Painful Lessons From 1997 Must Not Be Forgotten: Thai Editorial

[phiphidon]

Thailand still carries about 1.14-trillion-baht (principal only, without interest) debt from the 1997 crisis, which will take an estimated 20-30 years to pay off, even longer if Governments continue to make major borrowings for impressive but otherwise unnecessary megaprojects.

"even longer if Governments continue to make major borrowings for impressive but otherwise unnecessary megaprojects",

like the Dems Investing from Strength to Strength "stymulus" in 2009, an unprecedented 1.43 Trillion baht borrowed for schemes like the "dust free roads" scam and others currently being investigated by the NACC?

[Reasonableman]

Thailand still carries about 1.14-trillion-baht (principal only, without interest) debt from the 1997 crisis, which will take an estimated 20-30 years to pay off, even longer if Governments continue to make major borrowings for impressive but otherwise unnecessary megaprojects.

"even longer if Governments continue to make major borrowings for impressive but otherwise unnecessary megaprojects",

like the Dems Investing from Strength to Strength "stymulus" in 2009, an unprecedented 1.43 Trillion baht borrowed for schemes like the "dust free roads" scam and others currently being investigated by the NACC?

Is it a competition to produce the most scams, then? Is that what you are suggesting?

[Yunla]

But to stick to this topic again I just want to say Thailand like Iceland at least is addressing the problem.

I think that is a positive

The same cannot be said for much larger supposedly more developed countries & I hope they too can

soon start the long walk to recovery/repair.

I agree with you entirely but my first post which you answered was saying that I don't see debt or resource as the problem issues in Thailand, but mismanagement. I was infact suggesting that Thailand has a relatively minor debt problem and that if the government managed resources, economy, infrastructure and corruption better, the debt would be meaninglessly small. My point was criticising mismanagement and I was saying the debt is negligable compared to that.

Edited July 3, 2012 by Yunla

[kerryk]

As far as I know Thailand is the worlds second largest producer of pick up trucks. Not bad for a small country especially when you consider what Sweden did to Saab and Volvo. It is not an easy business.

Thailand's economic future is very promising as demonstrated by new investments by Japanese companies and American companies like Ford.

[phiphidon]

Thailand still carries about 1.14-trillion-baht (principal only, without interest) debt from the 1997 crisis, which will take an estimated 20-30 years to pay off, even longer if Governments continue to make major borrowings for impressive but otherwise unnecessary megaprojects.

"even longer if Governments continue to make major borrowings for impressive but otherwise unnecessary megaprojects",

like the Dems Investing from Strength to Strength "stymulus" in 2009, an unprecedented 1.43 Trillion baht borrowed for schemes like the "dust free roads" scam and others currently being investigated by the NACC?

Is it a competition to produce the most scams, then? Is that what you are suggesting?

Why would I suggest that? I was pointing out that the Dems were one of those governments who felt it necessary to borrow huge amounts for dodgy schemes whilst ignoring a debt held over from 96.

[Reasonableman]

Thailand still carries about 1.14-trillion-baht (principal only, without interest) debt from the 1997 crisis, which will take an estimated 20-30 years to pay off, even longer if Governments continue to make major borrowings for impressive but otherwise unnecessary megaprojects.

"even longer if Governments continue to make major borrowings for impressive but otherwise unnecessary megaprojects",

like the Dems Investing from Strength to Strength "stymulus" in 2009, an unprecedented 1.43 Trillion baht borrowed for schemes like the "dust free roads" scam and others currently being investigated by the NACC?

Is it a competition to produce the most scams, then? Is that what you are suggesting?

Why would I suggest that? I was pointing out that the Dems were one of those governments who felt it necessary to borrow huge amounts for dodgy schemes whilst ignoring a debt held over from 96.

Oh, I didn't realize you were selectively reviewing history to score a petty political point. I should have guessed. I thought we were talking about the current situation and what could and should be done now. Anyway, if someone did wrong in the past, then everyone should be able to do wrong now. It's a precedent. I see your point. Thanks.

Edited July 3, 2012 by Reasonableman

[phiphidon]

Oh, I didn't realize you were selectively reviewing history to score a petty political point. I should have guessed. I thought we were talking about the current situation and what could and should be done now. Anyway, if someone did wrong in the past, then everyone should be able to do wrong now. It's a precedent. I see your point. Thanks.

Whereas I knew you were selectively ignoring history to make a political point about this government

'continue to make major borrowings for impressive but otherwise unnecessary megaprojects"

Your point was far more obvious.

[Reasonableman]

Oh, I didn't realize you were selectively reviewing history to score a petty political point. I should have guessed. I thought we were talking about the current situation and what could and should be done now. Anyway, if someone did wrong in the past, then everyone should be able to do wrong now. It's a precedent. I see your point. Thanks.

Whereas I knew you were selectively ignoring history to make a political point about this government

'continue to make major borrowings for impressive but otherwise unnecessary megaprojects"

Your point was far more obvious.

We are talking about the present and the future, although you would clearly prefer to talk about history. The government in power is being alerted to the possible pitfalls of overextending. It's a bit pointless to cast back to the Democrats about potential governmental action NOW. I know you'd love to do that, but it's essentially irrelevant, since the party to which you refer is not in power now.

[Thai at Heart]

Public debt could rise from the current level of 40 per cent of GDP with excessive spending. If public debt is not controlled, the government could run into fiscal trouble and fall into a similar situation to the Greek tragedy.

http://en.wikipedia.org/wiki/Economy_of_Greece

The country's public debt-to-GDP ratio stood at 165.3% of nominal gross domestic product in 2011.^[14][15]

So better to borrow nothing to develop anything at all, because we might end up as Greece? The debate about government debt is always a reasonable discussion, but putting Thailand and Greece in the same article is pure scare mongering. The debate about waste, corruption and ill thought out spending is valid, but if the government isn't going to build the roads, schools, hospitals and all the rest that goes along with a country with a growing population that needs economic development, who the hell is?

Or is Thailand supposed to stay at 40% debt of GDP and accept that half its kids can't do their 7 times table?

[Toltec]

The Painful Lessons from 1997 Crisis are the following:

1) Crony Capitalism will lead to excesses - abuse of power, abuse of credit, just like what has happened in Greece, Spain, Italy etc..

2) Thaksin did silently get back in (March of 2007) the government of General Chavalit just right before the government devalued the baht in July 2 1997 - Tom Yam Kung Crisis. But he was not alone in taking advantage of the situation. He exchanged his 1 billion dollars for baht when the exchange rate shot up to 50bht to a dollar thereby doubling his money. He used this money to start up Thai Rak Thai. He did it by buying MPs at 1-5M, 6-10M, 10M and above prices with monthly salaries and special bonus plus poetential Cabinet positions.

3) The 1.6 Trillion Baht Debt did NOT go away. It is still there with the new owner - The Bank of Thailand. How they are going to solve this mountain of debt is anybodys guess.

4) Piling up another round of debt eg 300 Billion for farmers credits, 100 billion here and there for populist schemes and trillions for infrustructure project will sink this country in 5 years time if nothing is done with it. Corruption has already in the works.

5) After the Flood of 2011 by early 2012, all the brand new cars you see on the road with RED plate numbers are mostly brand new Mercs, BMs and Porches... We are back to PRE-1997 again...

I'll give Thailand less 5 years and the world the same...Something has to give....

[kerryk]

The Painful Lessons from 1997 Crisis are the following:

1) Crony Capitalism will lead to excesses - abuse of power, abuse of credit, just like what has happened in Greece, Spain, Italy etc..

2) Thaksin did silently get back in (March of 2007) the government of General Chavalit just right before the government devalued the baht in July 2 1997 - Tom Yam Kung Crisis. But he was not alone in taking advantage of the situation. He exchanged his 1 billion dollars for baht when the exchange rate shot up to 50bht to a dollar thereby doubling his money. He used this money to start up Thai Rak Thai. He did it by buying MPs at 1-5M, 6-10M, 10M and above prices with monthly salaries and special bonus plus poetential Cabinet positions.

3) The 1.6 Trillion Baht Debt did NOT go away. It is still there with the new owner - The Bank of Thailand. How they are going to solve this mountain of debt is anybodys guess.

4) Piling up another round of debt eg 300 Billion for farmers credits, 100 billion here and there for populist schemes and trillions for infrustructure project will sink this country in 5 years time if nothing is done with it. Corruption has already in the works.

5) After the Flood of 2011 by early 2012, all the brand new cars you see on the road with RED plate numbers are mostly brand new Mercs, BMs and Porches... We are back to PRE-1997 again...

I'll give Thailand less 5 years and the world the same...Something has to give....

Not that I doubt you of course (well there is the car thing but outside of that) but do you have any economic training or education? Just wondering. Because most of the economists in the world disagree with a lot of what you are saying. I don't of course but I would like something to tell my banker when he recommends the Thai Baht as a stable investment.

[metisdead]

Off topic posts have been removed.

[Reasonableman]

most of the economists in the world disagree with a lot of what you are saying...

Could you be a tad more specific? Which economists, about what topics? Some evidence to support your contentions would be.... well... nice. Perhaps we could leave Detroit and the light trucks out of it this time.

[kerryk]

most of the economists in the world disagree with a lot of what you are saying...

Could you be a tad more specific? Which economists, about what topics? Some evidence to support your contentions would be.... well... nice. Perhaps we could leave Detroit and the light trucks out of it this time.

No.

[Reasonableman]

most of the economists in the world disagree with a lot of what you are saying...

Could you be a tad more specific? Which economists, about what topics? Some evidence to support your contentions would be.... well... nice. Perhaps we could leave Detroit and the light trucks out of it this time.

No.

As expected, thanks.

[kerryk]

most of the economists in the world disagree with a lot of what you are saying...

Could you be a tad more specific? Which economists, about what topics? Some evidence to support your contentions would be.... well... nice. Perhaps we could leave Detroit and the light trucks out of it this time.

No.

As expected, thanks.

You are welcome.

[Yunla]

Perhaps we could leave Detroit and the light trucks out of it this time.

[kerryk]

The reason that the automotive business is important as an indicator or growth and stability in an economy is the nature of the industry. 1. It is manufacturing and not sales. Big difference in job and cash flow creation. It creates jobs and money where there were none before as opposed to the banking business. 2. It generates 100's of other industries. Perhaps most people don't know but an Engine plant or Assembly plant doesn't make washers or nuts or screws (simple example but you get the point). They buy those things from smaller Thai companies.

One of the reasons Thailand will not get into a situation like 1997 again is good basic manufacturing industry like the auto business. Airplanes would be even better. The engineers who work and train at Ford given some time and help can also generate the engineers who could work building aircraft. Detroit has GM institute of technology. It is a first class university sponsored by GM. Thailand could use technological universities funded by industry. It is a win win situation for everyone.

All of these things will insulate Thailand from going through another 97 crisis.

Edited July 3, 2012 by kerryk

[kerryk]

Bloomberg ranks Thailand #2 behind only China as promising emerging markets. Funny they don't even mention politics.

He what does Bloomberg know next to the sterling economic analysts on Thai Visa.

Although you better get over there and jump on that thread to straighten them out before someone believes them and has a chance to read something positive about Thailand without the usual 37 posts about how bad everything is and how everything is Thaksin's fault and they better start worrying about another 1997 crisis.

http://www.businessi...1#ixzz1zYpcHJId