Directors equally split over Thai economy

[webfact]

Directors equally split over economy
ERICH PARPART
THE NATION



BANGKOK: -- THE first-ever "Thai Directors Survey", conducted by the Thai Institute of Directors (IOD) earlier this year, shows that opinion regarding Thai economic prospects is split down the middle, while corruption remains their top concern despite the ongoing efforts of the military-led government to tackle the problem.

Meanwhile, the IOD's managing director believes the government's latest economic stimulus package, and especially the job-creation policy, is what the economy needs right now, and agrees that the introduction of land and construction taxation should be deferred.

The survey - the "Thai Director Survey on Director Issues, Corporate Governance, Economic Outlook, and Regulations", to give it its full title - that was released by the IOD yesterday is the first of its kind.

It was conducted between January 12 and February 25 with a sample size of 436 directors.

One of the key results is that 48 per cent of directors anticipate that the Thai economy will start to improve, while 52 per cent believe it will remain stable, or worsen.

"The government stimulus policy, which aims to increase consumer sentiment, does not really hit the nail on the head because it cannot create enough motives for people to spend … The [recently] lowered policy interest rate is not the answer as it was already low, so the government stimulus policy should be more targeted from sector to sector, such as via lower tax or a tax exemption for sectors with a long supply chain," said Weerachai Ngamdeevilaisak, independent director at Pruksa Real Estate.

Bandit Nitthavorn, managing director of the IOD, said: "The latest efforts of the government in terms of the job-creation policy and policies to boost people's purchasing power are straight to the point because this is the heart of the current economic problem, where the reason the economy is not doing so well at the moment is poor purchasing power."

Thailand Development Research Institute (TDRI) adviser Veerathai Santiprabhob said the most likely reason that directors' opinion regarding the prospects for the economy was almost equally divided was that the Kingdom's economy was currently only "growing with one leg", so people who rely heavily on exports would see gloomy prospects ahead, while domestic consumption is recovering.

Bandit said he agreed with the decision to put the land and construction tax on hold, but argued that the tax should be collected as soon as was practicable in order to increase government income.

The timing of the tax delay might therefore need to be revised, especially during this period of economic uncertainty, he added.

Weerachai said: "The land and construction tax will have a huge impact on the real-estate sector, where having attractive plots will be a key success factor this year and in the future, since the cost of doing business will rise after this tax comes into effect."

The IOD survey also revealed that Thai directors were still very worried about corruption.

Bandit said that while the situation had improved since the military government came to power, all concerned had to "step up and continue with their anti-corruption efforts".

Veerathai said the issue of corruption would take time to resolve because the main "actors" behind the problem, such as politicians, government officials who make key decisions and lobbyists, were still in place despite the change of power.

"The actors are still there, so we have to look to the long run by trying to improve the level of transparency in terms of government regulations and processes, while the private sector's efforts to cast out these corrupt individuals from society should be regularly and continuously pursued," he said.

Weerachai said he agreed with the TDRI adviser's assessment that the corrupt players were still on the scene, and added that corruption "will continue to be with us for a long time" if these crucial players were not weeded out from society.

"The corruption problem has to be tackled structurally and socially from both sides of the table, or else it will stick with us for a long time to come," said the Pruksa director.

Source: http://www.nationmultimedia.com/business/Directors-equally-split-over-economy-30256295.html


-- The Nation 2015-03-19

[trogers]

Weerachai said: "The land and construction tax will have a huge impact on the real-estate sector, where having attractive plots will be a key success factor this year and in the future, since the cost of doing business will rise after this tax comes into effect."

Isn't this stating the obvious? Real estate has always been location, location and location. Try buying one somewhere in Timbuktu.

[emilymat]

Two things I don't understand as an ordinary Joe.

Firstly, why do you need a massive job creation scheme if unemployment here is virtually nil, as recently announced.

Secondly, as a Brit I am told by my Chancellor that Britain's economy is growing faster than any major country. Then I read that Thailand's economy is pretty stagnant.

So, why does the UK pound continue to fall against the mighty baht.?

I honestly don't understand that. From 55 to 48 in a few weeks. This instability is a real concern to many ex-pats who are on modest fixed incomes, and not only the Brits.

[trogers]

Two things I don't understand as an ordinary Joe.

Firstly, why do you need a massive job creation scheme if unemployment here is virtually nil, as recently announced.

Secondly, as a Brit I am told by my Chancellor that Britain's economy is growing faster than any major country. Then I read that Thailand's economy is pretty stagnant.

So, why does the UK pound continue to fall against the mighty baht.?

I honestly don't understand that. From 55 to 48 in a few weeks. This instability is a real concern to many ex-pats who are on modest fixed incomes, and not only the Brits.

Simple. The UK is over her head with govt debts. Even with a growing economy, tax collection can only pay off interest but not the principle.

£78,000 per citizen, including young and old.

Edited March 19, 2015 by trogers

[jonclark]

Two things I don't understand as an ordinary Joe.

Firstly, why do you need a massive job creation scheme if unemployment here is virtually nil, as recently announced.

Secondly, as a Brit I am told by my Chancellor that Britain's economy is growing faster than any major country. Then I read that Thailand's economy is pretty stagnant.

So, why does the UK pound continue to fall against the mighty baht.?

I honestly don't understand that. From 55 to 48 in a few weeks. This instability is a real concern to many ex-pats who are on modest fixed incomes, and not only the Brits.

Simple. The UK is over her head with govt debts. Even with a growing economy, tax collection can only pay off interest but not the principle.

£78,000 per citizen, including young and old.

There was a documentary about the level of UK debt which stated that if you used 50 GBP notes. You would need to create a stack which reached the moon in order to pay the current level of debt back.

But that is peanutS when you consider Japanese debt is larger than the combined GDP of the UK, German and French Economies.

[ronwparker]

corruption is rife here-the RTP are the worst but Thailand has and will have the worst record in Asian-for many things -must start with better education at every level,crack down oon any official who is corrupt-takes graft

[ronwparker]

Also has the slowest growth in Asean

[trogers]

Two things I don't understand as an ordinary Joe.

Firstly, why do you need a massive job creation scheme if unemployment here is virtually nil, as recently announced.

Secondly, as a Brit I am told by my Chancellor that Britain's economy is growing faster than any major country. Then I read that Thailand's economy is pretty stagnant.

So, why does the UK pound continue to fall against the mighty baht.?

I honestly don't understand that. From 55 to 48 in a few weeks. This instability is a real concern to many ex-pats who are on modest fixed incomes, and not only the Brits.

Simple. The UK is over her head with govt debts. Even with a growing economy, tax collection can only pay off interest but not the principle.

£78,000 per citizen, including young and old.

There was a documentary about the level of UK debt which stated that if you used 50 GBP notes. You would need to create a stack which reached the moon in order to pay the current level of debt back.

But that is peanutS when you consider Japanese debt is larger than the combined GDP of the UK, German and French Economies.

True, but their household debts are modest. And most of Japan govt debts are borrowed domestically, due to high savings of households.

[emilymat]

Trogers.

Thanks for that. So, if what you say is correct - and I have no reason to doubt it - then it will make no difference in the medium or long term, vis.a.vis. exchange rates, if the UK economy improves and/or the Thai economy remains flattish.

I assume then that Thailand does not have a crippling debt, which is not surprising to me if they don't fund an NHS, an expensive welfare system, overseas aid and defence etc.

Well, it helps my decision about staying, as I though there was a chance when we reached 55 to the pound last autumn that things would continue to improve or at least remain stable at that level.

Why I'm so interested (maybe obsessed) is that on a fixed income of 1500 pounds per month, which originally was over 100,000 p.c.m when I came,(and I doubt anyone saw the financial crash in 07/08) it is now 72,000,fortunately enough for the retirement visa at present.

Thanks again

[trogers]

Trogers.

Thanks for that. So, if what you say is correct - and I have no reason to doubt it - then it will make no difference in the medium or long term, vis.a.vis. exchange rates, if the UK economy improves and/or the Thai economy remains flattish.

I assume then that Thailand does not have a crippling debt, which is not surprising to me if they don't fund an NHS, an expensive welfare system, overseas aid and defence etc.

Well, it helps my decision about staying, as I though there was a chance when we reached 55 to the pound last autumn that things would continue to improve or at least remain stable at that level.

Why I'm so interested (maybe obsessed) is that on a fixed income of 1500 pounds per month, which originally was over 100,000 p.c.m when I came,(and I doubt anyone saw the financial crash in 07/08) it is now 72,000,fortunately enough for the retirement visa at present.

Thanks again

Nothing to say the Thai Baht would not fall, depending on confidence in Thai assets, stock market, real estate, etc.

But look at QE of govt. Yen did fall due to it.

[Balance]

corruption is rife here-the RTP are the worst but Thailand has and will have the worst record in Asian-for many things -must start with better education at every level,crack down oon any official who is corrupt-takes graft

So, there seems to be a consensus that the "bad actors" are still there and still corrupt. This implies that that are known, and the private sector is trying to drive them out of Thai society. Sounds like the effort needs to be stepped up.

Everyone whines about the lack of domestic consumption. Maybe this is because Thai households are so debt ridden that if they are servicing the minimum amount, they have nothing to eat (probably overstated, but to make a point).

I have noticed that Thais like the bling, the fancy stuff, most of which is imported and a high percentage from western countries and therefore 30-70 percent more expensive than it costs in the country of manufacture. So we have middle class Thai families with Thai salaries trying to live a lifestyle that has a cost structure that is way out of balance with the incomes. I don't know of anyone who has a palatable solution to this problem.

I think that the Export market does need some help in the form of a 4-7 percent Bhat devaluation. That might generate some more middle class jobs and put some upward pressure on the salaries, which increases domestic consumption.

[Srikcir]

The government stimulus policy NEVER materialized. For 2014 it remained a plan of hopes and ambitions, but the government didn't make any substantial infrastructure investments:

"The junta has vowed to pump billions of dollars into the economy, mainly through long-planned infrastructure schemes....But analysts say the cash has yet to appear." 2015-03-11

Yet, Prime Minister M.R. Pridiyathorn Devakula announced on 2015-02-07 "that the government will not be implementing a second round of economic stimulus package in light of indications that previous budgetary injections have made a significant impact on the country’s economy."

If the Prayut government insists on living in some make believe world where his economic policies are a success, the Thai business sector has a lot to be concerned about with the economic direction of Thailand for the rest of 2015. With a continued "do-nothing" government economic policy, Thailand will again face virtually no GDP growth and a shrinking pool of capital available for further growth.

Elections might indeed take place in early 2016 if the Prayut government collapses under massive economic failures and it becomes the task of the Thai people to save the economy for themselves.

[emilymat]

Two things I don't understand as an ordinary Joe.

Firstly, why do you need a massive job creation scheme if unemployment here is virtually nil, as recently announced.

Secondly, as a Brit I am told by my Chancellor that Britain's economy is growing faster than any major country. Then I read that Thailand's economy is pretty stagnant.

So, why does the UK pound continue to fall against the mighty baht.?

I honestly don't understand that. From 55 to 48 in a few weeks. This instability is a real concern to many ex-pats who are on modest fixed incomes, and not only the Brits.

Simple. The UK is over her head with govt debts. Even with a growing economy, tax collection can only pay off interest but not the principle.

£78,000 per citizen, including young and old.

Ok, I accept this has to be a factor. But, the UK debt has not suddenly gone up since last autumn yet the pound has fallen by 11% or so.

Maybe it's the uncertainty of the forthcoming general election, but I'm afraid I just think these markets are manipulated ala the Libor scandal.

After all, the UK government love a weak pound as it helps exports.

[Strangebrew]

In my humble opinion if the BOT adjusted the exchange rate in a realistic fashion that tourism would rebound in massive numbers with tourist spending 4 to 5 times more money than they do at present this would offset the Russians coming here less and they could stop the free visa scheme for the Chinese in one swoop Thai's have more cash paying customers less rude Chinese spitting a defecating where ever they wish. Thus increasing the Thai happiness scale through the roof. Also this alone would create more jobs in the tourism sector. Of course downside Ole swampy might need and expansion I think.