Mega projects : mega financing problems…

Bad day for the boiling room.

Do you remember the “mega projects” ? It started with Thaksin, by the end of 2004, as a hilarious saga. They were speaking about HUNDRED OF KILOMETERS of mass transportation lines… Grandiose budget started from 500 billions THB ! Then 270. Then 200. Then… 160.
Anyway. Right after the Coup last september, the Junta decided to board the same boat. But had to reduce the size of it (the boat). Now it’s 3 train lines, worth in total 160 billions THB. Reality principle I guess. But always a good political tool.

From a civil engineering challenge the whole idea has turned therefore into a mystic Holy Grail.

YouTube : ban lifted… but other websites still censored

It’s official. The IT Minister announces that the ban on YouTube is lifted.

Quick reminder : last april, thai authorities banned YouTube in Thailand after they found some videos offensive to the King (read here and here).

In front of such censorship, the controversy echoed worldwide, and put the the Junta in difficulty.

Anyway. 4 month after, here it is : YouTube is available again.

GDP : boost of government’s spendings

The Fiscal Policy Office released its Monthly Economic Report for july.

-VAT collection : up 1,8 year on year, compare to -0,5 y-o-y in june. They say that it shows an improvement of consumption… Very optimistic view in my opinion…

-Private investment indicators in July grew at a slower pace. Indicator of investment in equipment and machinery as seen from import of capital goods fell by –3.3% (y-o-y), while the indicator of investment in construction sector from real-estate tax collection grew at a slower pace at 1.8% from 6.6% (y-o-y) in June.

-export value recorded at USD 11.8 billion, growing by 5.9% (y-o-y), significantly declined from 17.7% (y-o-y) growth in June.

And the big piece now :

Interest rate : BOT on hold

The Bank of Thailand yesterday maintained its one-day repurchase rate at 3,25%.

After 5 cuts since january, from 5 to 3,25 %… without any effects (as for the currency issue and the economic slowdown)… I think the BOT made the right move : wait and see, duck and cover…

All central banks around the world are actually waiting for the FED’s decision (meeting september 18).

Bangkok Post

Shin Deal : first victim of the nominees scandal ?

As I wrote here, the Shin Deal (january 2006, when Temasek from Singapore bought the flag amiral company of Prime Minister Thaksin) used many off shore companies and -probably- nominees.

In total contravention of laws and good governance principles (no one seemed surprised first that the Prime Minister of Thailand owned and worked with some companies located in British Virgin Islands, trully amazing !).

After one year and half… at last, the justice is tightening its grip (Nation).

Cheers : huge increase of taxes on alcohol and cigarettes

The government has announced yesterday evening -without any warning- a huge increase of excises taxes on alcohol (spirits) and cigarettes… With immediate effect.

Details are available here (Nation, Bangkok Post). For instance :

+ 58 % for locally-distilled alcohol (from 70 to 110 THB per liter)

and extra 2 THB per pack of local cigarettes, and extra 3 THB for imported cigarettes

Official reason for this decision : “to curb consumption” for public health.

Currency : expensive… interventions from the BOT

“The Bank of Thailand bought about $8 billion during the first half of the year to help stem the gains in the baht, according to deputy governor Atchana Waiquamdee.

The number was derived from “the change in our foreign- exchange reserves”, Dr Atchana said yesterday.

The central bank spent about $18 billion last year to smooth the baht’s 15% gain against the dollar, she added.

“We can’t fix the currency like we fix other products,” she said. “There is $1.5 trillion flowing in the world and we don’t know how much of it will flow into Thailand. We don’t know how much the cost will be.“

(Bangkok Post)

Comment : the deputy governor forgot one important item of the equation : the value of what BOT has bought.

Let’s have fun : one date and confidence is up !

The long litany of wishfull thinking continues. Or rather “magical thinking” (see here).
Remember ? The confidence of the investors should have been restored after :

-the nomination of Surayud as Prime Minister (last october)

-the nomination of his government

-then the dissolution of the Thai Rak Thai Party (may this year)

-then the referendum for the new Constitution (august)… etc.

… Unfortunately, after every step, facts, reality have revealed their real face.

South : “a brutal armed conflict”

The New York-based Human Rights Watch has released a 104 pages report about the South : “No One is Safe: Insurgent Attacks on Civilians in Thailand’s Southern Border Provinces”.

-”After decades of low-intensity insurgency, Thailand’s southern region is becoming the scene of a brutal armed conflict,” said Brad Adams, Asia director at Human Rights Watch. “Separatist militants are intentionally targeting both Buddhist and Muslim civilians in shootings, bombings and machete attacks.”

-Of the 2,463 people killed in attacks since january 2007, 89 % were civilians.

- “Violations of human rights and ongoing impunity have increased the level of hostility and widened the communal gap between Buddhist Thais and ethnic Malay Muslims, making it impossible to achieve peaceful and lasting resolution to this brutal conflict”

Official : general elections on December 23

The prime minister and the Election Commission agreed Monday to hold the next election on December 23.

Let’s the game begin !

New and re-entry NPLs rise in Q2

“Borrowers are apparently losing their ability to pay debts, as reflected in significant increases in both new and re-entry non-performing loans (NPLs) in the second quarter of the year.

Gross NPLs rose by Bt97.25 billion, higher than the increase of Bt78.62 billion in the first quarter. The jump was particularly sharp in the manufacturing, commerce, personal consumption and service sectors, according to the Bank of Thailand.

In the second quarter, new NPLs rose by Bt63.97 billion, compared with an increase of Bt39.17 billion in the first quarter. The rise of re-entry NPLs was Bt24.25 billion, higher than the Bt16.79-billion jump in the previous quarter.” (Nation)