CP’s power

Thai Enquirer has taken a look at CP with an op-ed entitled “Exploring the close ties between Thailand’s CP Group and the Chinese Communist Party.”

Recently said to be worth over $30 billion, up $3 billion over 2020,* CP and its Chearavanont family are Thailand’s wealthiest, after the monarch, and “CP’s domination of the Thai economy continues to grow…”. Its political influence is legendary.

Its growth has much to do with expansion in China since 1978, so that focus in the Thai Enquirer article is worth reading.

*The article is in error on wealth accumulation.

Wealthy winners

With some of the rich in the news of late, it is timely that Forbes has released its annual list of Thailand’s wealthiest. Forbes includes 50 on its list, and PPT shows the top ten.

Recent news has the top tycoons, CP’s Chearavanont family, yet again denying “any involvement in the government’s procurement of the Sinovac Covid-19 vaccine from China.” This came after cabinet’s decision last Tuesday “to procure 10.9 million more doses of Sinovac at a cost of 6.1 billion baht.” The report has CP stating:

Charoen Pokphand Group once again insists the Sinovac vaccine procurement is conducted in a government-to-government (G2G) format only, which has nothing to do with CP either directly or indirectly….

The Bangkok Post report neglects to recall CP’s role in the company producing the vaccine, via CP’s Sino Biopharmaceutical. Given the tight links between the regime and the top tycoons, including the Chearavanont family, we can only wonder about the claims made and those denied.

And, of course, PPT has recently posted on the Yoovidh­ya family, who rank second, and their runaway scion and the efforts to (further) corrupt the justice system for the wealthy.

As usual, the Forbes list leaves out the fabulously wealthy monarch. We estimate his wealth as about double that of the Chearavanont family.

Comparing the most recent Forbes list to earlier data, it is seen that the wealth of the top 5 is not back to their 2018 high. However, the top 5 has increased by $13.6 billion over 2020. As for the top 10, they also remain below their 2018 high, but have added $15.5 billion over 2020.

This is in a context where per capita GDP declined between 2019 and 2020 by 6.3%. And, we’d guess it might also decline in 2021.

Virus failure

Readers may recall that, a couple of days ago, in posting on military budgets, we observed that key supporters of the current regime were Sino-Thai oligarchs and their conglomerates. They are handsomely rewarded for their loyalty to military and monarchy.

As we noted then, several times already this group has come to the rescue of Gen Prayuth Chan-ocha’s regime, most recently offering more virus help to the government in a mass rollout of Covid-19 vaccination from June. Special mention made of billionaire Dhanin Chearavanont’s Charoen Pokphand Group.

Clipped from The Rand Blog

With the developing virus cluster around Klong Toey, it is reported that Charoen Pokphand Group (CP) has “launched a mass vaccination scheme to support the government…”.

The conglomerate has “set up a mass vaccination facility at Lotus Rama IV, aimed at vaccinating at least 1,000 people per day, said Suphachai Chearavanont, CEO and executive chairman of CP Group.” This will go on for a couple of weeks

This is described as “a model of collaboration among the private sector, social activists, and state agencies to minimise risks and curb the outbreak…”.

Rather, it is a statement of the regime’s vaccine rollout failure, bedrocked in the king’s “vaccine” company. More than this, as Gen Prayuth Chan-ocha gave himself total control and authority over the virus response, it is his personal failure.

Of course, CP is also a vaccine company, owning a Chinese producer. Can we assume that the vaccine it is using is from its own stocks?

Military, dictators, and money

There’s a story at something called the Atlas Institute for International Affairs which sounds very 1960s and argues that militaries kept “fed” with taxpayer funds don’t intervene politically. This long discredited notion is in part based on work on Thailand. The fact that coups in Thailand bear no relationship to that military’s ability to grab loot from the taxpayer should alert the authors. Think of “self-coups,” coups against military leaders and other rightists, and, most recently, the coup against Yingluck Shinawatra, when spending on the military increased.

That said, there’s no doubt that Thai military leaders love kit and money. One graph in the Atlas story demonstrates how the military has benefited by sucking the taxpayer of the people’s money.

What is clear, is that following the 2006 and 2014 coups, the military has been rewarded and the taxpayer filched. We might also observe that military and military-backed regimes also shovel taxpayer funds to their ally, the monarchy.

The other group that does well following military political interventions is the Sino-Thai capitalist oligarchy and their conglomerates. They get to such at the taxpayer teat via the contracts and concessions doled out by the regimes that reward their loyalty to military and monarchy.

Several times already this group has come to the rescue of Gen Prayuth Chan-ocha’s regime. And as Prayuth’s mafia coalition struggles with the virus, once again, Thailand’s top business groups “offered to join the government in a mass rollout of Covid-19 vaccination from June as the Southeast Asian nation grapples with its worst coronavirus outbreak since the pandemic began.”

Gen Prayuth’s faltering vaccine “strategy” has the support of “the Thai Chamber of Commerce, the Thai Bankers Association and the Tourism Council of Thailand,” with special mention made of “[b]illionaire Dhanin Chearavanont’s Charoen Pokphand Group and VGI Pcl…”. VGI is the profitable advertising arm of the Skytrain enterprise owned mostly by the Kanjanapas family.

It seems that these groups plan to not only prop up the regime, but the king’s vaccine company as well:

Thai owners of malls, commercial real estate and industrial parks will provide spaces for vaccination camps once the country receives more vaccines from June, while other businesses will assist in distribution and logistics, communication with the public and procurement of more doses….

The Bangkok Post – which is interlinked with the conglomerates through directors and major shareholders – manages to come up with the outlandish claim that, like frontline health workers, the “men in suits turn saviours,” joining “medical heroes in trying to give [the regime’s] slow vaccination drive a shot in the arm…”. These are, it claims, “a crop of saviours stepping out of their boardrooms to rally behind vaccine procurement and national vaccination efforts…”.

Observing that the “country’s economic powerhouses are being seen as an emerging sturdy force that can help prop up the government…”, the Post doesn’t acknowledge that, so far, they haven’t actually done anything apart from prop up their regime.

Of course, more vaccination is also good for business, so the tycoons are in a win-win-win situation. And, propping up the Gen Prayuth and his limping regime of hucksters, criminals, and thugs, guarantees profits, concessions, and contracts.

Money greases a lot of wheels, but the benefits flow mostly to military, money, and monarchy.

Protecting CP

PPT has posted several times on the relationship between Gen Prayuth Chan-ocha’s regime and the biggest, richest Sino-Thai tycoons (here, here, here, here, and here).

Khaosod reports on yet another “bonus” provided to the already hugely rich. It states that Bangkok’s health officials “omitted references to a convenience store chain owned by one of Thailand’s largest corporations when publishing coronavirus patients’ travel history ‘due to legal concerns’.”

In a remarkable turn of events, Siriporn Thongphu, an officer at Bangkok Metropolitan Administration’s infectious control division, said: “We have representatives from the legal department to review the travel history of patients before announcing them…”.

The result is that the travel history of a virus infected person was wiped of a trip to one of CP’s thousands of 7-Eleven convenience stores.

CP All, the operator of 7-Elevens rehearsed its PR:

The company said there is no report of anyone contracting the virus from its 7-Eleven stores to date. Bangkok has about 4,500 branches of 7-Eleven, according to available information.

“Customers only spent a few minutes in our stores, so there’s very low risk of infection,” the statement said. “However, we have instructed our staff to disinfect all the surfaces every three hours to ensure safety of our customers.”

Khaosod states:

The practice of scrubbing any mention of 7-Eleven stores seems to be exclusively adopted by Bangkok authorities, since travel timelines of coronavirus patients published by provincial agencies outside the capital explicitly mention names of each establishment visited by the individuals, including 7-Eleven.

But here’s the rub: CP has made a fortune during the virus crisis, not least because its thousands of convenience stores were permitted to stay open when almost everything else was closed. CP gets special treatment from the junta/post-junta.

Prayuth’s poverty regime

A story in the Bangkok Post reports that Jinanggoon Rojananan, deputy-secretary general of the National Economic and Social Development Council (NESDC), “11.4 million households are at risk of falling into poverty from the economic crisis caused by the pandemic, with the unemployment rate rising…”.

Today, there “are 637,000 households dependent on public and private financial assistance” with 467,000 of them reporting lower incomes today. These “households work in sectors that are more prone to job losses such as tourism or self-employment.” Jinanggoon claims that poverty fell between 2018 and 2019.

That poverty is claimed to have decreased between 2018 and 2019 may not be a huge surprise as the junta poured money into “buying” votes through all kinds of programs it once lambasted as “populist” or as “policy corruption.” But Jinanggoon seems to be warning of a dire downturn in 2020.

But the story of the Gen Prayuth Chan-ocha regime over several years needs to be told. Back in March, the World Bank reported:

Between 2015 and 2018, the poverty rate in Thailand increased from 7.2 percent to 9.8 percent, and the absolute number of people living in poverty rose from 4.85 million to more than 6.7 million. The increase in poverty in 2018 was widespread – occurring in all regions and in 61 out of 77 provinces. In the Central and Northeast, the number of poor increased by over half a million in each region during the same period. The conflict-affected South became the region with the highest poverty rate for the first time in 2017.

In suggesting why these increases in poverty have occurred, the World Bank states:

The population at the bottom 40 percent of the income distribution is not sharing as well in prosperity, and in the recent period of 2015-2017, consumption and income growth in this bottom 40 percent were negative. The reversal in trend among this bottom 40 during this period is related to declines in all forms of labor incomes, including a stagnation in wage growth and declines in farm and business incomes.

The full report can be downloaded as a PDF. For an academic discussion of this report and its implications, another PDF is available.

Meanwhile, some of the filthy rich are doing well, with CP having a massive rise in profits.

A winner!!

Remember when The Dictator-cum-Prime Minister Gen Prayuth Chan-ocha was babbling about getting help from Thailand’s richest tycoons? Remember the sclerotic ideas he received from some of the tycoons? Charoen Pokphand’s patriarch was one who proposed ideas that served CP’s interests.

Perhaps to the surprise of many, in the era of virus economic crisis, CP has done very nicely. Khaosod reports that: “Charoen Pokphand Foods PLC (CPF) reported Baht12,139 million in net profits in the first half of 2020, a jump by 45% from the corresponding period a year earlier…”. It reported increased sales, including in Thailand.

Even in a crisis where there are so many who have lost so much, there are winners.

The tycoons and the regime

In what looks like one of its regular paid adverts masquerading as news and called “PR story,” the Bangkok Post has an account of Chia Tai, a CP family company. It “reports” a recent “volunteering activity under its ‘Chia Tai Volunteer Project’ corporate social responsibility initiative whereby its staff join forces to make a difference in the community during the crisis.”

We guess this is yet another PR activity associated with Gen Prayuth Chan-ocha’s call to the country’s billionaires for support in responding to the enormous economic downturn associated with the virus crisis. CP has been doing pretty well during the crisis. So have others in the ranks of the giant conglomerates, so the PR seems like a political strategy.

This CP PR exercise involves the distribution of food boxes in communities surrounding Chia Tai Headquarters on Sukhumvit 60. Interestingly, it is said to be “supported by Phrakhanong District Office and Internal Security Operation Command (ISOC)…”.

As part of the embedding of the military in society, ISOC seems to be everywhere.

We can’t say for sure how far the mutual back-scratching between company, military and regime goes, but CP has done pretty darn well, soaking up state funds and helping itself. And there’s probably much more to come.

For example, the Bangkok Post recently reported that the “Industry Ministry is planning 1.9 billion baht in spending to help farmers and small and medium-sized enterprises (SMEs) as part of a 10-billion-baht pandemic relief proposal submitted to the National Economic and Social Development Council.”

Farmers, right? Well, not really. Industry Minister Suriya Juangroongruangkit said his ministry wants to “develop the whole agricultural industry from upstream to downstream production…”. The biggest beneficiary is likely to be CP’s Chearavanont family, one of the country’s largest landowners and long pushing for a more industrial-style agriculture.

The latter is being taken up by the regime in yet another virus crisis spend: “projects to cultivate sustainable growth include a 16.05-billion-baht project to develop five million rai covering 5,450 large-scale farms. The aim is to implement more machinery on large-sized farms to increase the value of production by about 11 billion baht a year.” And this is packaged among a bunch of state splurges said to be about promoting the dead king’s trite “New Theory”-cum-sufficiency economy, in the “agriculture sector which will cover a total of 240,000 rai.”

The mantra for sufficiency economy is as meaningless as it has ever been, but it polishes the royal family posterior and allows the regime to trumpet its “loyalty.” The importsant thing seems to be that the tycoons rub the regime’s tummy and the regime scratches the tycoons’ collective back. And, the taxpayer coughs up the loot.

Gorging on state funds

Reading the media the past couple of days and we feel like the regime, its ministers and its buddies are engaging in gluttony, seemingly gorging on state coffers.

One deal we posted on them recently got more press coverage:

The Eastern Economic Corridor (EEC) Office’s Eastern Special Development Zone Policy Committee yesterday signed the [290-billion-baht] deal with winning concessionaire, U-Tapao International Aviation Co, an offshoot of the BBS Joint Venture that won the bid to develop the “aeropolis” in Ban Chang district of Rayong Province….

…[T]he BBS Joint Venture comprises Bangkok Airways, which owns 45% of the shares, BTS Group Holdings which owns 35%, and Sino-Thai Engineering and Construction (STEC) which owns 20%.

So we can identify two conglomerates involving two of the countries wealthiest Sino-Thai tycoons – the Prasarttong-Osoth family at Bangkok Airways and the Kanjanapas clan at BTS. It was Forbes lister Prasert Prasattong-Osoth giving advice to Gen Prayuth Chan-ocha recently. It seems advice doesn’t come cheap. Then we have Sino-Thai Engineering and Construction:

Interesting. But what can we expect from people who are used to having with state officials in their pockets.

Then we saw that idea from convicted heroin smuggler and Deputy Agriculture Minister Thammanat Prompao for seizing land  illegally occupied by resorts and hotels, and then renting it back to them. Brilliant! Thammanat is already a baht billionaire and this looks like a surefire way to double money and pay for more of his big brother’s parliamentary seats and maybe even some watches. A Bangkok Post editorial commented that the scheme “is so outrageous that it should be dropped immediately…”.

And what about the news that the “Finance Ministry is ready to consider retail operators’ proposal for tax breaks on shopping to stimulate domestic spending…” with 50,000 baht per shopper! Now, who could that help most? We suggest it would throw shiploads of money into the big retailers, like the Chirathivat and Umpujh clans who are also Forbes listers.

It also potentially helps out the royal family and specifically Princess Sirindhorn, a member of the country’s wealthiest family that already scoops up billions in taxpayer funds. It was Chadatip Chutrakul, chief executive of majority royal-owned Siam Piwat Co, the operator of Siam Paragon, Siam Center and Iconsiam, that “said the government should come up with measures to compel people to leave the house and spend more.”

Happy to grab more loot

An academic once calculated that Princess Sirindhorn’s shareholding in Siam Piwat provided more than US$55 million per year from her property in the Siam-Ratchaprasong alone. She may be a bit short this year, so the state purse becomes a surrogate source of wealth.

Such “private” deals seem to be gathering pace under the virus crisis and rehabilitation plans. Recall how just a few weeks ago, the biggest of the business whales, multi-billionaire Dhanin Chearavanont was urging the regime to turn the country into a ‘safe haven’ for wealthy visitors.” His wish seems to be the regime’s command, with Tourism Minister Phiphat Ratchakitprakarn declaring that the “government’s tourism-revival strategy is to target big spenders seeking privacy and social distancing in the Covid-19 era, rather than try to attract a large number of visitors…. He added that the virus “provides an opportunity to reset the sector, which had become reliant on Chinese groups and backpackers…”. With 11 million Chinese tourists in 2019 and a total of almost 40 million, it seems there’s a determination to crush most of the industry and all that flows from it to every other part of the service sector, which before the virus accounted 46% of total employment and 57% of GDP.

And, these “private” deals are being institutionalized, with the regime reviving a Prem Tinsulanonda-era idea, agreeing with the private sector “to revive the Joint Public-Private Consultative Committee (JPPCC) as a core forum for the two to work together on solutions for the country’s social and economic rehabilitation after the pandemic.” That was first suggested a year ago but looks increasingly likely to become a processing terminal for turning state funds into private gains.

Finally, we may have missed the announcements, but it seems that the long-delayed contracts for the Sino-Thai high (probably medium) speed railway are being doled out. If the reporting is right, it suggests smoke-filled rooms and cosy deals. We quote the Bangkok Post:

SRT governor Niruj Maneepun yesterday told the media that Contract 2.3 is worth 50.6 billion baht, which includes funds for the railway system, rolling stocks and staff training….

The signing of the contract will be carried out in October as planned, Mr Niruj said.

Contract 2.3 is one of seven railway contracts worth a total of 179.4 billion baht for the Bangkok-Nong Khai High-Speed Train Project. Contract 2.3 would cover the project’s first phase, which is a 253-kilometre stretch from Bangkok to Nakhon Ratchasima….

The construction for the whole project has been ongoing since 2018 and it is expected to finish in 2023. [In fact, very little construction has occurred, apart from a very short section near Nakhon Ratchasima.]

So far, the SRT has said the project is making progress, noting it is finding contractors to develop all seven phases. It said a few have already agreed and signed some of the contracts.

That doesn’t look like open tendering, not that such systems stand in the way of the transfer of funds to private sector cronies and giant corporations.

(Some) winners and (lots of) losers

The South China Morning Post reports on what looks like an ever-increasing gap between the filthy rich and the rest. It begins:

On a roadside in a mixed Bangkok neighbourhood stands a shiny metal box – a “Pantry of Sharing” – where the haves in one of the world’s least equal countries can leave food for the have-nots, the ranks of whom are bulging as the coronavirus lays waste to the Thai economy.

Of course, it is the “maids from the grand mansions” who deliver the scraps for the “pantries.”

The report highlights that stark realities of wealth and poverty in Thailand. There’s research on this, showing how well the big families have done in recent years.

Now, already struggling, the virus and the mix of technocratic and authoritarian measures to control it and the population “is pushing Thailand’s poor deeper into penury.” The report notes that “[t]here are millions of newly unemployed…”.

As the report observes, it is “not just the poor who are facing ruin. Middle-class workers are losing their office jobs, and small and medium-sized enterprises (SMEs) are bleeding cash, with knock-on effects on mortgage, car and school payments.”

Looking at economic data, the report suggests that the economic decline is worse than during the 1997 crisis. It quotes academic Pavida Pananond who says that the hardest hit in the virus crisis “are the low and middle classes…”. She adds: “This crisis will further widen Thailand’s inequality.”

(We wonder if Pavida looked at 1997 data. Back then, the fact is that even the World Bank counted 1 million Thais falling into poverty and the top 20% saw their wealth increase through the crisis, although official Ginis declined, suggesting that the “middle class” suffered.)

The article continues:

Thailand is a country of extremes. Its king is one of the world’s richest monarchs while business monopolies with deep political connections have carved extraordinary wealth for family empires spanning from beer and duty-free to shopping malls.

The country has 57 billionaires, according to the 2020 Hurun Global Rich List, the ninth most in the world with a combined wealth of US$135 billion – more than Singapore, Japan or France.

Only China and India boast more billionaires in Asia, according to the list by the Shanghai-based publishers.

It’s raining money

Commenting on Gen Prayuth Chan-ocha’s “unprecedented plea for the tycoons’ help to float the economy and head off potential discontent…”, Pavida observes the quid pro quo: “Prayuth’s appeal for help “offers these tycoons direct opportunities to do favours for the government…”. She adds: “These tycoons know better than most what political favour can do for their businesses.”

But, as the report notes (as PPT has too), “most  the billionaires have so far offered little…”. Their “advice” has been self-serving and their funds limited and often building their own enterprises.

It goes on to observe that CP’s patriarch Dhanin Chearavanont, ignoring galloping unemployment asked for an open door for “foreign expertise.” He said, “Thailand needs around five million world-class talents to teach and lead Thais…. Give them Thai nationality to incentivise these great brains…”. We assume he means Chinese “talent.”

Forget fake  “Thai-ness” and “contributing to Thai society.” Dhanin wants more for his family and companies. His position is little different from that exhibited by the rest of the filthy rich.