CPB, land and evictions

There’s an important and long story at Bloomberg on the Crown Property Bureau that deserves considerable attention. PPT won’t summarize it; rather, we highlight some points.

The story is essentially about how the CPB is trying to boost the returns it gets from its vast land holdings in Bangkok. In doing that, it is shifting many of its long-term tenants, including the use of evictions, which is usually a sensitive issue for the CPB – probably the country’s largest landlord – and one they try to suppress as much as possible, to limit the damage to its reputation. That has been relatively easy to do when the reporting was mainly by Thailand’s tame, self-censoring and timid mainstream media.

The story’s headline must evoke collective angst at the CPB: Monarchy Fund Evicts Elderly to Boost Profit in Bangkok Renewal. The CPB self-portrayal as an altruistic outfit that keeps rents low and supports communities is smashed as it plans to build condominiums to “boost returns and regenerate Bangkok with its first commercial development project.”

The CPB’s attacks on the elderly and poor are part and parcel of its decision to “shift to build commercial properties, instead of just leasing land to private developers…”. According to the report, the CPB “earned income of at least 11.1 billion baht last year. Of that, rental income provided 2.7 billion baht…”.

This move to boost income from property is justified by apologists who keep to the CPB’s mantra of a paternalistic landlord. Others, like Chan Bulakul, CEO of The Brooker Group, say, apparently without flinching: “This is not a profit-maximization organization, but they have to survive…”. With assets of around US$41 billion, “survival” hardly seems the right term, unless succession exposes the CPB to looting or worse.

Members of the royalist elite like the Democrat Party’s former finance minister Korn Chatikavanij, is totally dismissive of the poor tenants:

All resources within the country should be put to the best social and economic use…. For property which is obviously in commercial areas, or is already being used commercially, for the crown to expect commercial returns from other people using those properties is perfectly reasonable.

Of course, critics of the CPB are hampered by the lese majeste law and the fact that it is never required to be transparent. Academic Kevin Hewison says: “Because it is opaque, we know little about how its profits support the monarchy and the royal family.” If the CPB is opaque, the Privy Purse Bureau is an impenetrable secret space.  An insider states: “The extent of the Privy Purse’s landholdings and revenue are unknown … because they aren’t disclosed…”.

The king’s personal holdings are said to:

include shares valued at $63 million in companies including Minor International Pcl (MINT), Thailand’s biggest hotel operator, which runs local franchises for Burger King Worldwide Inc., according to data compiled by Bloomberg. Privately held land includes the sites of Siam Paragon and Siam Center malls in central Bangkok.

The report also notes that the royal family rakes in taxpayer funds, with the government having:

allocated 7.4 billion baht in tax money to fund travel, security, development projects and agencies related to the palace in the fiscal year ended Sept. 30, a 10 percent increase from a year earlier, according to the budget.

Royalists dismiss calls for transparency. In doing so, they make some bizarre claims: “You cannot go into the bedroom of the king…. This is unlike in the U.K. — you can take the picture of the naked someone in the palace. That’s not our culture.”

In fact, naked pictures have been taken in a palace and circulated, more than once. Another culturalist apology crashes and burns….

Apparently related to this very fact of naked picture related issues, the challenge for the CPB, apart from simply filling bigger bags of cash,  is that “operations would change under a different monarch.” This seems to amount to “unforeseen events.”