Thai Finance Min Kittiratt Looks To Reconstruction In U S For Economic Boost

[webfact]

SUPERSTORM SANDY

Kittiratt looks to reconstruction in US for economic boost

THE NATION

Workers start picking up the pieces at New York subway. Photo by EPA

BANGKOK: -- Thailand is hopeful that post-storm investment in the United States in the wake of Hurricane Sandy will spur growth in the country and give a lift to the fragile global economy, Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said yesterday.

Economists forecast a preliminary loss of at least US$25 billion to $45 billion (Bt767 billion to Bt1.4 trillion). Rehabilitation expenses were expected to be no less than $20 billion. The hurricane-hit areas account for 25 per cent of the US economy.

Economists expect the hurricane to shave 0.1-0.2 percentage point off the growth of US gross domestic product. US GDP totals about $15 trillion. Its effect on the US economy will likely be fully realised this quarter. The New York Stock Exchange and Nasdaq were closed on Monday and Tuesday. It was the first two-day closure of the NYSE in more than a century.

The repercussions of the superstorm were one of the highlights of a meeting chaired by Prime Minister Yingluck Shinawatra.

Ministers, government agencies and the Bank of Thailand discussed the factors weakening the Thai economy including the impacts of quantitative easing in developed economies and soft export demand.

The Bank of Thailand said external factors still weighed down the economy, which expanded only 3.3 per cent in the third quarter. The growth forecast is 5.7 per cent for the full year.

Kittiratt said that on the downside, the storm could exacerbate the situation in the US and global economy. However, a huge reconstruction budget could lift the US economy. Unlike earlier injections that went into the financial system, this money will go directly into the real economy, he said.

The National Economic and Social Development Board (NESDB) was assigned to monitor the local impacts of the storm.

"The prime minister asked all economic agencies to hold discussions and work together closely. The NESDB takes care of the overall picture of the long-term economic situation. The central bank takes charge of monetary policy. The SEC [securities and Exchange Commission] supervises capital flows in capital markets. The Finance Ministry oversees fiscal policy and the country's overall economy," Kittiratt said.

Natural disasters usually affect three areas - business transactions, physical damage and productivity, said Methee Supapongse, a senior director of the central bank.

"It remains to be seen how this storm will affect the US economy," he said.

On monetary easing in major economies, including Japan, Kittiratt said the government has taken this matter into consideration and the Bank of Thailand has monitored the situation closely. According to the BOT, no irregularities in capital movements have been found, and foreign reserves remain high.

Excess liquidity in some countries is travelling fast to find higher returns, particularly in Asia. Hong Kong's dollar has come under attack. Though Thailand does not expect anything similar, the Bank of Thailand's data show that the country has been a destination of such capital inflows.

In September, when the US declared a third round of quantitative easing (QE3), Thailand registered net capital inflows of $499 million, or about Bt15 billion. Inflows to the bond market hit $1.46 billion or about Bt44 billion, but net inflows were much lower thanks to companies' overseas investment.

The inflows are strengthening the baht. The currency, at 30.99, gained 1.37 per cent against the US dollar in September from the previous month. The baht appreciated only 0.34 per cent against all currencies used for the trade-weighted exchange rate calculation. The stronger baht will put pressure on Thai exports, which suffer from weakening demand.

While Methee expects Thailand's exports to stage a recovery in the second quarter of next year, Kittiratt saw some positive signs. He is confident that Thailand would show an increase in exports.

In the first nine months, exports dropped 1.13 per cent from the same period last year. The Bank of Thailand forecasts 4.6-per-cent growth.

Kittiratt also urged seafood exporters to closely monitor the situation in the US to see if there would be any shortage of supplies in the country after the storm.

According to Commerce Minister Boonsong Teriyapirom, Thailand now exports a small quantity of consumer products to the US, including bottled water, snacks, milk, meat, vegetables and fruits and flashlights, which are in high demand during disasters.

Although the private sector wants a postponement of the increase in the minimum daily wage to Bt300 nationwide in January, Kittiratt insisted that there would be no review or postponement.

However, the government would consider existing measures and extend them, if possible, to relieve the private sector's burden, he said.

-- The Nation 2012-11-01

[geriatrickid]

This is a terribly written article. The intent of the minister was to convey the hope that a rebuilding effort in the USA would provide a spending surge in the US domestic economy which would perhaps result in a positive impact on the global economy. That's it. The reporter then went off on a tangent.

I anticipate that some will interpret the article to assume the minister was expressing a hope for Thai export and investment opportunities as a direct result of the catastrophe. That was not the intent. Everyone knows that the USA has some of the most stringent trade barriers in the world. The 1933 Buy American Act was rolled into the Surface Transportation Assistance Act of 1982 and is codified. Buy America provisions are a condition of U.S. federal government grants to state, municipal or other organizations. Buy America provisions, such as requirements for 100% U.S. content for iron/steel and manufactured products, put foreign goods and services at a serious disadvantage when they form all or part of a bid by any supplier. The threshold is $100,000 for Transportation contracts. Even though the WTO threshold is set at $7.7million, The USA has ways to circumvent the rule.

There is no opportunity for any foreign supplier because of the specific provisions of the 1933 Buy American Act which creates a price preference that favors "domestic end products" from American firms on U.S. federal government contracts for:

-Unmanufactured products mined or produced in the United States;

- Manufactured products in which the cost of its U.S. components exceeds 50% of the cost of all components of the item and the product is manufactured in the United States.

The storm recovery will be very much influenced by US federal funding. Hard hit New Jersey even has a state law that favours local procurement of material, labour and services.

[asiawatcher]

What a ridiculous statement from a finance minister. 20-40Bn damage bill and the thought the US Govt will bail it out by adding that amount to the economy being a 'stimulus'? The US keeps shooting itself in the foot by printing more money to meet debt, that weakens it's dollar, which in turn allows the minister to claim the Thai Baht is stronger. USD being printed weakens the USD and makes the Thai Baht 'appear' artificially stronger, but then what would I know? I am just a Thaivisa blogger...

[Thai at Heart]

This is a terribly written article. The intent of the minister was to convey the hope that a rebuilding effort in the USA would provide a spending surge in the US domestic economy which would perhaps result in a positive impact on the global economy. That's it. The reporter then went off on a tangent.

I anticipate that some will interpret the article to assume the minister was expressing a hope for Thai export and investment opportunities as a direct result of the catastrophe. That was not the intent. Everyone knows that the USA has some of the most stringent trade barriers in the world. The 1933 Buy American Act was rolled into the Surface Transportation Assistance Act of 1982 and is codified. Buy America provisions are a condition of U.S. federal government grants to state, municipal or other organizations. Buy America provisions, such as requirements for 100% U.S. content for iron/steel and manufactured products, put foreign goods and services at a serious disadvantage when they form all or part of a bid by any supplier. The threshold is $100,000 for Transportation contracts. Even though the WTO threshold is set at $7.7million, The USA has ways to circumvent the rule.

There is no opportunity for any foreign supplier because of the specific provisions of the 1933 Buy American Act which creates a price preference that favors "domestic end products" from American firms on U.S. federal government contracts for:

-Unmanufactured products mined or produced in the United States;

- Manufactured products in which the cost of its U.S. components exceeds 50% of the cost of all components of the item and the product is manufactured in the United States.

The storm recovery will be very much influenced by US federal funding. Hard hit New Jersey even has a state law that favours local procurement of material, labour and services.

There was a letter in the other paper yesterday complaining about a person having been severely misquoted about their opinion of ptps policies.

[noitom]

And not yet a statement from the Thai government, as a compassionate gesture for the 1/3 of the US population hit by this disaster, is shameful and reflects poorly on Thailand's character. Thailand should be expressing its shock and willingness to support the US rather than pontificating about its own self centered projections of the meaning of the US peoples' and government's plight.

This article paints a shameful picture of this Kittirat person almost rooting for more damage and suffering to be disclosed from Sandy so as to motivate more US investment in restoration that will ultimately help Thailand by proxy. A very disturbing reflection of Thailand's self centered, selfish, and crass views of itself in relationship to the civilized modern world.

[Thaddeus]

And not yet a statement from the Thai government, as a compassionate gesture for the 1/3 of the US population hit by this disaster, is shameful and reflects poorly on Thailand's character.

Checking the contents of the Last Will & Testament before offering condolences is fairly common around here.

[noitom]

Shocking and disturbing that Thailand offers no statement of condolence or compassion for the US people suffering from Sandy's devastation. Shame on Thailand and its people. http://www.foxnews.com/weather/slideshow/2012/10/31/superstorm-sandy-devastates-east-coast/#slide=1

@Geriatric Kid - How do you know the intent of this Kittirat person when you say something like "it was "not" the intent?" The intent was clearly a self serving comment that expresses very clearly that this self centered excuse for a leader viewed the Sandy disaster and suffering of the US people as a possible benefit and hope for Thailand.

[noitom]

This is a terribly written article. The intent of the minister was to convey the hope that a rebuilding effort in the USA would provide a spending surge in the US domestic economy which would perhaps result in a positive impact on the global economy. That's it. The reporter then went off on a tangent.

I anticipate that some will interpret the article to assume the minister was expressing a hope for Thai export and investment opportunities as a direct result of the catastrophe. That was not the intent. Everyone knows that the USA has some of the most stringent trade barriers in the world. The 1933 Buy American Act was rolled into the Surface Transportation Assistance Act of 1982 and is codified. Buy America provisions are a condition of U.S. federal government grants to state, municipal or other organizations. Buy America provisions, such as requirements for 100% U.S. content for iron/steel and manufactured products, put foreign goods and services at a serious disadvantage when they form all or part of a bid by any supplier. The threshold is $100,000 for Transportation contracts. Even though the WTO threshold is set at $7.7million, The USA has ways to circumvent the rule.

There is no opportunity for any foreign supplier because of the specific provisions of the 1933 Buy American Act which creates a price preference that favors "domestic end products" from American firms on U.S. federal government contracts for:

-Unmanufactured products mined or produced in the United States;

- Manufactured products in which the cost of its U.S. components exceeds 50% of the cost of all components of the item and the product is manufactured in the United States.

The storm recovery will be very much influenced by US federal funding. Hard hit New Jersey even has a state law that favours local procurement of material, labour and services.

@Geriatric Kid - How do you know the intent of this Kittirat person when you say something like "it was "not" the intent?" The intent was clearly a self serving comment that expresses very clearly that this self centered excuse for a leader viewed the Sandy disaster and suffering of the US people as a possible benefit and hope for Thailand.

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[jerrysteve]

If I were Min Kittiratt the Finance Minsister I would hold my breath, coz its still way off somewhere over the horizon.

[Songhua]

Dear Mr President,

Our thoughts are with ourselves in these difficult hours.

Rest assured we will continue to monitor our local economic impact.

[rubl]

The (possible) statement of the Finance Minister may be in line with how current government projects are founded and justified. Like the 'rice pledging', hoping a disasters elsewhere will justify higher Thai rice prices ?

[SICHONSTEVE]

Am I missing something?

If they are implying that some substantial benefits will arise (particularly with regards to building programmes) following Sandy, then why on earth don't they implement these kind's of macro-development schemes in normal times as they won't have the 20/30 billion dollar bill to fork out and it will (as I'm led to believe) boost employment, growth, moral and bring numerous benefits to the economy and nation and in doing so, turn everything around!!!

What are they waiting for???.

[bigbamboo]

What a ridiculous statement from a finance minister. 20-40Bn damage bill and the thought the US Govt will bail it out by adding that amount to the economy being a 'stimulus'? The US keeps shooting itself in the foot by printing more money to meet debt, that weakens it's dollar, which in turn allows the minister to claim the Thai Baht is stronger. USD being printed weakens the USD and makes the Thai Baht 'appear' artificially stronger, but then what would I know? I am just a Thaivisa blogger...

How the hell can this fool keep his job unless his boss is even less clued up that he is.

[Thai at Heart]

What a ridiculous statement from a finance minister. 20-40Bn damage bill and the thought the US Govt will bail it out by adding that amount to the economy being a 'stimulus'? The US keeps shooting itself in the foot by printing more money to meet debt, that weakens it's dollar, which in turn allows the minister to claim the Thai Baht is stronger. USD being printed weakens the USD and makes the Thai Baht 'appear' artificially stronger, but then what would I know? I am just a Thaivisa blogger...

How the hell can this fool keep his job unless his boss is even less clued up that he is.

How did he run an investment fund?

[rubl]

In a totally unrelated message

"Hurricane Sandy, which hit New York and New Jersey on Monday, will have only a marginal impact on the number of American tourists coming to Thailand, as the United States is a big country with many international airports, according to executives in the tourism industry.

At worst, they believe that flights may be postponed for two or three days before the situation returns to normal. Also, Americans are accustomed to natural disasters like this."

http://www.thaivisa....nd-experts-say/

[TheGhostWithin]

How did he run an investment fund?

He probably did what many so called "investment managers" do these days, and provided administration and communicative services on top of american and european fund managers products, and clipped his tickets on the way through.

[khaowong1]

Like Rubl said. Americans are used to natural disasters. We've had a lot of them and know how to handle them afterwards. We will forge on. We will help those who need it and not to just line some politicians pocket. Having said that, America needs to get back to what made America great to start with.

Intelligent leaders. Leaders who actually care about all Americans and not just their bank accounts.

Governments primary duties are, to defend the value of it's currency, to protect the well being of it's citizens and see to their health and security, and to help provide a economy that will sustain the needs of it's citizens. We've currently lost this vision. I don't believe that the present president has that goal or vision in mind and not to sure about his challenger. We need another Eisenhower or JFK. But where are they?

Enough rambling. We will get through this Hurricane Sandy and any other that's on the horizon. And I don't see how it will help Thailand one bit.

Edited November 1, 2012 by khaowong1

[rotary]

The USA will need to get approval from the main financial supporter China before they can comment or make any decision.

[brianP]

Too bad the storm didn't blow the 25 million illegals back where they came from, then the positive impact could be noted. It would be the only enforcement of immigration to take place in the joke system there now.

[cloudhopper]

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

[asiawatcher]

What a ridiculous statement from a finance minister. 20-40Bn damage bill and the thought the US Govt will bail it out by adding that amount to the economy being a 'stimulus'? The US keeps shooting itself in the foot by printing more money to meet debt, that weakens it's dollar, which in turn allows the minister to claim the Thai Baht is stronger. USD being printed weakens the USD and makes the Thai Baht 'appear' artificially stronger, but then what would I know? I am just a Thaivisa blogger...

How the hell can this fool keep his job unless his boss is even less clued up that he is.

Totally agree.

[asiawatcher]

What a ridiculous statement from a finance minister. 20-40Bn damage bill and the thought the US Govt will bail it out by adding that amount to the economy being a 'stimulus'? The US keeps shooting itself in the foot by printing more money to meet debt, that weakens it's dollar, which in turn allows the minister to claim the Thai Baht is stronger. USD being printed weakens the USD and makes the Thai Baht 'appear' artificially stronger, but then what would I know? I am just a Thaivisa blogger...

How the hell can this fool keep his job unless his boss is even less clued up that he is.

How did he run an investment fund?

Short answer is, he was not successful in doing that either...

[zydeco]

Shocking and disturbing that Thailand offers no statement of condolence or compassion for the US people suffering from Sandy's devastation. Shame on Thailand and its people. http://www.foxnews.c...-coast/#slide=1

@Geriatric Kid - How do you know the intent of this Kittirat person when you say something like "it was "not" the intent?" The intent was clearly a self serving comment that expresses very clearly that this self centered excuse for a leader viewed the Sandy disaster and suffering of the US people as a possible benefit and hope for Thailand.

I remember in recent years a lot of Yankees gloating and acting all smug as hurricanes lashed the South from Texas to Florida. Now, they want sympathy and help (read: tax money from the rest of the country). Shoe on the other foot.