Bonds to be issued to pay off rice losses

[Lite Beer]

Bonds to be issued to pay off rice losses
Somluck Srimalee,
Natthapat Phromkaew
The Nation

BANGKOK: -- First tranche set for early next year: Finance Minister Sommai

The Finance Ministry plans to issue long-term bonds with terms of three to 10 years to pay back losses totalling a massive Bt682 billion from previous governments' rice-pledging policies.

"This will force the country's fiscal budget into deficit for between three and five years from now," Finance Minister Sommai Phasee said yesterday after a ceremony to open the Asean Sustainable Development Symposium 2014.

Previously, Thailand had planned to achieve a balanced budget by 2017.

"The budget deficit may be more than 10 per cent of the total fiscal budget - that will depend on the demand to raise capital for both investment and to pay back these losses," Sommai said.

Normally, the country's budget deficit is an average 10 per cent of the total fiscal budget. For example, in this fiscal year (2014-15) the total budget of Bt2.5. trillion targets a deficit of Bt250 billion or 10 per cent of the total.

Sommai said the country could not have a balanced budget in the next five years, as it needed funds to invest in infrastructure. A budget of Bt3.3 trillion has been set aside for the period 2015-2022 to develop society via outlays on education, health, and to raise funds to pay back the huge loss from the rice-pledging scheme incurred by previous governments.

Total losses of Bt682 billion have been incurred from the rice-pledging policies from 2004 until May 2014. Some Bt163.67 billion of this came from rice-pledging policies from 2004 until 2010, while the major chunk - Bt518.69 billion - came from 2011 until May 2014, overseen by former prime minister Yingluck Shinawatra's government.

Sommai said the Finance Ministry would issue the first tranche of bonds to pay back losses from rice pledging in the first quarter of 2015.

"We cannot say [yet] how much bonds we will issue in the first tranche - that will depend on the deal to pay back debt in the first half of next year," he said.

However, in August the Finance Minister approved the issue of new bonds worth Bt1.4 trillion in the 2014-15 fiscal year by the Public Debt Management office (PDMO), with Bt790 billion to pay back part of the current debt, losses from the rice scheme, plus Bt360 billion for investment in infrastructure, and Bt250 billion to cover the budget deficit.

Sommai added that restructuring the country's tax system would also generate enough income for investment plans and to pay back debt over the long term.

"We will revise all of the tax system to be fair and also boost the country's income enough for the nation's finan?cial demand for investment in the long term. If we did not have a huge loss from the rice pledging it would have been better for the country to focus on investment," he said.

Meanwhile, the National Anti-Corruption Commission (NACC) will use the Finance Ministry's latest disclosure of information regarding losses incurred under the rice-pledging scheme of the Yingluck administration to press its case to the National Legislative Assembly (NLA) for impeaching the former premier.

The Finance Ministry revealed on Thursday that the Yingluck administration had incurred Bt518 billion in losses from four crops from 2011 to 2014.

NACC member Vicha Mahakun and NACC secretary-general Sansern Polchiak, who is in charge of the case, are expected to be the two members who will present the case to impeach Yingluck to the NLA although no final decision has been made yet.

Source: http://www.nationmultimedia.com/national/Bonds-to-be-issued-to-pay-off-rice-losses-30247836.html

-- The Nation 2014-11-15

[Somtamnication]

Robbing Peter to pay Paul. Works ok short term, but then both holes cave in. Just sayin'.

[BSJ]

So it will be interesting to see what the cost will be after all the bond holders have been paid off.

[NeverSure]

FINALLY. Admitting on the books that the Thai government has this debt, and that the Ag Bank is holding bad (overdue) loans which must be repaid.

Up until now the debt hasn't been acknowledged because "there was rice to sell to pay it back."

They must be expecting an audit by the IMF or something.

[EricBerg]

Filling holes with holes. And the ones that created the mess are still allowed to hop around freely. Quite incredible. Should be possible for a junta to pick them up, put them in another hole and take their assets. That way at least a small part of the lute can be taken back.

[Thai at Heart]

FINALLY. Admitting on the books that the Thai government has this debt, and that the Ag Bank is holding bad (overdue) loans which must be repaid.

Up until now the debt hasn't been acknowledged because "there was rice to sell to pay it back."

They must be expecting an audit by the IMF or something.

There is 18 mn tonnes of it left. The debt to GDP is under 50% but problem is they can't borrow until GDP gets moving, and with these numpties in charge nothing moves.

But they will probably put in some taxes and this story will go away.

[Robby nz]

Robbing Peter to pay Paul. Works ok short term, but then both holes cave in. Just sayin'.

So perhaps you would like to propose a solution.....Yes ?

[jaltsc]

Robbing Peter to pay Paul. Works ok short term, but then both holes cave in. Just sayin'.

Works out great if you are Paul. Unfortunately, with all the schemes the government fails at, it is obvious that this country is full of Peters .

[NamKAheng]

They better have a good interest rate on those bonds since they are base on the rice scam and they probably come to maturity under the rule of corrupt politicians

[worgeordie]

They should claw some of these loses back from the people responsible,

after all these people are very rich,and should be made to pay for their

wanton mistakes,just like ordinary people,who make mistakes have to pay

for them,

regards Worgeordie

[Thai at Heart]

They better have a good interest rate on those bonds since they are base on the rice scam and they probably come to maturity under the rule of corrupt politicians

They will just load it into the budget. No new submarines or f16s for a few years.

[jaywalker]

Talk about junk bonds..... These are the junkiest I've ever heard of.

No worries, they'll just print more useless paper to cover them, same as Uncle Sam has been doing for years.

I recently read an article where Beethoven & Mozart (the Beetles of their day) were paid 4,000 Italian florins per year way back when = $150,000 USD today, but paid in GOLD COINS.

Imagine if they had been paid in Italian Lira or Euros (or USD paper dollars).

What would that paper buy them 200 years later as opposed to gold coins?

[Thai at Heart]

Talk about junk bonds..... These are the junkiest I've ever heard of.

No worries, they'll just print more useless paper to cover them, same as Uncle Sam has been doing for years.

I recently read an article where Beethoven & Mozart (the Beetles of their day) were paid 4,000 Italian florins per year way back when = $150,000 USD today, but paid in GOLD COINS.

Imagine if they had been paid in Italian Lira or Euros (or USD paper dollars).

What would that paper buy them 200 years later as opposed to gold coins?

This will.just go in the budget like all the rest. Not sure why these are any junkier than any average thai govt bond.

Backed by the might of the Thai tax payer. .when he didn't notice he's paying.

[Ulic]

Sell the bonds to the politicians who came up with this ridiculous scam. 0 % interest with a 100 year payback.

They buy the bonds or go to jail.

[Ozziepat]

So the government will incur some massive short term debt, then stop borrowing and deficit spending, pay everything off over the next five years and all will be unicorns, rainbows and happy tunes. Really? Meanwhile, what are these "losses" of which so much is made? They are the difference between what was promised to rice farmers for rice delivered to the government, and what the rice sold (or will sell) for in a future market. Basically they are the consequence of a subsidy scheme, similar to all Thai government subsidy schemes, that went bad is a big way. ALL subsidies are public losses that benefit selected recipients. The issue here is magnitude of the loss (and opportunity costs, always ignored), which more commonly falls into the "small enough to ignore unless there is political advantage otherwise" category. Good to remember that when we see "subsidy" in all of its many guises.

[Anthony5]

They should claw some of these loses back from the people responsible,

after all these people are very rich,and should be made to pay for their

wanton mistakes,just like ordinary people,who make mistakes have to pay

for them,

regards Worgeordie

But you didn't take the " I scratch your back if you scratch mine" policy Thailand uses into account

[h90]

Filling holes with holes. And the ones that created the mess are still allowed to hop around freely. Quite incredible. Should be possible for a junta to pick them up, put them in another hole and take their assets. That way at least a small part of the lute can be taken back.

I think the family assets of the Shinawatra clan + cronies are nice, if you include the buildings in prime locations.

That should be all seized....

[ALLSEEINGEYE]

again, seize the assets of the caddy and Yingluck as well as all other cabinet ministers, rice millers, and anyone else involved in the scheme as well as their relatives (if the money trail points that way). Use that to payback the tax payers.

[kamahele]

Issuing bonds is a good idea I think. It is the responsible way for governments to raise money. Let's just hope that the government sells them directly to the public with no middlemen involved.

[Thakkar]

Normally, the country's budget deficit is an average 10 per cent of the total fiscal budget. For example, in this fiscal year (2014-15) the total budget of Bt2.5. trillion targets a deficit of Bt250 billion or 10 per cent of the total.

Thanks. I finally understand percentages.

T

[Robespiere]

Looks like they've found yet another way to funnel money into the pockets of the wealthy.

[Alwyn]

I love the way people are calling it "the rice scam". It was a scheme that failed. When the post office was sold off it was sold for a billion pound less than it's true market value and then dropped £750 million in one day on the market people were horrified and people called the government on it, but people were not targeted personally and calling it a scam. Bad idea? Definitely.. A similar story with British Airways. There are countless failures around the World from failed schemes yet in Thailand it's labelled a scam and then used as ammunition to go after people on a personal level.

[Thai at Heart]

Normally, the country's budget deficit is an average 10 per cent of the total fiscal budget. For example, in this fiscal year (2014-15) the total budget of Bt2.5. trillion targets a deficit of Bt250 billion or 10 per cent of the total.

Thanks. I finally understand percentages.

T

Scary that they target a 10% deficit. That is a big spread.

[maidee]

makes you wonder how smart or corrupt are all those governement workers that none saw that one comming, right ?

they cannot check everybody who suddenly got unusual rich between before and now ?

[meatboy]

makes you wonder how smart or corrupt are all those governement workers that none saw that one comming, right ?

they cannot check everybody who suddenly got unusual rich between before and now ?

wonder who will buy these bonds.the last ones [gov] never got to the counter.

[Anthony5]

makes you wonder how smart or corrupt are all those governement workers that none saw that one comming, right ?

they cannot check everybody who suddenly got unusual rich between before and now ?

wonder who will buy these bonds.the last ones [gov] never got to the counter.

Since 96,3% is happy these days with everything the junta shakes out of its sleeve, there will be no shortage of interested buyers, not?

[Lite Beer]

Most community leaders back bond for rice scheme debt

BANGKOK: -- An opinion survey by the Thai Researchers in Community Happiness Association found that 76.8 per cent of leaders of 605 communities nationwide support the government plan to issue bonds to pay Bt682 billion debt incurred by rice subsidy schemes.

The survey was carried out from Wednesday to Saturday.

Source: http://www.nationmultimedia.com/breakingnews/Most-community-leaders-back-bond-for-rice-scheme-d-30247873.html

-- The Nation 2014-11-16

[cloudhopper]

It's absolutely nothing more than money printing, of course the politicians back it.

There will be lots more coming too.

[LuckyLew]

What happens if no one buys the bonds?