Thai opinion: We DON'T NEED this massive debt

[webfact]

TELL IT AS IT IS
We DON'T NEED this massive debt
Pornpimol Kanchanalak

BANGKOK: -- It is inarguable that Thailand needs a comprehensive overhaul of its infrastructure. It is also irrefutable that huge social and economic losses have been incurred due to flawed planning, the sorry state of existing infrastructures, and lack of far-sighted initiatives.

This has been the result of obliviousness and corruption that has become the systematic norm. In Thailand, there live creatures that can chew, swallow and digest asphalt, concrete, gravel and steel.

The stomach-turning joke about our rail system is that King Rama V, in his desire to make the railways accessible to all citizens, created the country's railway system as a non-profit entity, and government officials thereafter have made sure it remains forever thus.

To skim off profits, should there be any, high-ranking officials of the State Railway of Thailand (SRT) have set up repair and parts shops and gained concessions from the SRT to do the work. The parts are substandard, but the prices are in the uppermost bracket. Many locomotive parts and engines have been bought at prices 40-50 per cent above value.

The scope of official corruption when it comes to infrastructure deserves a chapter in the "Guinness Book of World Records". This is one of the reasons why the public opposes the Bt2 trillion loan bill proposed by the government. The bill, should it pass Parliament, will allow the government to spend the borrowed money as an off-budget account beyond the realm of budget scrutiny mechanisms.

Do we need the Bt2 trillion to upgrade our infrastructure? Perhaps we do. The country also needs hard cash to go into the financial system to resuscitate the economy, without which hardship will visit most citizens by the end of the year. The economy is in ruins due to the miscalculated rice price-pledging scheme. The government cannot stop the populist policy because it is afraid of doing an about-face. This policy alone has caused significant damage, with outcomes that are beyond fixing. This is a place where looking good is valued more than being honest.

So the government plans to throw more good money after bad. It is like having to do more surgery to correct damage done by the first botched operation.

To make every Thai pay for this debt over the next 50 years does not make the powers-that-be even blink. We are just flies. The life span of a fly is short compared to the longevity of the wealth of the sons, daughters, grandchildren and great-grandcildren of the people who will handle the schemes. These people know the value of zeroes, while mortals like us just lose count.

There are alternative plans to raise funds for the infrastructure overhaul. One proposed by former finance minister Korn Chatikavanij calls for a lot less borrowing. But in a "democratic" country that is run by numbers - the number of parliamentarians in the government camp, that is - his initiative is DOA, "Dead On Arrival."

Other countries have raised monies for infrastructure restructuring by other means, without plunging the country into a deep hole of sovereign debt. Australia and India have created Infrastructure Funds that can borrow and are run proficiently by a board and managers. Investors can be outside of the government. The funds have proper by-laws that establish mechanisms for financial deployment and expected returns. The terms and conditions of each project are clearly established; the selection process and implementations are monitored. Professionalism, auditability and transparency protect the all the stakeholders in the fund.

In Australia, the government created a Public Private Partnership Policy (PPP) that is vital to the development of social and economic structure. The policy was implemented earnestly and it has worked well.

But in Thailand, the government has a different agenda that does not coincide with the country's long-term sustainable development. For future generations to carry a debt created without their knowledge or approval does not trouble the consciences of those who are pushing for the bill to pass in Parliament quickly.

The government is building a new parliament - bigger, shinier and away from the zoo that many of us hold in higher regard than its next-door neighbour. Perhaps, the word "conscience" should be carved deep into the stone or concrete or faux marble at every entrance and exit of the new parliamentary building, and projected on to the walls of the House during every session. Maybe the same word should be permanently attached to the office door of every Cabinet member.

Our country does not have to be shouldered with a Bt2 trillion debt that, with interest, will turn into Bt5 trillion. A PPP Infrastructure Fund could be created and run adroitly with transparency and stringent monitoring and auditing measures.

But in a democracy like ours that is run by numbers, we will unavoidably and unnecessarily be left with a pile of debt that is larger than any before or after it. It is heartbreaking.


-- The Nation 2013-09-26

[Thait Spot]

PTP. Government for the people by the people?

Or organised thievery?

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

[arthurboy]

PTP. Government for the people by the people?

Or organised thievery?

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

Plain, simple thievery on a massive scale. And it's been this way for ever.

Sabai, sabai...

sent from my hippo phone

[osiboy]

WELL , firstly , how this guy chose Australia and India as comparisons is daft to say the least , as australia is a modern 1st world country and the Indian rail network was built whilst colonized by the Brits , pity they decided not to colonize thailand ,...it would be a far better country than it is now , education, infrastructure , science ,law, corruption etc etc , ....a pity, .......even the french could have improved a few things ! some nice brothels though, .....well done thailand .

[Spalpeen]

Rambling and incoherent article that tries to link corruption with democracy. The unwritten subtext here is that if only they could get rid of elections and elected politicians everything would run more efficiently.

[chainarong]

We don't need this massive dept.\: You can say that again .

[Tatsujin]

It is also irrefutable that huge social and economic losses have been incurred due to flawed planning, the sorry state of existing infrastructures, and lack of far-sighted initiatives.

. . . and the payoffs that get taken from every single business deal here . . .

[yourauntbob]

Many good points in this article. I cant but help think, if a tree falls in a forest and nobody wants to hear it, does it make a sound.

Thailand is going to be a great place in the future for people who dont like change.

[Roadman]

I suggest Khun Pornpimol that you drop the trousers and take it where the sun does not shine just like every other thai who is not at the top of the feed chain is going to have too. That's the price every one of you are going to pay for the years of acceptance of bribes, corruption, lack of law and order and a general lack of morality to your fellow Thai's and other international citizens. Perhaps in years to come when the country is fully in the hell hole where it is being voted to then enough of you will finally work together to change the garbage that governs you all.

[trogers]

Rambling and incoherent article that tries to link corruption with democracy. The unwritten subtext here is that if only they could get rid of elections and elected politicians everything would run more efficiently.

What democracy? How democratic is the process of vote buying and selling?

The link between corruption and power holders lies in vote buying and selling - Americans called it, "Government of the people, by the people". The kind of government one gets reflects the moral character of the majority.

[slapout]

Rambling and incoherent article that tries to link corruption with democracy. The unwritten subtext here is that if only they could get rid of elections and elected politicians everything would run more efficiently.

If you look at the present cabinet, you find few who have ever been elected by vote of the people. then look at the representation of the population, how many are actually elected by the people?

Many of the political parties were set up with a money grab in mind, via a coalition to form a government, following a indecisive election. The lack of real checks and/or balances, within the system, to control the open/acknowledged corruption and thievery, is being flaunted, as there has been no real day of reckoning, YET.

[hookedondhamma]

Who needs debt??

[Neilly]

Perhaps, the word "conscience" should be carved deep into the stone or concrete or faux marble at every entrance and exit of the new parliamentary building

This lot don't even know what a policy is

[hellodolly]

Many good points in this article. I cant but help think, if a tree falls in a forest and nobody wants to hear it, does it make a sound.

Thailand is going to be a great place in the future for people who dont like change.

True it will be a great place for people who love to take train rides with a 50/50 chance at arriving at their destination. It will be a great place for people who want 30% of all their tax baht to go into the private pockets of politicians and bureaucrats. It will be a great place for people who want to see schools graduating people who are unable to reason or use logic much less add two plus two with out a calculator. These are the results that will come about if this bill is passed with out an intelligent plan that they must adhere to before they pass it.

As for the sex and drug trade they will change become more available. I don't think there will be much of an uproar over that.

[ABCer]

PTP. Government for the people by the people?

Or organised thievery?

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

Funny, I get the feeling the phrase is familiar...

... with a very similar outcome...

[monkeycountry]

Just to be clear, no private investor on earth is going to be interested in an infrastructure fund for high speed trains in Thailand for the simple reason that the trains will be running at a big loss from day one. This of course unless the government is willing to bear the loss by guaranteeing the investors a minimum return on investment for a very long time.

Don't forget, unlike most citizens of Thailand, investors are capable of reading and understanding budgets (I believe no budget exists for the operation of the high speed trains), and they do not care at all if some Thai minister(s) are running around yelling what a great idea it is to invest in such a fund.

Edited September 26, 2013 by monkeycountry

[Bakseeda]

Who needs debt??

Are you offering..?

[ABCer]

Many good points in this article. I cant but help think, if a tree falls in a forest and nobody wants to hear it, does it make a sound.

Thailand is going to be a great place in the future for people who dont like change.

True it will be a great place for people who love to take train rides with a 50/50 chance at arriving at their destination. It will be a great place for people who want 30% of all their tax baht to go into the private pockets of politicians and bureaucrats. It will be a great place for people who want to see schools graduating people who are unable to reason or use logic much less add two plus two with out a calculator. These are the results that will come about if this bill is passed with out an intelligent plan that they must adhere to before they pass it.

As for the sex and drug trade they will change become more available. I don't think there will be much of an uproar over that.

First we need a high speed trains so that more of us can arrive at a 50/50 chance faster.

Than we need to develop a few nuclear power stations for the other 50% of population, who didn't arrive quickly enough by trains.

The 30% of taxes you are talking about - who measured this? You look like a young optimist to me...

Leave sex&drug trades alone - nobody forces anybody to use them.

I never give my opinion on these two issues as long as I don't have to be sympathetic to the victims at my expense.

[monkeycountry]

Many good points in this article. I cant but help think, if a tree falls in a forest and nobody wants to hear it, does it make a sound.

Thailand is going to be a great place in the future for people who dont like change.

True it will be a great place for people who love to take train rides with a 50/50 chance at arriving at their destination. It will be a great place for people who want 30% of all their tax baht to go into the private pockets of politicians and bureaucrats. It will be a great place for people who want to see schools graduating people who are unable to reason or use logic much less add two plus two with out a calculator. These are the results that will come about if this bill is passed with out an intelligent plan that they must adhere to before they pass it.

As for the sex and drug trade they will change become more available. I don't think there will be much of an uproar over that.

Actually Thailand is a great place for all of the above with or without the loan bill / high speed trains

[thhMan]

Nothing will change while Thailand fakes its education system.

Nothing will change while Thailand thinks its the hub of the world.

Nothing will change while Thailand allows corruption to be overlooked so easily.

[rotary]

I hope Thailand does not act responsible finance wise as the USA has

[caughtintheact]

It is (almost) always easy for governments to throw away money from their taxpayers in order to be able to say, .."we did something".

Both the article and a number of comments seem to assume that the government will be able to raise the 2 trillion baht, which may or may not happen. If I recall correctly, a significant portion of the debt will have to come from lenders overseas, and with the Thai economy plunging as a result of other faulty government actions, will external lenders be willing to assume high risks? After all, debt is debt, regardless of whether it comes from building condos with inadequate collateral or repairing/creating infrastructure. Government projects and policies rarely, if ever, tell us the forecast impacts on all of the people. Fir example, how much inflation will the additional debt cause...i.e., how much higher will the prices of food and other products go? When prices increase because4 of higher taxes to repay the debt, how many people will lose their jobs? How many people will not get hired because of higher costs of production? Will these shortcomings be outweighed by the jobs created to do the projects? These points are aside from the questions about whether use of the high speed rail will justify the investment and debt incurred. Incumbent governments are rarely around when their projects go wrong. But all projects use scarce resources, and have impacts far beyond the objectives stated, The Thai people must start asking not merely what the benefits of such a project might be, but who will be harmed and to what extent.

[rosst]

It is (almost) always easy for governments to throw away money from their taxpayers in order to be able to say, .."we did something".

Both the article and a number of comments seem to assume that the government will be able to raise the 2 trillion baht, which may or may not happen. If I recall correctly, a significant portion of the debt will have to come from lenders overseas, and with the Thai economy plunging as a result of other faulty government actions, will external lenders be willing to assume high risks? After all, debt is debt, regardless of whether it comes from building condos with inadequate collateral or repairing/creating infrastructure. Government projects and policies rarely, if ever, tell us the forecast impacts on all of the people. Fir example, how much inflation will the additional debt cause...i.e., how much higher will the prices of food and other products go? When prices increase because4 of higher taxes to repay the debt, how many people will lose their jobs? How many people will not get hired because of higher costs of production? Will these shortcomings be outweighed by the jobs created to do the projects? These points are aside from the questions about whether use of the high speed rail will justify the investment and debt incurred. Incumbent governments are rarely around when their projects go wrong. But all projects use scarce resources, and have impacts far beyond the objectives stated, The Thai people must start asking not merely what the benefits of such a project might be, but who will be harmed and to what extent.

Oh yes, they will get it but we will pay the cost, higher risk equals higher cost, and we will pay and pay and pay.

I cannot believe that the population of this country can be so blind as to stand idly by and watch the total destruction of their country by these people who barely disguise their theft, it is a disgrace.

[robertson468]

It is (almost) always easy for governments to throw away money from their taxpayers in order to be able to say, .."we did something".

Both the article and a number of comments seem to assume that the government will be able to raise the 2 trillion baht, which may or may not happen. If I recall correctly, a significant portion of the debt will have to come from lenders overseas, and with the Thai economy plunging as a result of other faulty government actions, will external lenders be willing to assume high risks? After all, debt is debt, regardless of whether it comes from building condos with inadequate collateral or repairing/creating infrastructure. Government projects and policies rarely, if ever, tell us the forecast impacts on all of the people. Fir example, how much inflation will the additional debt cause...i.e., how much higher will the prices of food and other products go? When prices increase because4 of higher taxes to repay the debt, how many people will lose their jobs? How many people will not get hired because of higher costs of production? Will these shortcomings be outweighed by the jobs created to do the projects? These points are aside from the questions about whether use of the high speed rail will justify the investment and debt incurred. Incumbent governments are rarely around when their projects go wrong. But all projects use scarce resources, and have impacts far beyond the objectives stated, The Thai people must start asking not merely what the benefits of such a project might be, but who will be harmed and to what extent.

"The Thai people must start asking........" I would hazard a guess that most Thai People do not even know about the loan, let alone realize what the future consequences might be. That is what I find both despicable and exceptionally sad. If Buddha has any influence in the matter, these Politicians should come back as cockroaches or snakes, no, sorry that is an insult to those creatures. Thailand needs quality education, quality education, quality education and needs it NOW! But of course this is not even on the agenda for the present Government, at least not as any priority or serious way - why, because they know once the people are educated to a decent standard, all hell will break loose and they will witness "The Thai Spring". So, so sad.

[Robby nz]

Thought I read somewhere that the Govt had held meetings with local banks to explane to them why they should invest in the 2.2 trillion loan.

If this is true then they are looking to borrow the money from the Thai people, as they have done with the 350 billion, probably because they know no overseas investor would lend at a reasonable rate.

[monkeycountry]

It is (almost) always easy for governments to throw away money from their taxpayers in order to be able to say, .."we did something".

Both the article and a number of comments seem to assume that the government will be able to raise the 2 trillion baht, which may or may not happen. If I recall correctly, a significant portion of the debt will have to come from lenders overseas, and with the Thai economy plunging as a result of other faulty government actions, will external lenders be willing to assume high risks? After all, debt is debt, regardless of whether it comes from building condos with inadequate collateral or repairing/creating infrastructure. Government projects and policies rarely, if ever, tell us the forecast impacts on all of the people. Fir example, how much inflation will the additional debt cause...i.e., how much higher will the prices of food and other products go? When prices increase because4 of higher taxes to repay the debt, how many people will lose their jobs? How many people will not get hired because of higher costs of production? Will these shortcomings be outweighed by the jobs created to do the projects? These points are aside from the questions about whether use of the high speed rail will justify the investment and debt incurred. Incumbent governments are rarely around when their projects go wrong. But all projects use scarce resources, and have impacts far beyond the objectives stated, The Thai people must start asking not merely what the benefits of such a project might be, but who will be harmed and to what extent.

Unfortunately there is always someone overseas who is willing to lend money to almost any country, as long as the interest is high enough. And since it seems the PTP governments main goal is to skim the mandatory 30%+ from the loan, they are probably not too worried about the interest rate.

I suggest the PTP make a flyer to distribute to all Thais, in which they make it very clear that they intend to borrow appx. 35,000 baht on behalf of every Thai (from infant to old) and that unlike many loans, all Thais will eventually have to pay back this loan, with interest, one way or another!

[caughtintheact]

Thought I read somewhere that the Govt had held meetings with local banks to explane to them why they should invest in the 2.2 trillion loan.

If this is true then they are looking to borrow the money from the Thai people, as they have done with the 350 billion, probably because they know no overseas investor would lend at a reasonable rate.

I don't recall the source, and cannot be sure it is accurate, but it quoted the government as saying that 60% of the borrowing would be domestic and 40% would be from overseas sources. This, of course, does not mean that the funds can be found. That the government talked to Thai bankers does not preclude also talking to foreign sources, and it does not necessarily mean that the Thai bankers will take the risk. This brings up the question of the rewards that the bankers can expect for taking the risk, and whether or not those "rewards" will be induced by coercion. . In a form of government that has elected representatives, the solution is to vote out the government and replace it with a government that has no intention of borrowing 2 trillion baht, but of course that has to be done before any commitments are made. .

[hammered]

The opinion of one person. It is rather badly headlined as "Thai Opinion". The Thai people as a whole can have their say at the next election. Simple. That is how democracy works.

The last bunch actually spent 1.4 trillion on giving people 1000 baht notes in their hands and there was hardly a quibble from all those moaning now. And yet the people voted them out clearly not trusting them to run the country in a way that actually helped the majority. The current opposition after being unceremoniously booted out in this way should learn the lesson and adapt and try to get elected instead of spending all their time throwing tantrums, chairs, insulting the rural poor and locking everything up in a myriad of court cases to prevent any policy being implemented. Thailand needs a viable electable alternative to the current government. Right now they lack one. The history of the initial rise of Thaksin shows it is possible to appeal to the majority and electorally come from virtually nowhere and defeat established parties. It just means finding common ground with the majority. The opposition would be well served by learning form their nemesis and modernising their own archaic regionally hampered party structure although admittedly getting the inbuilt southern executive control to agree to give up their power of controlling the party without consideration for others is going to be hard and beyond a lightweight like Abhisit.

[Briggsy]

Does this mean there is a good chance of inflation rising to above 10%?

[monkeycountry]

Thought I read somewhere that the Govt had held meetings with local banks to explane to them why they should invest in the 2.2 trillion loan.

If this is true then they are looking to borrow the money from the Thai people, as they have done with the 350 billion, probably because they know no overseas investor would lend at a reasonable rate.

I don't recall the source, and cannot be sure it is accurate, but it quoted the government as saying that 60% of the borrowing would be domestic and 40% would be from overseas sources. This, of course, does not mean that the funds can be found. That the government talked to Thai bankers does not preclude also talking to foreign sources, and it does not necessarily mean that the Thai bankers will take the risk. This brings up the question of the rewards that the bankers can expect for taking the risk, and whether or not those "rewards" will be induced by coercion. . In a form of government that has elected representatives, the solution is to vote out the government and replace it with a government that has no intention of borrowing 2 trillion baht, but of course that has to be done before any commitments are made. .

Much of it will be from government controlled banks such as KTB, so yes, they will definately take the "risk", since the borrower and the lender is the same. So will private banks, both foreign and domestic, since the country guarantees the payment. The only issue is the interest rate.