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Bloomberg Report: Thailand's Generals Don't Have an Economic Plan

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  • Bloomberg Report: Thailand's Generals Don't Have an Economic Plan

    http://www.bloombergview.com/article...-economic-plan

    Man without a plan. Photographer: PORNCHAI KITTIWONGSAKUL/AFP/Getty Images" itemprop="image">


    Man without a plan.
    Photographer: PORNCHAI KITTIWONGSAKUL/AFP/Getty Images
    Thailand's Generals Don't Have an Economic Plan

    88 Aug 4, 2015 6:00 PM EDT By William Pesek

    [Formatting by moi]






    Militaries tend to justify coups d'etat by making assurances of political competence: The previous government failed the people, and military technocrats will now restore order, cleanse the system and get big things done.


    The generals who seized power in Thailand in May 2014, however, have essentially abdicated that argument. To be sure, Prayuth Chan-Ocha and his fellow officers pledged to restore political calm, end corruption and bring happiness to tens of millions not benefiting from $373 billion of annual output. But 440 days on, Prayuth's regime has only made things worse.
    Thailand's growth is the slowest among developing nations, its exports may contract 4 percent this year and Bangkok is the only major Asian stock market experiencing outflows. The currency is down 7 percent in six months. Thailand's new regime has learned the hard way that running Southeast Asia's second-biggest economy isn't as easy its officials once thought.


    Prayuth's main problem is that he lacks an economic strategy. He and his team are so preoccupied micro-managing small-scale public order issues (like banning alcohol sales near schools) that they're neglecting the big picture.



    Thailand, long a manufacturing powerhouse, needs a serious fiscal jolt. Factory output has fallen every month but one since March 2013, while exports have declined every month this year. The only thing the junta is doing about it is offering spin.


    In a series of speeches, military leader-turned-Prime Minister PrayuthJuly 1,Hiding in the Shadows: The Growth of the Underground EconomyPrayuth would be wise to reshuffle his cabinet, half of which is comprised of military personnel with little experience in their portfolios.

    That would relieve some of the social pressure bubbling around his regime. The country's already elevated levels of household debt are rising as growth and wages stagnate. In the first quarter alone, outstanding household debt from commercial banks alone jumped 7.2 percent.


    Speculation had been rife that Prayuth might tap Somkid Jatusripitak, who was deputy prime minister and finance minister in the government of former premier Thaksin Shinawatra. But it's hard to see how he could do that given that the coup was aimed at running Thaksin and his sister, former Prime Minister Yingluck Shinawatra, out of politics forever.


    Prayuth's first step should be to accelerate the government's $54 billion spending plans for roads, mass transit and other projects. Absent those improvements in infrastructure, Thailand won't be able to keep foreign automobile manufacturers in the country, and thus retain its reputation as the "Detroit of Asia." And with the Philippines already lobbying Toyota and other auto giants to relocate their Thai factories, Prayuth doesn't have any time to lose.


    Prayuth also must set a clear timetable for relinquishing power. That's a necessary first step to restoring confidence in the economy; investors tend to look askance at permanent military takeovers. Yet the junta hasn't even finalized a new constitution it says is required to allow Thais to cast ballots again.

    ...It is increasingly apparent that its talk of reform before elections is just a delaying tactic. The public would be forgiven for concluding the coup wasn't about improving the lives of average Thais but grabbing power for power's sake.


    When you seize power, though, it's best to have a plan. The chronic drift and uncertainty of the last 14 months is breeding a lack of trust from the trading floors of New York to the night markets of Bangkok. It's undermining growth, deepening poverty and increasing the odds Thailand will experience a lost decade. And as the government's economic argument loses force, the only authority it will have left is its force of arms.
    Ward of Lore

  • #2

    Philip Bowring
    August 4, 2015



    Enter Prayuth, looking nervous
    http://thailandchatter.com/showthrea...ll=1#post45112

    Comment


    • #3
      The economy remains in awful shape


      Thai PM May Reshuffle Cabinet to Help Economy
      http://thailandchatter.com/showthrea...ll=1#post45112

      Comment


      • #4
        Foreign corporate investment plunges in 1st half
        TAMAKI KYOZUKA
        September 7, 2015


        Shipping containers stand at a port in Bangkok on March 30.


        BANGKOK -- Applications by foreign companies to invest in Thailand have nosedived following the introduction in January of rules that reduce or remove incentives in certain industries.

        According to the Thailand Board of Investment, in the January to June period, foreign businesses submitted requests to invest 26.8 billion baht ($757 million) in the country, down 89% on the year. The plunge is largely a reaction to a jump in demand at the end of last year, before the changes took effect.




        The number of applications also shrank, sliding 46% to 219. The large gap in the ratios suggests that companies may be investing only small amounts to see how the new system plays out.

        China overtook Japan as the largest investor, at 8.5 billion baht, down 10% and accounting for roughly 30% of the total. Japan was next, at 6.9 billion baht, a drop of 91%.

        Japan long held the top spot for investing in Thailand. But the data from the investment board shows that the new rules have made Japanese companies more hesitant than their Chinese counterparts about pumping money into the Southeast Asian country.

        Industry overhaul

        The new rules were created to advance Thai industry, which is experiencing a combination of a labor shortage and rising wages. Under the latest investment guidelines, high value-added industries, such as aviation, electrical appliance design and software development, are exempt from corporate taxes for eight years.

        Meanwhile, benefits were reduced for companies engaged in simple metal processing and scrapped altogether for sewing and other labor-intensive operations. The number of industries that qualify for benefits has been reduced from 243 to 190.

        Thailand also removed all sweeteners for businesses setting up operations far from the capital.

        Foreign companies, primarily Japanese businesses, scrambled to turn in applications at the end of the year, immediately before the new rules were introduced. As a result, investment requests for all of 2014 jumped 95% on the year to a record 1.02 trillion baht.

        asia.nikkei.com
        http://thailandchatter.com/showthrea...ll=1#post45112

        Comment


        • #5
          Foreign investment pledges in Thailand fall 83% y/y in Jan-Aug: BOI
          Oct 19, 2015

          Foreign investment proposals in Thailand slumped 83 per cent in the first eight months of this year from a year earlier following the introduction of new investment policies, an investment agency said on Monday.

          The military government has struggled to revive Southeast Asia's second-largest economy after seizing power in 2014 to end months of street protests, as exports and domestic demand remain subdued. It has stepped up infrastructure plans and accelerated the approval process for private investment.

          In January-August, foreign investment applications were worth 50.3 billion baht (S$1.97 billion), down from 288.3 billion baht from the period last year.

          But the Board of Investment (BOI) said the fall should not be a concern as Thailand is gearing its incentives to more value-added sectors, which will enhance competitiveness, said Hirunya Suchinai, secretary-general of the BOI, which promotes domestic and foreign investment. "We reaffirm that Thailand remains an attractive country to invest in this region. We believe the trend from here on will be a gradual recovery, but it won't be at the same level as in 2014," she said.

          In the first eight months of this year, project applications from Singapore were worth 13.1 billion baht, followed by China's 10.7 billion and Japan's 9.91 billion.

          Suchinai said China was likely to emerge as the top foreign investor in Thailand, overtaking Japan for the first time in 20 years. "China will be the number one investor this year because many of their submitted applications are in solar cells and tyres, which require large investments," she told reporters.

          Japan, which usually accounts for more than half of foreign investments in Thailand each year, will lose its top rank this year as Japanese firms had submitted most of their projects last year before the policy change, Hirunya said.

          However, Japan is expected to take its top rank back next year as Thailand supports advanced technology, in which Japanese investors are interested, she said.

          In December, the agency replaced the previous policy by gearing its incentives towards more value-added sectors and providing special incentives to those investing in the government's special economic zones and designated provinces.

          Among the incentives are tax exemptions for up to eight years and exemption of import duty on machinery or raw materials for industries focusing on areas such as research and development.

          businesstimes.com.sg
          http://thailandchatter.com/showthrea...ll=1#post45112

          Comment


          • #6
            Thailand see little prospect of economic pickup
            Daniel Gallucci
            November 6, 2015


            Thailand remains a distant last place in terms of economic growth among its Southeast Asian peers, plodding along at roughly half the rate of Malaysia, Indonesia and the Philippines. The Bank of Thailand expects a lacklustre 2.7 per cent growth this year.
            junta must hold powerless optimistic that the economyThailand
            http://thailandchatter.com/showthrea...ll=1#post45112

            Comment


            • #7
              Half Full

              All these stats ignore the informal economy
              Smuggling
              Corruption
              Illegal workers fuel stones gold oil Traffic people drugs
              Creatures, Jade,pangolin,ivory

              I heard despite TAT Siam is awash in prostitutes,pimps local gangs
              Foreign gangs Chinese Russian US and UK scum all adds up
              mmm

              Comment


              • #8

                William Pesek
                December 4, 2015




                Prayuth Chan-Ocha, Thailand's prime minister.
                Photographer: Dario Pignatelli/Bloomberg New York Times readers in Thailand: the middle of the front page featured a large blank spacePrayuth Chan-ochaTeflon Thailand.

                In September, he assuredThailandreturn happinessSecond, bad timing.Indonesia, the Philippines and Vietnam are upgrading competitive capabilities in ways that allow them to leapfrog over peers in a few short years. Instead of keeping pace, the junta is increasing the odds that Thailand will suffer a lost decade at worst possible moment.

                Third, falling back on bad policies.Thaksin ShinawatraThaksin-likepro-market capitalism mores. The generals can block the New York Times
                http://thailandchatter.com/showthrea...ll=1#post45112

                Comment


                • #9
                  Thai Yield Drops Below Treasuries for 1st Time Since 2010: Chart
                  http://thailandchatter.com/showthrea...ll=1#post45112

                  Comment

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