Globalization: Thailand Heading into a New Global Economic Storm

It looks bad but keep rocking my Siamese business cats

Blog Note: China is reigning credit and that will impact growth that have heated up Chinese imports. In the mean time Obama is getting back to his fundamentals to regain his popularity and that means hitting the banks and foreign trade. Meanwhile many global class think tank believes it is time to get tough on Chinese cheap currency policy. While this blog believes intra-emerging market trade and investment will not result in great “Comparative Advantage” that enriches everyone. We do not anticipate a major storm from all of the above, but a difficult time nevertheless-in sum, a new global storm is brewing.

By Pooky, this blog economics journalist

Intelligence: The Thai central bank at a lost

Analysis: The Thai central banks is trying to keep the interest rates, inflation, liquidity and baht level all aligned in a way that best benefits Thailand, but the bank of Thailand is at a lost as the global environment is blowing their plans off both planning and implementation. Bottom-Line: Beneficial alignment un-likely

Intelligence: Firms in Thailand poised for major expansion and investments

Analysis: Most major sectors of the Thai economy is in a drive to expand investments and marketing efforts. The risk is in getting carried away with year-end positive numbers and a lack of global risk assessment. Likely outcome is short-term growth with profit margin squeezed dry-in the worse case scenario. Bottom-Line: Profit under pressure

Intelligence: Banks and borrowers suspected in massive fraud

Analysis: The Thai FBI is curious why many Thai banks lend massively to borrowers who have very little qualifying factors-and it suspect massive fraud by the Thai banking industry. Bottom-Line: Depends on how severe the fall-out in the bank controlled Thai press

Intelligence: Sin tax increase kept income above target and thus government budget better financed in 2009

Analysis: The government finance was kept looking fair with several massive increase in sin taxes, however, repeating it in 2010 may be difficult. Bottom-Line: Sin tax increase getting sticky

Intelligence: Thai Federation of Industries in total ruins

Analysis: The highly politicized unit is having a great deal of difficulty selecting a new head to the unit and reports is that there is a serious internal rift. Some say the rift goes beyond politics to the changing structure of Thailand’s economy where the old guard is being challenged. Bottom-Line: The government’s ear on the line

Intelligence: Thai banks recorded hefty profits in 2009

Analysis: Thai banks reports that good bank spread resulted in across the board increase in profit in 2009, as other sectors of the Thai stock market listed firms saw profits falls or kept up with down-sizing. Thai bank spread, in actuality not numeric, is one of the highest in ASEAN-indicating a very inefficient banking sector. Bottom-Line: Banks eat up system wide profitability

Intelligence: Trirong heading into massive head wind on Thai economic management

Analysis: Trirong, the new deputy prime minister in charged of economics, is heading into serious containment efforts by the old gang that surrounds Abhisit, the Thai prime minister, with Abhisit’s OK. many see Trirong appointment as nothing much more than keeping the Southern Democrat Party caucus satisfied with Abhisit, who is from the Bangkok caucus. Bottom-Line: Everything remains the same

Intelligence: Trirong plans revamp “Strong Thailand Stimulus” spending

Analysis: Trirong is talking about revamping the stimulus that have already been catered out to coalition parties and this will bring Trirong and Abhisit into a new fresh conflict point with its coalition parties. Bottom-Line: Depends on how hard Trirong huffs and puffs

Intelligence: Thailand’s broadband usage and speed falls massively behind other ASEAN countries

Analysis: Thailand’s broadband infrastructure development is now way behind most other ASEAN countries, as a result of mostly lack policy attention as the Thai ICT ministry focus on cracking down on internet activity. Bottom-Line: Thai government is anti-internet any way

Intelligence: Trusted tourism civil servant sent away by un-known people

Analysis: The trusted Thai tourism official follows others that have been sacked, in a move many say is a total war attempt at removing anyone that comes in the way of  controlling this high-profile unit under politician control. Bottom-Line: Politics not professionalism wins

Intelligence: Thailand’s 2010 GDP great divide

Analysis: Thai GDP growth for 2010, as is given can be anywhere from 2.5% to 5.5%, indicating that a great deal of uncertainty exists. Bottom-Line: Toss a coin

Intelligence: Current personal tax base shrinking but revenue department plans massive crack-down on gray area

Analysis: The Thai population is aging fast and the corresponding tax base is shrinking and as the population matures, social service cost are heading up fast, as a result the revenue departments plans to start reigning in those income made by people in the gray area. Bottom-Line: Good for finances, but bad for politics

Intelligence: Water war looms in some parts of Thailand

Analysis: Some province MPS are starting to fight for water in the dams that are about 50% level for their province agriculture sector, as oppose for having the water saved for the cities. Bottom-Line: Farmers may rise up

Intelligence: Half a million workers shortage as many switch careers during past crisis

Analysis: During the financial crisis of the past 2 years, many Thais were re-trained and now many are satisfied with their new careers and not returning to their earlier work and thus about half a million workers are in shortage. Bottom-Line: Upward pressure on wages

Intelligence: 1.5 million computers spending buffeted by accusations

Analysis: A massive government spending for computers for Thailand’s schools was buffeted with accusations of rigging to have about 3-4 computers suppliers cornering the market. Bottom-Line: Corruption slows development as usual

Intelligence: Thailand plans to increase cross-border trade with neighbors by 50%

Analysis: Thailand’s capable Commerce Minister plans to increase trade with neighbors at border check points by over 50% to about US$4 billion. However, some said Thailand’s foreign policy needs to be accommodating, as the logistics is fast linking the region together. Bottom-Line: Nationalism and trade does not go together

Intelligence: Investment blockade might take much more time to be lifted

Analysis: With every Thai government effort to break an investment blockade, environmentalist are upping their activity to keep the blockade going, with the latest in that those hurt by the poor environment plans to hold mass protest. Bottom-Line: A very long drawn out war

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