Archive for June, 2007

Date of elections : the little game continues

“Before the end of the year” ?

“25 november” ?

After or before the birthday of the King in december ? (“oh my lord, election billboards all over Bangkok before the birthday of the King, you are out of your mind“, yes we’ve heard that too)

Or… in 2008 ?

Surayud, the Prime Minister, has an idea.

Sonthi, the Junta’s leader, has obviously another one.

But they could probably find a compromise, because they have a point in common : they are both general. 😉
Continue reading ‘Date of elections : the little game continues’

Currency : more deceptions from BOT

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“Managed float system keeps Baht stable

The baht has been stable for the past one or two months under the Bank of Thailand’s managed float exchange rate system, according to BoT Governor Tarisa Watanagase.
The U.S. dollar has traded between Bt34.50 and Bt34.65 for the past month due to possible dollar buying by the central bank.

Despite trade- and equities-related inflows, the BoT was able to curb the baht’s appreciation as trade volume is limited by controls on speculative inflows, while investment in local debt must be fully hedged via foreign exchange swaps.
(Nation)

The naiveness of this news illustrates what the BOT is doing.

1-Intervention
The BOT is indeed buying USD, in order to curb the value of the THB. And by the way, because USD is loosing its value (anyway), the BOT records… accounting losses.
And interventions are easier due to capital controls, decided last december, because they create a small volume market, isolated.

2-Manipulation
The “managed float exchange rate system” is nothing less than manipulation. This is why we have 2 rates : the “on shore rate“, the one that BOT is looking at, very proud. And the “off shore“.

Today : 1 USD = 31.60 at off shore rate (we broken the bottom record last march, by the way). And 34.50 with the on shore rate.

That’s a 9 % difference !
Off shore rate shows only one thing : the real value, or the market value, of the THB. Continue reading ‘Currency : more deceptions from BOT’

Constitution : amnesty for the junta and extended lifespan for NLA

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It’s like that in Thailand : sometimes decisions take a long time to mature. Very long time. And occasionally, major decisions can happen… in a jiffy. 😉
Today is a perfect example, about the new Constitution…

“The controversial draft Article 299 of the draft charter which grants de facto amnesty to the military junta for staging the coup and tearing up of the 1997 charter was unanimously approved without debate by the Constitution Drafting Assembly (CDA) Thursday.

The assembly also approved in principle to add a highly controversial clause in the Transitional Provisions by agreeing to extend the lifespan of the junta-appointed National Legislative Assembly (NLA) after the promised general election and allow them to morphed into the ad hoc senate until a real senate is selected and appointed by the rules set by the new draft charter.”

Nation

GDP : investments are slowing down

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New chart regarding the GDP and its components. Today : Gross Fixed Capital Formation.

Basically, it covers the new investments made by businesses. After Private Consumption, it’s another important component of GDP.

This chart shows the % of change from the same period (quarter) of the previous year.

As you can see for Q1 2007 investments were down 0,87 % compare to Q1 of 2006.

The trend is worrying. The high point was Q2 of 2005… Since then, thai businesses are slowing their investments. Slowly. But surely.

Q1 2007 was the first quarter with negative growth since Q3 of 1999 !

So, watch out with Q2 of 2007. We will see if the negative trend continues or not.

Foreign Business Act 2 is well alive

The thai authorities are kind enough to refresh our memory… The legal process regarding FBA 2 is doing well. Very well.

The communication campaign starded june 26.

A former deputy commerce minister wrote an article in Nation.
Based on the latest information, the new law is likely to come into effect in October – well before the legislative assembly’s term expires with a new election, expected in November or December.
Commerce Minister Krirk-krai Jirapaet is working well with members of the NLA to finalise the legal points of the amendments, with agreement on most issues.

Then, one day after, it’s official (Nation). The Secretary to the Commerce minister said that, indeed, the reviewing process of the draft was under way. And would be concluded by the end of july.

The commissioner is scheduled to conclude the rectifying process by the end of next month. The Act will be returned for the Cabinet’s acknowledgement and should be enacted before the end of the current government’s term“.

And of course…. “The ministry said the FBA amendment would make Thailand friendlier to foreign investors.

(I’ll prepare an article to explain in details the FBA 2 issues. And to explain why this law is a real danger for the foreign business community in Thailand, contrary to the propaganda served by the authorities since last november).

Sufficiency Economy : +24 % for the military budget ?

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Sufficiency Economy at work.

“The Defence Ministry’s budget for fiscal 2008 is expected to increase 24.33 per cent to Bt143 billion, from the current fiscal year’s Bt115.02 billion.”

It’s important to note that the 2007 budget (115.02 billions) was already up… 33 %, compare to the 2006 budget (86 billions) 😉

It means that in 2 fiscal years, the military budget would have increased of… 66 %. That’s really “sufficient”, isn’t it ?

And to put figures in perspective, let’s remember that the gvt forecasts a deficit of… 165 billion baht for the whole fiscal year 2008. Continue reading ‘Sufficiency Economy : +24 % for the military budget ?’

“Interesting and artistic value… but no thanks”

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Another example of censorship, rather despicable… This time from… TAT (Tourism Authority of Thailand), the public agency that designed the campain “Amazing Thailand“, in order to lure tourists. Remember ?

Amazing, indeed. Continue reading ‘“Interesting and artistic value… but no thanks”’


Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.