Economics: Arrested Thai Development when the Texas Model Shining Through!

Texas politics and economis system makes it the performance star of America-and is leaps and bound ahead of the East Asia Economic Model
Texas politics and economis system makes it the performance star of America-and is leaps and bound ahead of the East Asia Economic Model or the Thai political model at that.

http://www.economist.com/

We would like to say thank you to the Economist for another cutting-edge research

By Terry/Tavivoot

The Bad News:

Oh my goodness, Abisit is borrowing and spending like mad dispite his repeated words that he all about sufficiency, and looks like tax is on the way up because Korn, the Thai Finance Minister just said today that he is seeking tax hike. “Higher Tax” in an economic slump that is leaving the globe weak for many years?

On top of it about 400,000 million baht in investment are stuck in about 30 court cases over pollution. And according to Thai Rath economic team, about 200,000 Small and medium enterprises (SME) are also on the verge of collapse.

And god is politics hurting Thailand in every direction-as Thais are now totally polarized into fraction that hates each other guts. The occupation of the Thai main airport alone, by one of those polarized fraction, cost a Thai central bank estimate damage of US$5 billion.

What on earth is Thailand to do? Because it looks the East Asia Development Model has finally come to a dead end. And Thai politics is at a dead end also.

The Abisit Solution:

Well you can’t blame Abisit for running around the globe trying to get businesses to invest in Thailand. Foreign investment means jobs, a good balance of payment position, and advancement of Thailand’s industry in general.

So don’t blame the Thai-Joint-Chamber of Commerce when they went to Abisit and told him to relax Thailand’s environmental regulations-because again right now about 400,000 million baht in both Thai and foreign investments are stuck in courts in over 30 cases-bought about by Thais hurt by pollution (see http://www.thairath.co.th/ for the whole list of what the joint chamber wants from the government)

Not to give credit or take anything away from Thaksin, but Thaksin went both ways in targeting both investments and putting a great deal of resources in Thailand’s small to medium enterprises (SME)-as a way to get Thailand out of an economic black hole about 10 years ago.

Politics wise, Abisit, while telling everyone that he is on the road of bringing all Thais together as on, under one united country, can’t even expell a suspect right wing terrorist from the government-and totally alienating other fractions.

Abisit Faces Some Bad Luck:

But unfortunately for Abisit-who is in the process of copying of much of what Thaksin did-except for as strong a focus on SME-Thailand has just about progressed to the point that people are being hurt by the pollution the Thai industrialization spills out.

If anyone can remember, not too long ago, the people who live near Thailand’s showcase of industrealization and petrochem industry-the Eastern Seaboard Zone-just took to the street in protest because their children were getting sick for unknown reason-that later proved to be all because of the pollution the zone was putting into the air.

If you think that is just about the concentration at that zon causing a problem in an isolated idea, think again. Recently a steel mill wanted to put up a steel plant way out no-where in the middle of no-where-and the people still didn’t want it there.

How ridiculous or serious the issue has gotten? Thailand, a power hungry country, seeing everyone in the region going for nuclear plant, gave up trying to locate it in Thailand because no matter where-people just didn’t want it. So Thailand went to Indonesia and asked if Thailand could rent an isolated Indonesian island to put up the plant.

So what is the solution to Thailand now?

Stop hoping that foreign investments will come in? Because even as Abisit is going around telling people to invest-there is no hiding the news that in Thailand, pollution is a major concern with the Thai people.

I mean it looks like the East Asian Development Model of export led or even import substitution through industrialization is out. Apart from Thaksin being right on the SME angle, what to do then?

And politically, well it is really a dead end as well here in Thailand. What Thailand is, is just a time bomb waiting to explode again.

A New Overall Development Model

The solution really-is in the overall direction of development Thailand might  take-economically and politically.

I am a strong advocate of sufficiency-but to tell people to go back to the farms and live there just isn’t what the Thai people of this modern day wants anymore. And in fact, sufficiency is about something much more advance than using it that way.

(see http://advancesufficiency.wordpress.com/ for what sufficiency really means)

So again what is the solution?

Its more than better environmental planning and muddling through in the current Thai-Style democratic process.

As the Joint-Thai-Chamber-of Commerce indicated-they are ready to dump good environmental planning-taking Thailand back to the starting point of having a lousy environmental planning. And politics, well just thinking reforming the Thai democratic process is getting angry shouts from the right wing fraction.

Go West Young Man!

The following is a comparison between the California model and the Texas model from the Economist. And it could provide some insight to Thailand’s key economic planners.

But then again if Thailand key economic planners think Thailand’s future truly lies in telling Thais to head back to the farms or throw away their hope for a better life materialistically, under a kiss-ass to Sufficiency deal, what can I say-except take a trip to the mall and wake up to reality already.

And if the Thai powers at be think the political road Thailand is on is the right way to go, well just check your own pulse because it is beating very fast-a sign that you are lying to yourself. Like really, is it extreme fear that have invoked the emergency decree to cover an entire island for a regional meeting.

America’s Future
The Economist is in America doing deep research on America
The Economist is in America doing deep research on America

By The Economist

AMERICA’S recent history has been a relentless tilt to the West—of people, ideas, commerce and even political power. California and Texas, the nation’s two biggest states, are the twin poles of the West, but very different ones. For most of the 20th century the home of Silicon Valley and Hollywood has been the brainier, sexier, trendier of the two: its suburbs and freeways, its fads and foibles, its marvellous miscegenation have spread around the world. Texas, once a part of the Confederacy, has trailed behind: its cliché has been a conservative Christian in cowboy boots, much like a certain recent president. But twins can change places. Is that happening now?

It is easy to find evidence that California is in a funk (see article). At the start of this month the once golden state started paying creditors, including those owed tax refunds, business suppliers and students expecting grants, in IOUs. California’s governor, Arnold Schwarzenegger, also said that the gap between projected outgoings and income for the current fiscal year has leapt to a horrible $26 billion. With no sign of a new budget to close this chasm, one credit agency has already downgraded California’s debt. As budgets are cut, universities will let in fewer students, prisoners will be released early and schemes to protect the vulnerable will be rolled back.

Plenty of American states have budget crises; but California’s illustrate two more structural worries about the state. Back in its golden age in the 1950s and 1960s, it offered middle-class people, not just techy high-fliers, a shot at the American dream—complete with superb schools and universities, and an enviable physical infrastructure. These days California’s unemployment rate is running at 11.5%, two points ahead of the national average. In such Californian cities as Fresno, Merced and El Centro, jobless rates are higher than in Detroit. Its roads and schools are crumbling. Every year, over 100,000 more Americans leave the state than enter it.

The second worry has to do with dysfunctional government. No state has quite so many overlapping systems of accountability or such a gerrymandered legislature. Ballot initiatives, the crack cocaine of democracy, have left only around a quarter of its budget within the power of its representative politicians. (One reason budget cuts are inevitable is that voters rejected tax increases in a package of ballot measures in May.) Not that Californian government comes cheap: it has the second-highest top level of state income tax in America (after Hawaii, of all places). Indeed, high taxes, coupled with intrusive regulation of business and greenery taken to silly extremes, have gradually strangled what was once America’s most dynamic state economy. Chief Executive magazine, to take just one example, has ranked California the very worst state to do business in for each of the past four years.

By contrast, Texas was the best state in that poll. It has coped well with the recession, with an unemployment rate two points below the national average and one of the lowest rates of housing repossession. In part this is because Texan banks, hard hit in the last property bust, did not overexpand this time. But as our special report this week explains, Texas also clearly offers a different model, based on small government. It has no state capital-gains or income tax, and a business-friendly and immigrant-tolerant attitude. It is home to more Fortune 500 companies than any other state—64 compared with California’s 51 and New York’s 56. And as happens to fashionable places, some erstwhile weaknesses now seem strengths (flat, ugly countryside makes it easier for Dallas-Fort Worth to expand than mountain-and-sea-locked LA), while old conservative stereotypes are being questioned: two leading contenders to be Houston’s next mayor are a black man and a white lesbian. Texas also gets on better with Mexico than California does.

American conservatives have seized on this reversal of fortune: Arthur Laffer, a Reaganite economist, hails the Texan model over the Gipper’s now hopelessly leftish home. Despite all this, it still seems too early to cede America’s future to the Lone Star state. To begin with, that lean Texan model has its own problems. It has not invested enough in education, and many experts rightly worry about a “lost generation” of mostly Hispanic Texans with insufficient skills for the demands of the knowledge economy. Now immigration is likely to reconvert Texas from Republican red to Democratic blue; Latinos may justly demand a bigger, more “Californian” state to educate them and provide them with decent health care. But Texas could then end up with the same over-empowered public-sector unions who have helped wreck government in California.

Second, it has never paid to bet against a state with as many inventive people as California. Even if Hollywood is in the dumps (see article), it still boasts an unequalled array of sunrise industries and the most agile venture-capital industry on the planet; there is no prospect of the likes of Google decamping from Mountain View for Austin, though many start-ups have. The state also has an awesome ability to reinvent itself—as it did when its defence industry collapsed at the end of the cold war. Perhaps the rejection of tax increases will “starve the beast” and promote structural reform. A referendum on a new primaries system could end its polarised politics. Mr Schwarzenegger’s lazy governorship could come to be seen not as the great missed opportunity, but as the spur for reform.

The truth is that both states could learn from each other. Texas still lacks California’s great universities and lags in terms of culture. California could adopt not just Texas’s leaner state, but also its more bipartisan approach to politics and its more welcoming attitude towards Mexico. There is no perfect model of government: it is America’s genius to have 50 public-policy laboratories competing to find out what works best—just as it is the relentless competition of clever new firms from Portland to Pittsburgh that will pull the country out of its current gloom. But, to give Texas some credit and serve as a warning to Mr Schwarzenegger’s heir, at this moment America’s two most futuristic states look a lot more like equals than ever before.

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