Archive for April, 2009

Lalaland : “Overall, economic fundamentals were satisfactory on Q1”

Another breach in the space- continuum ! Higher and stronger than Alice in Wonderland with a rocket up in her arse…

Mid january, it was the Bank of Thailand… the BOT saw “signs of economic recovery” … A real performance and a big laugh..

Today, it’s the Finance Ministry’s turn, with this highly funny summary about the thai economy during Q1 : “Overall, the economic fundamentals were in the satisfactory level, with low inflation and stable foreign reserves, despite risks in rising unemployment.” 😉

Thailand’s tourist arrivals stood at 3.7 million in the first quarter of this year, down 14.7 per cent from the same period last year due to global economic crisis and political problems, according to the Finance Ministry’s economic report.

Released yesterday, the report showed that while quarterly private investment and consumption slid, supporting the economy was the government’s spending. In the quarter, Bt567.4 billion of government budget was disbursed, up 41.1 per cent on year, due to the economic stimulus schemes. In March, about Bt16.2 billion from the Cheque Chuay Chart scheme was disbursed and Bt14 billion of the free-education scheme was disbursed.

The economic stimulus measures played a more important role in bolstering the economy, especially when domestic demand and private investment shrank largely. Though overall exports dropped due to the global economic conditions, some items showed an improvement particularly those in the agro-industrial and electrical and electronic products thanks to the demand recovery in the Middle East, China and Africa,” said Ekniti Nitithanprapas, the ministry’s spokesman.

“Overall, the economic fundamentals were in the satisfactory level, with low inflation and stable foreign reserves, despite risks in rising unemployment.” (Nation)

I’m laughing, but actually it’s not very funny. It could even be scary. Those brainless bureaucrats think that the national bribe of 2000 THB for 9 millions people and other government’s spendings are enough to make the economy, to give the impulse, to shape the economy.

It’s of course totally wrong. The 20 billions THB burned of the national bribe are nothing but a fart on GDP figures.

Furthermore, government’s spendings are… borrowed money. The government is penny less (read here) and can’t create jobs per se. It takes on the left to give on the right (or it borrows). This is what the government is doing. And anyway, the bullets fired on Q1 won’t be available on Q2… The gun is empty… and cold.

The Soviet Union is long gone… but those stupid socialists and keneysians fanatics still believe in the magic stick, in alchemy applied to economy.

Give the authority to the government to spend 89797787567856 trillions of THB (borrowed of course), pay people to dig holes and other people to fill holes, and chop chop, miracle, Jesus is back, my casas es tu casa, the GDP will grow.

Anyway, I’m getting angry, it’s bad for my heart. But all those clowns will lose face on may 20, when GDP figures (first estimation) for Q1 will be published by the NESDB.

(meanwhile, you can still read my report about GDP Q4 2008)

Abhisit in the time machine : “communists are still active”

abhisittimemachine

Prime Minister Abhisit Vejjajiva says there is still a communist movement in the country, but he believes the general public would reject it.

He was commenting after the National Intelligence Coordinating Centre reported on Monday that some groups of people were conducting illegal political activities similar to those of the dissolved Communist Party of Thailand (CPT).

Mr Abhisit said it was clear there was still a comunist movement inThailand.

However, he was confident most people in the country were opposed to communism. (Bangkok Post)

Abhisit did it again. What ? To push the button of the warp time machine. Back to the 70s, when the “commies” were everywhere (hence the necessity of a little massacre in 1976)… Nostalgia ?

Anyway. Abhisit seems tired.

A more talented fearmonger would talk about the Flying Pig Flu Virus for instance. Much more efficient. More fashion. 😉

But… communists… really… It’s… old school. I’m sure the children don’t even know what is communism.

Public debt rises to 3,59 trillions THB in february

Thailand’s public debt at the end of February stood at 39.93 per cent of gross domestic product (GDP), not far from the statutory ceiling of 50 per cent of GDP as required by law, a senior Ministry of Finance official said on Monday.

Pongpanu Svetarundra, director-general of the Public Debt Management Office, said Thailand’s national debt at end of February was approximately Bt3.59 trillion.

Of the total amount, about Bt2.29 trillion was in direct government borrowings, Bt1.01 trillion from state enterprises which are not financial institutions, Bt182 billion were debts incurred by government-run financial institutions, Bt110 billion in debts of the Financial Institution and Development Fund and Bt3.68 billion by other government agencies, he said. […]

Compared to January 2009, Thailand’s public debt in February increased by Bt73.78 billion, Pongpanu said. (TNA)

The percentage of GDP is idiotic. For one very good reason : GDP is falling. Right now. While you’re reading this.

So the percentage will increase. Mechanically.

In 2008, total GDP was 9 102 billions (at current prices). Let’s assume a drop of 5 % for the whole year, that would make 8 647 billions… So a ratio debt to GDP of 42 %.

But we forget another factor… during the year the total debt will continue to go up ! 😉

The government is penny less… And despite (shy) calls for budget cuts… the debt will increase. Abhisit has no choice.

So the ratio debt to GDP will follow. Up. No escape.

[Rendez-vous may 20, the NESDB will publish the GDP report for Q1 2009]

Chart, VAT collection and total net revenues in march : negative again

(Source report from the Ministry of Finances for march 2009).

-VAT collections plunged by 18 %, compared to march 2008 (in february, the drop was 25 %).
-total net revenues fell 1,5 % (-21 % in february)

It looks a litte bit better. But… it’s the base effect. March 2008 was weak, with a subsidy on oil taxes for instance.

And the VAT, which a bigger indicator, remains totally depressed. The consumption is still falling, despite all the “stimulation” lunacies from the government… Bad news for the GDP.

Car taxes and exports taxes are crashing. Perfectly normal. Sales of cars are falling, and exports too. One item explodes though : taxes on liquor (+55 %) !

After playing Santa Claus, the government is trying by every means to replenish the empty coffers, with “silent” and/or “sin” taxes. 😉

vatmarch

netgvtrevmarch

Now, here is the detail of the report from Finance Ministry.

gvtrevenuesmarch

The forecast is easy to make : fasten your seatbelt in april (because april 2008 was strong with 127 billions THB in total net revenues, and because the crisis is deepening, riots etc.) and also in may.

May is traditionally a very strong month, with the first part of corporate taxes… In may 2008, the total net revenues was 273 billions THB… All the clowns at the government were relying on this famous month (and september too, the second part) to design their budget.

They are going to suffer… Why ? Because the first (the very first) effects of the recession on businesses profits, hence on corporate taxes, will show up in may… Corporate taxes are a lagging indicator…

The real nightmare will be in september.

Anyway, the shit is about to hit the fan big time. And this is precisely why Abhisit made a striking U-Turn a few days ago (he started to increase the budget and the budget deficit following the “stimulus logic”, and now he wants to make some cuts ! read here).

[to see my article about february, click here]

UPDATE
Look how critical is the situation…

Tax refunds for exporters may be delayed due to concerns over fraud and falling fiscal revenues caused by the recession, the Finance Ministry says.

But business leaders argue that delaying refunds for exporters only increases the pressure on their operations, at a time when demand has plummeted due to the global downturn.

Members of various foreign chambers of commerce, including India, Japan, China, Britain and the US, met with Deputy Finance Minister Pradit Phataraprasit yesterday to express their disapproval over the slow pace of repayments.
[…]
Mr Pradit said while he understood the concerns voiced by local businesses, the government was facing its own financial pressures, as tax revenues for the fiscal year ending September are expected to fall as much as 280 billion baht under target.Tax agencies, as a result, were under added pressure to ensure that claims were legitimate, resulting in processing delays.
(Bangkok Post)

The story about fraud is of course totally laughable ! 😉 Classic (but so pathetic) face-saving exercise.

Exporters enjoy many privileges, because they are so important for the thai economy… So when the government plays with them like this, with empty pockets… it shows that it is really against the wall !

Thai Airways : tales of the daily corruption

Apichai Sangsasi, director of Thai Airways International’s Crew General Administration Department, yesterday filed a complaint with the National Anti-Corruption Commission against a selection committee chaired by Finance Ministry permanent secretary Suparut Kawatkul.

The NACC the day before rejected Suparut’s appeal against a ruling he had violated the law by appointing deputy director-generals at the Finance Ministry.

Apichai said the committee changed the list of nominations for two key executive positions at THAI without the president’s endorsement, in order to benefit certain committee members who had a conflict of interest.

He said that last September 4, the selection committee named himself and Montri Chamriang as executive vice president for operations and business administration, respectively.

However, at another meeting six days later, the committee cancelled the nominations and instead named Porpong Sanpakit and Norahuch Ployyai for the positions.

Upon investigation, the new appointees were found to be connected to some of the committee members, as a brother-in-law and classmates.

Apichai said that prior to the selection committee’s meeting, there had been an attempt to distance himself through charges he caused more than Bt10 million in damage to the company via the rental of crew accommodation in Rome. (Nation)

Thai Airways is like a crashing airplane. First the oil prices, then the economic crisis… A loss of 21 billions THB in 2008, an investment plan cut, the inability to renew an old fleet, a board in total disarray with the changes of government…

But all airlines in the world face many challenges… How come Air France/KLM for instance is (still) able to make profits ?

Thai Airways can no longer hide the uggly truth : this company is not a company. It’s a bordello. An economic bordello.

For long, Thai Airways was the whore of the military… Generals, colonels, retired or not… you have a ridiculous rank and an obscene uniform ? And a sister, a cousin, a buddy, a classmate without a job ? Send them to Thai Airways… That will do the trick…

Then of course the politicians arrived… they wanted also a piece of the milking cow. And they had also sisters, brothers, cousins, maids, classmates etc. 😉

Everything was cool : tourism was boosting… the airline received awards… the hostesses were an object of fantasy… Those were the golden times…

But it was smoke and mirrors.

Now that we have a real, and I mean, a real economic global crisis… the whore has no clothes anymore. Naked.

Her pimps are going to face some serious troubles…

And the poor suckers (AKA the thai tax payers)… will pay. Eventually.

It’s interesting to remember that Abhisit, as a payback for his election, gave the Transports Ministry to a member of the Newin’s MPs gang (Newin is the ex-friend of Thaksin who changed allegiance and gave his support to the Democrat Party, creating the Frankenstein Coalition)

UPDATE

Thai Airways International has witnessed a 20-per-cent drop in bookings since the government imposed a state of emergency on April 13, a move that has scared away Asian tourists – mostly from China, South Korea and Japan. (Nation)

And minor shareholders are complaining…

No respite : car sales plunged 36,5 % in march

The Federation of Thai Industries has reported a 37 per cent decrease in automobile sales, and a 52 percent drop in total production in March.

Surapong Pasitpattanapong , spokesman of the Automobile Industry Division at the Federation of Thai Industries, revealed that domestic car sales in March totalled 42,000 units, down 37.8 percent from last year, while the sales of motorcycles dropped by 12.40 percent, to 125,000 units.

Surapong concluded that domestic vehicle sales in the first quarter went down by 33.4 percent from last year’s 160,000, to 107,000 this year. (TANN)

carmarch

I will update the chart with the exact data end of april (when they will be published by the Bank Of Thailand).

Eventhough the total units sold in march (42 000) was higher than february (34 361), the trend remains really negative. The negative % of change year on year (-36,5 %) is a record.

And march is longer and there is the traditional MotorShow in Bangkok…

No need to go to Harward to foresee bad results in… april (riots and a deepening economic crisis)…

Another classic from Not The Nation : “Police Field Several Hundred Thousand Leads In Sondhi Case”

Another pastiche, and another classic from Not The Nation… !

Police Col. King Kwaengwisatchaicharn, head of the team investigating the assassination attempt on Sondhi Limthongkul, said he had whittled the list of suspects to a little under one third of the Thai population.

The new estimate of 19,673,298 suspects is slightly lower than the 24,120,939 mentioned by police earlier in the day. […]

King said he had been inundated with leads since the assassination attempt. “Every time I get the list down under 15 million it spikes back up again,” he said. “It is incredible how many people wanted to kill this guy.” […]

Personally I think his humor, so british, his sense of non-sense are totally irresistible.

And the point is : this kind of humor matches perfectly many thai stories.


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.