Korn on military spending but not electoral buying power

7 03 2011

For those who enjoyed the first part of Asia Provocateur’s interview with Finance Minister Korn Chatikavanij, the second installment is now available.It is a long interview, so PPT just highlights bits and pieces from Andrew Spooner’s blog.

On food security and prices and the challenge for the Democrat Party: “From my perspective the high cost of living is a big issue…. Actually, the people who are hurting more are the urban dwellers and consumers, who don’t have the benefits derived from higher food prices. That is problematic as it is also the Democrat Party’s support base. So it is a challenge for us.”

Korn adds that the government has “scaled back on our spending programmes, which is consistent with our plan to achieve budget balance in five years.” PPT wonder what impact the huge pre-election spending is having on the budget bottom line. Korn speaks about the “oil fund” saying that, when the interview was conducted it had a surplus of 27 billion baht. Estimates are now that it will be drained by April.

Korn goes on to mention the government’s Pracha Wiwat program, saying “… all of it is address the quality of life issues that have been raised as a reason for social division and to strengthen the grassroots economy…”. He also comments on social spending spurring demand. The unmentionable is influencing the election outcome.

Like Abhisit, Korn likes to claim: “We did something that wasn’t done before.” IOn this case he is referring to flood relief, where he says: “We wanted to ensure that everything was received by the individual recipients with no leakage along the way.” Maybe Korn has forgotten this. And what could be done about corruption when the Minister doesn’t know the figure for this huge program?

Referring to the reported level of investment in the Pracha Wiwat programme of 2 billion baht (US$65.6m) a year…

That’s totally wrong. It’s more. Well, that’s right for the first year anyway.

Well the Bangkok Post state that it is 2 billion baht.

Okay, okay. Roughly.

Spooner then asks this really neat question:

And I am referring to the level of Pracha Wiwat investment in this next question as it seems quite a surprising state of affairs to an outsider such as myself when set against payments in other areas. For example, when we consider the amount of money put aside to spend on Privy Council president General Prem Tinsulanonda’s new cavalry unit in Khon Kaen, which costs 70 billion baht (US$3.3bn), equivalent to 35 years of the Pracha Wiwat welfare programme, and a military project that some commentators consider to be something of an unnecessary vanity project, I must wonder, and speaking very much as an outsider on this issue, but also having observed other grandiose spending, is military spending out of control in Thailand? And, given all the reforms and changes you are talking about, when are Thais going to be able to ensure they get the best value for money from their military? Setting 2 billion baht against the military spending seems very small.

Korn gets back to his comment above:

Pracha Wiwat is just a sliver of what we do in terms of welfare. Income guarantee for farmers is over 40 billion baht. Free education is another 30 to 40 billion baht. We pay 500 baht to elderly people who don’t have a pension that, again, is tens of billions of baht.

So that’s annually up to 150 billion baht plus tens of billions to the elderly. Korn gives these figures as a defense of the claim that welfare amounts to a sliver of what the military has been paid.

Korn then turns to the military part of the question. The Finance Minister states: “I have no idea about the Khon Kaen thing.” This would seem to imply that the military gets its piles of money and uses it with no oversight from the government.

He adds:

The less money we need to spend on the military the better…. But … of course we need to have a military, then they need to be properly equipped. And on that basis we need to be willing to spend money to ensure that we’re getting the best value from our military.

Yes, Minister, but how can you get “best value for money” if you have “no idea” what they are doing with their budget? And what of failed zeppelins, “lost” arms, GT 200s and so on?

Finally Spooner  asks about Map Ta Phut, environment and development. Korn essentially says on Map Ta Phut: “We solved it in a timely manner and in a very democratic manner…”. PPT isn’t at all sure the issue is “solved.”

Strikingly, Korn adds:: “The reason the country is spending quite a lot of money in helping Myanmar (Burma) develop, for example at the new port city of Tavoy, is because that is where our industrial growth is likely to be in the future and not within Thai borders.” While it is understood that this is Thai policy, it hasn’t been so clearly expressed. Move polluting and dangerous industries to other, neighboring countries. Charming idea.

It is a very useful interview and Korn seems pretty relaxed. We wish he’d been asked about elections and government spending.





Looking west (or north)

15 01 2011

There’s a long and interesting article on the developmental prospects for Tavoy/Dawei in Burma in The Irrawaddy, authored by Htet Aung, that readers might like to link with our earlier post on this project here, here and here.

Tavoy today

The article is about Burma “seeking to become Asia’s next miracle economy by establishing a special economic zone (SEZ) in the southern port city of Tavoy.” That’s the  US$8 billion Thai invested project discussed in our earlier posts. The model is said to be “Shenzhen, the first SEZ created as part of Chinese paramount leader Deng Xiaoping’s sweeping economic reforms in the late 1970s.”

The project is said to go back to a memorandum of understanding signed in May 2008, Samak Sundaravej was prime minister of a pro-Thaksin Shinawatra government. However, the first real step was in November 2010, when “Burma’s ruling military regime reached a final agreement with Italian-Thai Development PCL, the Bangkok-based company that was awarded the contract to carry out the project.” The article cites Italian-Thai president Premchai Karnasuta saying that Burma’s military leader “Than Shwe said he wanted this project to be like the Shenzhen economic zone…”.

The article questions the viability of the project on several grounds, and those interested will find these arguments in the article. One of the interesting points made is that Premchai argues that “if Burma’s generals want to see a China-like economic success at home, they will have to take bold step to change the current economic management of the country…”.

Of course, Tavoy/Dawei is going to be heavily dependent on Thailand, and not just for investment. The article suggests that “the chief beneficiary of the Tavoy SEZ could end up being Thailand itself. A dual railway and highway link between Bangkok and Tavoy would increase the importance of the Thai capital in facilitating trade in the Mekong region, while plans to build an oil refinery and coal-powered electricity generating plant in Tavoy would ease environmental pressures on Thailand’s heavily industrialized Eastern Seaboard.” In addition, during the construction phase, because of Burma’s dearth of skilled labor and professionals, many of these positions will “likely be filled by Thais or other foreigners, while Burmese will do most of the unskilled work. Indeed, the abundance of cheap Burmese labor is one of the main attractions for Italian-Thai…”.

A Greenpeace photo of a Map Tha Put protest

One of the main attractions, mentioned above is that Burma may well become a base for dirty Thai industry:

The factories that Italian-Thai will build in Tavoy SEZ include a steel mill, a fertilizer factory, a 4,000 MW coal-fired power plant and a petrochemical complex, including oil and gas storage facilities, an oil refinery, a gas separation plant and a combined cycle power plant.

In Thailand, there has been significant resistance to the construction of such factories on the grounds that they are known to cause a wide variety of serious environmental and health problems. Rather than address these concerns, however, Thai companies now see the Tavoy SEZ as way of avoiding them.

“By moving to Burma, [Thai companies] can leave behind the environmental problems of Map Ta Phut and Rayong courts,” said a recent editorial in The Bangkok Post.

Even Thai Prime Minister Abhisit Vejjajiva has acknowledged this as a major consideration behind the decision to move to Tavoy. “Some industries are not suitable to be located in Thailand. This is why they decided to set up there,” he said in a recent television address.

Tavoy tomorrow?

Finally, the article raise the specter of forced relocation, a task that has always been handled poorly in Thailand and abominably in Burma. It is estimated that some 3,800 households will be relocated. In the past, the Burmese army has “helped out” on relocation. If that happens again, expect condemnation of Italian-Thai.





Royal-invested companies and Burma

15 11 2010

The Bangkok Post has a most useful story on why the Abhisit Vejjajiva regime, and especially its royalist-capitalist wing, has so wholeheartedly jumped into bed with the Burmese regime. It says: “Thai heavy industry is likely to shift to industrial estates in Burma’s western coastal city of Dawei instead of setting up facilities in southern Thailand or Map Ta Phut…”. Map Ta Phut has been a problem for them – including several royally-invested firms.

Just who is likely to invest?  The story says: “Companies planning to invest in a Dawei industrial estate include PTT Plc, Siam Cement Group and the upstream complex of a Japanese steel company.” Both groups have had considerable trouble at Map Ta Phut, so what better way to solve a problem of environment and  “civil society” than to go and invest in Burma, where the military can guard them from all business and political threats, or so they think.

According to the NESDB, “It is quite clear, he said, that more heavy industry cannot be located in Map Ta Phut in Rayong, while the agency’s survey showed residents in the South disagreed with the establishment of an oil refinery and petrochemical complex.”

PPT wonders when they will add the gimmicky ideas about how this is sufficiency economy and good for Thailand… even nationalist? Oops, the latter has already begun: “It is predicted Dawei’s wide-ranging infrastructure project will strengthen Thai competitiveness with improved access to raw materials such as natural gas and ore for the steel industry from the Middle East and South Africa.”

And guess which obedient leader has helped out, yet again? “Prime Minister Abhisit Vejjajiva also sought the support of the Chinese government for the Dawei project on the sidelines of the G20 meetings last Friday, encouraging Chinese companies to set up projects in an industrial estate planned by Thailand’s Amata Corp.”

All so predictable.





Burma as a model for reconciliation

15 11 2010

PPT knows a lot has been written on the release of Burma’s pro-democracy leader Aung San Suu Kyi. We simply note that the Abhisit Vejjajiva government somehow give the impression that they think that the events in Burma are a model for Thailand. This from MCOT News:

The Thai government welcomes the release of Myanmar pro-democracy leader Aung San Suu Kyi from house arrest by the military junta, according to a statement issued by the Thai Foreign Affairs Ministry.

The statement, issued Saturday after the release of the Nobel Peace Prize winner, said her release marked “another important step in the national reconciliation and democratisation process in Myanmar”. It said the Thai government hoped that she will have a “constructive role to play in Myanmar’s nation building process”.

“The Royal Thai government reaffirms its commitment to cooperating with the new government of Myanmar in these endeavours for peace, development and prosperity of Myanmar as well as for the well-being of the Myanmar people,” the statement issued by the Ministry added.

Co-operation for national reconciliation seems to involve forcible repatriation of refugees and business opportunities.

As a variant on the Chinese model, for Abhisit and his regime, a fixed election followed by the release of red shirt leaders might be one of the models they have in mind for an electoral authoritarianism in Thailand.





Protests escalate, stock market up

5 04 2010

BusinessWeek (5 April 2010) reports on the red shirt rejection of demands for them to leave the Rajaprasong area and on the brief and peaceful occupation of a large public area of the government complex at Chang Wattana. Protest leaders claimed that 300,000 red shirts came out for their rally, while the government said 30,000 to 60,000.

Being BusinessWeek, the story notes that the “escalation by protest leaders after three weeks of mostly peaceful demonstrations risks undermining Thailand’s recovery from the first recession in a decade. More disruptions could lead to a downgrade of the country’s credit rating, said Kobsidthi Silpachai, head of capital markets research at Kasikornbank Pcl in Bangkok.” Kobsidthi claims that investors will be heading for Vietnam, but that is a claim that has been made by various analysts long before this series of protests and also relates to Map Ta Phut issues.

“Mostly peaceful” is an interesting term. As far as PPT can ascertain, the demonstrations have been entirely peaceful. There has been the odd scuffle, but nothing major. At the same time, there have been a series of bombs going off, most causing little damage, but no one has claimed responsibility for these.

Then the reports states: “So far the peaceful demonstrations haven’t deterred investment in Thailand, whose benchmark SET index has risen 11 percent since the protests began, the best performance by an Asian benchmark in that period.” That’s worth emphasizing, so PPT added the italics. Minori Uchida, senior analyst in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan’s biggest bank, is reported to have stated: “Thailand’s political situation has been quite unstable for years now and people seem to get used to it…. Should the protest spread to the airport or affect flows of goods, then it will have a much bigger impact.”

Our earlier post on this topic may be of interest.

Thai protesters ignored police demands to leave a central Bangkok business district for a third day and stormed a government building in a bid to force Prime Minister Abhisit Vejjajiva to call an election.

The demonstrators, who have held round-the-clock rallies since March 12, briefly broke into the Election Commission office this afternoon after moving their main base to Bangkok’s commercial heart over the weekend. Abhisit has declared the protest illegal and is seeking a court order to arrest the group’s leaders.

“We will continue to rally at this area,” Nattawut Saikuar, a protest leader, told reporters near the group’s stage at an intersection beneath one of the city’s two mass transit rail lines. They plan to stay even if the court approves arrest warrants, he said.

The escalation by protest leaders after three weeks of mostly peaceful demonstrations risks undermining Thailand’s recovery from the first recession in a decade. More disruptions could lead to a downgrade of the country’s credit rating, said Kobsidthi Silpachai, head of capital markets research at Kasikornbank Pcl in Bangkok.

“Foreign direct investment is shifting toward other competitor nations like Vietnam,” he said in an interview in Bangkok today. “These guys are in it for the long haul.”

Rejected Offer

Abhisit’s opponents have rejected his offer to call an election within nine months, demanding he step down within the next two weeks. The demonstrators may be open to a third round of televised negotiations if the government reduces the timeframe for dissolving parliament, TNN television reported, citing Jatuporn Prompan, another protest leader.

Protesters who had split off from the main group broke into the Election Commission, and images broadcast on the Nation television channel showed dozens walking through the building.

The group rallied at the commission to pressure officers into explaining delays in deciding whether to recommend the dissolution of Abhisit’s ruling Democrat party for receiving an illegal campaign contribution. The party did nothing wrong, spokesman Buranaj Smutharaks said by phone.

“We have cooperated with the Election Commission throughout and now it’s up to them to proceed,” he said. “No such donation was ever made.”

The Election Commission will release details of the case on April 20, 10 days sooner than scheduled, Vichai Sangprapai, head of metropolitan police, division 1, told protesters at the scene.

Asia’s Best

So far the peaceful demonstrations haven’t deterred investment in Thailand, whose benchmark SET index has risen 11 percent since the protests began, the best performance by an Asian benchmark in that period.

The index rose 0.9 percent today to close at its highest level since June 2008. The baht dropped 0.1 percent, the most in a week, according to data compiled by Bloomberg.

“Thailand’s political situation has been quite unstable for years now and people seem to get used to it,” said Minori Uchida, senior analyst in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan’s biggest bank. “Should the protest spread to the airport or affect flows of goods, then it will have a much bigger impact.”

Central Pattana Pcl, the largest operator of shopping malls in Thailand, fell 1.5 percent to its lowest in three weeks after closing its CentralWorld complex for a third day. Others in the area also shut their doors, including Siam Paragon, Siam Discovery, Gaysorn Plaza and Siam Center.

Millions vs. Billions

The protests are costing businesses as much as 300 million baht ($9.2 million) per day, Sumida Buranasiri, acting senior vice chairman of the Federation of Thai Industries, told reporters. In 2008, an eight-day airport blockade by the group’s rivals who supported Abhisit cost about 300 billion baht in tourist revenue, according to central bank estimates.

Protest leaders said 300,000 protesters joined them over the weekend, ten times the police estimate. Temperatures in the afternoon heat climbed to as high as 36 degrees Celsius (97 degrees Fahrenheit) today.

Thailand’s Cabinet last week extended usage of the Internal Security Act until April 7. The law, in place since the rallies began last month, gives the military power to clear streets and make arrests. A year ago, the military quashed similar protests by Abhisit’s opponents that started peacefully and descended into viol

Thai protesters ignored police demands to leave a central Bangkok business district for a third day and stormed a government building in a bid to force Prime Minister Abhisit Vejjajiva to call an election.

The demonstrators, who have held round-the-clock rallies since March 12, briefly broke into the Election Commission office this afternoon after moving their main base to Bangkok’s commercial heart over the weekend. Abhisit has declared the protest illegal and is seeking a court order to arrest the group’s leaders.

“We will continue to rally at this area,” Nattawut Saikuar, a protest leader, told reporters near the group’s stage at an intersection beneath one of the city’s two mass transit rail lines. They plan to stay even if the court approves arrest warrants, he said.

The escalation by protest leaders after three weeks of mostly peaceful demonstrations risks undermining Thailand’s recovery from the first recession in a decade. More disruptions could lead to a downgrade of the country’s credit rating, said Kobsidthi Silpachai, head of capital markets research at Kasikornbank Pcl in Bangkok.

“Foreign direct investment is shifting toward other competitor nations like Vietnam,” he said in an interview in Bangkok today. “These guys are in it for the long haul.”

Rejected Offer

Abhisit’s opponents have rejected his offer to call an election within nine months, demanding he step down within the next two weeks. The demonstrators may be open to a third round of televised negotiations if the government reduces the timeframe for dissolving parliament, TNN television reported, citing Jatuporn Prompan, another protest leader.

Protesters who had split off from the main group broke into the Election Commission, and images broadcast on the Nation television channel showed dozens walking through the building.

The group rallied at the commission to pressure officers into explaining delays in deciding whether to recommend the dissolution of Abhisit’s ruling Democrat party for receiving an illegal campaign contribution. The party did nothing wrong, spokesman Buranaj Smutharaks said by phone.

“We have cooperated with the Election Commission throughout and now it’s up to them to proceed,” he said. “No such donation was ever made.”

The Election Commission will release details of the case on April 20, 10 days sooner than scheduled, Vichai Sangprapai, head of metropolitan police, division 1, told protesters at the scene.

Asia’s Best

So far the peaceful demonstrations haven’t deterred investment in Thailand, whose benchmark SET index has risen 11 percent since the protests began, the best performance by an Asian benchmark in that period.

The index rose 0.9 percent today to close at its highest level since June 2008. The baht dropped 0.1 percent, the most in a week, according to data compiled by Bloomberg.

“Thailand’s political situation has been quite unstable for years now and people seem to get used to it,” said Minori Uchida, senior analyst in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan’s biggest bank. “Should the protest spread to the airport or affect flows of goods, then it will have a much bigger impact.”

Central Pattana Pcl, the largest operator of shopping malls in Thailand, fell 1.5 percent to its lowest in three weeks after closing its CentralWorld complex for a third day. Others in the area also shut their doors, including Siam Paragon, Siam Discovery, Gaysorn Plaza and Siam Center.

Millions vs. Billions

The protests are costing businesses as much as 300 million baht ($9.2 million) per day, Sumida Buranasiri, acting senior vice chairman of the Federation of Thai Industries, told reporters. In 2008, an eight-day airport blockade by the group’s rivals who supported Abhisit cost about 300 billion baht in tourist revenue, according to central bank estimates.

Protest leaders said 300,000 protesters joined them over the weekend, ten times the police estimate. Temperatures in the afternoon heat climbed to as high as 36 degrees Celsius (97 degrees Fahrenheit) today.

Thailand’s Cabinet last week extended usage of the Internal Security Act until April 7. The law, in place since the rallies began last month, gives the military power to clear streets and make arrests. A year ago, the military quashed similar protests by Abhisit’s opponents that started peacefully and descended into violence.

Thai protesters ignored police demands to leave a central Bangkok business district for a third day and stormed a government building in a bid to force Prime Minister Abhisit Vejjajiva to call an election.

The demonstrators, who have held round-the-clock rallies since March 12, briefly broke into the Election Commission office this afternoon after moving their main base to Bangkok’s commercial heart over the weekend. Abhisit has declared the protest illegal and is seeking a court order to arrest the group’s leaders.

“We will continue to rally at this area,” Nattawut Saikuar, a protest leader, told reporters near the group’s stage at an intersection beneath one of the city’s two mass transit rail lines. They plan to stay even if the court approves arrest warrants, he said.

The escalation by protest leaders after three weeks of mostly peaceful demonstrations risks undermining Thailand’s recovery from the first recession in a decade. More disruptions could lead to a downgrade of the country’s credit rating, said Kobsidthi Silpachai, head of capital markets research at Kasikornbank Pcl in Bangkok.

“Foreign direct investment is shifting toward other competitor nations like Vietnam,” he said in an interview in Bangkok today. “These guys are in it for the long haul.”

Rejected Offer

Abhisit’s opponents have rejected his offer to call an election within nine months, demanding he step down within the next two weeks. The demonstrators may be open to a third round of televised negotiations if the government reduces the timeframe for dissolving parliament, TNN television reported, citing Jatuporn Prompan, another protest leader.

Protesters who had split off from the main group broke into the Election Commission, and images broadcast on the Nation television channel showed dozens walking through the building.

The group rallied at the commission to pressure officers into explaining delays in deciding whether to recommend the dissolution of Abhisit’s ruling Democrat party for receiving an illegal campaign contribution. The party did nothing wrong, spokesman Buranaj Smutharaks said by phone.

“We have cooperated with the Election Commission throughout and now it’s up to them to proceed,” he said. “No such donation was ever made.”

The Election Commission will release details of the case on April 20, 10 days sooner than scheduled, Vichai Sangprapai, head of metropolitan police, division 1, told protesters at the scene.

Asia’s Best

So far the peaceful demonstrations haven’t deterred investment in Thailand, whose benchmark SET index has risen 11 percent since the protests began, the best performance by an Asian benchmark in that period.

The index rose 0.9 percent today to close at its highest level since June 2008. The baht dropped 0.1 percent, the most in a week, according to data compiled by Bloomberg.

“Thailand’s political situation has been quite unstable for years now and people seem to get used to it,” said Minori Uchida, senior analyst in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan’s biggest bank. “Should the protest spread to the airport or affect flows of goods, then it will have a much bigger impact.”

Central Pattana Pcl, the largest operator of shopping malls in Thailand, fell 1.5 percent to its lowest in three weeks after closing its CentralWorld complex for a third day. Others in the area also shut their doors, including Siam Paragon, Siam Discovery, Gaysorn Plaza and Siam Center.

Millions vs. Billions

The protests are costing businesses as much as 300 million baht ($9.2 million) per day, Sumida Buranasiri, acting senior vice chairman of the Federation of Thai Industries, told reporters. In 2008, an eight-day airport blockade by the group’s rivals who supported Abhisit cost about 300 billion baht in tourist revenue, according to central bank estimates.

Protest leaders said 300,000 protesters joined them over the weekend, ten times the police estimate. Temperatures in the afternoon heat climbed to as high as 36 degrees Celsius (97 degrees Fahrenheit) today.

Thailand’s Cabinet last week extended usage of the Internal Security Act until April 7. The law, in place since the rallies began last month, gives the military power to clear streets and make arrests. A year ago, the military quashed similar protests by Abhisit’s opponents that started peacefully and descended into violence.

ence.





Are the red shirts hurting the economy?

2 04 2010

The claim that the red shirt protests are hurting the Thai economy is one that the government has been promoting, along with its supporters, and is now a common refrain from the yellow-cum-pink shirts. Interestingly, the international media reflects on this in two recent articles.

The Washington Post (2 April 2010) has this to say, citing Joseph Tan, chief Asia economist at Credit Suisse: “While not reflected in stock prices, the political crisis shows up in foreign direct investment, which cuts into long-term economic growth. Thailand’s Board of Investment, for instance, expects investment pledges this year to fall 15 percent.” PPT would put much of that down to Map Tha Phut issues rather than political activism.

It adds: “Chief among Tan’s concerns is the timing of the protests coinciding with the hospitalization of 82-year-old King Bhumibol Adulyadej, admitted on September 19 suffering from fever, fatigue and loss of appetite. TV footage suggests his health has improved, but his hospitalization focuses attention on royal succession.  His son and presumed heir, Crown Prince Maha Vajiralongkorn, does not yet command the same popular support as his father. Many Thais and analysts fear if the crown passes to Vajiralongkorn while political divisions remain unresolved, opposing factions will intensify their struggle, with destabilizing consequences.  Strict lese majeste laws restrict discussion of the monarchy.” Tan adds: “It is not clear to me how this is going to pan out should the king pass on…”.

So its is the future of the monarchy and succession that worries many investors.

Reuters (2 April 2010) has a long story looking at several aspects and sectors of the economy. On tourism – recalling that the Federation of Thai Tourism Associations has become a pink shirt booster – Reuters notes that the  “Tourism Authority of Thailand expects 15.5 million tourist arrivals this year, up from 14.1 million last year. The red shirt protests could impact this, but those not part of the pink team say “business is doing just fine as big-spending visitors from other countries are shrugging off the problem. AllTheBestTravel says Japanese clients, who are usually sensitive to political developments, are still coming, viewing the protests as no problem unless they lead to the closure of airports.” Reuters observes that “Tourism … has proved fairly resilient to previous unrest.” It adds that, “Just a short ride from the protest site, Khao San Road, a a magnet for low-budget tourists, seems unaffected, with plenty of Westerners in the bars and Internet cafes.”

On investment, Reuters states: “portfolio investors are still putting money into Thailand, driving the stock market to a 22-month peak and the baht to 20-month highs. Foreigners have bought a net $1.6 billion of Thai shares since Feb. 22.” The baht is also rising. The real threat to long-term foreign direct investment is said to be “another coup.” It is added that the  “Board of Investment says investors have not relocate[d] but their investment pledges this year could fall 15 percent to 300 billion baht. Japanese firms, the country’s biggest investors, have expressed concern and might look elsewhere if the crisis continues.” More worrying for these investors however is Map Tha Phut.

Reuters considers that businesses in Bangkok “are largely operating as usual and many around the protest site are thriving, especially convenience stores, hotels, restaurants and stalls selling food and drink. CP All, Thailand’s largest convenience store operator, expects profit growth of 15-20 percent this year…. But some businesses around the site such as petrol stations, beauty salons and non-food shops are suffering, especially those that have opted to close their doors at the weekend.” While consumer confidence has dipped, Thai consumers “have not stopped spending. Domestic auto sales increased in February for the sixth straight month, up 57.7 percent from a year before.”

Official figures seem to confirm all of this: “On March 29 the Finance Ministry raised its economic growth forecast to 4.5 percent from 3.5 percent due to better exports and consumption.” At the same time “it warned the political turmoil could cut growth by as much as 1.8 points if it continued until the fourth quarter and led to a dissolution of parliament.” But that is essentially Minister Korn Chatikavanij’s view and he is unreservedly opposed to a dissolution. Meanwhile, the Bank of Thailand “forecasts economic growth of as much as 5.3 percent this year…”.

PPT doesn’t doubt that ongoing political turmoil could reduce economic growth rates. However, the loud bleating from yellow-cum-pink shirts seems somewhat histrionic.





More on Map Ta Phut

26 02 2010

Bangkok Pundit comments on this story from the Bangkok Post (25 February 2010). PPT would have raised very similar questions. Why is it that the Crown Property Bureau-invested Siam Cement Group is getting such favors?