Former prime minister Thaksin Shinawatra has praised Chinese businessmen for their ability to thrive in a capitalist economy and suggested that Thai businesses prepare for a surge in global liquidity, in a post on his Facebook page on Friday.
Thaksin suggested that Thai businesses should buy assets overseas. (Photo from Thaksin Shinawatra facebook page)
Thaksin's post said that he was in China having discussions with bankers and large investors. It said he was impressed with how quickly they adjusted to capitalism, citing the fact that the businessmen were planning a strategy to use excess liquidity in China to buy assets and businesses in low-risk countries, especially in Europe and the USA.
"After seeing the enthusiasm of Chinese businessmen, I would like to tell Thai businessmen to buy assets overseas when the baht is appreciated," Thaksin wrote.
He expressed worries about fast fund inflows, or hot money, being used for speculative purposes, and suggested the Bank of Thailand impose measures to require that those funds remain in Thailand as long as possible. This would prevent speculation on interest rates.
Thaksin added that although Thailand has high foreign reserves, so do other countries in Asia, partly from the pumping of money into the economy by Japan, the US and Europe.
"Holding a large amount of foreign currencies will result in higher interest in baht terms. This means we have to borrow at high interest to deposit at almost zero interest," he said.
Thaksin then suggested Thai businesses get ready for a period of high global liquidity, when money will flow to wherever it can generate profit. An example was the over subscription to the BTS Rail Mass Transit Growth Infrastructure Fund introduced last week, mobilising a total of 62.51 billion baht of capital.