Thailand Crisis

“The King assigned Her Royal Highness Princess Maha Chakri Sirindhorn to work at his command.“

This sentence closes the article of TNA (thai official news agency), reporting the 19th official statement about the King’s health, issued by the Bureau of the Royal Household.

The medical statement in itself is a repetition of the previous (”The King had been able to move around more as he wished. He could walk longer with the support of a walker and enjoyed a good appetite“).

However, the sentence about the Princess is new.

My article on Foreign Direct Investments was right on the spot.

Today, “the central bank chief revealed the foreign direct investment in the first eight months of this year totaled US$5 billion, down from $8 billion in the same period last year, since no commercial banks had raised their capital in that period.” (Bangkok Post)

I will update my chart with the figures of Q3 (not available yet).

But apparently, it seems that the third quarter won’t be really good…

South Africa = 7,2 %, China = 6,2 % in september, Vietnam = 8,8 %… What I’m talking about ? Inflation of course.

Emerging countries are suffering from inflation.

And what about western countries ? Same. “The inflation rate in the 13-nation euro area rose to 2.6 percent from 2.1 percent in September, the European Union’s statistics office in Luxembourg said today” (Bloomberg).

The trend is global.

But apparently, Thailand thought it could avoid this plague… Like France was thinking in 1986 that the radioactive cloud from the Chernobyl’s accident would stop… at the border with Germany…

The situation is changing. Fast.

And the BOT starts to show at last some common sense.

“Thailand is bracing for inflationary pressure next year following hikes in global oil prices, which are pushing up the cost of products and wages, the Bank of Thailand warned yesterday.

Central bank senior director Amara Sriphayak said the BOT feared a secondary inflationary blow would hit the Kingdom next year. The first-round is expected to occur after product manufacturers raise their prices due to an increase in oil-related production costs. After domestic demand improves and pushes up the economic-growth rate, manufacturers tend to hike wages, which would create a second impact. ” (Nation)

However, I disagree with the cause of the second impact… Improvement of demand, higher growth, and then hike of wages ? I think the BOT is reading too many classic economy books.

Where is the growth ? Where is the improving domestic demand ? !

It’s very likely that the BOT misunderstands the situation : we are heading toward a stagflation.

Weak growth and inflation.

18th official statement, since october 13 (when the King was hospitalized).

“The team of Royal Physicians reported that the follow-up blood tests of His Majesty the King showed that the inflammation of his large intestine has now returned to normal and the blood chemistry is within normal limits.

The monarch’s general condition is good, said the statement. ” (TNA)

I think this statement is the first one saying that -seemingly- the 2 medical problems are solved.

The first one was a cerebral ischemia (solved after one week), the second an intestinal infection (last week antibiotics treatements were stopped, and today blood analysis are normal).

And furthermore, the general condition is good.

So… we could, we should have soon a good news : when the King will be able to leave the hospital.

A new warning for the luxury hotel business (after this one), a new proof of a nasty “cisor effect” for 2008.

“We expect that overall occupancy rates for Bangkok’s four- and five-star hotels will only be 70 per cent in 2007 compared to 75 per cent in 2006,” said Navaphol Viriyakunkit, head of research at CB Richard Ellis Thailand.”

“Hotel prospects for 2008 looked worse because of a looming glut in the market.

The property consultant projected that more than 2,000 new four- and five-star hotel rooms would be completed in Bangkok in 2008, raising the supply by 24 per cent from 2007.

Thailand’s tourist arrivals in 2007 have been disappointing. During the first eight months of this year, 9.59 million tourists visited the kingdom, up 2.3 per cent from the same period in 2006 but well below the more than 10-per-cent increase registered in 2006. ” (Bangkok Post)

“The banking system’s non-performing loans increased in the third quarter in line with the economic slowdown, according to the Bank of Thailand. The NPLs, after provisions, totalled 260.4 billion baht, or 4.43% of total loans in the third quarter, slightly up from 254.2 billion baht, or 4.40%, in the second quarter.” (Bangkok Post)

Meanwhile, the principle of reality is hurting. The Fiscal Policy Office announces that “Thailand’s economic forecast will be revised on November 23, when the recent oil price hikes as well as global economic conditions will be taken into account“.

He said that “Thailand’s gross domestic product will be slashed 0.2 percentage point for every US$1 increase in the Dubai crude oil price. Meanwhile, the $1 increase will also push up inflation by 0.3 percentage point.” (Nation)

Last week, on october 19, the Bank Of Thailand has actually INCREASED its GDP forecast (Bangkok Post) , from 4 /5 % to 4,3 / 4,8 % !
It’s funny how things can change in one week…

To the credit of BOT (sometimes I’m too harsh with them), they said that “the new forecast was based on an assumption that Dubai oil prices would average $68 per barrel in the fourth quarter and $64.6 per barrel for 2007.“

Which might be actually totally… irrealist, as people start to understand… Oil is expensive today. It will remain expensive on whole Q4 (it’s the winter in US and Europe).

Today the average Dubai crude is at… 83 USD per barrel… (look here for the different price per month of delivery).

So long BOT…

The scandal of the plot against PPP (read here) continues to reverberate…

And create for the Junta a ridicule situation.

The chairman of CNS said today :

-Those who leaked what are claimed to be classified official documents of a state agency and released them to the public are “guilty according to law”

-but “related agencies are checking the authenticity of the documents” (they were authentitfied by the Prime minister himself already…)

-and he denies :”CNS does not hope to suppress an old power clique” (a huge lie, because it’s exactly the content of those documents)

-and for him, well, a new coup is still possible ! “When asked if there is going to be another coup if PPP wins the upcoming election, ACM Chalit said it is “unlikely” but refused to rule it out.” (Bangkok Post)
Another democracy lover in uniform shows is true face.

Here is an update of my previous chart about VAT (look here and here for a broader view of government’s revenues).

It shows the % of change for VAT collections (gross), per month, year on year, for the fiscal year 2007 (from october 2006 to september 2007, source Ministry of Finance).

For instance, in september the evolution was + 3,5 % compare to september 2006.

As you can see, the up trend seen since may is broken. And the level, albeit positive, remain weak.

What about values ?

Q3 = 109,96 billions THB
Q2 = 109,94
Q1 = 107,56
Q4 = 107,21

Here is a new chart : amount of VAT collection, per quarter, from 2003 to 2007 (in millions THB).

You can clearly see the “plateau”.

The machine hasn’t steam anymore.

You’ll notice that the plateau starts in Q2 of 2006, exactly the peak of the political crisis (after the dissolution and after the elections in april, boycotted by the opposition, etc.).

I wanted to wait before speaking about the new “scandal” : the rules announced last week by the Electoral Commission…

As usual, it’s better to wait for a while, for the drama to unfold…

So what all the fuss is about ?

The EC has enacted a totally insane (stupid, grotesque, hilarious, tragic you choose) set of rules, regarding the organization of the elections, how the medias can handle the campaign, the ways the political parties have to organize their campaign, etc.

For instance (just a quote) :
“Strictly read, no newspaper, broadcaster or internet blogger could mention one party without mentioning all. A printed or broadcast interview with one candidate on the election trail would be illegal unless all candidates in the same election got the same type of interview. A commentator cannot recommend a candidate for her honesty, say _ or point out the graft allegations against her.” (read the editorial of Bangkok Post)

If you want to laugh more, you’ll find other details “rule prohibiting news agencies, educational institutions and private organisations from organising public discussion forums without permission from the EC” (Nation).

Another one : parties can’t choose themselves the location to organize a meeting or a rallye. And all campaign billboards and posters could be set up only in spots designated by the EC…

And  : “The EC said parties could address the public from trucks but would not be allowed to park permanently in one spot. “

Should we be surprised ? No. This is Thailand. And this is Thailand ruled by a bunch of generals.

Basically, one year and half ago, for the april 2006 elections (after the dissolution) the EC was the tool of Thaksin, working with absolute no shame for him (some of its members went to prison after by the way).

And now… you can just change the label : the so called independent EC is working without any shame for the generals, supporting their obsession to close the doors to Thaksin, and following their own agenda for power.

However, the EC has a good way of defense : “why politicians refuse the rules now, when they didn’t oppose them during our meetings ?”

Indeed, that’s a good question.

Maybe, at that time, the representants of political parties were sleeping or typing SMS on their phone. They were not listening

Or maybe, they didn’t understand immediatly. Who knows ? Nobody knows. And it’s not important.

Second way of defense from the EC : “we set those rules in order to insure a fair and transparent elections, to insure that all the parties, big and small, are treated equitably without discrimination, to reduce the risk of vote buying etc. “.

We could almost cry in front of such display of commitment and democratic virtues.

Of course, it’s nothing less than bullshit.

They don’t give a rat about small parties, or the elections process in a whole.

The only aim is to control, delete, reduce, lower the impact of the campaign of the PPP (a revival of Thaksin’s old party TRT) in order to avoid at all cost its probable electoral victory (in the north and north east regions).

The scandal of the plot to curb PPP’s influences continues (read here, here and there).

Quick reminder : the CNS (Junta) basically made (and issued) some plans to curb the political influences of People Power Party (a revival of TRT, the party of ex-Prime minister Thaksin).

And they were caught like children smoking in the toilets.

So much for their image of “democracy lovers”, who staged a coup in order to restore values of democracy in the country…

The generals who wanted to play OSS and CIA games, of course, were stupid enough to put everything on papers. And the documents were leaked.

Even the Prime minister Surayud confirmed, with his legendary ingenuity, that they were perfectly… real.

A group linked to Thaksin released a translation in english (click here).

In a very pathetic way, the generals (Sonthi etc.) continue to try to deny, but on the side, by saying that basically it might be real with some fake inside… or the contrary… they don’t know exactly… however they “know” (of course) who leaked the documents…

It’s a traditionnal thai form of denial, looking like a confusing mixed salad…

“The 16th Royal Household Bureau statement on the condition of His Majesty said his large intestine had performed normally and he was no longer receiving antibiotics. His physical strength has increased, it added.”

The King has been hospitalized since october 13.

So to summarize : brain is okay (cerebral ischemia has been treated) and now the intestinal infection is over (no more antibiotics). So ? When the King will be able to leave the hospital ?

It’s still a mystery. Or a well kept state secret.