The Vongthip Letter Jun 09

National juggler: In 5/09 PM Abhisit was trying simultaneously to implement his government’s policies, solve the country’s fast deteriorating economic woes, close the “political divide” within the Thai society, work out acceptable compromises among the warring factions, satisfy the near-impossible demands from his coalition partners, pacify his own party MPs impatient quest for ministerial posts, deliver timely and adequate assistance to the struggling business and farming sectors, and strengthen his own popularity among hard-to-please voters.

His successful handling of a minor cabinet change (to replace Bhum Jai Thai’s Deputy Minister of Agriculture) as well as the highly controversial rice, maize and NGV-bus deals have won him many more admirers. They have been urging him on to act even more boldly (but not recklessly) against corruption practices and conflicts of interest that seemed to be reappearing among politicians, government officials and their business partners.

Walking the tight rope: Notwithstanding his hectic schedules at home, the young PM has been making a lot of efforts to improve Thailand’s international image and to fulfill his role as the current chairman of Asean. On 15/5/09 PM Abhisit made a day-trip to shore up foreign investors in Hong Kong. From 31/5-2/6/09 he led a delegation to attend the Asean-Korea CEO Summit in Korea during which the Asean-Korea FTA was finalized.

By Vongthip Chumpani*

He also took the opportunity to meet up with other Asean leaders to discuss hot issues i.e. the current trial of Aung San Su Kyi and the 2009 H1N1 flue. Notwithstanding his latest 70% thumbs-up poll, PM Abhisit continued to work against time to get Thailand back on track, politically, economically and socially.

After the harrowing experience in 4/09, the PM has no more qualms that his ruthless opponents were still out there to get him, and, that any faux pas by him or his party members could easily send the Democrats back to the opposition-bench after the next election.

Resurrecting the Red Shirts

Although Thaksin has been keeping a low profile (as called for by the Dubai government), his faithful followers in Thailand have managed to regroup and redefine their strategies after the April debacle. Their immediate tasks seemed to be to destabilize the political situation and to discredit the Abhisit government and the military as much as possible, in and outside the parliament, so that they could win another major victory at the next election.

Of late, the intensifying conflicts between the Democrats and their coalition partners over a number of high profiled spending schemes have given fresh hope to the Red Shirts that the Abhisit coalition would soon be breaking up and that a snap election would have to be called. In 5/09, the Red Shirts set up their new TV-satellite and community-radio stations, and launched a new publication and a website to expand their electoral base in the North and the Northeast. The Red Shirts have scheduled another big anti-government demonstration from 21-27/6/09 and to also call for Thailand’s national day to be moved to June 24th instead of December 5th!

Spring Green Shirts

On 25/5/09, the PAD celebrated the first anniversary of their 193 days demonstration against Thaksin. Over ten thousand Yellow Shirts showed up to vote en mass to set up their own party (NPP-New Politics Party) as a tool to bring about their dream of “new politics”, free from vote buying and trading, free from corruption, nepotism and cronyism. Spring green was chosen as NPP’s color and Somsak Kosaisuk was named party leader, at least for the time being.

Although many people were skeptical about PAD’s decision, most people believed that it would be more beneficial for the country as well as for PAD to move their idealistic fights into the parliamentary system rather than on the streets (and at the airports). Many pro Democrat voters in Bangkok and the South, however, would be facing quite a dilemma, deciding whether to vote for the Democrats or the NPP at the next election. Both the Red (Puea Thai) and the Blue Shirts (Bhum Jai Thai) were delighted to see the clear break between the PAD and the Democrats.

It takes two to tango

Throughout 5/09, the Bhum Jai Thai party bosses have been working systematically behind-the-scene to woo and win the hearts and minds of MP’s, vote canvassers and voters in the Puea Thai’s strongholds in the Northeast. Their party-leaders and cabinet ministers have also been fighting tooth and nail to win huge spending projects that have turned highly questionable because of their inaccurate facts and inflated figures e.g. the THB 67.9 billion leasing of 4,000 buses that was turned down by the cabinet several times before it was sent to be scrutinized by the NESDB’s newly set up committee of 15 “wise men.”

The Senate too has threatened to impeach the Abhisit government if the bus deal were to be approved by the cabinet. With the latest hoopla over the sale of government stocks of rice and maize by the Ministry of Commerce, the public has become increasingly more annoyed by the internal bickering and alarmed by the corruption allegations among the cabinet ministers. With the economy going down hill and the government’s coffer fast emptying, taxpayers were in no mood to tolerate any skimming of public spending by their ministers and their politicians.

Gloomy April

The April’s economic figures were not encouraging. Manufacturing production was down 9.7% and industrial capacity utilization only 56.6%. Car sale was marginally up but imports of consumer goods and capital goods were down by 17.2% and 21.7% respectively. Export plunged 25% to USD 10,279 billion and import by 36.4% to USD 9,660 billion. Trade surplus shrank to USD 619 million. Both current account and balance of payments showed smaller surplus of USD 426 million and USD 645 million respectively. International reserves went up slightly to USD 116.8 billion.

Although the Bank of Thailand has continued to maintain their Repo rate at 1.25% in 5/09, the Thai banks have reduced their lending rates by 0.125%-0.25% to help move the stagnating economy. Average banks’ NPL has also increased to over 4% of total loan portfolio. With huge government borrowing still in the pipeline, interest rates could not possibly go down much further. Depositors too would not be seeing higher deposit rates – at least until inflation started to kick in next year.

Cautiously optimistic

Although the world economy appeared to have hit the bottom and major international stock markets seemed to be moving north, most economists have been cautioning against out-right optimism as the SET moved up dramatically to 560 and the Baht strengthened to THB 34.35 in 5/09. The rationale for prudence was based also on the strong surge of oil prices toward USD 70 level and the down grading of Thai banks and conglomerates by international rating agencies, to be in line with the weaker government’s rating.

Thailand’s 7.1% GDP plunge in 1Q09 was also a shock to both the public and the private sectors. Many have been keeping their fingers crossed that the sudden increase in export orders for electronics, electrical, automotive parts and other key consumer products was the harbingers of improved global economic environment rather than just a short term replenishment of depleted inventories.

In the longer term, most people opted to agree with PM Abhisit that the government’s second stimulus package of THB 1.56 trillion, to be spent in the next three years on infrastructure projects (to upgrade our transportation, land and water management, schools and hospitals etc.), would go a long way to increase the country’s competitiveness and enable Thailand to join other Asean countries, Japan, China, Korea and India as the world’s new growth locomotive!

No too much to wish for

Many have come to believe that political stability would be the key to Thailand’s survival and prosperity. This, however, would be a next-to-impossible task unless the following could be achieved in the next few months i.e. all political conflicts could be worked out calmly and pragmatically in the parliament instead of on the streets; all the pending political cases could be speedily and effectively processed by our impartial court systems so those who were guilty could no longer create further conflicts in the society; PM Abhisit could remain in office at least until the 2010 budgets were passed; all political opponents could compromise on the amendments of the 2005 constitution so as to be acceptable also to the public; an orderly and successful election could take place so that whoever returned as PM would have a firmer mandate to run the country for the full term of four years.

* 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 Oct 09
  2. The Vongthip Letter Jul 09
  3. The Vongthip Letter Feb ‘10
  4. The Vongthip Letter Sep 09
  5. The Vongthip Letter Apr 09
  6. The Vongthip Letter Jan ‘10
  7. The Vongthip Letter Nov 09

June 5, 2009 | Filed Under Business & Economics, Politics, Property & Investment, The Vongthip Letters 

Comments

One Response to “The Vongthip Letter Jun 09”

  1. antipadshist on June 5th, 2009 9.26 am

    Shouldn’t it be “2007 Constitution”?

    Interesting post!

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