Floods: Recovery & Govt Borrowing | Bangkok Post: learning

About the floods

World Bank: Thailand in good financial position to pay for flood recovery. Govt debt at 40.2% of GDP, well within 60% legal debt ceiling.

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ECONOMY: Rehabilitation to cost B755bn, National priorities 'may need adjusting' by Soonya Vanichkorn & Somruedi Banchongduang

A new World Bank report estimates public spending on post-flood rehabilitation in Thailand could reach 235 billion baht by 2014, but experts say this would still not exceed the country's public debt ceiling.

The government can accommodate this flood-related damage and loss with the existing public debt ceiling. Whether it decides to raise funds from foreign or domestic organisations is up to the discretion of the government, but scope remains for borrowing," Kirida Bhaopichitr, a senior economist at the bank, said of the preliminary assessment of post-flood recovery rehabilitation. 

Thailand's public debt now stands at 40.2% of gross domestic product (GDP), while the debt ceiling stands at 60% or 600 billion baht. 

The assessment said Thailand would need 755 billion baht to rehabilitate for a stronger and more resilient economy. 

The private sector is expected to need most of that at 520 billion baht and the public sector the other 235 billion.

The production sector will require the lion's share of the money, with the finance and banking sub-sector taking most of that, followed by the manufacturing sub-sector and water-resources management.

"The state can accommodate these projects alongside existing plans. However, implementation may involve some reprioritisation as to what would be best for the country's recovery," said Annette Dixon, the World Bank's country director for Cambodia, Laos, Malaysia, Thailand and Burma.

Given that the scale of this disaster is unprecedented in terms of the provinces it hit, the number of lives affected and impacts on the economic infrastructure of the country, it would be only prudent for the government to focus on what is most needed for recovery and to enable the country to remain competitive in the future. 

Total damage and losses are estimated at about about 1.36 trillion baht - 1.28 trillion or 94% in private damage and 81.4 billion in damage to the public sector. 

The World Bank estimates Thailand's GDP growth at 4% next year and 5.6% in 2013. 

The country can also take this as an opportunity to 'build back better' - not just building back but doing it in such a sustainable way as to enable it to withstand volatility in climate change in the future as well," said Ms Dixon. 

The assessment report is preliminary. A revised version will be submitted to the government at the end of next month.

Meanwhile, HSBC predicts V-shaped growth for the Thai economy after the floodwater recedes - 4.5% next year after a year-on-year contraction of 5% in this year's fourth quarter. 

Frederic Neumann, co-head of Asian Economic Research, said the research house has cut this year's GDP growth to 1.7% from 3.9% projected earlier. 

The key engine will be government spending after the crisis, with a 1% increase expected in state expenditures to help boost the country's real GDP by 0.2 percentage points in the following quarter, he said.

Dr Neumann expects the Bank of Thailand will cut its policy rate by 0.25 percentage points next month from 3.5% now while maintaining the one-day repurchase rate to ease economic pressure.

(Source: Bangkok Post, ECONOMY, Rehabilitation to cost B755bn, National priorities 'may need adjusting', 29/11/2011, Soonya Vanichkorn & Somruedi Banchongduang, link) 

Economics Vocabulary

public spending - government spending

public debt - government debt (money the government borrowed to pay for times when government spending was greater than tax revenue received by the government = government spending deficit)
gross domestic product (GDP) - the total value of all the goods and services produced by a country in one year (See Wikipedia)

Thailand's public debt now stands at 40.2% of gross domestic product (GDP), while the debt ceiling stands at 60% or 600 billion baht  

exceed - to be more than something; to go beyond a limit; to be greater than a number or amount เกินปริมาณ เกินกว่าที่กำหนด
debt - an amount of money that you owe หนี้
ceiling - an upper limit เพดาน ขีดจำกัด

debt to GDP ratio - a measure of the level of government debt that a country has (See Wikipedia and also list by country)
public debt ceiling - the highest level of government debt allowed by law; very high levels can lead to economic crisis (See Wikipedia)

exceed the country's public debt ceiling - go beyong the level of government debt allowed by law

accommodate - to prepare what is needed for something ปรับตัว to provide a place for someone or somethingให้ที่พักพิง
the government can accommodate this flood-related damage and loss with the existing public debt ceiling

rehabilitation - the process of making normal again after suffering injury or harm การทำให้กลับสู่สภาพเดิม, การทำให้กลับมาดีเหมือนเดิม making a system, building, etc., suitable for use again, i.e., bringing it back to a good condition การฟื้นฟูสภาพกิจการ ฟื้นฟูสุขภาพ

rehabilitation to cost B755bn

the priority - the most important thing to do, the most important goals to achieve (that must be done first, before all other things)
priorities - the most important things that you must do first (before other less important things)

national priorities - the most important goals for a country to achieve
national priorities may need adjusting - since a lot of expensive flood repairs and prevention measures are needed, might have to spend less on other things
prioritize (verb) - deciding what is most important and should be done first
prioritization (noun) - the process of deciding what is most important and should be done first
reprioritization (noun) - changing what you think is most important (after looking at the situation again)

implementation may involve some reprioritisation as to what would be best for the country's recovery 

estimates - guesses of what the size, value, amount, cost, etc. of something might be การประมาณค่า

post-flood rehabilitation - rebuilding things after the flood
a new World Bank report estimates public spending on post-flood rehabilitation in Thailand could reach 235 billion baht by 2014

funds - money needed or available to spend on something เงินทุน
raise funds - get money for a business or project by loans or injections of new capital by owners (to expand business, new business venture, maintain existing operations through bad times, etc)

domestic - within the country ภายในประเทศ
raise funds from foreign or domestic organisations

it is up to you - you will decide
it is up to the government - the government will decide

discretion - having the power and authority make decisions
up to the discretion of the government

scope remains for borrowing - there is still room for borrowing, it is still possible to borrow (have not reached the limit yet)

assessment - evaluation, the process of making a judgment or forming an opinion, after considering something or someone carefully (example: teacher assessment or grading of students in a class) การประเมิณสถานการณ์

preliminary - not final, temporary; an event or action that introduces or prepares for something else ขั้นต้น, ขั้นแรก
preiminary assessment - not the final evaluation and report

the assessment report is preliminary

recovery - 1. when the economy gets better (more jobs, higher incomes); 2. becoming strong and healthy again after an illness or a proble การฟื้นฟูสภาพ
the preliminary assessment of post-flood recovery rehabilitation

repair - to fix something that is broken or damaged ซ่อมบำรุง

resilient - able to succeed after failure, able to get strong after being weak คืนสู่สภาพเดิม  ความสามารถในการฟื้นคืนสู่ปกติ
the assessment said Thailand would need 755 billion baht to rehabilitate for a stronger and more resilient economy

sector - a part of the economy ภาคเศรษฐกิจของประเทศ (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,...) (See Wikipedia)
expected - believe will happen คาดว่า (จะเกิดขึ้น)

public sector - the government
private sector - businesses; all the businesses in an economy

the private sector is expected to need most of that at 520 billion baht

share (verb) - to have or use something at the same time as someone else ใช้ร่วมกัน
share (noun) - the one part that one person has, of a thing used or shared by many

the lion's share of the money - the biggest share or part of the money (more than anyone else)

finance - to acticity of providing money for businesses and for projects and other activities or new ventures (via loans or "raising equity" new money put into the business by owners) จัดหาเงินทุนให้ (See Wikipedia)
finance and banking sub-sector

manufacturing sub-sector - the part of the economy of companies producing goods in factories

resources - things needed for proper functioning, to get a job done; things such as money, workers and equipment that can be used to help achieve something ทรัพยากร
water resources - water used by people and companies in different ways (for agriculture, industry, at home, etc)

water-resources management - the process of managing water (storing enough in dams so that farmers have enough for their crops; while making sure that there is not too much that could lead to floods)

the state can accommodate these projects alongside existing plans 

implementation - making a plan into reality, making sure that something that is planned actually gets done; actually do or carry out a plan (See glossary) นำ (แผนการ) มาบังคับใช้  

scale - size (relative size)
disaster - something very bad that happens and causes a lot of damage or kills a lot of people ความหายนะ ภัยพิบัติ
unprecedented - has never happened before, this is the first time ที่ไม่เคยเกิดขึ้นมาก่อน

the scale of this disaster is unprecedented - there has never been a disaster this big

in terms of - as measured by

impacts - effects on different people and things
infrastructure - the high-cost facilities that everyone in the economy shares (water, roads, electricity, trains) สาธารณูปโภค
prudent - careful, making reasonable and sensible decisions; good judgment   รอบคอบ ถี่ถ้วน (See glossary)

the scale of this disaster is unprecedented in terms of the provinces it hit, the number of lives affected and impacts on the economic infrastructure of the country

prudent - being careful and sensible; being conservative and not taking risks (example: The school teacher was prudent with investments and by the time he reached retirement he was a millionaire.)
focus - be concerned mostly with one thing ให้ความสำคัญ  (rather than waste time on many), concentrate time and attention on one thing

enable - to make someone able to do something, or to make something possible ทำให้เป็นไปได้
competitive - involving competition มีการแข่งขัน

it would be only prudent for the government to focus on what is most needed for recovery and to enable the country to remain competitive in the future  

opportunity - a situation when it is possible to do something that you want to do (See glossary)
sustainable - able to be successfully continued for a long time ยั่งยืน, ถาวร ที่ดำเนินต่อไป an activity that can continue over long periods of time (some activities, like spending more money than you have, are not sustainable)

withstand - survive a strong force that could destroy; to be strong enough not to be hurt or damaged by extreme force, extreme conditions, etc. ทนทาน
volatility - changing suddenly and unexpectedly (bad because it makes it difficult to make decisions) ความไม่แน่นอน

climate - the general weather conditions usually found in a particular place สภาพอากาศ
climate change - changes in the weather such as more rain and floods or no rain, no water, drought and less water for farmers who need it; caused by things that humans do on earth to destroy the environment that a person's carbon footprint measures (See Wikipedia)

the country can also take this as an opportunity to 'build back better' - not just building back but doing it in such a sustainable way as to enable it to withstand volatility in climate change in the future as well

revised - written again, changed and improved เปลี่ยนแปลง
submitted - formally given to someone so that they can make a decision about it ยื่น  ยื่นเอกสารเพื่อการพิจารณา

A revised version will be submitted to the government at the end of next month.

V-shaped growth - meaning "V-shaped recovery"
V-shaped recovery - when the economy suffers a sharp but brief economic slowdown followed by a strong recovery, the normal shape of an economic slowdown (See Wikipedia)

year on year - an economic statistic for a period this year, compared to the same period last year
contraction - decreasing in size; shrinking, growing smaller; getting smaller
fourth quarter - the last three months of the year

year-on-year contraction of 5% in this year's fourth quarter

research house - a company that does independent research for other companies 
projected - expected, forecast; the amount that experts believe (forecast) for the future

the research house has cut this year's GDP growth to 1.7% from 3.9% projected earlier  

key - important คนสำคัญ
the key engine - the key engine of growth driving the economy, the important things or factors that will keep the economy going and growing
crisis - an urgent, difficult or dangerous situation วิกฤตการณ์  วิกฤต

the key engine will be government spending after the crisis

boost - to increase; to strengthen เพิ่ม; ทำให้มีกำลังมากขึ้น
expenditures - spending
state expenditures - government spending

real - an economic statistic with the effects of inflation taken out (so that prices at two different times comparable)
inflation - a general rise in the price of goods and services
nominal - an economic statistic in current prices without the effect of inflation taken out

real GDP - national income with the effect of inflation taken out

with a 1% increase expected in state expenditures to help boost the country's real GDP by 0.2 percentage points in the following quarter

policy - a plan of action to guide decisions and achieve outcomes (See Wikipedia) นโยบาย
rate - the level or speed at which something happens or changes, or the amount or number of times it happens or changes in a particular period อัตรา
ease - to make or become less severe, difficult, unpleasant, painful, etc ทำให้ง่าย
pressure - stress, a force causing change

Dr Neumann expects the Bank of Thailand will cut its policy rate by 0.25 percentage points next month from 3.5% now while maintaining the one-day repurchase rate to ease economic pressure.

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