Thailand Crisis

Who said that ? The Commerce Minister, who went to seminar in Tokyo yesterday “Japan-Thailand: The Strategic Economic Partner under Jtepa”.

“Commerce Minister Krirk-krai Jirapaet said Japanese businessmen were worried about four key issues: the import of automotive goods, customs procedures, new investment and reinvestment and the amended Foreign Business Act’s restrictions against foreign shareholders.

“They [Japanese businessmen] are uncomfortable [in the belief that] the FBA amendments will draw investment barriers to them. However, the chairman of the Thailand’s Board of Trade has explained that the amended law is aimed mostly at creating good governance in the country,” Krirk-krai said.” (Nation)

Must have been a hard day for mister Krirk-krai… who started the amendement process of the FBA last october (read our dossier here).

At last now, he can’t say anymore that he doesn’t know the feeling of foreign investors…
And because japanese businesses are so important for the thai economy (car industry)… we could hope that their concerns will be heard…
Anyway, it’s rather funny to see thai officials sticking to their motto, like a life jacket : amended FBA is for “good governance” only.

Good news : Thailand ranks 15th on the “Ease of Doing Business” Index, published by the World Bank, up from 17th in 2006.

Singapore, for the second year, is still in first position.

However, it’s enough to look at the details of the index’s components to turn off a bit our enthusiasm… Continue reading ‘Doing Business Index : the tree hiding the forest’

Hum… it’s becoming like a festival (after Interior, IT and Deputy Commerce Minister)…

Last victim : The Education Minister.

“NCCC commissioner Methee Krongkaeo said Mr Wijit might have violated Article 100 of the anti-graft law, which bans government officials and their spouses from entering into or having interests in contracts made with state agencies under their authorisation. It also bans government officials and their spouses from playing a role in private companies under the officials’ supervision.” (Bangkok Post)

And as usual, we have the classic line of defense : I didn’t know.

“Mr Wijit [Education Minister], who also serves a councillor of Siam University, insisted that legal experts told him the post does not violate the law.”

Transparency International releases its annual corruption perceptions index.

Thailand slipped back from 11th place to 14th in the Asia-Pacific index and from 63rd to 84th in the overall 180-nation world index.

New-Zeland is in first position. The worst are Somalia and Burma (179 and 180).

Click here to see the rankings and tables.

Aree, the Interior Minister, has resigned, after ITMinister and the Deputy Commerce Minister (read here and here).

As usual, he didn’t see nothing, he didn’t know nothing. “I would have rectified the cap violations if I knew about the rule“.

Furthermore, we learned that one of the company in which he owns shares… was working with the government (supply of food) (Nation)… Even until january of this year.

And furthermore… Aree was minister before the Coup, in Thaksin’s government…

Therefore, as he said : “he had consistently declared his shares on three occasions without being aware of the equity cap. He disclosed his assets when appointed to be permanent secretary at the Interior Ministry, deputy Education minister and Interior minister“.

The burning question now : why the NCCC didn’t react 2 years ago ? Why the NCCC is disclosing the story now ?

Like all essential questions in Thailand… we’ll never have an answer.

The political manipulation is obvious.

“The draft Retail and Wholesale Business Act is unlikely to be passed by this government, considering the short time left in its mandate, says Lt Jit Siratranont, a National Legislative Assembly member (NLA).

Lt Jit, also a spokesman for the NLA commerce committee, said he was not even sure if the legislation would be passed by an elected government, which could prioritise rapid economic growth over protecting small businesses. Continue reading ‘Retail Act : unlikely to be passed by this government…’

“The Supreme Court decided on Tuesday to suspend a corruption case relating to the Ratchadaphisek land deal against ousted premier Thaksin Shinawatra and his wife Potjaman until prosecutors bring them back to court.

“The court decided to suspend the case and the trial will resume when the two defendants are found,” chief judge Thonglor Chomngam said. Continue reading ‘Court suspends case against Thaksin : serious blow, or serious trick ?’

It’s check bill time… Despite the buzz, despite the boiling room, the figures have often the last word…

BOT said yesterday that Foreign Direct Investments in Thailand felt by 32 % during the first semester, compare to the same period of 2006.

“Foreign investment, in the form of equity investment and joint ventures with Thai companies in the manufacturing sector, totalled 170 billion baht in the first six months of the year, or 32% below the same period in 2006.

Japan remained the largest foreign investor in the first half, with inflows of 54.78 billion baht, or 33% of total foreign inflows. Ranked second was Singapore, at 25.16 billion baht worth of investment in the first half of the year, or 15% of the total, followed by the United States at 21.6 billion, or 13% of total investment.” (Bangkok Post)

It’s now a well trained routine.

-public health officials threaten to ask for compulsory licences on new drugs, “unless” the drug company agrees to show some goodwill… The threat is then relayed in the medias.

Last example yesterday : “the National Health Security Office revealed it might propose that the Ministry of Public Health impose compulsory licenses, or CL, on four cancer drugs if the negotiations with drug companies for lower prices proved fruitless.

The drugs that could be affected include Imanitib and Letrozole from Novartis; Docetaxel from Sanofi-Aventis; and Erlotinib from Genentech“

“To apply the CL is Thailand’s last resort, unless an agreement has been reached with the pharmaceutical companies to allow poor patients to access to the drugs,” said Dr. Mongkol [Public Health Minister].“ (Bangkok Post, Nation)

This idea has been in the air since july (read here).

It’s a gross tactic. It’s once again a clear violation of IP rights and nothing less than a blackmail against foreign drugs companies.

After drugs against Aid, and the anti clotting Plavix, now the target seems to be drugs against cancer.

And tomorrow ? Painkillers ? Aspirin ? Vitamine C ? I’m joking, but when the “national health emergency” concept (in the WTO agreement) shall stop ?

The shareholdings scandal continues.

Three ministers have violated the anti graft law of 2000, regarding the ownership of shares (more than 5 %) in companies (read here).

The IT Minister said he will resign. Interior Minister said no. And eventually, the Deputy Commerce Minister, miss Oranuj, refused first and then agreed (during a press conference yesterday).

Her statement is very… revealing (her picture above).

“It’s uncomfortable to work with a team that is divided in its thinking. This government shows some signs of problems as members criticise others. I don’t feel bad about those persons, but they are breaking etiquette. As a team, if they feared that [her business holdings] would tarnish the government’s image, they should have sought personal discussion with me. They need not have talked about it in public,” Oranuj said.” (Nation)

To summarize : she doesn’t speak about the issue (what happened exactly, why this story is coming out now, etc.).

She just says that she will resign because it’s uncomfortable to work with a divided team ! A few government’s members dared to criticize her in public… therefore they have broken the etiquette…

On other latitudes, “etiquette” can have another meaning : “code of silence”…

Last point that will probably interest foreign investors : “A high-ranking official at the ministry said it was sad to see her leave, as Oranuj had been the key player in answering all questions, particularly those regarding the foreign business and retail business laws, as Krirk-krai [the Commerce Minister] was often away on overseas trips.”

Surprisingly, we received 2 good news last week :

-”Thai business confidence in August edged up from a four-year low on easing political uncertainty, marking the first increase in three months, a survey showed Friday. The confidence index rose to 76.0 from 72.7 in July, the Federation of Thai Industries said in a monthly survey.” (Forbes)

-and… exports went up 17,9 % in august, year on year, at 13,91 billions USD (historic high in USD value) ! (Nation)

Despite the fact that on september 5, Finance Ministry’s Custom Department said : “The exports in August rose only 6 per cent year on year, a continue slowdown from July’s growth of 5.9 per cent.“

Explanation : “Chavalit Sethameteekul, director-general of the Customs Department, said the re-export of two nuclear reactors - each worth about Bt10 billion - had also taken place in August. Moreover, several trade invoices were collected late in the month, so the actual export figures were significantly better than his previously announced 6-per-cent year-on-year growth, he added.“

It’s interesting to note that : “Sales to the United States fell by 7.9 per cent, the fourth straight monthly decline due to the weakening economy there. Exports to the US were down 2.7 per cent in the first eight months”

Exports in august 2006 were 11,72 billions USD. The difference bewteen a growth of 6 % and a growth of 17,9 % equals 1,39 billions USD (48,8 billions THB). That’s a big difference…

And what is this story about “re-export of 2 nuclear reactors” ? What are they talking about ?

When the BOT will publish the details of exports figures (end of september) we will be able to have a better view of the situation.