1995 Flood - 1997 Asian Financial Crisis

[ExpatOilWorker]

I am not suggesting that the October/November 1995 flood was the root cause of the July 1997 Asian Financial crisis, but could it have been a trigger event?

The financial consequences of the 2011 flood, which is about 500 billion baht or 20 times worse than the 1995 flood will only show after the water receed. Could it result in a local financial crises? High inflation?

[gk10002000]

Interesting post. I looked up some articles on that 1995 flood. A worse one was in the 80s. I will read up more on it. But 1997 was a bit different because of all the "mini dragons" flaming out economincally.

[ExpatOilWorker]

Interesting post. I looked up some articles on that 1995 flood. A worse one was in the 80s. I will read up more on it. But 1997 was a bit different because of all the "mini dragons" flaming out economincally.

The early 2011 damage estimates seem to dwarf the previous floods:

DAMAGE TO THE ECONOMY

1983: 6.6 billion baht.

1995: Tens of billions of baht

[givenall]

Interesting post. I looked up some articles on that 1995 flood. A worse one was in the 80s. I will read up more on it. But 1997 was a bit different because of all the "mini dragons" flaming out economincally.

This remains to be seen, but this is only flood in 2 or 3 countries andnot the whole region. China economy is still doing ok. I think this may be badfor Thailand for few years but not the whole region, it actually may be greatfor Vietnam, Cambodia and possibly Myanmar especially due to some of economic policies of this inexperience government

Edited November 1, 2011 by metisdead
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[GuestHouse]

I'm quite certain that the executive management of foreign companies in Thailand who's Thailand based factories and offices are underwater are at this very moment looking at alternative locations to base their operations.

The fix to make sure that floods like these are not repeated is not one that is going to happen overnight (even if political infighting, negligence, corruption and simple shortsightedness were not around to prevent any improvement at all).

Do these companies sit around hoping that it will not flood again and that Thai government will act to prevent floods or do they move to a new location?

Thailand, hub of farce and mismanagement.

[aussiebebe]

Interesting post. I looked up some articles on that 1995 flood. A worse one was in the 80s. I will read up more on it. But 1997 was a bit different because of all the "mini dragons" flaming out economincally.

This remains to be seen, but this is only flood in 2 or 3 countries andnot the whole region. China economy is still doing ok. I think this may be badfor Thailand for few years but not the whole region, it actually may be greatfor Vietnam, Cambodia and possibly Myanmar especially due to some of economic policies of this inexperience government

It's an interesting thought that the 95 flood could have contributed to the 97 woes - all meltdowns have many causes, there is rarely one smoking gun. I for one am fascinated with how the 2008 crash was preceded in many economies by a housing boom, itself symptomatic of a credit boom. The latest edition of 'Time' headlines with 'The China Bubble' (Oct 31) and the article explores the property boom which has really underpinned the economy for sometime. Anyone familiar with the fall of the Celtic Tiger economy, for example, will shudder when reading as you can easily call to mind the 'ghost' estates littering Ireland - property sold well above it's value, estates empty and crumbling, with the few unlucky buyers trapped in negative equity. Property bubbles are left unchecked until the last possible moment; the following is from The Independent, a British newspaper, in 2007, listing all the benefits of EU membership for the UK:

3. Once poor countries like Ireland, Greece and Portugal prospering

EU subsidies well spent have been crucial to the lift-off of the Irish economy. Once firmly in Britain's economic shadow, the Celtic tiger has emerged. Gross domestic product per capita in Ireland in 2005 was 137.1 per cent of the EU average, compared to 116.8 per cent in the UK.

That, just a year before the boom turned to bust, based almost entirely upon property appreciation.

This is a contrast with Thailand as the BOT stamped out 100% mortgages two years ago, but we've more to fear from the China bubble popping than the damaging floods. Gordon G. Chang's book 'The Coming Collapse Of China' is nearly eight years old now and clearly he was brave writing about something about which he'll potentially live to be disproved, but Time's article looks into how the only chance for the Chinese government to push the debt upon it's citizens may provoke the kind of uprising Chang (not specifically) forewarned about.

[ExpatOilWorker]

Interesting post. I looked up some articles on that 1995 flood. A worse one was in the 80s. I will read up more on it. But 1997 was a bit different because of all the "mini dragons" flaming out economincally.

The early 2011 damage estimates seem to dwarf the previous floods:

DAMAGE TO THE ECONOMY

1983: 6.6 billion baht.

1995: Tens of billions of baht

2011: The PM is seeking 900 billion to rebuild "The New Thailand. These are wopping numbers and I think we will see some inflation in Thailand in 2012.

[ExpatJ]

I'm quite certain that the executive management of foreign companies in Thailand who's Thailand based factories and offices are underwater are at this very moment looking at alternative locations to base their operations.

The fix to make sure that floods like these are not repeated is not one that is going to happen overnight (even if political infighting, negligence, corruption and simple shortsightedness were not around to prevent any improvement at all).

Do these companies sit around hoping that it will not flood again and that Thai government will act to prevent floods or do they move to a new location?

Thailand, hub of farce and mismanagement.

The problem is that there is no real alternative in the region- Vietnam, Laos, Cambodia are far far more corrupt and inefficiency than the Thai government. Malaysia, much much higher labor costs. So, no these factories are unlikely to be leaving Thailand anytime soon.

[ExpatOilWorker]

From a Bangkok based local news paper "......it can be assumed that the present flood that inundates scores of provinces along Chao Phraya river can be considered the greatest flood in the recorded history of Siam because before 1942 there was no record of any great flood in Bangkok."

So 2011 is a biggy.

Edited November 2, 2011 by ExpatOilWorker