The headline of a story at The China Post, with its origins in The Nation, is “Thailand ‘cronyism’ tops list of concerns among global investors.” That would suggest that some kind of survey had been completed and that cronysim was nominated by a significant number of foreign investors as a concern for Thailand.
In fact, the story is about one investor, Marc Faber, and the story’s headline at The Nation was more accurate: “Financial guru Faber knocks Thai ‘cronyism’, pledging scheme.”
It turns out that the “[w]orld-renowned investment guru” has discovered that “the Thai government has appointed people connected to former Prime Minister Thaksin Shinawatra.” Has he been walking around with his eyes shut? Has he not noticed that every Thai government does this? Think of the military junta appointing its government and filling all conceivable slots with its cronies. Faber mentions “Thai (Airways) International,” as an example of Thaksin cronies being appointed. Did he not notice the Democrat Party-led government do the same thing at Thai Inter? Didn’t he notice that the military also intervenes at Thai Inter?
Of course, that all do it doesn’t make it good and right, but where has Faber been until now?
He adds that: “Thailand is unlikely to be a dynamic economy. It’s not going to be like South Korea or Taiwan. In the long run, it could easily grow at 4-5 (percent) per annum for the next 10-20 years unless the whole global economy collapses.” Just to add to the gloom and doom he is famous for, Faber predicted “the entire financial sector was vulnerable to a setback…”. But then he talks up Thai banks and property.
Back in 2009, Faber was quoted at Bloomberg in a story about the health and likely demise of the king:
Publicly traded companies in Thailand are trading at just 11 times estimated 2009 earnings, making them the second- cheapest in Asia after Pakistan. They currently offer a dividend yield that averages 4.7 percent compared with 3 percent for U.S. stocks and as little as 1 percent for Chinese equities, according to data compiled by Bloomberg. That makes Thailand a buy, says Marc Faber, who manages $300 million in Asian shares at Hong Kong-based Marc Faber Ltd….
“I can get here relatively recession-resistant businesses that are well run with a dividend yield of 6 percent or 7 percent,” says Faber, publisher of the Gloom, Boom & Doom Report, who has been buying shares in Thai banks and food producers this year. “If you buy good businesses, it would be most unusual if you did not make good money in 5 or 10 years. And with these dividends, in Thailand you are paid to wait.”
Of course, many of those businesses are run in crony capitalist style by Sino-Thai tycoons who play fast and loose with their companies, workers and shareholders. At the same time, following the 2011 floods, he was more optimistic when cited at Bloomberg:
Investor Marc Faber is more optimistic. He says he doesn’t expect the floods to have any impact on Thailand’s long-term prospects…. In 2000, Swiss-born Faber, who oversees $300 million at Hong Kong-based Marc Faber Ltd., moved his family home to Chiang Mai, a 1,000-year-old walled city 700 kilometers (435 miles) north of Bangkok…. In October, floods seeped into the teak house he built on the banks of the Ping River. Faber, 66, publisher of the Gloom, Boom & Doom Report, says he’ll continue to invest in Thailand…. “Some companies will have second thoughts about expanding their Thailand operations, but the majority will continue to operate here,” he says.
Gloom may be warranted, but so is consistency in claims and clarity of political vision.