Korn frets over risk of zero-growth economy

[webfact]

Korn frets over risk of zero-growth economy
By WICHIT CHAITRONG 
THE NATION

 

File photo : Korn

 

BANGKOK: -- FORMER finance minister Korn Chatikavanij is more troubled by the country’s sluggish economic growth rather than the prospects for a repeat of the Asian financial crisis that broke out in 1997.

 

Korn expressed his concerns about persistently low economic growth at a forum yesterday that marked the 20th anniversary of the crisis. 

 

The economy has been ex-|panding at a rate of about 2-3 |per cent over recent years, compared with the expansion of about 10 per cent seen before the crisis flared up.

 

Thailand could potentially suffer a sustained period of no growth that had been experienced in some African countries and which entrenched widespread poverty, Korn told the forum, which was hosted by Infinity Global Investors.

 

Korn, who was finance minister from 2008 to 2011, said the country faced a loss of competitiveness due to factors such as the low skills of the workforce, a poor education system and a squeeze in exports from trade rivals.

 

While Korn noted that the government’s Thailand 4.0 technology vision is aimed at supporting innovative industries, he said there may not be sufficient people capable of contributing to these sectors. “Has anyone asked farmers if they are ready to switch over?” Korn said.

 

Only relatively few people will be able to take advantage of the new government policies, he said. 

 

Government investment in infrastructure projects makes up only a part of the whole economy, he told the forum. The former minister cited demographic changes in Thai society as key concerns. The ageing of the population that will coincide with shrinkage in the ranks of those of working age will be a negative factor felt over the next 20 years.

 

The ratio of working-age people to seniors is 4:1; the ratio will be 2:1 in the next 20 years. Social welfare costs will rise significantly, putting great pressure on the government budget, he said.

 

Korn also expressed concern over the impact of what he describes as the vast liquidity in the global system.

 

“How is that Argentina over |the past few weeks could sell government bonds with 100 years of maturity with coupon rate of 8 per cent?" he said. Investors oversubscribed to the bonds to the tune of four or five times the amount of debt issued.

 

This market response suggests that too much liquidity is available in the market and investors are too willing to take on risks, he noted. Over the past 200 years, Argentina has defaulted on its eight times, he said.

 

Korn warned that the massive injections of funds into the mar-kets by the central banks in |Japan, Europe and the United States could lead to a global financial crisis. “It might be the most severe crisis the world has ever seen,” he said.

 

He pointed to what he called a weak spot in Thailand’s financial markets, with the Deposit Protection Agency holding only a small amount of funds to protect bank depositors in the event of an emergency.

 

Meanwhile, former central bank governor Prasan Trairatvorakul warned that the next crisis could come in a different form to the 1997 crisis, so the country should not be complacent.

 

Source: http://www.nationmultimedia.com/news/business/EconomyAndTourism/30319182

 

-- © Copyright The Nation 2017-06-27

[darksidedog]

50 minutes ago, webfact said:

the country faced a loss of competitiveness due to factors such as the low skills of the workforce, a poor education system and a squeeze in exports from trade rivals.

The neighbouring countries are improving their education systems way faster than Thailand, so the competition is going to get much tougher. Thailand runs a real risk of slowed growth if it can't keep up.

[HiSoLowSoNoSo]

3 minutes ago, darksidedog said:

The neighbouring countries are improving their education systems way faster than Thailand, so the competition is going to get much tougher. Thailand runs a real risk of slowed growth if it can't keep up.

True, and investors are not very confident in investing in a country run by a military junta.  

[Smarter Than You]

What was the reason for the coup?

To ensure the continuation of policies that..."Only relatively few people will be able to take advantage of the new government policies, he said."

[mikebell]

1 hour ago, HiSoLowSoNoSo said:

True, and investors are not very confident in investing in a country run by a military junta.

With a corrupt police force who view foreigners as milch cows.

[halloween]

23 minutes ago, Smarter Than You said:

What was the reason for the coup?

To ensure the continuation of policies that..."Only relatively few people will be able to take advantage of the new government policies, he said."

Continuation from what? These are new policies.

[yellowboat]

2 hours ago, webfact said:

“Has anyone asked farmers if they are ready to switch over?” Korn said.

Yes, they are not.  Besides farmers thinking it is some sort untrustworthy voodoo, the radios needed for soil monitoring are illegal in Thailand. 

[Smarter Than You]

26 minutes ago, halloween said:

Continuation from what? These are new policies.

Continuation of policies that benefit the few over the many, the policies that unelected Thai governments have been enacting for decades, the policies that have created such enormous levels of inequality in Thailand, the policies that keep the Red Bull kid out of jail, the policies that had 17,000 unnecessary infant deaths per year due to lack of access to health care... do keep up sunshine.

Edited June 27, 2017 by Smarter Than You

[klauskunkel]

2 hours ago, webfact said:

Korn warned that the massive injections of funds into the markets by the central banks in Japan, Europe and the United States could lead to a global financial crisis.

Korn has received the news from 10 years ago.

[williamgeorgeallen]

3% growth for thailand is excellent. new zealand is going through a boom with 3.5% growth. things must be going well in thailand since i left last year.

[sungod]

8 hours ago, HiSoLowSoNoSo said:

True, and investors are not very confident in investing in a country run by a military junta.  

Dont you believe that. Investors dont care who runs the country as long as there is some stability.

[Smarter Than You]

3 minutes ago, sungod said:

Dont you believe that. Investors dont care who runs the country as long as there is some stability.

http://www.straitstimes.com/asia/se-asia/foreign-investment-plummets-78-in-junta-ruled-thailand

[sungod]

2 minutes ago, Smarter Than You said:

http://www.straitstimes.com/asia/se-asia/foreign-investment-plummets-78-in-junta-ruled-thailand

Cant argue with that,

 

Nor with the' lost decade'

[halloween]

6 hours ago, Smarter Than You said:

Continuation of policies that benefit the few over the many, the policies that unelected Thai governments have been enacting for decades, the policies that have created such enormous levels of inequality in Thailand, the policies that keep the Red Bull kid out of jail, the policies that had 17,000 unnecessary infant deaths per year due to lack of access to health care... do keep up sunshine.

Only you could read that from Thailand 4.

 

BTW Thailand has a problem with ASSET ownership inequality. Income inequality is about world average and better than the US. But the BS sounds better when you keep it vague, right. https://en.wikipedia.org/wiki/List_of_countries_by_income_equality

[Smarter Than You]

14 minutes ago, halloween said:

Only you could read that from Thailand 4.

 

BTW Thailand has a problem with ASSET ownership inequality. Income inequality is about world average and better than the US. But the BS sounds better when you keep it vague, right. https://en.wikipedia.org/wiki/List_of_countries_by_income_equality

Me ... and Korn -  "Only relatively few people will be able to take advantage of the new government policies, he said."

 

It is just plain silly to persist in denying Thai inequality.

Forget the evidence below, just go look outside your window.

 

 

http://www.nationmultimedia.com/news/national/aec/30243892

[halloween]

3 minutes ago, Smarter Than You said:

Me ... and Korn -  "Only relatively few people will be able to take advantage of the new government policies, he said."

 

It is just plain silly to persist in denying Thai inequality.

Forget the evidence below, just go look outside your window.

 

 

http://www.nationmultimedia.com/news/national/aec/30243892

"Only relatively few people will be able to take advantage of the new government policies, he said."    He was talking about education levels. Availability of good paying hi-tech jobs is an incentive for further education.

 

I am writing to the CIA and the World Bank right now to tell them how wrong they are about income equality. I'll forward the response.

[Smarter Than You]

16 minutes ago, halloween said:

"Only relatively few people will be able to take advantage of the new government policies, he said."    He was talking about education levels. Availability of good paying hi-tech jobs is an incentive for further education.

 

I am writing to the CIA and the World Bank right now to tell them how wrong they are about income equality. I'll forward the response.

He is talking about the Junta investing in "Thailand 4.0" is not going to address Thailand's problem of 15 million unskilled workers.

It will probably be wonderful for the children of the middle class but not so great for the future of the nation.

The money can be better spent in ways to benefit the many, not the few.

 

Both the CIA and the World Bank will laugh at you when you ask them to confirm there is no inequality in Thailand.

 

"In Thailand, the richest 20% make almost 60% of the income, the highest among Indonesia, Laos, Malaysia, the Phillippines and Vietnam in 2009. In addition, the poorest 20% garnered only 4% of the income, also the lowest among the group." 

"He said Thailand fared poorly on its income gap compared to other countries, on par with troubled Latin American countries like Mexico, Argentina and Columbia."

 

Inequality and Politics in Thailand – Kyoto Review of Southeast Asia

Edited June 27, 2017 by Smarter Than You

[HiSoLowSoNoSo]

1 hour ago, sungod said:

Dont you believe that. Investors dont care who runs the country as long as there is some stability.

So why is the FDI down 80%?

[Oleg57]

Allow foreigners to hold land under 50 years lease and to own companies in Thaland. And money will flow to the country.

Edited June 27, 2017 by Oleg57

[Redline]

13 hours ago, webfact said:

Korn, who was finance minister from 2008 to 2011, said the country faced a loss of competitiveness due to factors such as the low skills of the workforce, a poor education system and a squeeze in exports from trade rivals.

Not faced~the problem is bad now, and about to become critical.

Edited June 27, 2017 by Redline

[sungod]

22 hours ago, HiSoLowSoNoSo said:

So why is the FDI down 80%?

Sure, In Thailand's case and the 'lost decade' it mentions, cant argue with that.

 

Vietnam's one party system seems to be doing well though.