Digging out from under Thailand's 1997 Crisis debt | Bangkok Post: learning

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Thailand has long recovered from the 1997 crisis, but the debt, held by the FIDF under the central bank, remains and puts a drag on Thailand's development.

Every year the government must direct money to making interest payments on this debt.

This is money that could be better spent developing the country.

Read previous articles on this lingering debt: #1 and #2.

Click button to listen to Restructuring Thailand's 1997 Crisis Debt and rightclick to download

PUBLIC FINANCE: Korn wants solutions for FIDF debt and B65bn interest by Wichit Chantanusornsiri

The government must move quickly to restructure the outstanding debt of the Financial Institutions Development Fund, as interest costs alone run at 65 billion baht per year, says Finance Minister Korn Chatikavan
Deputy Premier Trairong Suwannakhiri has held talks with the Bank of Thailand about the 1.1 trillion baht in debt held by the FIDF to help reduce the burden on the annual budget.

The liabilities, which stem from the fund's bailout of bankrupt banks and finance companies during the 1997 crisis, were later made the responsibility of the government with costs to be ultimately carried by the central bank.

Regulators are currently considering several options to help reduce the carrying cost of the debt, including refinancing FIDF bonds with the issue of zero-coupon bonds to be sold directly to the central bank, an option that would essentially cut interest expenses to zero.

A second option, one that would require amendments to the BOT Act, would be to consolidate the central bank's accounts to open the door for excess reserves to be applied against the debt.

Mr Korn said the central bank's reserves were now at an all-time high, and that it remained questionable whether the funds were being used to maximum efficiency.

It's an opportunity cost that the government must direct 65 billion baht per year to paying the FIDF liabilities rather than use these funds for new development projects," he said.

Mr Korn added that as the liabilities stemmed from the central bank's actions in the first place, the responsibility should remain with the central bank, rather than the Finance Ministry and taxpayers.

The FIDF liabilities account for one-quarter of the country's public debt, which stood at 3.96 trillion baht at the end of 2009.

Over the past decade, FIDF liabilities have fallen by only 100 billion baht.

(Source: Bangkok Post, PUBLIC FINANCE: Korn wants solutions for FIDF debt and B65bn interest, 6/03/2010, Wichit Chantanusornsiri, link) 

FIDF - Financial Institutions Development Fund, the fund under the central bank responsible for bailing out banks and other financial insitutions after the 1997  financial crisis

debt - an amount of money that you owe หนี้
interest - payments made for the use of another's money for a period of time
interest expenses - money paid by an organization to cover the cost of borrowing and debt
restructure - to organise something in a different way to make it work better ปรับโครงสร้างใหม่
outstanding - currently exists, not ended or finished yet
talks - negotiations, formal discussions of problems between different sides in a conflict in order to solve the problem
burden - a serious or difficult responsibility that you have to deal with, a difficult thing that must be done, a heavy load to carry ภาระ (See glossary)
annual - happening once a year ประจำปี
budget - the amounts of money that an organisation has available to spend on different things during a period งบประมาณ (See Wikipedia)

liabilities - debt, the amount of money that a company owes หนี้สิน
X stems from Y - X comes from or is caused by Y
bailout - help in the form of money to prevent failure and bankruptcy ช่วยไม่ให้ธุรกิจล้มละลาย  (See glossary)
bankrupt - when a business fails and the assets are sold off by a court (liquidation) (See Wikipedia)
finance - to provide money for something จัดหาเงินทุนให้
finance companies - companies that provide loans to people to buy things like cars (but are not as heavily regulated)
crisis - an urgent, difficult or dangerous situation วิกฤต
responsibility - having to take care of some task as part of your job
ultimately - finally, in the end, after a series of things have happened ท้ายที่สุด, ตอนสุดท้าย, ในที่สุด
central bank - the main bank in a country that controls the supply of money in the economy and provides financial services to the government and other banks (See Wikipedia)

regulator - a government agency that issues rules (regulations) to control activities in an industry 
options - choices, the different things that someone can choose to do ทางเลือก
refinancing - making a new arrangement for a loan, changing the conditions and terms
bonds - an agreement by a government or an organization to pay back money that an investor has lent plus a fixed amount of interest by some date in the future (See Wikipedia)
zero-coupon bonds - "a bond that is issued at a deep discount from its value at maturity and pays no interest during the life of the bond" (See Wikipedia)
issue - offering securities (stock shares, bonds) for sale
essentially - for the most part ที่สำคัญที่สุด

amendment - change in a law
BOT Act - the law that guides the operation of Thailand's central bank
consolidate - join together a group of many things into one รวมเป็นหนึ่ง
accounts - the accounting records of a company, the records of money paid, received or owed over a period of time by a company
consolidate accounts - join together different sets of accounting records into one set of accounting records
open the door for - create the possibility or opportunity for
excess - greater than is usual; too much of something มากเกินปริมาณที่พอดี
reserves - foreign exchange reserves, the amount of foreign currency or gold held by a national bank, which is used for dealing with the national banks of other countries เงินสำรอง
excess reserves - foreign exchange reserves beyond the amount needed for operation
questionable - involving doubts about whether something has been done properly ที่น่าสงสัย
funds - collection of money เงินทุน
maximum - the most or best possible ที่สูงสุด ที่มากที่สุด
efficiency - doing a task well without wasting time, money, resources (See glossary) การทำงานอย่างมีประสิทธิภาพ คุ้มค่าเวลาและใช้พลังงานหรือต้นทุนในการผลิตน้อย เพื่อให้ได้ผลผลิตมาก

opportunity - a situation when it is possible to do something that you want to do (See glossary)
opportunity cost - (See Wikipedia)
direct X to Y - give resource X to use or project Y
development - the gradual growth and formation of something
taxpayers - people who pay taxes (who don't want to see their hard-earned money wasted) ผู้เสียภาษี
public debt - government debt (money that the government has borrowed over time to pay for spending deficits)
decade - a period of ten years ทศวรรษ, ระยะเวลา 10 ปี

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