A Warning From Voters In Europe To Thai Populists: Editorial

[hyperdimension]

Well that is all possible, but I am sick and tired of the Nation peddling this alarmist b*******s that PTP will tip Thailand into the same situation as Greece in a few years.

I don't think it was written anywhere that Thailand could get into the same situation as Greece in just a "few years". The point is that it can eventually get there if governments lack discipline in continuing to borrow significant amounts of money and then throwing it around via massive populist policies.

At each new election campaign, political parties have to promise even more than previously in order to compete. The costs (and therefore debts) can snowball after each election cycle, and may rarely be cut back. If the GDP increases at or more than the rate of debt increase, then there's no problem, but in reality GDP doesn't always increase every year (e.g. Thailand's GDP % change in 1998 was -10.51%), yet interest payments still needs to be made on the debt regardless.

All possible, which is just as well that thailand has such a whopping amount of forex then. I don't mind the point that reckless spending can wreck a county, I just like it if people consider the position that Thailand is in today and recognize that it is in a good fiscal position and that as a developing country grows it is natural that it spends some of its wealth on development. The issue is on what and how it should be spent, not to discuss that impending doom comes with all government debt. Comparing Europe and Thailand is ludicrous. The social costs aren't comparable, the pension obligations aren't tcomparable.

I agree that Thailand is still OK and there is currently room to borrow. The worry is with the path that Pheu Thai has set us on with their massive populist policies like the rice pledging scheme and tablets PCs for all primary school students, which have questionable outcomes in terms of improvement to the country's GDP. So it does come back to your issue of "what and how it should be spent" - governments should not recklessly borrow and spend on attractive populist policies just to get into power.

So the keyword is "path". It's a little like warning your children about addictive drugs or smoking. If they smoke only once per month, it's not so bad, but the frequency and amount can increase over time, to the point that in a number of years they could be smoking a pack of cigarettes per day due to nicotine addiction. If you warn and educate them about good health, especially early on and over the course of those years, such a progression may be prevented or at least moderated.

So it's not such a bad thing for there to be warnings of the dangers of what could happen eventually if governments continue to borrow and spend recklessly just to get elected.

A teacher in Europe gets 20k euro per year. 800k baht lets say, an average teacher gets that much in 3.5 years in Thailand. The pensions attached to this job in Europe outweigh thailand massively. The social obligations faced in Europe are gargantuan, Thailand much less so. So the I would rather debate where and and what to spend than start the discussion from the point of view that raising say the govt debt to 50% of GDP would be beneficial and doable or not, not that it puts Thailand anywhere remotely close to the situation in Greece or EU. The situations are literally continents apart.

Thailand has 65M people compared with Greece's 11M, so Thailand has 6 times as many people to "feed". Yet Thailand's GDP (PPP) per capita in 2011 was just 9,396 while Greece's was 26,294 (Source: List of countries by GDP (PPP) per capita), which is 3 times as small per person. Could Thailand afford to provide the same social programs to its population as in Greece?

Edited May 12, 2012 by hyperdimension

[siampolee]

What is interesting is the fact that the I..M.F.. are muttering quietly in the background concerning P.T.T.E.P. and its longer term plans which may well have an adverse affect on its current credit rating.

There have also been a few little rumblings of late concerning Thailand's current fiscal policies as well. Note the big drop in the countrys foreign reserve over the last month.

ll may not be as it seems, however only time will tell, However I have my suspicions that there may well be a re-run of 1997 in the not too distant future if the current policies are followed to the full.

Edited May 12, 2012 by siampolee

[tlansford]

The Nation is now an expert on France.

They should just work on learning journalism.

Giving the boot to a right-wing government is not a warning shot to a government with populist policies.

Sarko was given the boot because most of the French do not like him nor his policies. It is not a warning to Thailand at all.

As for the comments on the IMF, their history has been to administer dogma-induced poison to countries in exchange for loans. Most countries should slam the door when they see the IMF knocking...

[bigbamboo]

According to my French customers, Sarkozy was defeated because he was an arrogant prick and people didn't like him.

Quite similar to Abhisit actually.

That's certainly true about Sarky.

And ironically he's been suceeded by 'man of the people' Hollande. who rides a scooter and says he dislikes the rich although it turns out he's not exactly potless himself.

[animatic]

According to my French customers, Sarkozy was defeated because he was an arrogant prick and people didn't like him.

Quite similar to Abhisit actually.

Very much different, I hardly see any common ground at all actually.

[phiphidon]

According to my French customers, Sarkozy was defeated because he was an arrogant prick and people didn't like him.

Quite similar to Abhisit actually.

Very much different, I hardly see any common ground at all actually.

If he was the opposite he could still be regarded as a servile c...............

[tlansford]

According to my French customers, Sarkozy was defeated because he was an arrogant prick and people didn't like him.

Quite similar to Abhisit actually.

Very much different, I hardly see any common ground at all actually.

Right - Sarko is French and Abhisit is English...

[gand]

Abhisit only problem was that he was not Thaksin's son.

[hellodolly]

Rank Country Public debt (% of GDP)

1 Japan 225.8

2 Saint Kitts and Nevis 185

3 Lebanon 150.7

4 Zimbabwe 149

5 Greece 144

6 Iceland 123.8

7 Jamaica 123.2

8 Italy 118.1

9 Singapore 102.4

10 Belgium 98.6

11 Ireland 94.2

12 Sudan 94.2

13 Sri Lanka 86.7

14 Canada 84

15 France 83.5

16 Portugal 83.2

17 Egypt 80.5

18 Belize 80

19 Hungary 79.6

20 Germany 78.8

21 Dominica 78

22 Nicaragua 78

23 Israel 77.3

24 United Kingdom 76.5

25 Austria 70.4

26 Malta 69.1

27 Netherlands 64.6

28 Spain 63.4

29 Cote d'Ivoire 63.3

30 Jordan 61.4

31 Brazil 60.8

32 Mauritius 60.5

33 Ghana 59.9

34 Albania 59.3

35 Bahrain 59.2

36 United States 58.9

37 Seychelles 58.8

38 Morocco 58.2

39 Bhutan 57.8

40 Guyana 57

41 Vietnam 56.7

42 Philippines 56.5

43 Uruguay 56

44 India 55.9

45 Croatia 55

46 El Salvador 55

47 Poland 53.6

48 Malaysia 53.1

49 Kenya 50.9

50 Argentina 50.3

51 Pakistan 49.9

52 Tunisia 49.5

53 Turkey 48.1

54 Norway 47.7

55 Denmark 46.6

56 Aruba 46.3

57 Latvia 46.2

58 Finland 45.4

59 Colombia 44.8

60 United Arab Emirates 44.6

61 Costa Rica 42.4

62 Thailand 42.3

Greece nestles just below Zimbabwe in the list. Only 58 places to go to reach the same position. The government would have to break spending records for a 20 years to get anywhere this situation. And this makes no allowance for the Thai economy growing.

http://www.indexmund...aspx?c=th&v=143

Japan is the worst country in the world.

No, Japan has the worst public debt as a % of GDP. It is not the worst country in the world. To make that statement you would need to look at areas such as infant mortality, education, healthcare, infrastructure, average income per capita etc, etc. Before making such a broad and in your case, erroneous statement

You are spot on. Not all dept is bad. Most people in Western countries have mortgages and that is generally a good things. Many of these people have debts much larger than Japan's but get along just fine. As long as the borrowing is for investment and it able to be paid back, the debt can be good. It gets bad when the money is wasted and when it gets so high that it can't be paid back. When countries and people have low debt simply because they are poor and no-one will lend them money. That doesn't make the country better than countries with more debt.

Excellent

Edited May 12, 2012 by hellodolly