Thailand Set For Return To 'Thaksinomics'

[webfact]

Thailand set for return to 'Thaksinomics'

by Janesara Fugal

BANGKOK, July 11, 2011 (AFP) - Riding a wave of support among rural voters, Thailand's incoming premier plans a raft of populist measures to narrow the rich-poor divide, at the risk of higher inflation and public debt.

A rise in the minimum wage, increased rice prices for farmers and free tablet computers for primary school students are some of the promises that helped propel former premier Thaksin Shinawatra's Puea Thai Party to victory.

The one-time billionaire telecoms tycoon, who was ousted by the military in 2006 after five years in power, is adored by Thailand's rural poor for his populist policies such as cheap healthcare and microcredit schemes.

Now his sister Yingluck is set to follow in his footsteps as Thailand's first female premier, marking a return to her brother's expansionary policies targeting the rural poor that came to be known as "Thaksinomics".

"The concept of the policies is good because it focuses on how to resolve the vicious circle of poverty," said Thanawat Pholwichai, head of economic forecasting at the University of the Thai Chamber of Commerce.

"But Puea Thai has to implement it carefully," he added.

Thailand has made great strides in reducing poverty, with 8.1 percent of the population living below the national poverty line in 2009, one of the lowest rates in developing Asia, according to the World Bank.

But there are significant inequalities in the distribution of wealth, particularly between Bangkok and the rural northeast, the heartland of Thaksin's "Red Shirt" supporters.

The richest 20 percent of Thai households account for nearly half of total household incomes, the Asian Development Bank estimates.

"When people have more income they will spend more and that will boost the economy," Thanawat said. "But it is also risky. There are concerns that Puea Thai's populist policies will cause higher inflation."

Inflation in Thailand is relatively contained for now at about four percent, lower than the levels in many other Asian nations.

But growing price pressures could lead the central bank to extend its series of interest rate rises -- attracting more capital inflows, driving up the value of the baht and affecting the competitiveness of exports, analysts said.

The effects of Yingluck's policies are likely to be felt further afield than just Thailand, the world's top rice exporter.

She has promised rice farmers a minimum price of 15,000 baht per tonne, much higher than the current market price of less than 10,000 baht.

"It will be the highest rice price in the world," said Korbsook Iamsuri, director of the Thai Rice Exporters Association.

"It will definitely affect our exports. With this price, we can sell our white rice only after Vietnam sells all its rice," she told AFP.

There are also concerns about the impact on Thai companies of a proposed 40-percent increase in the daily minimum wage to 300 baht, about 10 dollars, although the impact should be cushioned by a cut in the corporate tax.

The biggest worry is for small and mid-sized firms, the bedrock of the Thai economy, said Mark Monson, a fund manager at Vienna-based Raiffeisen Capital Management.

"Their margins are thin already. Will they have to fire people? It could put pressure on job and labour growth," he warned.

For now investors appear largely unfazed: Thai stocks surged 4.5 percent last week as news of a decisive win by Puea Thai in the July 3 vote raised hopes of a return to political stability after years of turmoil.

The Thai baht also rose sharply and extended its gains after Yingluck, who is widely seen as Thaksin's political proxy, said the value of the currency would continue to be determined by market forces.

Jitters about the new policies are tempered by optimism about the robust health of the Thai economy, despite years of political unrest and a series of sometimes-bloody opposition street protests.

Thailand's export-dependent economy grew 7.8 percent in 2010 and there are hopes that rising incomes and consumer spending will boost tax revenues, easing pressure on the public finances.

Analysts estimate Puea Thai's proposed policies, which also include a planned high-speed rail network and free Wi-Fi in public places, will cost about 60 billion dollars over the next five years.

But with public debt at manageable levels, a bigger concern for many investors is that Thailand's fragile political calm may prove short-lived.

The outgoing ruling party is seeking the dissolution of Puea Thai on the grounds that banned politicians were involved in its election campaign.

Any attempt to remove Thaksin's allies from power yet again could trigger another round of street protests, in a fresh blow to the key tourism sector.

-- (c) Copyright AFP 2011-07-11

[Ricardo]

She has promised rice farmers a minimum price of 15,000 Baht per tonne, much higher than the current market price of less than 10,000 Baht.

AFP appear to have missed Ms Yingluck's off-the-cuff promise to raise the price to 20,000 Baht per tonne, which will be even-more damaging, to the country's finances & rice-exports.

[animatic]

She has promised rice farmers a minimum price of 15,000 Baht per tonne, much higher than the current market price of less than 10,000 Baht.

AFP appear to have missed Ms Yingluck's off-the-cuff promise to raise the price to 20,000 Baht per tonne, which will be even-more damaging, to the country's finances & rice-exports.

The farmers might get 1/2 of the 15k

and the other 5 if it happens goes right to the millers and transporters on the top.

Eventually the farmers will catch on again and the truck loads of rice dumped in front of ministries will start up again.

But by then the economy will be in the hopper.

[webfact]

Thaksin unveils 3 megaprojects-land reclamation along Bangpakong and Tajean rivers, high-speed train, new water source construction /TAN_Network

[Sateev]

Thaksin unveils 3 megaprojects-land reclamation along Bangpakong and Tajean rivers, high-speed train, new water source construction /TAN_Network

Maybe he/she can revive the search for the losr Japanese gold in Kanchanaburi...then ALL Thais will be rich!

[Bkkorupcountry]

As usual, the anti-thaksin brigade misses the whole point. The article is pointing towards generally good times for the country and the economy, albeit with certain inflationary concerns. The greatest risk to Thailand is now political turmoil. And yet, the anti-T gang is still criticising the new Govt and unable to look to the future.

[whybother]

As usual, the anti-thaksin brigade misses the whole point. The article is pointing towards generally good times for the country and the economy, albeit with certain inflationary concerns. The greatest risk to Thailand is now political turmoil. And yet, the anti-T gang is still criticising the new Govt and unable to look to the future.

It's funny that you want people to look to the future, but support going back to Thaksin.

[OzMick]

As usual, the anti-thaksin brigade misses the whole point. The article is pointing towards generally good times for the country and the economy, albeit with certain inflationary concerns. The greatest risk to Thailand is now political turmoil. And yet, the anti-T gang is still criticising the new Govt and unable to look to the future.

Take off your rose-coloured glasses and read it again. Shouldn't the PM be announcing mega-projects?

[rubl]

Thaksin unveils 3 megaprojects-land reclamation along Bangpakong and Tajean rivers, high-speed train, new water source construction /TAN_Network

Goh, who would have thought, k. Thaksin the non-involved unveils. He also confirmed to respect the opinion of locals regarding ecological impact I assume

[animatic]

As usual, the anti-thaksin brigade misses the whole point. The article is pointing towards generally good times for the country and the economy, albeit with certain inflationary concerns. The greatest risk to Thailand is now political turmoil. And yet, the anti-T gang is still criticising the new Govt and unable to look to the future.

It's funny that you want people to look to the future, but support going back to Thaksin.

We worry about Thaksin Bankrupting the country with his Thaksinomics.

Most all non TRT aligned economists said years ago

it was unworkable as he has presented it, and no signs of change.

It will make him adored in Issan till the day the bill will come due for all Thais.

[Ricardo]

As usual, the anti-thaksin brigade misses the whole point. The article is pointing towards generally good times for the country and the economy, albeit with certain inflationary concerns. The greatest risk to Thailand is now political turmoil. And yet, the anti-T gang is still criticising the new Govt and unable to look to the future.

I somehow doubt that a price of 20,000 Baht-per-tonne for rice. over half of which is subsidy from the government, is a sign of prudent management of government-finances, although I'm sure that certain middle-men (now which party do they support ?) will welcome the good times which appear to be heading their way !

And how come Thaksin is now making announcements about mega-projects, rather than the PM-elect or PTP-ministers-to-be, looking to the future doesn't this suggest certain tensions, as to who may actually be running the country ? Perhaps Ms-Yingluck will show the country who's really the boss, a woman scorned, and all that ? Or perhaps not.

[hammered]

Thaksinomics appeal to a lot of people in Thailand. We all know his rural middlemen mates love it, but if you actually talk to the poor they do too. How much is due to real qualitative difference between what Thaksin gives and the Dems and how much is down to packaging or being first or even what are the perceived motivations of giving by Thaksin and Democrats who knows, but Thaksinomics are popular and no small part of the recent election result.

Another side is that they are perceived as the party that delivers, and hence those who think they will just abandon all the announced policies that the poor like could well be surprised as losing the reputation for delivering is the quickest way they will lose the vote.

[bangkokrick]

50% increase in the price of rice is insanity. Lets look at the unemployment figures next year.

[ratcatcher]

BANGKOK OR UP COUNTRY ,doesn't matter which part.

BANKRUPT is what Thailand will be. With certain inflationary concerns.

Good times ahead for sure.

[bangkokrick]

And this is the only IPAD that the Thai kids will be getting from the new Government.

[1bbcd5]

Thanks guys.

[taurus88]

The facts speak for itself. Taksin's era was a time where the economy was at its zenith, inflation keep at bay, IMF loan paid and people were generally happy compare to last 2 years where inflation peaked and GDP was lower than most ASEAN countries. Taksin was touted as the next Mahathir and Lee Kuan Yew. Then the coup and schemers took that all away.

Thanks guys.

[ToffeEFCpower]

And this is the only IPAD that the Thai kids will be getting from the new Government.

[ToffeEFCpower]

HAHaHa. Nice one

[Thormaturge]

As usual, the anti-thaksin brigade misses the whole point. The article is pointing towards generally good times for the country and the economy, albeit with certain inflationary concerns. The greatest risk to Thailand is now political turmoil. And yet, the anti-T gang is still criticising the new Govt and unable to look to the future.

Take off your rose-coloured glasses and read it again. Shouldn't the PM be announcing mega-projects?

He did.

It would probably be best if the Press referred to "Prime Minister Shinawatra" in future. Saves the confusion.

[noahvail]

As usual, the anti-thaksin brigade misses the whole point. The article is pointing towards generally good times for the country and the economy, albeit with certain inflationary concerns. The greatest risk to Thailand is now political turmoil. And yet, the anti-T gang is still criticising the new Govt and unable to look to the future.

Take off your rose-coloured glasses and read it again. Shouldn't the PM be announcing mega-projects?

He did.

It would probably be best if the Press referred to "Prime Minister Shinawatra" in future. Saves the confusion.

Which one?

[bobmac10]

As usual, the anti-thaksin brigade misses the whole point. The article is pointing towards generally good times for the country and the economy, albeit with certain inflationary concerns. The greatest risk to Thailand is now political turmoil. And yet, the anti-T gang is still criticising the new Govt and unable to look to the future.

It's funny that you want people to look to the future, but support going back to Thaksin.

We worry about Thaksin Bankrupting the country with his Thaksinomics.

Most all non TRT aligned economists said years ago

it was unworkable as he has presented it, and no signs of change.

It will make him adored in Issan till the day the bill will come due for all Thais.

Look... you anti T *flame removed*.

Wake up, the policies of Thaksin of paying minimum guaranteed prices brought real tangible benefits to Thai farmers.

The rich Chinese grain buyers have always controlled the prices and kept the rural poor in debt to them for many many years.

Also, low cost micro loans enable farmers to purchase equipment to enable them to be more efficient and more productive.

Simple yet meaningful policies which the rural poor remember.

That is why he has so much support in the country, not just in Isaan.

As soon as the Dems got back in, the old ways came back, farmers screwed by the big buyers.

You can pontificate until the cows come home, but you can't change the reality of the situation.

The Dems have always looked after the big players and the government pen pushers who couldn't give a rat's about the rural poor,

I read all this rubbish by golf playing, pub hanging expats, and it's obvious some of you need to get out of their caves and talk to the supporters of PT.

The reasons are always the same, Mr T was the first guy to care about us.

That is why we support him and PT.

Edited July 11, 2011 by metisdead
Flame removed.

[djlest]

The facts speak for itself. Taksin's era was a time where the economy was at its zenith, inflation keep at bay, IMF loan paid and people were generally happy compare to last 2 years where inflation peaked and GDP was lower than most ASEAN countries. Taksin was touted as the next Mahathir and Lee Kuan Yew. Then the coup and schemers took that all away.

Thanks guys.

Actually there was a global recession that would have taken that away from even Mr T

[tlansford]

"The concept of the policies is good because it focuses on how to resolve the vicious circle of poverty," said Thanawat Pholwichai, head of economic forecasting at the University of the Thai Chamber of Commerce.

"But Puea Thai has to implement it carefully," he added.

Thailand has made great strides in reducing poverty, with 8.1 percent of the population living below the national poverty line in 2009, one of the lowest rates in developing Asia, according to the World Bank.

But there are significant inequalities in the distribution of wealth, particularly between Bangkok and the rural northeast, the heartland of Thaksin's "Red Shirt" supporters.

The richest 20 percent of Thai households account for nearly half of total household incomes, the Asian Development Bank estimates.

Good points here -

1: resolve the cycle of poverty

2: implement it carefully

3: address inequalities in distribution of wealth

true, true, and true, ...

On the other hand :

... when journalists use figures like "the richest 20% account for half of the total income", a red flag goes up for me. Numbers like this usually (OK, almost always...) hide the true levels of inequality. This is either laziness or deliberate.

Example : in the USA, the 400 richest individuals control as much wealth as the bottom 150 million people.

When writers quote figures like "20%" & "nearly half", the inequality doesn't seem so bad, does it? In the example above, 150 million is "nearly half" of the population of the USA, and the 400 richest individuals represent 0.0001% of the population. Change that example for the wealthy and make it the top 10% - or even 20% - and the bottom number won't change much. Hence an easy way to hide the true concentration of wealth.

Regarding Thailand inequality, journalists must drill down on the data - not the top 20%, 10%, or even 5% vs the poorest, but the top 1% and 0,01%, ...

[bangkokrick]

As usual, the anti-thaksin brigade misses the whole point. The article is pointing towards generally good times for the country and the economy, albeit with certain inflationary concerns. The greatest risk to Thailand is now political turmoil. And yet, the anti-T gang is still criticising the new Govt and unable to look to the future.

It's funny that you want people to look to the future, but support going back to Thaksin.

We worry about Thaksin Bankrupting the country with his Thaksinomics.

Most all non TRT aligned economists said years ago

it was unworkable as he has presented it, and no signs of change.

It will make him adored in Issan till the day the bill will come due for all Thais.

Look... you anti T *flame removed*.

Wake up, the policies of Thaksin of paying minimum guaranteed prices brought real tangible benefits to Thai farmers.

The rich Chinese grain buyers have always controlled the prices and kept the rural poor in debt to them for many many years.

Also, low cost micro loans enable farmers to purchase equipment to enable them to be more efficient and more productive.

Simple yet meaningful policies which the rural poor remember.

That is why he has so much support in the country, not just in Isaan.

As soon as the Dems got back in, the old ways came back, farmers screwed by the big buyers.

You can pontificate until the cows come home, but you can't change the reality of the situation.

The Dems have always looked after the big players and the government pen pushers who couldn't give a rat's about the rural poor,

I read all this rubbish by golf playing, pub hanging expats, and it's obvious some of you need to get out of their caves and talk to the supporters of PT.

The reasons are always the same, Mr T was the first guy to care about us.

That is why we support him and PT.

You think that Thaksin was thinking about the rural poor when he ripped Thailand to shit by not paying taxes on the Singapore's Temasek Holdings deal. This sale was also a threat to Thai national security. He changed the laws to suit his business requirements. The sad thing is he is about to get his 46 Billion Baht back on the back of his sister. What a lovely guy.

[OzMick]

The facts speak for itself. Taksin's era was a time where the economy was at its zenith, inflation keep at bay, IMF loan paid and people were generally happy compare to last 2 years where inflation peaked and GDP was lower than most ASEAN countries. Taksin was touted as the next Mahathir and Lee Kuan Yew. Then the coup and schemers took that all away.

Thanks guys.

I have 3 words for you - World Economic Crisis.

2 countries seem to have ridden it out quite well, Australia and Thailand - Thaksin had nothing positive to do with either.

[tlansford]

Look... you anti T *flame removed*.

Wake up, the policies of Thaksin of paying minimum guaranteed prices brought real tangible benefits to Thai farmers.

The rich Chinese grain buyers have always controlled the prices and kept the rural poor in debt to them for many many years.

Also, low cost micro loans enable farmers to purchase equipment to enable them to be more efficient and more productive.

Simple yet meaningful policies which the rural poor remember.

That is why he has so much support in the country, not just in Isaan.

As soon as the Dems got back in, the old ways came back, farmers screwed by the big buyers.

You can pontificate until the cows come home, but you can't change the reality of the situation.

The Dems have always looked after the big players and the government pen pushers who couldn't give a rat's about the rural poor,

I read all this rubbish by golf playing, pub hanging expats, and it's obvious some of you need to get out of their caves and talk to the supporters of PT.

The reasons are always the same, Mr T was the first guy to care about us.

That is why we support him and PT.

You think that Thaksin was thinking about the rural poor when he ripped Thailand to shit by not paying taxes on the Singapore's Temasek Holdings deal. This sale was also a threat to Thai national security. He changed the laws to suit his business requirements. The sad thing is he is about to get his 46 Billion Baht back on the back of his sister. What a lovely guy.

Two different things...

Thaskin did things for the benefit of the poor, and he did for the benefit of himself.

Edited July 11, 2011 by metisdead
Flame removed from quoted post.

[Jingthing]

The facts speak for itself. Taksin's era was a time where the economy was at its zenith, inflation keep at bay, IMF loan paid and people were generally happy compare to last 2 years where inflation peaked and GDP was lower than most ASEAN countries. Taksin was touted as the next Mahathir and Lee Kuan Yew. Then the coup and schemers took that all away.

Thanks guys.

I have 3 words for you - World Economic Crisis.

2 countries seem to have ridden it out quite well, Australia and Thailand - Thaksin had nothing positive to do with either.

Exactly, in that context the economic policies under Abhisit have been spectacular successes. The trouble is again ignorance of the Thai public to how exceptional this has been and of course the utter failure of the Thai democrats to decently COMMUNICATE their considerable accomplishments.

[OzMick]

Look... you anti T *flame removed*.

Wake up, the policies of Thaksin of paying minimum guaranteed prices brought real tangible benefits to Thai farmers.

The rich Chinese grain buyers have always controlled the prices and kept the rural poor in debt to them for many many years.

Also, low cost micro loans enable farmers to purchase equipment to enable them to be more efficient and more productive.

Simple yet meaningful policies which the rural poor remember.

That is why he has so much support in the country, not just in Isaan.

As soon as the Dems got back in, the old ways came back, farmers screwed by the big buyers.

You can pontificate until the cows come home, but you can't change the reality of the situation.

The Dems have always looked after the big players and the government pen pushers who couldn't give a rat's about the rural poor,

I read all this rubbish by golf playing, pub hanging expats, and it's obvious some of you need to get out of their caves and talk to the supporters of PT.

The reasons are always the same, Mr T was the first guy to care about us.

That is why we support him and PT.

You think that Thaksin was thinking about the rural poor when he ripped Thailand to shit by not paying taxes on the Singapore's Temasek Holdings deal. This sale was also a threat to Thai national security. He changed the laws to suit his business requirements. The sad thing is he is about to get his 46 Billion Baht back on the back of his sister. What a lovely guy.

Two different things...

Thaskin did things for the benefit of the poor, and he did for the benefit of himself.

How much better it would have been for the poor if he had used B46 billion for free schooling rather than stealing it! Oh wait, someone else did it for him!

Edited July 11, 2011 by metisdead
Flame removed from quoted post.

[bangkokrick]

Look... you anti T *flame removed*.

Wake up, the policies of Thaksin of paying minimum guaranteed prices brought real tangible benefits to Thai farmers.

The rich Chinese grain buyers have always controlled the prices and kept the rural poor in debt to them for many many years.

Also, low cost micro loans enable farmers to purchase equipment to enable them to be more efficient and more productive.

Simple yet meaningful policies which the rural poor remember.

That is why he has so much support in the country, not just in Isaan.

As soon as the Dems got back in, the old ways came back, farmers screwed by the big buyers.

You can pontificate until the cows come home, but you can't change the reality of the situation.

The Dems have always looked after the big players and the government pen pushers who couldn't give a rat's about the rural poor,

I read all this rubbish by golf playing, pub hanging expats, and it's obvious some of you need to get out of their caves and talk to the supporters of PT.

The reasons are always the same, Mr T was the first guy to care about us.

That is why we support him and PT.

You think that Thaksin was thinking about the rural poor when he ripped Thailand to shit by not paying taxes on the Singapore's Temasek Holdings deal. This sale was also a threat to Thai national security. He changed the laws to suit his business requirements. The sad thing is he is about to get his 46 Billion Baht back on the back of his sister. What a lovely guy.

Two different things...

Thaskin did things for the benefit of the poor, and he did for the benefit of himself.

The good he did appears to be heavily weighted in his favour.