Songkran, alcohol ban : how to make a Z-Turn and lose face, simultaneously ?

Prime Minister Abhisit Vejjajiva has asked the Council of State to examine the Alcohol Control Act and advise him before he makes a makes decision on whether to ban alcohol during the Songkran celebration next month.

The Council of State is expected to give its opinion this week.

There are conflicts between the Act and the coupmakers’ regulation which allows the sale of alcoholic beverages from 11am to 2pm, and from 5pm to midnight. The Act gives the alcohol policy committee authority to ban alcohol sales on specific days. (Bangkok Post)

Backfire. Hot potato. Abhisit, the alleged Prime Minister, gave a green light to his ministers to play with the thai talibans… The result ? They fell themselves into the trap. No one else is to blame.

Abhisit showed, once again, a total lack of leadership, a lack of courage and very poor political skills.

To understand how this new soap opera started, click here.

The thai talibans, because they are talibans coming from the Dark Age, hate alcohol and hate the idea that people could drink. Fair enough. Therefore, they pushed for a total ban during Songkran.

First, the Deputy Health Minister made some proposals, in their direction… then he modified the proposal. Mistake… And then, eventually, his boss (the minister) said that he was okay with the idea.

Now they are trapped.

They can’t let it go and cancel the whole circus. And they can’t impose a real ban.

So, in a very pathetic way, they give the hot potato to someone else ! The Council of State ! To get, allegedly, an “advice “.

What an absurd joke.

Abhisit wants to save face… His little face. But he will lose it… and the people will laugh at him because eventually they will impose a ban, but a… mini ban.

Like the Mini-Me in Austin Powers movie.

The world faces huge challenges because of the crisis… but Mister Abhisit is looking at his navel and is working really hard… about sales of alcohol during Songkran holidays. What an achievement.

Abhisit ? A mini Prime Minister.

A mini resignation would be suitable.

UPDATE
And of course the talibans… are not happy ! They think -and they are right- that this story is nothing less than a delaying tactic. I told you It would make a perfect thai drama.

Anti-alcohol activists on Tuesday demanded the removal of Deputy Prime Minister Sanan Kachornprasart as chairman of the National Committee on Alcohol Consumption Control, citing a conflict of interest.

The call was made a day after Maj-Gen Sanan resolved to seek a Council of State ruling on the legality of the alcohol sales ban during next month’s Songkran festival. The move was seen by activists as a delaying tactic to prevent the ban from taking effect before the festival. (Bangkok Post)

UPDATE MARCH 28

Bingo. That was fast ! The Council of State gives back the hot potato.

The government has the authority to ban alcohol sales during the Songkran festival next month, the Council of State says.

The government’s legal arm said the proposed ban on alcohol sales was not in conflict with an announcement issued by the ruling National Executive Council (NEC) in 1972.

The ban could be issued under the 2008 Alcohol Beverage Control Act and not contravene the 253rd announcement of the NEC, Deputy Public Health Minister Manit Nopamornbode said. (Bangkok Post)

Finance Minister’s Way of the Cross : “economy could contract by 3 %”

The worse-than-expected economic recession worldwide has caused Finance Minister Korn Chatikavanij to announce that Thailand’s economy could decline by 3 per cent in 2009, down from earlier estimations of between zero and two per cent. The government’s stimulus policies have also been taken into account for the projection.

In the case of the government policy failing to save the ailing economy, Korn said the economy could be slashed by 8 to 9 per cent and more than 2 million workers could lose their jobs.

He added that the government must inform the public of these facts, in order to build cooperation between the state and private sectors to alleviate the crisis. Furthermore, it will have to raise more public debt to supervise the economy, but cautious and transparent distribution of the budget is also imperative. (TOC)

Poor Korn ! A real Way of the Cross… On his way to the Via Dolorosa…

From incredulity, to denial. From denial to lies… And then the admission.

Well you know what we say : only stupid people do not change their mind.

Reality check…

Anyway, for the entertainment we still have the Prime Minister Abhisit (“take 2000 THB, go spend, and you’ll be rich and the economy will boosted and you’ll win the lottery too. Don’t forget to vote for me. And please, don’t forget to love me“).

And of course the Bank of Thailand… Indeed, the BOT saw “signs of recovery” in january. Sounds like a century ago, I know.

Recovery is like the Loch Ness monster or Bigfoot : all the clowns are talking about it. But no one has seen it. Yet.

More seriously : exports will continue to decline. Investments are in the toilets. Consumption is on holiday. Tax collections are melting like an icecream in Isaan.. What do we have left ? Governments spendings… With debts…

Not a very nice cocktail for any kind of recovery.

We don’t like it. We fear it. But we have to face it. The recession.

We have to look the gorgon Medusa in the eyes.

Delusional Abhisit : “Stimulus measures to yield results in 2 or 3 months”

We shouldn’t care much if Abhisit is happy to be delusional. Afterall, it’s his life.

The problem is : this man is the (alleged) Prime Minister. And each week, he’s speaking to the people, via a TV statement.

Prime Minister Abhisit Vejjajiva said Sunday that the stimulus package of his government would yield results in the next two or three months.

Speaking during his weekly TV programme, money under stimulus schemes be released to the people next week and distribution would be carried out throughout next month and May.

He said the stimulus money from the government, including Bt2,000 nation-rescue cheques, allowances for the elders and allowances for health volunteers would help stimulate the local economy. (Nation)

Many people don’t have a clear understanding of the situation.

So to tell them that the 2000 THB they’re about to receive are going to “yield results” is not only stupid. But also criminal.

The backslash is going to be painful.

The stimulus he’s talking about is like 160 billions THB, around 4,5 billions USD… But guess what thai businesses are  losing (exports) 4 to 5 billions USD per month, since november ! The total turn over of thai exports went from 15/16 billions USD… to 11 billions since november.

The amount of wealth destroyed is much higher than… the “stimulus plan” (this idea applies to the whole world actually).

Therefore, from a macro economy point of view, Abhisit’s stimulus is pathetic. And dangerous, because it creates high expectations.

Abhisit said mid-january :

I am not going to boast by committing how much the economy will grow, but I can assure you that the government is committing to to spur economy and to lift the quality of life of all the Thais.

Abhisit is a bad poker player. In the current situation, to make such a gamble is just a proof of stupidity.

It’s not even arrogance anymore. It’s foolishness.

Songkran holidays : “room reservation rates decreased by more than 40 %”

The Association of Domestic Travel revealed that the economic crisis has had an effect on hotel bookings for Songkran days this year.

Association of Domestic Travel president Maiyarat Pirayakoset said that 3-month tallies of tourism figures show stagnation as the world’s economy slows down, and that people are spending about 50 per cent less. It has effected the hotel industry, which reports that room reservation rates have decreased by more than 40 per cent.

The president of the Association of Thai Travel Agents Apichart Sankary confirmed what Maiyarat said, adding that room reservations have dropped by more than 40 per cent, compaired with the same period last year. Chinese tourists who leased more than 60 private flights last year, have leased only 30 flights this year. (TOC)

I don’t really trust this kind of feedback. Because those people are the same who ask for help from the government, therefore their interest is to make us cry.

But in any case, they don’t lie about the trend. They can’t lie about the trend. And my friends, the trend is all what matters. This is one of the ideas I’m toying with on this blog since a few months.

The trend is negative. The trend is a freaking negative loop, a non linear process, a self reinforcing process…

The trend makes the politicians look like fools.

Abhisit sees “yields” for his stimulus plan in 2 or 3 months. Trichet sees recovery on Q4. Bernanke too. Obama sees everything in pink. Geithner sees nothing at all… The Big Clowns Circus is pumping like crazy. Coming to your neighbourhood soon.

Anyway. The thais officials were thinking that tourism would bail them out from the exports slump… The foreigners would come to Thailand by A380 loads… Sabai.

But those brainless people forgot something : during a recession, what is the first budget people cut ? … holidays. Of course.

Just plain common sense. Even a high schooler knows this. But no, the clowns don’t.

What happens when a millionaire sees his stock portfolio melting ? When Joe The Plumber loses his job ? When a business owner loses 25 % of his turn over ? Do they continue to come to Thailand and spend the money they don’t have anymore ? A few yes. But other don’t.

And what is true with the foreign visitors is also true for the local tourists. Obviously.

Therefore, expect no miracle from tourism, as far as GDP growth is concerned.

Chart, commercial banks : total credit and type of debtors… first red lights ?

(Source Bank Of Thailand, table FI_CB_015_S3).

Time to update the charts about total credit and type of debtors, at commercial banks.

The total amount (outstanding) of credit was 7 465 billions THB in january, lower than december (7 549 billions, 84 billions less). Year on year (compared to january 2008) we still have a very strong growth : 18 % !

(Credit = Overdraft + Loans + Bills)

Now a view (still in % year on year) per type of debtors.

Now a view, per amount and type of debtors.

The push in january 2008 (after the elections, with the government of Samak) is obvious.

There is still no credit crunch in Thailand… The growth of credit remains strong, if we compare with last year.

It will change of course. It has to change…

I note one thing that could be a bad sign : in january, total credit for business went down 50 billions THB, compared to the previous month… We have to go back to january 2007 (after the Coup) to find a – 49 billions monthly difference.

Exactly the same for credit to individuals : minus 11,6 billions in january… the last negative difference was in january 2007.

My feeling : january 2009 could be the official beginning of the infection of the thai credit system (on the commercial banks side) by the recession virus.

My point : since january, the situation of the economy has worsened. It’s a fact (less exports, fall of production, unemployment on the rise, less consumption)… how in those conditions the banks could (or would be willing to) lend more ?

The same principle applies everywhere in the world : banks were reckless by giving cheap money before… now the bozos at the government (and on the streets) complain that the banks are too cautious !

They don’t understand that it’s meaningless to give credit during a full blown recession. The risks are just too high. Credit to a company to build new factory ? To make what and to sell to who ? Credit to someone who is unemployed to build a new house ?

So what do we have left ? Credit to please the clowns, the politicians. To save jobs at zombie companies during a certain period of time. But for how long and for what results ?

Chart : auto sales drop 30% in first two months

Auto sales in the first two months of the year dropped 30 per cent year on year to 66,446 units, according to data compiled by Tri Petch Isuzu Sales.

This is despite the 7-per-cent month-on-month increase in February sales. In February, the number of units sold reached only 34,361 units. (Nation)

Here is the chart, until february.

The car market can be volatile on a monthly basis. But… the pattern of 2 very low months is unusual.

No question about it : the recession is there. Even though the appeal of car ownership is very powerful in Thailand… consumers are switching to frugality. The banks might be responsible too (the credit party is over).

But businesses are another important factor. Sales of commercial cars are plunging.

Add the export drama to the domestic market… and it’s easy to understand the disaster the local car industry is facing.

Electronics, electrical appliances and automotive exports, which contribute 30 per cent of the Kingdom’s exports, suffered falls of 30 per cent, 33 per cent and 33 per cent, respectively. [february]

Meanwhile, the Thailand Automotive Institute said auto firms had cut their capacity by 50 per cent in the first two months of 2009, when local sales and exports dropped by 25 per cent and 30 per cent, respectively. (Nation)

It’s now a race against time. Actually, the main factor of the crisis is the time. Every day that passes with a drop in demand, a drop of the activity… leads to a compound effect.

The process is not linear. Companies can hold for some time, they can cut costs, adapt, use their cash, borrow… government can substitute itself (bailouts, handouts, loans whatever) but if the downturn is too long… then… businesses lay off, close factories… unemployment rises… people lose their income, consumption drops… lower demand leads to lower investments… debts and defaults are increasing, etc.

Can we break the negative loop ?

Alcohol ban during Songkran : the thai taliban tribe has a new member

Public Health Minister Witthaya Kaewparadai yesterday approved the two options with regards to alcohol sales during Songkran, from April 12 to 14, before asking the National Committee for Alcohol Consumption Control to make a final decision. (Nation)

Thai politicians have the sense of hierarchy. And the thai t(h)aliban tribe got a new member.

March 5
The Deputy Health Minister proposes :

ban alcohol sales throughout the entire Songkran holiday period, for five days or for just three days.

March 12
The Deputy Health Ministers changes his plan :

ban all sale of alcohol during the entire period; or ban sale at stores but allow restaurants, pubs and hotels with an Excise Department permit to serve booze from 6pm to midnight.

March 18
The Health Minister agrees with the latest proposal of his subordinate. But as a good politician, he gives the hot potato to… the National Committee for Alcohol Consumption Control !

He’s courageous.

Of course, there is a debate within the government. The Tourism Minister is not happy… He wants to postpone the ban. Read his statement and you’ll find the light. Or the drink.

Tourism and Sports Minister Chumpol Silapaarcha said he did not agree with the public health ministry’s plan to ban alcohol sale during Songkran, as it would destroy the festive atmosphere. Instead, he said, the government should put off plans to ban alcohol until next year, because the country badly needed to boost its tourism.

“We agree with the ministry’s plan to ban alcohol sale, but it should not be done this year,” he said. “We will lose a lot of tourists if we stop them from purchasing alcoholic beverages. The government can issue a ban when the economy returns to normal.

“We have to remember that tourists bring money to Thailand and we must take advantage of this. So I ask the government to put off the ban.”

What a nice guy… very straightforward in a way.

Let me translate his words : “I agree with the ban, but right now we are in deep poo poo so we need them. The tourists. Unfortunately if I may say. Oh my god, I always forget that I’m the Tourism Minister. What a freaking job. But anyway, when the economy will be back to normal, fuck them, we will be able to impose the ban.”

What do you think ? Am I a good translator ?

“Surprise” drug testings : “every day between 9 and 11 PM”

PATONG, PHUKET: Drug testing taking place at popular nightlife entertainment venues in Patong has yet to result in any arrests of foreigners in connection with illegal drug use. [...]

Each night in Patong, three testing teams, including police and public health officials, conduct the surprise raids from 9 pm to 11 pm.

The initiative follows a policy directive issued by Deputy Prime Minister Suthep Thaugsuban to crack down on drug abuse.

The raids are scheduled to continue over a 90-day period that began March 6. (Phuket Gazette) [thanks to a reader for the link]

A good one, isn’t it ?

Now the new “war on drugs” decided by the dashing Abhisit takes a real thai color.

Purple like when a sample of piss contains methamphetamine.

And we can feel safe since the directive of the Deputy Prime Minister is followed with diligence by the thai police…

Abhisit’s 2000 THB national bribe will benefit large groups…

Central Group companies, Tesco Lotus, the Major Cineplex Group, CP Fresh Mart, Big C Supercentre, McDonald’s, Carrefour, KFC and Pizza Hut are among 21 business operators enlisted to allow low-income earners to purchase items using their Bt2,000 government cheques.

Deputy Finance Minister Pruttichai Damrongrat said some operators were even offering discounts of up to 70 per cent.

The operators signed a memorandum of understanding yesterday. They make up 3,146 outlets nationwide. (Nation)

Well done Abhisit. Nine millions (latest figure) of people are going to receive… 40 Euros (2000 THB) end of march, beginning of april (read here)..

The alleged Prime Minister call this a “stimulus plan“, to “start up” the economy. It’s so pathetic. It’s a blow into the water, it’s nothing more than a mere national bribe.

And it’s a striking demonstration of contempt : “You are poor ? Here are 2000 THB. Go buy junk at Tesco and shut up”.

Some are going to drink those 2000 THB. Other will buy a mobile phone (made in China). And a majority will just buy stuff in large outlets.

Eventually, big groups like Central, Tesco, CP, Carrefour… will enjoy higher sales during a few weeks. And then ? The state will recover 7 % (VAT). And then ? After ?

Where is the “stimulation” in this idiotic scheme ? 18 billions THB burned. For nothing. 18 billions THB to be shared between a lot of large companies (so per companie the effect will be marginal). And after ?

Exports, drop of 11 % in february : serious anomaly on gold and jewelry

The total amount of exports for february was published today : 11,73 billions USD (against 10,49 billions in january).

That’s a drop of 11 % compared to february 2008.

Meanwhile, imports are crashing… drop of 39 % year on year, at 8,15 billions… Ouch. Bad omen for the consumption and the industry (that imports raw materials, parts etc.)

In February exports of electrics fell 30.1 per cent, electrical appliances 33.3 per cent and automobiles by 33.2 per cent, according to the ministry’s latest figures.

The three sectors account for more than 60 per cent of Thailand’s total exports. (DPA)

The long term chart :

So, I can hear you : you see the crisis is over. Exports are higher in february than in january… Hurrah.

Wait a minute.

According to Mr Siripol, the February exports were also boosted by high gold prices which prompted Thai investors to sell the precious metal shipped to Hong Kong and other markets. Gold exports surged 1,148% last month to $1.86 billion from $781 million in January. Exports of jewellery and ornaments as a result rose 402.7% in February, earning $2.15 billion. (Bangkok Post)

Guys, this is a serious… anomaly !

It’s insane… Okay prices were lower one year ago… but such an increase… And by the way it shows that some thais are desesperate… they are ready to sell their gold because they need cash… and someone “out there” is ready to pay for the thai gold…

[to answer a question from a reader : no, the Bank of Thailand is not the culprit. Their gold reserve is still there, see comments section]

Anyway you know what it means. It means that the “better than very bad” number for february is totally artificial... and won’t last.

In march the nightmare will start again, with a drop of 25 % year on year for total exports.

I remind you the schedule : the Bank Of Thailand will publish the details (in USD, in THB, per category of goods, countries etc.) on march 31.

I will update all the charts the following days.

Last point : this article wouldn’t be completed without a… rant, right ?

Look the liquid bullshit some people have into their brain…

Aat Pisanwanich, director of the Centre for International Trade Studies of the University of the Thai Chamber of Commerce (UTCC) said he was a bit surprised to see big improvements in February’s exports although the world economy was still mired in the downward spiral.

This guy is… paid. This guy is “educated”. And yet, he’s ready to make a total fool of himself…

Abhisit goes orbital : penultimate “stimulus” plan… now 1,4 trillions !

What is happening to Abhisit ? Jet lag after his small trip in the UK ? Anyway, something is seriously wrong, because the Prime Minister is going totally orbital.

Thailand plans to borrow Bt1.4 trillion to finance investment in infrastructure during fiscal years 2010-12, when foreign direct investment and exports will remain subdued, says Prime Minister. (Nation)

Paf ! Like the cork of a Champagne bottle. Like a Scud missile. Like a north-korean “satellite”. Like a supersonic fart.

Why 1,4 trillions THB (39 billions USD) ? Why not 5 trillions ? Or even 10 trillions ? I mean at this point of insanity… why should we put some limits ?

-Thailand does not have this money. Period.The government is broke. They must already borrow 2 billions USD to pay for the CURRENT “stimulus” plan… so who is going to give Abhisit 39 billions USD ? Where ?

It’s vaporware. Like the mega-projects that Thaksin and then all his followers endorsed. Where are the HUNDREDS of kilometers of new train lines all those clowns did promise to the people ? On the paper.

-Abhisit does not learn. He doesn’t learn from the mistakes of other people. The japanese spent mountains of money during the 90s crisis to build… everything… bridges to nowhere, roads to nowhere… Did it stop deflation ? Of course not.

The US are doing the same… stimulus with money that doesn’t exist. Bush, Paulson and now Obama and Geitner… they all follow the same pattern. It’s a failure. But the USA have a BIG ADVANTAGE. They can print… money. Thailand could not do that (at least not on a large scale).

-Abhisit looks -once again- like an amateurish fool. In january, his “stimulus” plan was 180 billions THB (or 200, or 300 no one really knew).

3 months later… he presents another one… of 1,4 trillions ? What happened in 3 months ? Ah yes I forgot : he visited my blog and he eventually understood that the thai economy was in deep trouble…

I remind you that the Bank Of Thailand saw “signs of recovery” in january… Another bunch of clowns.

Abhisit himself announced last week a recovery... during the fourth quarter. So why a new stimulus plan ?

You think I’m harsh when I use the words “amateurish fool” ? I give you the gran finale :

“The projects are small, but collectively they are large. Even though schools and hospitals are small, when a large number of them emerge, totally they will require a huge sum of investment,” Abhisit told reporters yesterday.

He said it was not yet clear how many jobs would be created.

I didn’t make up. Maybe Nation did.

So to summarize : Abhisit wants to spend 1,4 trillions THB he doesn’t have and will not have, on projects he doesn’t know (“small but collectively large“), and he doesn’t even know how many jobs would be created…

So what’s the point of such plan ? I should even ask : what is the purpose of the thai Prime Minister on this earth, excepted flying to Davos, to the UK, making ridiculous comments and launching crazy ideas like stones in the water, exactly like all his glorious predecessors did (Thaksin, Surayud, Samak…) ?

Change with Abhisit ? Yes we can’t.

And good luck.

[to understand how the thai debt market is seen and why Thailand won't be able to borrow big, on the long term... Lack of confidence... click here. More on that later]