Leave it to Internal Security
Watching Thai TV these days, one can not escape seeing something from the Thai internal security apparatus.
One the that something is a long running advertisement about how the security apparatus has the information on about 50,000 small villages that it is using to help develop those villages. Well great, because news have been trickling out about corruption on a massive scale from the Abisit grassroots spending.
But to many Thais, who sees the internal security people as the central point at propagating and keeping the “Right Wing” thing controlling Thailand-that involvement with the grassroots is a major threat to Thai democracy. And Abisit is appearing on many many of those internal security advertisements.
Many says that the in-tight relationship, between the security people and the Democrat party-spells longevity to Abisit reign. Many are saying it will be another 1-2 years before an election-and that Abisit will wait-however long and however bad he dose-on a better global economy lifting the Thai economy.
So Thai democracy development-comes down to the economy-both global and locally.
Micro Spending Back Fires
Apparently, the SML village fund that was started by Thakin-and now renamed to something else so people will forget Thaksin-is being used by some people to cram spending projects down the throat of villagers. In one item alone, the solar powered water unit, is being forced onto villagers at about 40% above market price. And thousands and thousands of these units have been forced onto villagers.
Well, there has been speculation as to who is benefiting from that above market price spending on something the villagers didn’t agree to get. The SML fund, as envisioned by Thaksin is to make funds available to villagers and let them decide how to spend it. Literally speaking, the SML funds totals in the billions and billions of baht-taking up a big chunk of money being used by Korn to stimulate the economy.
The SML village fund program is is headed by Korbsak-who reports about it directly to Abisit. Abisit chairs some committee that controls it. Korbsak is in charged of economic oversight for Abisit and Korn, the finance minister, reports to Korbsak. Then the internal security people also gets involved-as the advertisement on TV say that it is helping to develop the villages and has all the information on what the villagers need.
Korbsak vs Korn
Well today the Bangkok Post ran a story that says Korbsak, doesn’t have any conflict with Abisit or Korn-and that Korbsak and Korn will be making a major joint press meeting together to announce some other type of spending.
Korn himself is real impatience with Korbsak because news are leaking out that villagers aren’t spending the money-only some 50%-60% have been spent. Korn himself went public earlier and said he wants to see the spending speed up.
But reports have been coming out from E-Sarn and the North-stronghold of Thaksin-that many villagers simply didn’t want to touch the money-with many saying the money is dirty. The same thing happened to the money hand out with the “Help the Country” checks by Abisit earlier-where a lot of people refused to take it. And the government now doesn’t know what to do with that rejected money.
And so, the powers at be-who ever they are-are cramming projects down the throat of villagers-and taking a hefty cut. Many villagers are so pissed off of the rip off, some news reports says that they are using the solar panel on those water system as a drying rack for fish and fruits.
Macro Spending Back Fires
In the mean time, on the opposite side of the grassroots spending, Korn and Korbsak are in conflict over the global economic environment-as many have speculated.
That is because Korn is pinning a great deal of hope on a recovering global economy to lift Thai economy and take pressure the finance cost of all the massive borrowing he is making. Some financiers estimate the interest alone will cost Thailand some 40-50 billion baht a year.
While Korbsak, just said today that he doesn’t think the global economy will recover any time soon-and so give Thailand any cushion at all. Both fear the ultimate need of a general tax hike down the line.
In the mean time, other massive spending outlays, like with the new bus purchase and the Thai railway many projects, corruption has plagued them-as documented by many. Now Korn is speeding up state enterprise investments projects further, as a way to stimulate the economy.
One such spending, made in the past on a rush order from politicians, is like the one at Thai Airways-that is now stuck with a big passenger jet purchase order-that the airline doesn’t want or need, but can’t get out of-is going to cost dearly.
Then to make things worse off or better off nobody really knows, but the massive spending on Bangkok’s mass transit system, that had earlier been sent for re-evaluation again-looks like it may get speed up again. While many speculated that the “Shuffling About” is all about something un-healthy, but Korn now wants it out of the re-evaluation and implemented quickly.
Spending on Provincial Cities
Then you have provincial cities spending like at Chiang Mai, where Korn proudly pronounced that the city will be getting so much money-it follows only in Bangkok in the amount of outlays. Wow, the people of Chiang Mai was so impressed, until a community radio said the total amount of spending on the mass transit system alone, that covers Bangkok and surrounding areas outside of Bangkok’s city limits and so was not counted by Korn as a Bangkok spending, is about a hundred times more than Chiang Mai.
People were so pissed of at Korn, the community radio lines were burning up with angry callers.
In the mean time, eye witness reports circulating the internet with actual pictures, of the reds and the police clashing in Chiang Mai-clearly showed the police marching into the red protesters who were just standing there.
Like one can just imaging why the villagers doesn’t want the money from the Abisit government-just like when Thaksin was in power and people down south-the strong hole of the Democrats, just simply said they did not want Thaksin money. Now many are saying they do not want the Abisit money.
Politicians Fighting it Out
Then on top of all the above-that many still say is good intention by Abisit, Korbsak and Korn-you got politicians and their thing with the voters and their un-healthy appetite. Like a key Democrat MP, who sais the other day with a straight face-if you keep protesting when we visit you, we might stop the spending on you. Well Thaksin, when in power said about the same thing-and got literally trashed big times. Now the Democrats are doing the same thing.
That thing about bickering between Abitis and Nevin, a guy with political roots in E-Sarn, is all about getting the E-Sarn votes. And guess what, after the fight, more money is now going to E-Sarn.
Well it is kind of odd really, because you would think there is some grand development strategy for regions like E-Sarn guiding the government spending-but in fact there is no plan, just politicians fighting it out, base on political reality, the dictates where the money goes.
If anyone can still remember, under Thaksin it was a big-thing, for the provinces to come up with development plans and also to coordinate that provincial development plans with other province nearby-all under the provincial governor CEO initiative.
Then you have the Abisit twist on thing
Literally speaking, where ever Abisit goes in Thailand, other than the South-one can expect the reds to come out and protest the visit. But Abisit just can not fact that reality.
So like in one town that he recently visited-the government ended up spending about 100-200 million baht to prep up the city and make it look “Very” welcoming for Abisit. I mean would you believe it-the politicians of that town got the town to “paint” buildings and plant new trees so the town would look new.
Then the Thai internal security people-got the Thai special forces to come out in droves and protect Abisit like he was a target of an assassination plot-like with helicopters circulating in the sky. The reds are joking that any towns Abisit visits, ends up loosing business for the duration of the visit, as the security people locks down the towns tight.
The Bottom-Line to Economist
The bottom line to many independent economist, is how much stimulating all the massive spending will generate.
That is because a great deal of money is going into infrastructure-that will push up the import bill significantly and foreign contractors will be all over the place-and also on education-where it is about long-term competitiveness. Other projects like a water system, will take years to kick in and do some real good. But it looks good politically-and that is more important.
Then you have Korn saying he will make so much money available to Thai manufacturers to up-grade their production stack with imports of latest production machinery. Well in fact-for most Thai manufacturers to survive at this point, they are focusing on Blue Oceans Markets-or new markets-and also on R&D to come up with “New & Cutting Edge” products. And as many have pointed out, the Thai Commerce Ministry, has pretty much failed to do help Thai exports, which is contracting and contracting.
Korn is basing his rationale on the fact that purchasing power in key Thai exports markets are down and so people are obviously spending based on pricing. That is right, but still other economist disagree, saying that Thailand will never be able to match China, Central America and emerging European countries, that are the cheap production hubs that are close to their key markets.
If anyone can still remember Thaksin, he made a very big deal about Blue Ocean and R&D. Efficiency-was just part of a total package of solution Thaksin prescribed. Instead of taking Thailand closer to war, like Kasit, the Thai foreign minister is doing, the foreign ministry was turned into having trade and commerce mission-as the key objective.
All of the above in this writing, to many economist, spells problem for the Thai financial position. The “Key Word” is deterioration of many important accounts. And this is not even mentioning tourism-that is so down there is no more down to go-all because of the the internal security people keeping the right wing thing a priority. So here again, it is right wing politics.
What the Economy Needs?
Like the Thai Federated Industry head just said, Abisit will likely stay in power, and get support from its coalition parties, until the economy register some solid numbers-and he said that means another 1-2 years. What that means is that Abisit survival depends on the economy.
Unfortunately, it also means the economy depends on Abisit survival needs-and not on economic needs. And the development of the Thai democratic system, well, it means “back-burner” for a very long time-if ever it is developed at all.