B17bn rice loan eases pressure on government

[rickirs]

Not sure about the legalities but the government must have funds to pay government workers & for ongoing services plus other contracts awarded by the government so why don't they have any money to pay the farmers as surely it is just another government contract. Conversely if they are not allowed to pay the farmers are they allowed to pay all the others.

BTW I saw another news item which stated GSB did not even ask what the loan was for. Incredibly irresponsible on their part if true & certainly not a good place for your savings with such risque behaviour.

Different buckets of budget funds that cannot be mixed or interchanged.

[rickirs]

30-day maturity, so BAAC will have to repay the B17-billion a month later, or will they be able to roll it over without any problem ?

The government may use the credit facility as a revolving credit account wherein the principal is not paid off, only the interest. This is a very common business practice througout the world.

[473geo]

Amazing how the reds have come out in such force this evening on this and other topics.

Most of their posts unfortunately have been designed to divert or distort the subject, which is :

The loan or loans from the GSB to the BAAC.

When all the statements from various officials are combined there would seem to be some doubt as to whether there is only one loan of 20 billion or another of 17 billion as well.

The GSB director has said the 20 billion is not supposed to be to pay the farmers rather to shore up the BAAC's sagging liquidity but what will actually happen once the money gets into the BAAC is another thing.

Kitteratt has it seems given a guarantee that the loan will be paid back with interest within or at 90 days.

Given that there should be a new Govt in power at that time this is obviously putting a burden of repayment on that Govt, something we have been told is against the law, constitution, whatever.

It remains to be seen come tomorrow whether any of the farmers get paid and if they do which ones get paid and how much.

In the mean time the lady has told me she has to go out early tomorrow to a local meeting of all those with money in the GSB to talk about getting their money out.

Why would anybody want to take their money out of a bank that has just struck a rewarding short term loan deal?

Read my comment above for the answer.

Not really an answer, how many times impeached now? another farcical problematic process that requires attention, doubt it will ever see it though, far too useful for the consistent losers

Edited February 16, 2014 by 473geo

[djjamie]

So, as stated the delays in paying the farmers was down to the anti-government protesters as confirmed by the GSB labour union head Likit Klinthanom. Perhaps the farmers will think again about approaches from the ever slippery suthep and his sheeple.

Sent from my i-mobile IQ 5 using Thaivisa Connect Thailand mobile app

Oh please! 17 billion out of a 130 billion baht doesn't satisfy many does it. And the country is still burdened with a massive debt from the government's ineptitude and corruption.

Why dont you do a bit of research before posting? Thailands national debt as a percentage of GDP is well below most European countries, The US and Japan. 130 bn baht is 2.5bn quid. A drop in the ocean in terms of world economics and the Isaan has boomed as a result.

So its ok for you that 1.4 MILLION farmers are suffering so much that some have even killed themselves in shame as long as it made Isaan prosperous. You are a sick individual!

Sent from my GT-S5310 using Thaivisa Connect Thailand mobile app

Isaan is prosperous??

According to the latest report by the Thailand Development Research Institute (TDRI), the richest 20 per cent of rice farmers produce 42 per cent of the total rice supply in the market. Meanwhile, the 2.59 million poorest rice-growing households do not produce enough grain to join the programme.

 That means the richest 20 percent are MORE prosperous. The poorest are still the same. So does that mean you are happy that the rich are getting richer while the poor are stagnant?

The extended family live about 100km out of Khon Kaen. They grow rice. 3 years later, they still don't own a car. Rain still leaks in through the roof of their house. The husband has a 2nd job. They fear they will loose the harvest. I asked if they know about higher yields through improving water management, better seed selection, alternate pesticides, more efficient harvesting methods and soil analysis. Their eyes glazed up while staring over the 18" black and white TV they saved up for. The only thing sustainable about this scheme is the votes it generates.

If the government's real intention was to help farmers, it should have spent tax money on things that would assist the sector towards sustainability, such as research and development, irrigation, transportation, financial management, cooperatives and agriculture education. These efforts have multiplier effects that have the power to eventually lift poor farmers out of poverty. Funding for these longer-term measures should have been accompanied by several sensible short-term measures to alleviate the farmers' debt burden.

Through research and development the Vietnamese, who live only a few hundred km from Thailand, have a sustainable industry that produce 810kg of rice per rai compared to Thailand's 250kg per rai. They need no hand outs, they produce bumper crops and they don't live in dilapidated houses.

Fact - Thaksin lead governments (yes, yes yingluck is the PM) have put 1.5 trillion baht into rice schemes over 14 years yet the farmers they purport to help miss one payment…I will reinforce that by repeating it, they missed ONE payment from the government and some farmers are committing suicide while the rest travel to Bangkok to protest. Doesn't sound like they are prospering.

So when these farmers come to Bangkok pleading for money to survive how about YOU tell them "Thailands national debt as a percentage of GDP is well below most European countries, The US and Japan. 130 bn baht is 2.5bn quid. A drop in the ocean in terms of world economics and the Isaan has boomed as a result"

To understate the current situation in Thailand and brush off the very people that brought the PTP into power because they dont suit the PTP agenda anymore says more about the supporters of the PTP than the party itself.

Disgusting.

Edited February 16, 2014 by djjamie

[Chao Lao Beach]

I appreciate the farmers delaying a week or so before the next Bangkok Burning Riots.

I need to do some shopping, I may even see Ms Y

Edited February 16, 2014 by Chao Lao Beach

[ramrod711]

The borrowed cash should relieve pressure on the government for at least a month, as the BAAC usually has the capacity to process payments of two billion to three billion baht per week.

He suspected that the borrowing could violate Section 181 (4) of the constitution, which bars the caretaker government from using state agencies’ resources to boost its electoral support.

I can see how this may relieve presssure on a few farmers, but violating yet another section of the Constitution isn't going to relieve any pressure on the government when the CC brings the hammer down.

[Eddy B]

Well here comes 1997 again. The baht will crash if it doesn't I do not understand why it hasn't happened. If a new government comes into power they will have to try and repay back this loan from the bank. Thailand is sinking as quickly as the Titanic...........very sad to see this happening. If there is not some serious investigation of certain politicians accounts as to where money has gone and to whom in the last 4 years this country will be totally bankrupt and no one will want to deal with them as long as this scam/corruption continues.

[Basil B]

GSB?

I did have to look it up on google, with a name like that I thought the Government had just created a bank to lend them 17 billion THB.

Seems not, over 100 years old.

His Majesty King Vajiravudh
(Rama VI)

introduced savings services to Thailand in 1913. The main purpose was to educate Thai people on banking services and to promote savings habit among them. King Vajiravudh issued an act, effective from 1 April 1913, to formally set up the Savings Office which began its operation under the Royal Treasury since then.

http://www.gsb.or.th/about/index-en.php

If the bank is still in existence in a few weeks it will be celebrating 101 years.

[djjamie]

Amazing how the reds have come out in such force this evening on this and other topics.

Most of their posts unfortunately have been designed to divert or distort the subject, which is :

The loan or loans from the GSB to the BAAC.

When all the statements from various officials are combined there would seem to be some doubt as to whether there is only one loan of 20 billion or another of 17 billion as well.

The GSB director has said the 20 billion is not supposed to be to pay the farmers rather to shore up the BAAC's sagging liquidity but what will actually happen once the money gets into the BAAC is another thing.

Kitteratt has it seems given a guarantee that the loan will be paid back with interest within or at 90 days.

Given that there should be a new Govt in power at that time this is obviously putting a burden of repayment on that Govt, something we have been told is against the law, constitution, whatever.

It remains to be seen come tomorrow whether any of the farmers get paid and if they do which ones get paid and how much.

In the mean time the lady has told me she has to go out early tomorrow to a local meeting of all those with money in the GSB to talk about getting their money out.

Why would anybody want to take their money out of a bank that has just struck a rewarding short term loan deal?

Read my comment above for the answer.

Not really an answer, how many times impeached now? another farcical problematic process that requires attention, doubt it will ever see it though, far too useful for the consistent losers

Denying a problem does not make it go away.

PS - It is considered "inter-bank lending" as opposed to a loan. Remember if it is a loan (and like corruption) then the PTP will be impeached because it is AGINST THE LAW.

Edited February 16, 2014 by djjamie

[robhur]

The BAAC is facing a shortage in liquidity, which is a major sign of a bank in distress. This triggers concerns from their union as the employees would like to receive their salaries as do the farmers who are demanding the payment for the pledged rice. To keep the system running (i.e. Avoid bankruptcy of the BAAC) the GSB provides a inter-bank loan that is 'secured' by a letter of support by the care-taker government. A letter of support is significantly less of security than an actual guarantee. (The news reports are not clear on whether its a letter of support or an actual guarantee and as long as the actual letter has not been published i assume it is a letter of support as a guarantee issued by a care-taker government would face some legal challenges). That GSB is issuing a THB 20 Billion loan to a bank in distress 'secured' by a letter of comfort is at best daring and i wonder if the lessons learned from the 1996/1997 financial crisis were considered when the credit committee approved the loan.

Sent from my iPad using Thaivisa Connect Thailand

[Melyn]

Amazing how the reds have come out in such force this evening on this and other topics.

Most of their posts unfortunately have been designed to divert or distort the subject, which is :

The loan or loans from the GSB to the BAAC.

When all the statements from various officials are combined there would seem to be some doubt as to whether there is only one loan of 20 billion or another of 17 billion as well.

The GSB director has said the 20 billion is not supposed to be to pay the farmers rather to shore up the BAAC's sagging liquidity but what will actually happen once the money gets into the BAAC is another thing.

Kitteratt has it seems given a guarantee that the loan will be paid back with interest within or at 90 days.

Given that there should be a new Govt in power at that time this is obviously putting a burden of repayment on that Govt, something we have been told is against the law, constitution, whatever.

It remains to be seen come tomorrow whether any of the farmers get paid and if they do which ones get paid and how much.

In the mean time the lady has told me she has to go out early tomorrow to a local meeting of all those with money in the GSB to talk about getting their money out.

It remains to be seen that there is another full government in a month or even 3.

My take on what the EC is saying is that until the general election is 100% complete that party list candidates cannot be allocated so the 95% conundrum could hinge on one constituency in the south not being completed

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

Except EC has no legal basis for withholding the result. The Constitution requires they announce it. So the "we won't tell you who won until 100% of seats have voted because [excuse]" is against their duty under the Constitution!

Section 236. The Election Commission shall have the following powers and duties:

(7) to announce the result of an election and the voting in a referendum;

I sort of expect the EC to try to throw the 23rd Feb elections he way they failed to register candidates and failed to send ballots and failed to clear polling stations....

They will announce the results when they are fully known and not before.

The EC is governed by this thing called a "constitution". Its part of a functioning democracy don't you know!

Sent from my Nexus 7 using Thaivisa Connect Thailand mobile app

[rreddin]

Time to withdraw my money from GSB then.

Could not agree more. Many people where I live in Central Thailand have been ringing round to inform all about the actions of the GSB. Tomorrow we and many others will descend upon out branch and remove all our money which when added together, is a considerable sum. Hope many others do the same.

What you are saying is that you are starting a run on a bank. That is something you do not even suggest lightly, let alone try and do.

[puanddavid]

One branch of the government loaning money to another branch. Sure. Just the same way social security in the US works BTW.

It's all just going to be printed in the end.

Not really, in the US we would just print 130 Billion Baht and call it a day.

[love1012]

I thought Suthep and his allies wanted to help the farmers? If this is so, why are the unions allied with the PDRC blocking the payments to the farmers? I even read a statement in the past few days where Suthep encouraged the banks to loan the government money to pay the farmers. Utilitarian politics at its best.

well gee-wiz, I don't know maybe because the company they work for and receive their livelihood from may have a high possibility of going bankrupt and they will be left without income to feed their families. Oh these people are so selfish I know...

If you read the article, it is an 'inter-bank' loan and such matters carry little or no risk. Given that, what is the Union President's agenda? Does he want the farmers to be paid or not? You can argue over the viability of farm subsidies but the fact is that the debt is due and owing. The government isn't going to go bankrupt by paying the farmers.

OF COURSE IT IS ...............if it doesnt have the money to do it.............where did you learn about Economics - the village green???

[holeyman1]

What a circus!

1.

gov says can't pay farmers due to protests hindering payment (supposedly has money to pay)

2.

Gov needs to borrow from financial institutions to pay farmers

(now no more money to pay?)

3.

Protester threaten to close banks who lend gov money

(doesn't want financial institution to bail out gov)

4.

Protester campaign to raise money for farmers

(Money not to be given to ease farmers financial plight but for legal council?)

5.

Gov pushes blame and tells mills to pay farmers (doing a he say, she said, apparently mills also not paid for warehousing yet)

6.

Protester tells banks to lend gov money to pay farmers

(why sudden change in tone?)

7.

Gov now has a minute amount to pay farmers but who will it go to first and what's the duration for exhausting borrowed funds? (I wonder who'll end up paying those borrowed funds)

Are any of those reports holding any truths? If so, Who'll do what next is anybody's educate guess!

Am all out of popcorn, going to get some now!

somtam palah

Edited February 16, 2014 by holeyman1

[Melyn]

What a circus!

1.

gov says can't pay farmers due to protests hindering payment (supposedly has money to pay)

2.

Gov needs to borrow from financial institutions to pay farmers

(now no more money to pay?)

3.

Protester threaten to close banks who lend gov money

(doesn't want financial institution to bail out gov)

4.

Protester campaign to raise money for farmers

(Money not to be given to ease farmers financial plight but for legal council?)

5.

Gov pushes blame and tells mills to pay farmers (doing a he say, she said, apparently mills also not paid for warehousing yet)

6.

Protester tells banks to lend gov money to pay farmers

(why sudden change in tone?)

7.

Gov now has a minute amount to pay farmers but who will it go to first and what's the duration for exhausting borrowed funds? (I wonder who'll end up paying those borrowed funds)

Who'll do what next is anybody's educate guess!

Am all out of popcorn, going to get some now!

somtam palah

It looks remarkably like too little too late.

Cobbling together a small percentage of what is needed.

The heat is certainly on the caretakers with no end in sight.

The gong show is going to shortly implode with Suthep and his band blowing whistles until its all over.

Sent from my Nexus 7 using Thaivisa Connect Thailand mobile app

[lawrence1366]

Time to withdraw my money from GSB then.

Could not agree more. Many people where I live in Central Thailand have been ringing round to inform all about the actions of the GSB. Tomorrow we and many others will descend upon out branch and remove all our money which when added together, is a considerable sum. Hope many others do the same.

Does the GSB Credit Committee realised that such news is dangerous for the bank as it will cause a "bank run" by GSB depositers? Someone will come out quickly on Monday to deny this and the farmers will be confused again.

[samuidave]

So, as stated the delays in paying the farmers was down to the anti-government protesters as confirmed by the GSB labour union head Likit Klinthanom. Perhaps the farmers will think again about approaches from the ever slippery suthep and his sheeple.

Sent from my i-mobile IQ 5 using Thaivisa Connect Thailand mobile app

Look at a calendar.

Payments due October. Alleged disruption to payments begins in January.

I'd explain more, as no doubt you still don't see the fatal flaw in your argument, but what's the point?

[samuidave]

Time to withdraw my money from GSB then.

Could not agree more. Many people where I live in Central Thailand have been ringing round to inform all about the actions of the GSB. Tomorrow we and many others will descend upon out branch and remove all our money which when added together, is a considerable sum. Hope many others do the same.

What you are saying is that you are starting a run on a bank. That is something you do not even suggest lightly, let alone try and do.

Why not? We'd all be better off without the Banksters. And they are a completely fraudulent and criminal entity to begin with. But you already know that.

[Thait Spot]

Time to withdraw my money from GSB then.

Could not agree more. Many people where I live in Central Thailand have been ringing round to inform all about the actions of the GSB. Tomorrow we and many others will descend upon out branch and remove all our money which when added together, is a considerable sum. Hope many others do the same.

Does the GSB Credit Committee realised that such news is dangerous for the bank as it will cause a "bank run" by GSB depositers? Someone will come out quickly on Monday to deny this and the farmers will be confused again.

There's also a risk that one or both banks will go on strike

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

[DrDweeb]

So, as stated the delays in paying the farmers was down to the anti-government protesters as confirmed by the GSB labour union head Likit Klinthanom. Perhaps the farmers will think again about approaches from the ever slippery suthep and his sheeple.

Sent from my i-mobile IQ 5 using Thaivisa Connect Thailand mobile app

Wow, a talking head said something, so it must be true.

More kool-aid patently ridiculous rhetoric for the converted and astroturfers here on AV,

A predictable response from fab4 who will probably die of some form of chemical poisoning soon as he/she has consumed so much of the stuff

[jerome2]

why don't they f... print it?

how much USA and EU printed last year ?.....

130 billions baths is nothing and could only lower the bath (good for export)

[GentlemanJim]

"He suspected that the borrowing could violate Section 181 (4) of the constitution, which bars the caretaker government from using state agencies’ resources to boost its electoral support."

Where as Suthep can collect money and donate to the farmers no issues.......because his plan is to have no 'electoral' participation in the forseeable future!!

Are the apologists going to stop this garbage? Suthep is not a Government and any money he gives the farmers is not in violation of the constitution in that it does not burden the next Government with the debt does it? Kittirat is not concerned about this being seen as 'boosting electoral support', he is much more concerned by the rather stronger constitutional law which says that he - PTP cannot burden the next Government. When are you guy's going to admit that there is NO money? That 600-700 Billion has just disappeared. Jeez!

Feeling better are we ......what next government? you mean the unelected peoples council.......or perhaps 'New' Democrat installed government after the reset button has been utilised yet again

Fact is the farmers are due paid, it is inhumane to expect otherwise, but there appears to be no way the constitution protectors will allow a caretaker government to facilitate payment without punishment, the government may have made the initial failure, but now in a caretaker state, following an incomplete election by the EC, and activity by an undemocratic minority, the 'caretaker' government is hamstrung by legal interpretation. An exceptionally good indicator of exactly what is wrong with the Thai system and the areas that are really in need of 'reform'!

Somehow I just don't see an unelected peoples council identifying or managing the change required

Whilst the Government has lied and has not paid the farmers may be inhumane, I find it rather interesting that you (an American?) would suggest that the 'constitution protectors should back down and allow the constitution to be side-swiped. I find it rather inhumane that so many school children are slaughtered in the USA each year by Gun crime, but I don't see a rush to try and make the 'constitution protectors' bypass the US constitution and get rid of the right to bear arms. Who are you to suggest that the people of this country should scrap their constitution?

The solution is very simple. If this is all very inhumane, then why does Thaksin, the man that supposedly cares for all these people not just front up with the 130 billion baht now? He could do it, and after all he has made all his money off the back of the poor in Thailand. So why blame Suthep who has had NOTHING to do with this farce. Why not start asking two questions....1. Where has all the money gone, and 2. Why doesn't Thaksin clear the farmers debt now? Go on, answer those two questions if you have the balls.

[djjamie]

why don't they f... print it?

how much USA and EU printed last year ?.....

130 billions baths is nothing and could only lower the bath (good for export)

The only way to lower the bath is to remove the bath plug.

As for printing money to pay debt then look no further than Zimbabwe.

Zimbabwe’s population of 12 million had experienced some of the worst currency inflation in history due to printing money. By one estimate, over the last decade, Zimbabwean currency was devalued by 89 sextillion percent. (One sextillion is a billion trillion or 1,000,000,000,000,000,000,000!)

​I know…I was there as an expat. I didn't even use the local currency. I used US dollars. If I wanted to buy a loaf of bread I needed a wheel barrow of local currency to pay for it.

Summary - Don't print money to get out of trouble.

Mind you, I have my tiny fortune in Singapore in US currency and if they did print money I would transfer it back to Thailand and make a 89 sextillion % profit...

Kittiratt Na-Ranong, please listen to jerome2!!!……Exports will be better!!!

Edited February 16, 2014 by djjamie

[473geo]

Jim

1) In your anger and confusion you have associated me with a nation that I have never even carried the inclination to visit

However Suthep is the man requesting 'reform' is he not? if reform does not include a revised constitution he has no requirement to hold up elections, correct?

2) Thaksin contributing to the economy, paying the farmers? really Jim, do you read and understand the posts here? Thaksin would immediately be accused of vote buying, so a rather ill thought out suggestion, wouldn't you agree?

[Trembly]

The BAAC is facing a shortage in liquidity, which is a major sign of a bank in distress. This triggers concerns from their union as the employees would like to receive their salaries as do the farmers who are demanding the payment for the pledged rice. To keep the system running (i.e. Avoid bankruptcy of the BAAC) the GSB provides a inter-bank loan that is 'secured' by a letter of support by the care-taker government. A letter of support is significantly less of security than an actual guarantee. (The news reports are not clear on whether its a letter of support or an actual guarantee and as long as the actual letter has not been published i assume it is a letter of support as a guarantee issued by a care-taker government would face some legal challenges). That GSB is issuing a THB 20 Billion loan to a bank in distress 'secured' by a letter of comfort is at best daring and i wonder if the lessons learned from the 1996/1997 financial crisis were considered when the credit committee approved the loan.

Sent from my iPad using Thaivisa Connect Thailand

I think such considerations were overshadowed by Mr. Worawit's 'debt of gratitude'.

I did some digging around on the Thai internet and found out some interesting things about Worawit. (spoiler : he's sat on enough gravy trains to last several lifetimes).

After having worked in finance for only 2 years, Worawit became an economic advisor to the Energy Commission in 1997, aged 28.

He obviously deepened his already deep connections with members of parliament because in that same year he also became a member of an important Minister-appointed committee overseeing the privatisation of bus routes for the publicly owned Transport Company (monopolistic operator of all Thai bus stations with their own buses and bus routes).

2003 was a bumper year for him; he was made advisor to the Deputy Minister of Finance as well as the becoming the Chairman of the Law and Debt Collection committee for the Dairy Promotion Organization. Later in the year aged 34, he becomes a fully fledged board member of GSB (!!!).

I won't bother to name them all but suffice it to say that this man has been passed around like a relay baton by the relevant PTP ministers since his mid-twenties.

There was even a scandal when his name was put down for the job of director of the Government Housing Bank; the employees got wind that 20 million baht had changed hands to rig the selection process in his favour against many more senior and more qualified candidates (which involved a great deal of PTP infighting resulting in a few quiet resignations) and there was even a ballot for industrial action by the union which explicitly cited the 20 million baht bribe as the reason, but apparently that fizzled out when he didn't get the job.

So . . .who's your boy?

Edited February 16, 2014 by Trembly

[GentlemanJim]

Jim

1) In your anger and confusion you have associated me with a nation that I have never even carried the inclination to visit

However Suthep is the man requesting 'reform' is he not? if reform does not include a revised constitution he has no requirement to hold up elections, correct?

2) Thaksin contributing to the economy, paying the farmers? really Jim, do you read and understand the posts here? Thaksin would immediately be accused of vote buying, so a rather ill thought out suggestion, wouldn't you agree?

I think you are confused. I am not angry in the slightest. Not even an incy wincy bit.

[SamMunich]

(previous quote) Time to withdraw my money from GSB then.

rredin said:

What you are saying is that you are starting a run on a bank. That is something you do not even suggest lightly, let alone try and do.
________________________________________________

Correct in genereal, but not in Thailand <wg>.

GSB is a majority government-owned bank, so if the bank runs out of money, the government will jump in an provide the necessary cash,- don't you think so? Well, ask Chalerm and Kittirat, they will tell you the plain truth...

Much more of concern for the GSB bosses should be, if those last few shareholders, that are not part of the gov't start selling their shares. Because then suddenly the value, and thus the amount of reserve the bank has, will come crashing down.

The whole thing is a ruse to buy time, if the BAAC has to pay back within only 30 days. BAAC will of course NOT have the necessary spare to re-pay and thus the GSB has "unfortunatelly lost" some 20 billion Baht.

Lets see, where the GSB share price is in 10 days and in 40 days...

[DrDweeb]

Good. The farmers will get paid as we all knew they would. Great pity it has taken so long

As usual, you are in dire need of remedial math lessons!

[geriatrickid]

Time to withdraw my money from GSB then.

And put it where? The GSB is backed by the government. Who backs the other banks?

Yes, it is not a good scenario, but the debt of the government carries less risk than "private" company debt.

Personally, I keep the bare minimum in Thailand through my bank's correspondent in Thailand, SCB. I have no confidence in the Thai banking system. There are only 3 top rated banking systems in the world in terms of stability, and they are Australia, Sweden and Canada.