Press : Ikea delays its plans in Thailand

At last common sense starts to prevail…

A large european company has obviously connected the dots and has decided wisely to delay its plans in Thailand, due to the current uncertainty regarding foreign ownerships laws (the FBA controversy).

An interesting piece in Daily Telegraph.

“Ikea delays Thai plans as government moves to tighten foreign ownership laws

WHAT price flatpack furniture in Bangkok? Ikea, the Swedish retail group, has put plans to expand into Thailand firmly on the shelf amid an increasingly uncertain environment for multinational investors.

The Daily Telegraph can reveal that the lingering after-effects of last year’s military coup and a series of tougher laws on foreign ownership have prompted Ikea to postpone a move into one of south-east Asia’s most important economies. “

New Chief Of Army : “we must accept public’s decision”

As you may know, general Anupong has been appointed Chief Of Army. He will replace general Sonthi on october 1 (mandatory retirement ).

Anupong is member of the CNS, and was part of the Coup of september 2006.

He made some interesting statements… (Bangkok Post).

”Please be assured that I will take soldiers back to barracks and will not get involved in politics. There may be political problems, but that is the nature of democracy.

Even if the old political clique returns as a majority in the House and leads the next government, we must accept the public’s decision,” said the 57-year-old general. “

”Please be confident that I will never be lenient towards Mr Thaksin. Although we are friends, the national interest must come before personal matters. No one knows what the CNS ordered me to do with Mr Thaksin”

Visa : a Z-Turn… in less than 3 weeks

Quick summary : End of august, we learned that Immigration will stop giving “dependent extension of stay”, based on retirement visa (dependant can be spouse or child).

Then, on september 12, we received the official explanation given to justify this change.

Even by thai standards, it was ridiculous. Basically, they said that the Police Order of october 2006 contradicted… a Ministerial Regulation of 2002.

And because a Ministerial Regulation is superior, then they had to scrap the “dependent extension of stay” process. Period.

Quickly, we understood that something was wrong : because “dependent extension of stay” were given before 2006 and this famous Police Order. So ?

Better to say “we were wrong since october 2006″… rather than “we were wrong since 2002″, or… rather than “we want to change the regulation now”…

Anyway. On september 20, Immigration made a huge Z-Turn. Go back to status quo ante. They don’t change, they resume the process (see forum ThaiVisa here) and it’s possible again to apply for a “dependent extension of stay”…

All that in less than 3 weeks… How do you say “credibility” in Thai ?

Oil, transports : +8 % would not make a big impact… ?

A perfect illustration of :

-the oil factor (the very weak point of Thailand, read here)
-and the sense of humor of some thai executives when they deal with economy (or their cynicism…)

“Association of Inter-provincial Bus Operators Chairwoman Suchinda Cherdchai said on Thursday that she has submitted a written request to the Transport Minister for a hike in bus fares, amid continued rises in diesel oil prices.

Suchinda said that the operators asked to raise the fare by 8 satang per kilometre.

“Diesel is now Bt26.54 per litre. In the past year, when diesel weakened, we had reduced the fare by 3 satang per km. Inclusive of additional cost of 5 satang per km, we need a hike of 8 satang per km,” she said.

She also noted that the increase should not pose much impact on consumers. The bus fare from Bangkok to Nakhon Ratchasima, for example, will be raised by only Bt14 from Bt181 at present, she said.” (Nation)

A hike of 8 % should not pose much impact ?

And meanwhile, oil sets a new record (Light crude New York) : more than 83 USD…

And meanwhile, PTT is complaining : “Vithaya Wangchitrarak, PTT executive vice president, said that it is likely that the retail oil prices would be raised by 40 satang per litre, due to the continued hike in world oil prices.
At present, our marketing fee is only 40 satang per litre. So far, this year, PTT has lost Bt700 million from this business“. (Nation)

Scandal : 3 ministers have violated the law… but an “old one”

… They will never change.

“Under the graft law enacted in 2000, Cabinet members are banned from having more than 5 per cent of equity stakes in a company“

Unfortunatly…. three ministers of the Surayud cabinet (IT, Deputy Commerce and Interior) have shareholdings in a few companies higher than 5 %… Much higher.

It took them 10 month to figure out, and to understand that it could be, it might be, probably, a problem…

Of course, there is a “legal technicality” : “The penalty for violating the ban is termination of office, but a problem arises because the 1997 Constitution, which is the basis to meter out punishment, has been suspended. The 2006 Interim Constitution has no provisions to penalise the ministers and the 2007 Constitution has a temporary clause to exempt the interim government from rules relating to asset declaration
“Since there is no law for punishment, the NCCC has reported what it deems as misconduct to the prime minister for further action” (Nation)

It’s interesting to read some of their explanations. The Deputy Commerce Minister said for instance that her daugthers were managing the business, therefore she didn’t know nothing.

We can argue that the “legal technicality” is correct (even though the Surayud government was appointed before the Constitution of 2007). However, they have clearly violated the spirit…

And I should add : the NCCC has published in december 2006 the assets declarations (total amount) of all the Surayud’s ministers (plus spouses and children) ! So ?

Why the NCCC didn’t at that time reveal the problem of the shareholdings (that were, probably, listed on the assets declarations…) ?

Anyway. The fact that the IT Minister Sitthichai “owns 16.17 per cent in International Science and Technology, which runs Mahanakorn University of Technology, 31.33 per cent in Thai Space Industries, and 31.36 per cent in Technological Research and Development”, companies that are obviously working in the high tech field… that poses clearly a problem.

Press : “Democrat and Motherland parties will form a new coalition gvt… that will last 2 years”

A must-read piece published by Asia Times Online, that covers the probable outcome of the elections, the CNS’s actions toward foreign investors and the problem of the King’s succession.

This article was written by one of their editors, Shawn W Crispin , and part of a presentation made tuesday to a group of foreign investors in Bangkok.

Nothing to add. It’s just brillant.

Here are 3 excerpts. Click here to read the whole article.

Stock Exchange : drop of newly listed companies

“Pattareeya Benjapolchai, president of the Stock Exchange of Thailand, said the newly listed companies this year were much less than the target.

Over the first nine months of this year, there were less than 10 companies listed on the SET, far less than 64 companies the SET estimated previously.

Earlier, Prakorn Malakul Na Ayudhya, chairman of the SET, said he would like to implement urgent measure to boost new listed companies for the rest of this year or “fast track” policy“. (Nation)

Fast track policy ? Do they really believe that the problem is only… administrative red tape ?

Funny that no one is speaking about the current economic conditions…

Currency : after FED’s cut… THB is going up

Here we go again… After US Federal Reserve Board’s decision to cut rate by 50 basis, the Dollar is under great pressure. And the THB (off shore) starts again to going up (this morning 31,70).

What will do now the Bank Of Thailand ?

The next meeting of BOT’s Monetary Policy Committee is scheduled on october 10.

Cake and candle : Happy Birthday to the Junta

One year. Already. Times goes so fast.

On september 19 2006, a group of generals led by Sonthi, staged a Coup against Thaksin (who was outside Thailand at that time).

Since then, well, you know…

The CNS wants to “make public its achievements“(understand : none).

And Thaksin is… bitter and criticizes the Junta.

The circus shall continue. And the crisis too.

Elections : Democrats open their wallets (figurative style)

Here we go again… It sounds like Thaksin in the end of 2004, when he “launched” the idea of mega-projects (at that time… 500 km of mass transportation systems in Bangkok !).

The Democrat Party has a plan for the elections, to create a “stimulus for the economy“.

Press : King’s fortune estimated at 5 billions USD

The magazine Forbes publishes “The World’s richest royals“.

“In the top spot is the Sultan of Brunei (22 billions USD), 36 times more than then Queen of England (600 millions USD, 11th).

The only other Asian monarch to make the cut is the world’s longest-reigning living monarch, King Bhumibol Adulyadej, the deity-revered king of Thailand, who we estimate is worth $5 billion” .