangkok’s airports for a week, trapping tourists and businessmen and blocking air freight export routes. The Bank of Thailand estimated that the siege cost some $8.5bn.

Analysts say the problem is not so much that Thailand’s allure has declined in absolute terms, though it has, but that it has declined so much relative to rivals.

The reasons for Thailand’s disappointing performance go deeper than that. Stimulated by US capital inflows during the Korean and Vietnam wars and, in the 1980s, by a wave of foreign investment from Japan, Thailand’s economy grew beyond the tourism and agriculture on which it had traditionally relied. But it never fully developed an indigenous capitalist class able to compete internationally. Instead, local entrepreneurs – of whom Mr Thaksin was one – prospered by forging close relationships with politicians, carving out monopolies in service industries such as telecommunications and construction.

In Thaksin: The Business of Politics in Thailand, their book on the populist mogul, Pasuk Phongpaichit and Chris Baker write: “Big business was closely connected to politics. The businessmen shared some of their profits with the generals, who in return constructed a friendly environment for business, and rewarded their particular friends with contracts, favours and other profit-sharing advantages.” As well as stalling the creation of world-class businesses, that cosy arrangement also held back the social transformations, particularly land reform, that underpinned rapid take-off in Japan, Taiwan and South Korea.

Much of the Thai elite is fearful of the aspirations stirred by Mr Thaksin. Even Anand Panyarachun, a former prime minister associated with more inclusive social policies, insists Thailand should shun the blind pursuit of economic growth. “We have ambitions, but we don’t have exaggerated ambitions,” he says.

Playing down social needs, he adds: “Here we are lucky in the sense that we have such a temperate climate, and you don’t need much shelter, and you don’t need much clothing and everywhere you go you can always get people to give you food.” [sic[ let them eat cake[sic]

“Some of the vestiges of latent feudal society will have to give way.”

Whether those vestiges go rapidly or gradually and whether they do so with or without the direct involvement of Mr Thaksin is anybody’s guess. But many Thai activists are braced for what they are certain are coming political convulsions.

“Even if you remove Thaksin, there are still a large number of people left to fight for democracy,” says Chaturon Chaisang, one of 111 opposition MPs banned from politics. “In certain aspects, Thai politics have gone far beyond Thaksin.”

[asiawatcher]

The politics is all about gain. The majority of those 'elected' through bought votes, have one intention, that being to gain more money.

Thaksin openly marketed 'seats available' at 500M Baht guaranteed. He had a few takers. They were 'enthroned' and they reaped their investment many times over. Present coalition seats are doing the same thing. Nothing changes.

It has been said the dis-ease of Asia is corruption and it will be a long time before anything will change especially when you have Thailands' poor prepared to back corrupt leaders without understanding how much they have already stolen from the same people casting favourable votes!

Edited June 23, 2010 by cdnvic
corrected spelling of proper name

[Extraterrestrial]

I agree with what you are saying, but I do think that some people who think Thailand is doing great need to visit this link and select Asia.........you will see a reality that most people deny:

GDP - real growth rate - Color-Coded World Map - Asia

Also on the same site, click this:

I wish I could cut and paste the visuals here, but it seems impossible.

What it is showing is a long term decline.........especially in relationship to virtually all of the other countries in Asia (especially Southeast Asia).

[hyperdimension]

Thaksin openly marketed 'seats available' at 500M Baht guaranteed. He had a few takers.

Who were they? How did he "openly market" the seats, e.g. in full view of the media & public?

Present coalition seats are doing the same thing.

Can you provide evidence?

[Rucharee]

Thaksin openly marketed 'seats available' at 500M Baht guaranteed. He had a few takers.

Who were they? How did he "openly market" the seats, e.g. in full view of the media & public?

Present coalition seats are doing the same thing.

Can you provide evidence?

Yes, they pay cash as well as doing the money transfer in full view of the public, in youtube, in CCTV tape, BBC, CNN, you name it, and photos even in all national and international newspapers.