The Vongthip Letter Jul 09

Another hectic month: Throughout 6/09, PM Abhisit was here, there and everywhere, trying to get his government’s policies accepted by the elites and implemented quickly by the bureaucrats. He had to work extra hard to get the SP2 and 2010 budgets through parliament in between official visits to Korea, Cambodia, Singapore, Malaysia, China and Vietnam.

Meanwhile, there were demonstrations not only by the Red Shirts but also by hundreds of other protestors who made a habit of gathering every Tuesday to show-case their grievances in front of the Government House. On 22-23/6/09 the SRT staged a 48 hour nationwide strike against “privatization.” Unionists from MEA and other state enterprises quickly joined in.

One of their demands was for THB 2,000/month allowance for those earning less than THB 50,000! Meanwhile, fruit farmers were campaigning for subsidies to shore up falling prices. A management scandal at GPF prompted thousands of their disgruntled members to protest against Government Pension Fund. Indeed, the birth of first baby panda born in Thailand was the best news of the month!

By Vongthip Chumpani*

The “rise and fall” of the Bhumjaithai’s political fortune in 6/09 was a bitter-sweet experience not only for Newin and his followers but also for his partners and opponents. Buoyed by their success in the previous low-keyed by-election, the BJT ministers were pushing many controversial deals (4,000 NGV buses, the Purple Line, maize, rice, longan sales) through the cabinet.

Political pundits too were prophesizing that Newin would be “leading” the biggest political party once he had successfully pocketed the by-election in Sakon Nakorn and Sri Saket in 6/09. Scores of MP’s from Thaksin’s weak and still-headless Puea Thai were reported to be ready to move over to BJT after they saw Newin’s “reality” show in Sakon Nakorn.

A déja-vu of Thaksin’s Artsamart sojourn, BJT’s high-profiled home-stay weekend with the villagers was well publicized. The BJT ministers were seen planting rice, eating Isarn lunch, attending political seminar, announcing juicy give-away schemes and even handing out cash to the poor!

The magic still worked?

Alas, Newin & Co. had grotesquely underestimated Thaksin’s “heavy arsenal” and popularity among the Northeastern Red Shirts who seem to consider Newin an ungrateful power-monger. Thaksin was phoning in daily from Dubai to each and every village-headman, pleading for their sympathy (for being ill treated by the power-that-be) and for their votes (to bring him home from the desert).

Contrary to the all expectations, Puea Thai party scored a landslide victory in both Sakon Nakorn and Sri Saket by-elections. Giddy with success, Puea Thai MP’s went off to celebrate their victory in Dubai. In Bangkok, the Red Shirts mounted fresh offensive attacks: holding another mass (30,000) demonstration in Bangkok on 27/6/09 to demand immediate parliament dissolution; seeking to appoint a more credible leader to revive Puea Thai for the impending general election; and organizing a campaign to gather one million signatures to support their plea for a royal pardon for Thaksin (so that he could return home to lead the country back to economic prosperity once again)!

Flu pandemic

Like other countries in the world, Thailand has joined the global fight against H1N1 Flue that was believed to be threatening millions of lives. The Ministry of Health dutifully issued their daily report on the number of people affected: now totaling some 1,700 cases, most of whom were already cured, except for some 40 being quarantined or hospitalized.

So far 5 deaths have been reported. A few schools were closed for a week or so at the insistence of the worried parents. With global panic subsiding slowly, tourists have started to travel again. The TAT went on many road shows and became bold enough to revise their forecast of in-bound arrivals to 13 million in ‘09 and 14 million in 2010.

More tourists were expected to come from South Asia, the Middle East and China, where tourist advisory was lifted after PM Abhisit’s June visit. From 1-5/09, actual tourist arrivals totaled 5.6 million and the average hotel occupancy was just above 40%. New government measures to assist the tourist industry would be truly welcomed.

Southern tragedies

Through out 6/09 more people were ambushed and brutally killed in the Deep South. They were Buddhist monks and teachers, Muslims women and children as well as soldiers and policemen. The bitter struggle has been an uphill task for the government notwithstanding the huge amount of budget that has been poured into the region to improve the livelihood and the education of the people, as well as to maintain some 40,000 soldiers to protect innocent and helpless citizens in the area.

On 8/6/09, PM Abhisit made an official visit to Malaysia and took the occasion to explore closer cooperation with our only Muslim neighbor to deter the “terrorists” from moving back and forth across the border, and also to assist the Thai Ministry of Education to provide a more effective education system to Thai Muslims students in the Deep South. Clearly this highly complex situation would need many years to be normalized.

Thai Khem Kaeng

In spite of all the tantrums by our honorable MP’s and the qualms of the country’s more conservative elites, the THB 800 billion loans for SP2 Stimulus Package and the THB 1.7 trillion budget for fiscal year 2010 managed to sail (248 vs 128) through the extraordinary parliamentary heated debates on 15-16/6/09.

PM Abhisit and his economic cabinet could barely breathe a sigh of relief when on 23/6/09, while PM Abhisit was on his first official trip to Singapore, the Senators summarily voted down the Bill to increase oil excise taxes and were threatening to also reject the Executive Decree allowing the Ministry of Finance to borrow THB 400 billion to finance phase 1 of the SP 2 Stimulus Package. Fortunately PM Abhisit was quick enough to rush back from Singapore to make his plea for a positive vote just before the midnight!

Easier said than done!

To appease the parliamentarians’ moans and groans, PM Abhisit had to give his word that the THB 1.56 trillion special 3 year-budget would be carefully spent on 6,000 small scale projects to strengthen local infrastructure, benefit the maximum numbers of citizens and to create the most number of jobs. The allocation was 31% for water and agriculture, 24% mass transit, 21% roads, 21% alternative energy and 3% for 3G broadband.

Taxpayers and NGO’s were also invited to actively track the use of fund and to closely monitor project development so that they could be transparent and corruption-free. Disappointingly, the Abhisit government’s THB 116 billion SP1 supplementary budget was only 60% disbursed as at end of 6/09. The coalition government would have to get their acts together quickly and start working much harder as a team to keep the economic momentum going. In the mean time, the Ministry of Finance has once again reduced their 09 GDP growth rate forecast to -3.5% from -2.5%.

Light at the end of the tunnel?

In May, the Bank of Thailand reported that business sentiment has improved, retail sales picked up, and private investment stabilized. Manufacturing production index went up 9% and industrial capacity utilization was well above 60%. Exporters were showing more confidence as export of electronics parts and electrical appliances continued to move up.

Export totaled USD 11.5 billion down 27% yoy. Imports also went down 34% yoy to USD 9.2 billion. Trade balance, current account balance and balance of payment were all in the black at USD 2.3 billion, USD 1.4 billion and USD 602 million respectively. International Reserves chalked up to USD 121.5 billion. Inflation continued negative at -3.3%, as in the previous five months.

The SET surged to break 600 briefly before profit taking brought it down to end the month at 597. The Baht strengthened to THB34 to USD, THB 35.3 to Yen, THB 48 to Euro. Gold was at USD 940 and oil prices were firmer at around USD 70 level.

The Khao Praviharn saga

During the last week of 6/09 the Khao Praviharn conflict flared up again after Thailand filed a protest with UNSEC and World Heritage Committee over their approval of Phra Viharn Temple as a world heritage site, during their annual meeting in Seville.

Citing the still-incomplete management plan that needed to be submitted jointly by Cambodia and Thailand, UNSEC and WHC decided to postpone their final approval until 2/2010. The incident prompted another battle-cry from PM Hun Sen as more troops were sent to the Thai-Cambodian border. PM Abhisit kept his cool and insisted that a political dialogue was the only means to address the dispute.

As active members of the Asean, both Thailand and Cambodia would have more to lose and not much to gain from an all-out military confrontation. The dilemma for both countries has been how far they could compromise without upsetting their voters and/or jeopardizing further development the Asean Community.

* Vongthip Chumpani is an advisor to and former president of Bangkok Bank and a former advisor to the Senate Foreign Relations Committee. All views and opinions expressed herein are entirely from her own personal observations.




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Related posts on absolutelyBangkok.com:

  1. The Vongthip Letter Jan 09
  2. The Vongthip Letter Jun 09
  3. The Vongthip Letter Sep 09
  4. The Vongthip Letter May 09
  5. The Vongthip Letter Oct 09
  6. The Vongthip Letter Apr 09
  7. The Vongthip Letter Feb 09

July 3, 2009 | Filed Under Business & Economics, Politics, Property & Investment, The Vongthip Letters 

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