Virabongsa as central bank chairman: Conflict ahead? | Bangkok Post: learning

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Virabongsa as central bank chairman: Conflict ahead?

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Appointment of economist pushing for big changes (monetary policy, foreign reserves, sovereign wealth fund) may lead to conflicts. 

In the photo above, Virabongsa Ramangkura with Prime Minister Yingluck Shinawatra and Finance Minister Kittiratt Na-Ranong before a press conference.

Virabongsa's appointment to the position happened after the article below went to press, read here.

Click button to listen to Virabongsa Appointment to Central Bank to download

ECONOMY

Virabongsa tipped to be central bank chair

15/05/2012
Parista Yuthamanop

Virabongsa Ramangkura has been tipped to become the next chairman of the Bank of Thailand, according to sources.

A selection committee headed by Panas Simasathien, a former finance minister, finalised the nomination, which must now be submitted to Finance Minister Kittiratt Na-Ranong and the cabinet before royal approval.

Mr Virabongsa was selected ahead of MR Chatumongol Sonakul, the current central bank chairman and Tienchai Keeranand, a former rector of Chulalongkorn University. All three candidates were nominated by the central bank and Finance Ministry for final selection by the panel.

A former finance minister and deputy prime minister, Mr Virabongsa's selection may heighten building tensions between the Yingluck Shinawatra government and the central bank.

Mr Virabongsa in recent years has called on the central bank to ease its traditional conservatism and be more aggressive in reducing interest rates to spur growth.

He has also called on the central bank to allocate a portion of the country's foreign reserves for investment in infrastructure projects, a plan opposed by central bankers.

Mr Virabongsa, 68, holds a doctorate in economics from the University of Pennsylvania and has had extensive experience in the private sector, including positions as chairman of the Export-Import Bank, Double A Plc and Finansa.

Under the Bank of Thailand Act, the chairman must oversee general administrative matters of the central bank, including guidelines for the appointment of members to the three primary committees overseeing monetary policy, financial institutions and the payment systems.

The chairman is also responsible for approving guidelines over the central bank's foreign reserve management.

Central bank Governor Prasarn Trairatvorakul played down concerns about possible conflicts with the Yingluck administration.

He said the law guaranteed the independence of the central bank's operations by requiring decision-making through independent committees.

The chairman also must seek a mandate from other board members on changes.

"According to the law, the chairman should act as a buffer between the Bank of Thailand and the government," Mr Prasarn said. "I believe different opinions can be transformed into constructive dialogue."

But Korn Chatikavanij, deputy leader of the opposition Democrat Party and a former finance minister, expressed concern about Mr Virabongsa's close ties with the government and possible impact on the independence of the central bank.

His past advocacy for changes regarding monetary policy and foreign reserve management also was a concern.

"As the government pursues its pro-growth agenda, the central bank at least is the last organisation in the country to look after economic stability," Mr Korn said. "Mr Virabongsa should work carefully with the central bank as he is working closely with the government."

The law outlines the role and duty of the central bank chairman clearly. The law distinctly draws a line between his duty and that of the central bank governor. The law gives independence to the central bank governor in performing his work to a certain extent.

Mr Korn said that Mr Virabongsa's past support for fixed exchange rates had been proven wrong with the 1997 economic crisis.

He also repeated that any investment in domestic infrastructure should be financed directly by the government through the central budget.

Under the Abhisit Vejjajiva government, an agreement had been reached with the central bank that gave the governor final say in establishing the size of any reserves to be used to create a sovereign wealth fund.

The guidelines also called for investment to be free from political interference and focused on investment in the international markets.

Apichat Satitniramai, an economist at Thammasat University, said that the government could run into more conflicts with the central bank going forward

The government's policies are clearly to stimulate growth through fiscal spending, which in turn could spur inflation.

"The government aims to apply fiscal means to stimulate the economy, while the central bank focuses on inflation," Mr Apichat said. "Mr Virabongsa has said the country's foreign reserves are too high, and some should be used to finance future infrastructure investment."

There is a higher chance now that the appointment of Mr Virabongsa as the new [central bank] chairman could lead to more conflicts.

(Source: Bangkok Post, ECONOMY, Virabongsa tipped to be central bank chair, 15/05/2012, Parista Yuthamanop, link

Central Bank Appointments Vocabulary

tipped to become - many people (especially insiders) believe will be appointed to a position

chairman - the head or leader of an organization's board of directors
chairman of the Bank of Thailand

central bank -
the institution that controls the supply of money in a country and provides financial services to the government and other banks (See Wikipedia)
central bank chair - central bank chairman

board
- board of directors, the group of people in an organization who make the highest level of policy for the organization
board members - directors, people who are part of the board

Virabongsa tipped to be central bank chair

mandate - have the authority and power needed to do something
seek a mandate - seek the authority to do something
seek a mandate from other board members

The chairman also must seek a mandate from other board members on changes

sources - people who give the media information for the news

Virabongsa Ramangkura has been tipped to become the next chairman of the Bank of Thailand, according to sources.

independent (adjective) - free from outside influence เป็นอิสระ not being influenced by or dependent on other people เป็นหน่วยงานอิสระ not taking help or money from other people พึ่งตนเอง separate, not connected, working by yourself with your own resources
independence (noun)

independence of the central bank
central bank independence -
a trend towards increasing the independence of central banks as a way of improving long-term economic performance (See Wikipedia)

finalised - make a final decision about something
nomination - an official suggestion that someone should get a job, be given an award, etc. การเสนอชื่อเข้ารับตำแหน่ง การเสนอชื่อ
finalised the nomination

submitted - formally given to someone so that they can make a decision about it ยื่น  ยื่นเอกสารเพื่อการพิจารณา
approval - official permission การอนุมัต
submitted for approval

A selection committee headed by Panas Simasathien, a former finance minister, finalised the nomination, which must now be submitted to Finance Minister Kittiratt Na-Ranong and the cabinet before royal approval.

current - of the present time ปัจจุบัน
rector - the person in charge in some universities, schools, colleges and universities อธิการบดี
nominated - officially suggested for a job or position แต่งตั้ง
panel - a group of people brought together to discuss, investigate, and give advice on a subject

Mr Virabongsa was selected ahead of MR Chatumongol Sonakul, the current central bank chairman and Tienchai Keeranand, a former rector of Chulalongkorn University. All three candidates were nominated by the central bank and Finance Ministry for final selection by the panel.

tensions - disagreements and lack of trust that could break out in conflict and violence ความตึงเครียด
building tensions - increasing tensions and disagreements
heighten building tensions

A former finance minister and deputy prime minister, Mr Virabongsa's selection may heighten building tensions between the Yingluck Shinawatra government and the central bank.

finance - to provide money for something จัดหาเงินทุนให้ money to expand a business, project funding, borrow money to pay for something
ease - to make less severe บรรเทา ทำให้ง่าย

call on - ask someone to do something, request that someone take some action
conservative (adjective) - a philosophy or attitude of not accepting much change, especially in the traditional values of society
conservatism
(noun)

traditional
- things (clothes, music, customs, etc.) that have been part of a country or society for a long time
traditional conservatism 
ease its traditional conservatism - reduce the level of conservatism (become more flexible about accepting change)

spur
- to cause something to happen ก่อให้เกิด (See glossary)
spur growth - cause the economy to grow faster

interest
- payments made for the use of another's money for a period of time
interest rates - the cost of borrowing money, usually expressed as a percentage of the amount borrowed

aggressive
- determined to win or succeed and using forceful action to achieve victory or success, ซึ่งมีความมั่นใจสูง ก้าวร้าว (See glossary)
be more aggressive in reducing interest rates to spur growth

Mr Virabongsa in recent years has called on the central bank to ease its traditional conservatism and be more aggressive in reducing interest rates to spur growth.

allocate - to officially give out an amount of or share of something to someone for a special purpose แบ่งส่วน to officially give something to someone จัดสรร, จัดแบ่ง
portion - a part of something ส่วน

reserves - a supply available for future use when needed สงวน
foreign 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
foreign reserve management

investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
infrastructure - the high-cost facilities that everyone in the economy shares (water, roads, electricity, trains) สาธารณูปโภค
allocate a portion of the country's foreign reserves for investment in infrastructure projects

He has also called on the central bank to allocate a portion of the country's foreign reserves for investment in infrastructure projects, a plan opposed by central bankers.

doctorate - a PhD, the highest degree that involves making research contributions to a field such as chemistry, physics, biology, etc

extensive
- includes a wide variety ที่มีมากมาย
extensive experience - a lot of experience

sector
- a part of the economy ภาคเศรษฐกิจของประเทศ (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,...) (See Wikipedia)
private sector - all the businesses in an economy

Mr Virabongsa, 68, holds a doctorate in economics from the University of Pennsylvania and has had extensive experience in the private sector, including positions as chairman of the Export-Import Bank, Double A Plc and Finansa.

oversee - manage, make sure that an activity is carried out correctly and successfully คุมงาน,ควบคุม ตรวจตรา จัดการ ดูแล
matters - affairs, a situation that you must deal with that has problems
general administrative matters
oversee general administrative matters of the central bank

guidelines - rules to help guide action แนวทาง นโยบาย
appointment - when someone is officially chosen for a job การแต่งตั้ง
primary - first and most important
the three primary committees - the three most important committees
guidelines for the appointment of members to the three primary committees

overseeing
- managing, checking to see that it operates properly and nothing goes wrong
policy - a set of plans or action agreed on by a government, political party, business, or other group นโยบาย  (See Wikipedia)
institutions - large and important organizations, such as universities or banks สถาบัน
financial institutions - banks and other organizations like banks
the three primary committees overseeing monetary policy, financial institutions and the payment systems

Under the Bank of Thailand Act, the chairman must oversee general administrative matters of the central bank, including guidelines for the appointment of members to the three primary committees overseeing monetary policy, financial institutions and the payment systems. The chairman is also responsible for approving guidelines over the central bank's foreign reserve management.

played down concerns - said don't worry (not as important as you think it is)
administration - an elected government that is in power for a period of time
the Yingluck administration

Central bank Governor Prasarn Trairatvorakul played down concerns about possible conflicts with the Yingluck administration.

the law guaranteed the independence of the central bank's operations
decision-making through independent committees.

He said the law guaranteed the independence of the central bank's operations by requiring decision-making through independent committees.

reserve - kept for use for something or someone ที่จัดสรรไว้ สำรอง something currently not being used but that can be used when needed สำรองไว้
concerns - worries ความกังวล
conflicts - angry disagreements between people or groups ความขัดแย้ง
administration - one government that a country has for a period of time
guaranteed - promised that they will get something, for sure
act - a law passed by a country's government พ.ร.บ. พระราชบัญญัติ

buffer - something that protects from harm (example: buffer stock of rice)
a buffer between X and Y
a buffer between the Bank of Thailand and the government

transformed - changed
dialogue - formal talks between opposing countries, political groups, etc. การสนทนา, การอภิปราย
constructive dialogue - a discussion with disagreement sometimes and debate that works out and resolves difference, leads to compromises and final agreement
different opinions can be transformed into constructive dialogue

"According to the law, the chairman should act as a buffer between the Bank of Thailand and the government," Mr Prasarn said. "I believe different opinions can be transformed into constructive dialogue.

opposition - of a political party that is not part of the government or a group which is against the government ฝ่ายค้าน ผู้ต่อต้าน
the opposition Democrat Party
concern - a worry ความกังวล
expressed concern about

ties - relations; connections ความสัมพันธ์
close ties with the government - close friends with the government in power

impact
- an effect or influence ผลกระทบ
possible impact - possible effect
possible impact on the independence of the central bank.

But Korn Chatikavanij, deputy leader of the opposition Democrat Party and a former finance minister, expressed concern about Mr Virabongsa's close ties with the government and possible impact on the independence of the central bank.

advocacy - supporting certain policies; pushing for them to be adopted
advocacy for changes

His past advocacy for changes regarding monetary policy and foreign reserve management also was a concern.

agenda - 1. list of goals to achieve in the future; 2. a list of goals or issues to be discussed at a meeting ระเบียบวาระ กำหนดการ, วาระ
pro-growth agenda

stability - when a situation does change suddenly and unexpectedly, so people can operate normally and successfully ความมีเสถียรภาพ ความมั่นคง
economic stability

"As the government pursues its pro-growth agenda, the central bank at least is the last organisation in the country to look after economic stability," Mr Korn said. "Mr Virabongsa should work carefully with the central bank as he is working closely with the government."

role - the position, function or purpose that someone or something has in a situation, organisation, society or relationship บทบาท
duty - something that you have to do because it is part of your job, or something that you feel is the right thing to do หน้าที่, ความรับผิดชอบ
the role and duty of the central bank chairman

distinctly - very clearly อย่างเห็นได้ชัด ชัดเจน
distinctly draws a line between

extent - size ขนาด
to a certain extent.

The law outlines the role and duty of the central bank chairman clearly. The law distinctly draws a line between his duty and that of the central bank governor. The law gives independence to the central bank governor in performing his work to a certain extent.

support - help สนับสนุน
fixed exchange rates
crisis - an urgent, difficult or dangerous situation วิกฤตการณ์  วิกฤต
1997 economic crisis

Mr Korn said that Mr Virabongsa's past support for fixed exchange rates had been proven wrong with the 1997 economic crisis.

domestic - within the country ภายในประเทศ
domestic infrastructure
budget - the amounts of money that an organisation has available to spend on different things during a period งบประมาณ (See Wikipedia)

He also repeated that any investment in domestic infrastructure should be financed directly by the government through the central budget.

establishing - creating for the first time
sovereign - 1. related to a country ("sovereign debt" means the debt of a country); 2. (of a country) ruling itself เอกราช อำนาจอธิปไตย
wealth - how much money and assets a person or country owns
fund - money provided for some purpose เงินทุน กองทุน
sovereign wealth fund - an very large investment fund run by the government of a country (See Wikipedia)

Under the Abhisit Vejjajiva government, an agreement had been reached with the central bank that gave the governor final say in establishing the size of any reserves to be used to create a sovereign wealth fund.

interference - the process of deliberately becoming involved in a situation and trying to influence the way that it develops การเข้าแทรกแซง
political interference - when politicians try to influence events (that don't directly concern)
free from interference - when no one is interfering in an situation, no one trying to influence outcome of events
free from political interference

international
- between countries ระหว่างประเทศ
international markets
investment in international markets


going forward -
in the future

The guidelines also called for investment to be free from political interference and focused on investment in the international markets. Apichat Satitniramai, an economist at Thammasat University, said that the government could run into more conflicts with the central bank going forward

stimulate - act so as to increase activity กระตุ้น encourage activity, growth, and development (See glossary)
stimulate growth - cause growth to increase

fiscal
- related to government spending; connected with the government budget, i.e., public money เกี่ยวกับงบประมาณ
fiscal spending - government spending
stimulate growth through fiscal spending - spend government money to cause growth of economy to increase

inflation
- the level of prices rising in the economy as a whole ภาวะเงินเฟ้อ
spur - cause something to happen
spur inflation - cause inflation

The government's policies are clearly to stimulate growth through fiscal spending, which in turn could spur inflation

apply - to make use of something นำมาใช้
means - methods; ways วิธี, วิธีการ
fiscal means - using government spending or taxation to achieve goals
apply fiscal means to stimulate the economy

the central bank focuses on inflation

chance - the possibility or probability that some event will happen
higher chance - there is a greater possibility that some event will happen
there is a higher chance now that ...

"The government aims to apply fiscal means to stimulate the economy, while the central bank focuses on inflation," Mr Apichat said. "Mr Virabongsa has said the country's foreign reserves are too high, and some should be used to finance future infrastructure investment. There is a higher chance now that the appointment of Mr Virabongsa as the new [central bank] chairman could lead to more conflicts.

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