I’m no economist but ain’t stupid either

[Eric]

The fact is our economy is in dire state. Korn has list the woes. -3% GDP, 2 M unemployments, export down double digits, more business failures etc. It is worse than the '97 crisis except banks are in slightly better shape but are not lending. We can't print money as no one will buy our treasury bonds or have sufficient gold reserve to bankroll. With the millions out of work, they can be cannon fodders for political games. We also have to keep the economy moving till the world recession recover which can be protracted.

All countries will spend big to stimulate their economies and keep jobs. All countries will run into 3-10% GPD deficits. Borrowing among countries will be high. UK borrow 100% of GDP. So Thailand at 35% (thereabout) is not over gearing. Singapore went into their reserves which Thailand did not which is good. Revenues are also seriously down which curtail another source of funds. There really is no choice but to reach for friendly countries for loans. Unfortunately borrowing at this times is necessary.

However, you have a point in stating how the hugh chunk of borrowed money should be used albeit into grey 'political' areas. We need accountablity and transparency and the government will have to provide that to show that all the money are targetted at the right and legal places.

[Chaiyo Thailand]

The fact is our economy is in dire state. Korn has list the woes. -3% GDP, 2 M unemployments, export down double digits, more business failures etc. It is worse than the '97 crisis except banks are in slightly better shape but are not lending. We can't print money as no one will buy our treasury bonds or have sufficient gold reserve to bankroll. With the millions out of work, they can be cannon fodders for political games. We also have to keep the economy moving till the world recession recover which can be protracted.

All countries will spend big to stimulate their economies and keep jobs. All countries will run into 3-10% GPD deficits. Borrowing among countries will be high. UK borrow 100% of GDP. So Thailand at 35% (thereabout) is not over gearing. Singapore went into their reserves which Thailand did not which is good. Revenues are also seriously down which curtail another source of funds. There really is no choice but to reach for friendly countries for loans. Unfortunately borrowing at this times is necessary.

However, you have a point in stating how the hugh chunk of borrowed money should be used albeit into grey 'political' areas. We need accountablity and transparency and the government will have to provide that to show that all the money are targetted at the right and legal places.

Hi Eric

I enjoyed your forum and I agree with most of your informations, however, I need some clarifications.......

1) Just last night, I heard on one of the news channel (forgive me, I can't remember which one, as I watched so many, for my business) and it said, Thailand's unemployment is currently at 1 m. Did I hear wrong ?

2) "Singapore went into their reserves which Thailand did not which is good." I think, it's only appropriate, if you had explained that Singapore's reserves is many times more than that of Thailand's. Singapore's GIC and Temasek have invested billions of dollars (hundreds of billions of Baht) in CitiGroup, AIG, UBS....and so on. In Singapore's case, therefore, there's no reason to borrow. They are lenders.

3) If we (Thailand), really want to move on to the next level, in economy, then we should partner Singapore, in as many joint ventures as possible, as they (Singapore), are among the top ' world class' in Management.

[Eric]

Sawadee Chaiyo. The -3% GDP and 2M unemployment were Korn's projections.

As regards to Singapore drawing from the foreign reserve, my premise is that the reserve are for national disasters or emergencies. As this is an economic crisis, there are other means of borrowing. The reserve is important to support and maintain confidence for monetary and exchange rate management and also limits external vulnerability. It is a level of confidence to markets that a country can meet its external obligations. It has a bearing on sovereign rating. Perhaps the size of Singapore reserve may not affect its rating but I feel that the drawing from reserve for economic reason will start a precedent which will be hard to manage. Thailand maintain discipline and did not reach for its foreign reserve as it will made foreign borrowing more expensive as rating deteriorate.

I agree that there should be more economic collaboration between Thailand and Singapore as well as locating more new export markets. If I am not wrong, Singapore investment to Vietnam is more than investment to Thailand now.

Thanks

[jhcusa]

The Government before Thaksin was also Democrats and they also borrowed money. They are under influence of making the country dependent its a tradition in that party and their foreign moneylenderfriends knows that.

[Chaiyo Thailand]

Sawadee Chaiyo. The -3% GDP and 2M unemployment were Korn's projections.

As regards to Singapore drawing from the foreign reserve, my premise is that the reserve are for national disasters or emergencies. As this is an economic crisis, there are other means of borrowing. The reserve is important to support and maintain confidence for monetary and exchange rate management and also limits external vulnerability. It is a level of confidence to markets that a country can meet its external obligations. It has a bearing on sovereign rating. Perhaps the size of Singapore reserve may not affect its rating but I feel that the drawing from reserve for economic reason will start a precedent which will be hard to manage. Thailand maintain discipline and did not reach for its foreign reserve as it will made foreign borrowing more expensive as rating deteriorate.

I agree that there should be more economic collaboration between Thailand and Singapore as well as locating more new export markets. If I am not wrong, Singapore investment to Vietnam is more than investment to Thailand now.

Thanks

Sawasdee Krap Khun Eric

I agree, what you've said in the first paragraph, is normally the case with many countries, however, Singapore's case is an exception....they have plenty of reserves to support their currency, to draw money for various economic reasons, long term investments in huge institutions, at a discount, and so on. Some, may not consider the current Financial meltdown a disaster, but I've alot of respect for Singapore government's governance, based on their very long term track records. If not for Singapore's Mr Lee Kuan Yew's and Dr Goh Keng Swee's advices, today, China would not be as developed.

Singapore's Temasek Holdings had lost alot of money in their Thailand's Telco investments and maybe partly because of that their CEO is replaced. I'm, sad to say, feeling sorry for them, when some of my countrymen, reacted negatively towards them, on this action. It was, a long term foreign investments, in Thailand, and we all should have supported it....even those who didn't like Thaksin, as it would have encouraged them (Singapore), to invest more in Thailand. Nobody, is so stupid, to throw away their money on someone/company, without expecting any good dividends in returns. I'm, thus, not surprised, if Vietnam has overtaken Thailand, in terms of Singapore's investments.

Hi Lalida

I don't want to bet with you because, I know, I'll lose. In every spendings, it's very hard to digest, no one has benefitted anything from it/them. But then, that doesn't mean, we've to stop spending ,where it is essential (I don't know, if huge army spending is essential....so I won't include it). Yes, you can say, we must have every Baht accountable, as and when payment is made out, to minimise the corruptions. But, you can never, ever, wipe out corruptions 100%, as there're several ways to dodge the authorities. Eg inflate the Invoices, getting kick back, commissions etc etc.

[Voice]

Hi Chaiyo, misinformation yet again! From the government and Thai media. Thailand hasn’t kept correct recording of unemployed due to our state of economy I am sure it far too high than one could mention for the world to hear.

[Chaiyo Thailand]

Hi Chaiyo, misinformation yet again! From the government and Thai media. Thailand hasn’t kept correct recording of unemployed due to our state of economy I am sure it far too high than one could mention for the world to hear.

Hi Voice

Nice to hear from you. If the unemployment is not controlled soon, the government is going to be under alot of pressure...more people will join street protests.

Maybe, to begin, they can start......
1) Cutting the pay but remain employed. Some money to take home is better than no money. Less worries also means less medications.....thus less expenses.
2) Manufacturers can cut down productions, instead of closing down, by working 3-5 days a week, instead of 5-7 days a week. In this way, they can still employ workers, and keep their expenses down.
3) The government can assess their businesses, and if need be, arrange bank loans for them, at competitive rates.

[Voice]

Hi Chaiyo, thank you very much it good to be back too. In the past weeks when I was in Thailand I have met with a lot of businessmen in Bangkok and had spoken to many of their employ. Most of the companies around Bangkok have already cut down on working hours, some 3 days on & off to keep the workforce going. The most worrying for them is that the order of production has gone down as low as 50% of the output. The government itself hasn’t done very much about planning as it has the law waging again foreign investment. As the Baht is very strong it look less attractive for the margin and more expensive to produce here in Thailand. Thailand is one of the country in the Fareast that produce car accessories due to less demand for car sale & production around the world Thailand have lose out major order like Nissan, Honda Toyota etc. On high technology we also have lose out because of less demand on electronic goods. Thailand is one of agriculture country we have been producing sugar, rice, chicken, noodles and canned foods etc therefore I think the government should come up with the plan to increase production make it less expensive but high in quality to compete with major producer like China that low in quality. The Bank only give out loans if the project involves government, I don’t think at the moment Ahbisit know what to do or decide what to do so they everything is left blank!

[faranginkorat]

In response to a question about unemployment in Thailand, I'm no ecomomist, but I can do the math.

I was very surprised by a study released about a year ago showing unemployment in Thailand being the lowest in any of the 125 or so countries included.

It included everywhere that data was available for (excluded Somalia, for example).

The unemployment rate for Thailand was noted at 1.2%, which really surprised me based on my experience in Thailand.

There were other references in the media to this number, which supposedly came from a government office of statistics, or something like that.

One of the references in the media was more detailed, noting some 3.5 million unemployed and a workforce of about 30 million.

Obviously, that is 12%, not 1.2%, and then everything made sense!

[Chaiyo Thailand]

Hi Chaiyo, thank you very much it good to be back too. In the past weeks when I was in Thailand I have met with a lot of businessmen in Bangkok and had spoken to many of their employ. Most of the companies around Bangkok have already cut down on working hours, some 3 days on & off to keep the workforce going. The most worrying for them is that the order of production has gone down as low as 50% of the output. The government itself hasn’t done very much about planning as it has the law waging again foreign investment. As the Baht is very strong it look less attractive for the margin and more expensive to produce here in Thailand. Thailand is one of the country in the Fareast that produce car accessories due to less demand for car sale & production around the world Thailand have lose out major order like Nissan, Honda Toyota etc. On high technology we also have lose out because of less demand on electronic goods. Thailand is one of agriculture country we have been producing sugar, rice, chicken, noodles and canned foods etc therefore I think the government should come up with the plan to increase production make it less expensive but high in quality to compete with major producer like China that low in quality. The Bank only give out loans if the project involves government, I don’t think at the moment Ahbisit know what to do or decide what to do so they everything is left blank!

Hi Voice

You've done a good survey and, may I contribute my 2 satangs worth of opinion ?

1) Autos sales are down by about 50%, everywhere in the world......Japan, Korea, Europe, US and Thailand, but, in Thailand's case, there's not much help from the government. To save this industry, Thailand, will not only save jobs, earn foreign currencies, bring down transport costs, but, will also assure foreign investors' confidence in Thailand. The strength of the country and its government is judged, after they go through the financial crises and, not when things are normal.

2) Productivity and quality control (QC) is very important in every industries. The companies will have to do alot of researches and developments to reamain competitive and, what better time than now, when the sales are down by 50% (means production is down) and, there's plenty of spare time, which was not there, when the sales were booming.

3) While the employees are going through these courses, the employers can reduce their salaries, to keep the factories going.

4) Any business person, who thinks, in business, he can make money all the times, is really naive. During boom time, he should put aside a portion of his revenues, that may come into use, during bad times, like now.

5) The biggest problem with Thailand is that, the governments and the army generals don't last too long and, they're busy thinking of themselves and, have no long term policy for the country to move on to next level. Every government, will blame the previous governments, for the mistakes and, yet, they will do the same mistakes themselves. This is the disease and, we've to find the cure.