Don't expect too much from Somkid's economic dream team

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BURNING ISSUE
Don't expect too much from Somkid's economic dream team
SASITHORN ONGDEE

BANGKOK: -- THAIS should not expect quick miracles from the new economic team led by Somkid Jatusripitak. After all, its first day at work on Monday was ominously marked by a 64-point drop in the SET Index.

Yet many businesses are positive about this new Cabinet, and have high hopes that it will restore confidence in the economy. They believe that Somkid, who's also a deputy premier, and his team will bring the economy a much-needed boost by getting people to start spending again - at least in the short term.

However, some economic gurus are warning people against getting too excited. They believe this government will require at least five quarters to rebuild the economy - provided their missions are successful.

There are a number of reasons for this:

Firstly, the government's budget-disbursement process for investments is not fully functional yet, and infrastructure projects worth a total of Bt1.6 trillion are still pending Cabinet approval.

This means the projects will not get underway at least until 2016.

Secondly, the problem of laws blocking the participation of private firms in these mega-projects has not been resolved yet.

Thirdly, Thailand is heavily reliant on giant economies that are also experiencing an economic slump. It's tough for the government to boost the economy at home when the economies it relies upon have not yet recovered.

Then there was China's recent economic hiccup and stock market meltdown, which sent ripples through the global economy, including Thailand. China has been Asean's largest trading partner since 2009, and last year Thailand was its fourth largest trading partner in Asean.

Varavan Tarapoom, chief executive officer of BBL Asset Management, said in a Facebook post that the global stock market tumbles over the past few days could be blamed on three key factors.

Firstly, she pointed out, there had been a fundamental change in China's economy, proved by the fact that there had been price drops in key areas such as auto sales, freight loading, electricity usage, and exports and imports over the past few years.

Secondly, she said extreme incidents such as cyber wars and actual wars were happening far too frequently across the globe.

Lastly, she said, speculative foreign investors had packed up and gone home after selling shares in emerging markets, including in Thailand, out of fear of the first two factors.

The stock index is normally a barometer for measuring the business environment in relation to the growth of corporate earnings and the economy.

Thailand's growth this year is likely to be below 3 per cent and exports might also flatten or contract, according to latest predictions from many economic houses.

Somkid, however, promised the private sector at a seminar yesterday that he will focus on rebuilding confidence in the economy - he said one of his missions is to ease the worries of the business community.

"The situation is not a crisis yet. Many firms are doing well, but are worried about the weakness of farmers, which might eventually affect corporate wealth," he said, adding that Prayut Chan-o-cha's government was very business friendly.

This probably explains why Somkid's first priority is to inject money into the system, focusing on the grassroots and small and medium-sized enterprises - a job he aims to complete in the next three months.

Perhaps we should wait and see, as what happens in the next few months will shed some light on the state of the economy in the future.

Source: http://www.nationmultimedia.com/politics/Dont-expect-too-much-from-Somkids-economic-dream-t-30267625.html


-- The Nation 2015-08-28

[BSJ]

Would they like to borrow my business adviser? Make a wish fairy is busy these days but I am sure she could squeeze them in!

Edited August 27, 2015 by BSJ

[ChrisY1]

I'm pretty sure that Somkid is no miracle maker....far from it......!

Thailand lacks people of great vision...... and with the army watching each move, there'll be plenty of interference!

[NongKhaiKid]

OK we won't.

Did someone say ' dream team ' ? Plenty of room for responses there !

[Charlie Croker]

Sure the rest of the world is allowed to fail under this pressure, caused by the Chinese situation, but the current Thai administration is expected to pass through the storm unscathed or else the 'dream team' is considered lacking?

I wonder how everyone here would fair with a bunch of commentators sitting in your office or at the back of the classroom, constantly criticizing every move you made.

All the teachers would immediately blame the Thai education system, and its the same for the government. They are working with what they've got.

Tough times

Edited August 28, 2015 by Charlie Croker

[chainarong]

OK we won't.

Did someone say ' dream team ' ? Plenty of room for responses there !

I think it can be said "everyone has had a wet Dream"

[chainarong]

Thailand rocks like everyone else to the world song, not its own tune, it is not a mover it is a follower, that is the main principle song, then you have antiquated business and taxation laws that sing a sad song, there is too much of You cannot do , thinking that this protects Thailand, all it does is prevents , inhibits and turns people off, Thailand doesn't mind investments of millions , why would you if you can't own the land, Thailand investment, in each step of registering you get the impression that they don't trust , you going to rip them off, and in the background rife with corruption as you fork out for extra's as they call it, to get things moving, don't expect the Dream Team to do that, get things moving.

[ikke]

Somkid is a competent minister , but they give a few reasons why we should not expect too much of him and team....

However they seems to forget that the mean reason is incompetence of the Junta and their leader.

[ChrisY1]

Sure the rest of the world is allowed to fail under this pressure, caused by the Chinese situation, but the current Thai administration is expected to pass through the storm unscathed or else the 'dream team' is considered lacking?

I wonder how everyone here would fair with a bunch of commentators sitting in your office or at the back of the classroom, constantly criticizing every move you made.

All the teachers would immediately blame the Thai education system, and its the same for the government. They are working with what they've got.

Tough times

When the media tells the Thai people not to expect too much from the dream team....what are we to think....just working with what they have really isn't enough.....they need new blood.

[trainman34014]

''Dream Team '' is the right name for them; this country is overloaded with dreamers and very few doer's. Too much time on Golf Courses, wearing white uniforms, showing off rows of medals that mean Jack Shit and telling everyone ''who '' they are and how important they are, whilst PA is busy booking free first class flights on Thai Airways for the whole family.

[Eric Loh]

The only country of significant that is showing signs of economic recovery is USA. Unfortunately the junta and USA do not see eye to eye and trade suffers. Perhaps the Somkid's civilian team will be more palatable to promote more trade with USA. TPP now seem an important part of the economic recovery. Prayuth may have overplayed the China relation card and with their economic in distress, we suffer the consequences.

The external factors we can't control but we can do better with our domestic economy with fiscal policies. Farmers form 70% of the work force and play a significant role in domestic consumption. I think Somkid is on the right track albeit few quarters to see results.

[fvw53]

Nothing can change the fundamental rule that :

1. a good economy is where the people believe it is good

2.a bad economy is where the people believe it is bad

....and nobody has been able to predict exactly when the change happens

Most stock market investors behave like a pack of young dogs ...if they see that one dog thinks it found a good tree for a pee they all rush to pee at the same tree...until one of the pack barks in panic and than they all run for cover.

Prof Mertens and Prof Scholes were two Nobel Price winners for Economy in 1997 but 3 years later their company went bankrupt

http://harvardmagazine.com/2001/01/risk-without-reward.html

And what to say about the (in)famous US rating agencies or even the "oracle of the Fed) Alan Greenspan who never saw any problem until Lehman Brothers collapsed in 2008 ?.

[FangFerang]

The line that made me chuckle was : "Secondly, the problem of laws blocking the participation of private firms in these mega-projects has not been resolved yet."

So much for Article 44 being used for anything useful other than diluting voter's rights and arresting Herr Suthep's opposition.

[FangFerang]

Nothing can change the fundamental rule that :

1. a good economy is where the people believe it is good

2.a bad economy is where the people believe it is bad

....and nobody has been able to predict exactly when the change happens

Most stock market investors behave like a pack of young dogs ...if they see that one dog thinks it found a good tree for a pee they all rush to pee at the same tree...until one of the pack barks in panic and than they all run for cover.

Prof Mertens and Prof Scholes were two Nobel Price winners for Economy in 1997 but 3 years later their company went bankrupt

http://harvardmagazine.com/2001/01/risk-without-reward.html

And what to say about the (in)famous US rating agencies or even the "oracle of the Fed) Alan Greenspan who never saw any problem until Lehman Brothers collapsed in 2008 ?.

I agree but when the Nobel Laureates company went bankrupt, their company paid all their revenues out as bonuses and then filed bankruptcy to dodge bills -- a common tactic that makes the owners both very rich and immune from being pursued for corporate debts. All they have to do is not own more than a 35% stake in it (proxy buddies take care of that quite easily).

[fvw53]

Nothing can change the fundamental rule that :

1. a good economy is where the people believe it is good

2.a bad economy is where the people believe it is bad

....and nobody has been able to predict exactly when the change happens

Most stock market investors behave like a pack of young dogs ...if they see that one dog thinks it found a good tree for a pee they all rush to pee at the same tree...until one of the pack barks in panic and than they all run for cover.

Prof Mertens and Prof Scholes were two Nobel Price winners for Economy in 1997 but 3 years later their company went bankrupt

http://harvardmagazine.com/2001/01/risk-without-reward.html

And what to say about the (in)famous US rating agencies or even the "oracle of the Fed) Alan Greenspan who never saw any problem until Lehman Brothers collapsed in 2008 ?.

I agree but when the Nobel Laureates company went bankrupt, their company paid all their revenues out as bonuses and then filed bankruptcy to dodge bills -- a common tactic that makes the owners both very rich and immune from being pursued for corporate debts. All they have to do is not own more than a 35% stake in it (proxy buddies take care of that quite easily).

Thank you for this quite interesting clarification. My main point was to illustrate that "economy" cannot be taught as a science because the human factor is more than 50 pct / suppose there is next week an overthrow of the rulers of Saudi Arabia...or China descends in its old habits of civil wars....then again all economic predictions, models and formula's will be thrown out of the window.

[Alwyn]

So the reasons this cabinet won't be successful yet is because some investments haven't been appoved yet, some laws haven't changed yetand there's a melt down in China? Much the same reasons/excuses as the previous hand selected cabinet then.

[Srikcir]

"Somkid's first priority is to inject money into the system, focusing on the grassroots and small and medium-sized enterprises - a job he aims to complete in the next three months."

He has basically one opportunity to set up 2016 for economic recovery. He can't afford long-term solutions that really go to the fundamental problems of the Thai economy: collapsed domestic consumption, flat or negative exports, and stagnant household income.

Why just three months? Why not 5-8 years that it took Western nations to recover with some on the verge of collapse again?

Because 2016 is probably the last year of the Prayut regime and the dominance of the NCPO. If political conflict eclipses economic success, the regime loses creditability among its commercial supporters. What's the point of giving up power if one must also give up wealth? If 2016Q1 shows no improvement over 2015 FOR ANY REASON, there is likely to be another enforced change in government and Somkid, et al will follow Prayut into retirement.