Date of elections : the little game continues

“Before the end of the year” ?

“25 november” ?

After or before the birthday of the King in december ? (“oh my lord, election billboards all over Bangkok before the birthday of the King, you are out of your mind“, yes we’ve heard that too)

Or… in 2008 ?

Surayud, the Prime Minister, has an idea.

Sonthi, the Junta’s leader, has obviously another one.

But they could probably find a compromise, because they have a point in common : they are both general.

Currency : more deceptions from BOT

“Managed float system keeps Baht stable

The baht has been stable for the past one or two months under the Bank of Thailand’s managed float exchange rate system, according to BoT Governor Tarisa Watanagase.
The U.S. dollar has traded between Bt34.50 and Bt34.65 for the past month due to possible dollar buying by the central bank.

Despite trade- and equities-related inflows, the BoT was able to curb the baht’s appreciation as trade volume is limited by controls on speculative inflows, while investment in local debt must be fully hedged via foreign exchange swaps.“
(Nation)

The naiveness of this news illustrates what the BOT is doing.

1-Intervention
The BOT is indeed buying USD, in order to curb the value of the THB. And by the way, because USD is loosing its value (anyway), the BOT records… accounting losses.
And interventions are easier due to capital controls, decided last december, because they create a small volume market, isolated.

2-Manipulation
The “managed float exchange rate system” is nothing less than manipulation. This is why we have 2 rates : the “on shore rate“, the one that BOT is looking at, very proud. And the “off shore“.

Today : 1 USD = 31.60 at off shore rate (we broken the bottom record last march, by the way). And 34.50 with the on shore rate.

That’s a 9 % difference !
Off shore rate shows only one thing : the real value, or the market value, of the THB.

Constitution : amnesty for the junta and extended lifespan for NLA

It’s like that in Thailand : sometimes decisions take a long time to mature. Very long time. And occasionally, major decisions can happen… in a jiffy.
Today is a perfect example, about the new Constitution…

“The controversial draft Article 299 of the draft charter which grants de facto amnesty to the military junta for staging the coup and tearing up of the 1997 charter was unanimously approved without debate by the Constitution Drafting Assembly (CDA) Thursday.

The assembly also approved in principle to add a highly controversial clause in the Transitional Provisions by agreeing to extend the lifespan of the junta-appointed National Legislative Assembly (NLA) after the promised general election and allow them to morphed into the ad hoc senate until a real senate is selected and appointed by the rules set by the new draft charter.”

Nation

GDP : investments are slowing down

New chart regarding the GDP and its components. Today : Gross Fixed Capital Formation.

Basically, it covers the new investments made by businesses. After Private Consumption, it’s another important component of GDP.

This chart shows the % of change from the same period (quarter) of the previous year.

As you can see for Q1 2007 investments were down 0,87 % compare to Q1 of 2006.

The trend is worrying. The high point was Q2 of 2005… Since then, thai businesses are slowing their investments. Slowly. But surely.

Q1 2007 was the first quarter with negative growth since Q3 of 1999 !

So, watch out with Q2 of 2007. We will see if the negative trend continues or not.

Foreign Business Act 2 is well alive

The thai authorities are kind enough to refresh our memory… The legal process regarding FBA 2 is doing well. Very well.

The communication campaign starded june 26.

A former deputy commerce minister wrote an article in Nation.
“Based on the latest information, the new law is likely to come into effect in October - well before the legislative assembly’s term expires with a new election, expected in November or December.
Commerce Minister Krirk-krai Jirapaet is working well with members of the NLA to finalise the legal points of the amendments, with agreement on most issues.“

Then, one day after, it’s official (Nation). The Secretary to the Commerce minister said that, indeed, the reviewing process of the draft was under way. And would be concluded by the end of july.

“The commissioner is scheduled to conclude the rectifying process by the end of next month. The Act will be returned for the Cabinet’s acknowledgement and should be enacted before the end of the current government’s term“.

And of course…. “The ministry said the FBA amendment would make Thailand friendlier to foreign investors.“

(I’ll prepare an article to explain in details the FBA 2 issues. And to explain why this law is a real danger for the foreign business community in Thailand, contrary to the propaganda served by the authorities since last november).

Sufficiency Economy : +24 % for the military budget ?

Sufficiency Economy at work.

“The Defence Ministry’s budget for fiscal 2008 is expected to increase 24.33 per cent to Bt143 billion, from the current fiscal year’s Bt115.02 billion.”

It’s important to note that the 2007 budget (115.02 billions) was already up… 33 %, compare to the 2006 budget (86 billions)

It means that in 2 fiscal years, the military budget would have increased of… 66 %. That’s really “sufficient”, isn’t it ?

And to put figures in perspective, let’s remember that the gvt forecasts a deficit of… 165 billion baht for the whole fiscal year 2008.

“Interesting and artistic value… but no thanks”

Another example of censorship, rather despicable… This time from… TAT (Tourism Authority of Thailand), the public agency that designed the campain “Amazing Thailand“, in order to lure tourists. Remember ?

Amazing, indeed.

Private Consumption : a chart that looks like the 97 crisis…

Let’s have a closer look on the components of GDP. Today : Private Consumption.

Here is a chart, from Q1 1997 to Q1 2007 with the % of change from the same period (quarter) of the previous year, of this component.

For instance : for Q1 2007, the growth of Private Consumption was +3.15 % compare to Q1 2006. Okay ?

Now, you can see a trend. Since Q3 2006 and the Coup… we are going to… zero. And below zero, we can recognize on the chart the aftermaths of the 1997 crisis.

So, basically, Q2 of 2007 is going to be very important to follow.

Apparently, private consumption remain low in Thailand. It means that probably the % of growth will get closer to zero for Q2.

And it’s a long way before… the “elections” (that are supposed to solve all our problems) and a long way before thai people start to spend again to boost the GDP.

Again the trend doesn’t look good.

Source BOT.

The most depressing opinion poll….

… or the most stupid, even by thai standards…

Abac Poll Research Centre survey (4 135 people in 24 provinces between June 10 and June 23. )

13.6 per cent of respondents support the government while 6.6 per cent are against it. The majority of 79.8 per cent have no opinion.

The Nation

National Security : diapers and ID cards

Bombings, shootings, arsonings, beheadings in the South… But the Interior Ministry is on the front line of the fight against terror, and for national security. We should praise this new and decisive action.

ID plan for one-year-olds

If the Interior Ministry has its way, children from age one will have to apply for and carry identification cards.

Failure to apply for the card carries a Bt500 fine while not producing the card to officials is punishable by a Bt200 fine.

The Interior Ministry plans to submit draft legislation for Cabinet approval tomorrow. The Council of State has approved the bill.

According to the law, applications for those under 15 years can be submitted by parents and carried by them on their children’s behalf.

Today, only those older than 15 need to have identification cards.

Critics attacked the move as “irrelevant and impractical”. Children and parents are not together all the time, they said.

Children under 15 are already considered the responsibility of parents and schools.

The Nation

The Junta designs its own security tool… for after

There has been an important event -but a quiet one- this week : The Cabinet approved on june 19 a revision of the Internal Security Act.
“Surayud [Prime Minister] explained the revisions empowered the Internal Security Operations Command (Isoc) to maintain peace and national safety.

“The bill is aimed at enabling Isoc to more efficiently handle acts of sabotage, transnational crime and propaganda.

“The purpose of is to achieve a better legal mechanism than the imposition of states of emergency. These are harsh measures to be used only during wars. Besides, this law is outdated; it was enacted in 1944,” Surayud said.

“Under the bill, Isoc’s chief, as a member of the national committee, would have the right to direct state-run security agencies if the country comes under threat from terrorism, an act of sabotage or other forms of violence.

In addition, he would be empowered to ban people from leaving their homes, from using vehicles and roads, and from assembling in public places. He could also appoint security agents and assign them to bring suspects into custody, conduct searches and seize assets and documents believed to be linked to offences against national security. “

Without a court order !