absolutelyBangkok archive · Business & Economics
Originally published Jan. 13, 2011
A month full of joy:
During the first half of December, Thailand staged another memorable birthday celebration for HM the King. Even the weather seemed to join in the nationwide festivities that continued well into the year-end and the New Year. With high consumer confidence, retail sales were brisk. Domestic tourism also flourished as people were enticed to spend their long weekends in the north and the northeast where temperatures dropped to single digits on mountain tops.
Foreign tourists too were coming back in droves especially after the CRES lifted the emergency decree in and around Bangkok. Clearly the mood has improved markedly from the year before. At Ratchaprasong, tens of thousand of people and tourists came for the grand New Year countdown party. Except for the Cambodian border incident (where one MP and six other Thais were arrested and jailed by the Cambodian government for wandering into their territory), the country seemed to be peaceful and fun again during the holiday season.
Here comes the Golden Rabbit: In Thailand, the hail and farewell events to welcome the year of the Rabbit and to say goodbye to the Tiger were held with mixed feelings. While some astrologers were saying that the Rabbit would strive for security using subtle charm and quiet diplomacy rather than violent force, other soothsayers were predicting yet another year of economic hardship and political violence, not between the yellow and the red shirts like in 2010 but among hardcore politicians as they struggled to gain, regain or retain their power before and after the election in 2011.
By Vongthip Chumpani*
No wonder the pessimists took to the temples to pray and fast during the year-end holidays to prepare themselves for the rough road ahead. The optimists went instead to enjoy themselves at midnight count-down parties with their families, friends and a lot of fireworks. Notwithstanding the government’s high profiled anti-alcohol campaign, there were some 3,500 road accidents, with 358 deaths, during the week- long break! Noteworthy was the high number of deadly accidents involving public vans! Hopefully, the implementation of the new mass transit lines and railways would soon provide Bangkokians with better, faster and safer means of transportation.
Second anniversary
Early in 12/10 PM Abhisit made a day trip to Laos for the inauguration of Nam Thurn 2 electricity generation project and Highway 11 to mark the 60th anniversary of Thailand-Laos relationship. Agreement was also signed to upgrade border crossing between the two countries, similar to which had already been agreed with Cambodia. The much feared demonstrations by both the yellow and the red shirts came to pass with no violence in 12/10. Meanwhile PM Abhisit has been sending out strong signals that a general election would be called well before his term ended in 12/2011. In respond, government coalition and opposition parties alike had shifted their gears to election mode and national horse trading negotiations for MPs.
As expected, the Abhisit government has been launching a series of political campaigns to attract voters e.g. subsidies to maintain diesel price at THB 30/litre; measures to support the cooperatives to enable them produce cheaper basic foodstuffs such as eggs; high profiled police crackdown on kingpins of drug trafficking and gambling dens; anti-corruption campaign launched to reduce corruption practices in both public and private sectors. On his second anniversary, PM Abhisit braved the critics with a positive and detailed report on his government’s performance.
National reconciliation and reforms
Throughout 12/10, PM Abhisit has been reaching out quietly to both the red and the yellow shirts to move them closer toward national reconciliation. In a surprised move, he met with the new leader of the red shirts UDD to hear her plan to obtain court’s order for the release of their 9 jailed hard-core activists. As called for by the constitution and the international human rights protocol, PM Abhisit did not hesitate to provide the necessary legal assistance to some 90 red shirts, arrested and left to their own devices in jail by their bosses.
Meanwhile, the Puea Thai Party was still not able to come up with an acceptable party leader whom they could nominate as PM for the no-confidence debate when parliament reconvened on 21/1/11. The results of the recent by-elections had shown that Puea Thai Party could no longer take their former supporters and voters for granted if they were to win enough MP’s to form the next coalition government.
Better lives for better people
In 12/10, PM Abhisit spoke continuously about his “Pracha Wiwat” social welfare project, the details of which would be announced on 9/1/11. Many viewed PM Abhisit’s New Year’s gift to the nation as a populist policy to gain votes in the coming election. Some were more concerned about its cost to the fiscal budget in the long run. Others believed it was a long overdue social security system to solve the “inequality” in the Thai society. The Ministry of Finance was reported to be working in close consultation with an international consultancy to identify the most urgent and viable schemes to ease the economic burdens of the majority of the people e.g. making permanent the subsidies for utilities and transport for the urban poor; tailor-made financial assistance schemes for landless farmers, low-come informal and unorganized workers; tax incentives for private sector’s contributions, in cash and in kind, for education and training of the country’s workforce; compulsory healthcare for pregnant women and adequate nursery-care for pre-school toddlers. All in all “Pracha Wiwat” would certainly be the beginning of the country’s social welfare system that would eventually entitle all Thai citizens to basic social benefits from cradle to grave.
Bull at the SET
On 30/12/10, the SET closed at 1032, up 40.6% for the whole year, with total market capitalization of 8.33 trillion, up 60.8% from 2009. Foreign investors were the big investors with net purchases totaling THB 81.7 billion in 2010. Local institutional investors’ net sales totaled THB 15.2 billion, and, retail investors’ THB 66 billion. According to most market analysts, 2011 is expected to be volatile, with limited upside gains due to the comparatively slower GDP growth rate of 4-5%, compared to 7-8% in 2010. The average earning growth of SET listed companies was forecasted to be 15% compared to 25% in 2010.
However, there seemed to be a number of optimists who expected the SET to move much higher still from the unrelenting foreign fund inflows seeking higher yields from equities in the Asian markets. The THB is expected to average around THB 29.5 to USD in 2011, after appreciating 31.7% in 2010. With prices of oil and gold expected to go respectively to as high as USD 100 and USD 1,500, prices of other commodities would certainly be heading up north as well.
Strong numbers still
In 11/10, domestic growth (up 4.1% yoy) improved along with consumption index (up 3.5% from 10/10). Yoy private investment grew 15.5% as exports rose 28.7% to USD 17.58 billion and import 35% to USD 17.09 billion. Tourist arrivals went up 10.2% to 1.5 million with average hotel occupancy at 55%. While prices of agricultural products rose 28.1%, production contracted 7.2% due to the floods.
For 2011, the Bank of Thailand’s forecasted another year of positive economic growth due to improving world economy, the country’s less reliance on exports to the West, and the impending general election. Rising inflation from higher food and fuel prices (crude oil to average USD 83 compared to USD 78 in 2010) and interest rate (policy rate to increase to 3% from the current 2%) were not expected to hamper local business sentiments this year.
Wish, I wish, I wish…
Throughout 2010 our society kept complaining day-in and day-out about the country’s low productivity and weak competitiveness. We kept criticizing the government’s continued incompetence and failure to meet our expectations. We moaned about our compatriots’ shortcomings and idiocies. Then we simply turned around to do whatever it took to make sure our own wealth, privileges, influence and power kept growing! Under the present uncertain circumstances, it might be a good time for us to make our New Year resolutions e.g. to have the courage to change what we can, the serenity to accept what we cannot change and the wisdom to know the difference!
As good citizens, we could, for example, pay our taxes in full, pay our people enough for them to improve their standard of living, take better care of our immediate environments, do more charity work quietly and consistently etc. For those of us who are still strong physically and financially, we could become more actively involved in supporting the government’s good policies. We could also resolve to walk that extra mile to make our high hopes and best wishes for Thailand come true this year. As PM Abhisit was saying, simply making our wishes would not do, we have to work long and hard to realize them. Cheers and best of luck to all of us in 2011!
* Vongthip Chumpani is an advisor to and former president of Bangkok Bank and a former advisor to the Senate Foreign Relations Committee. All views and opinions expressed herein are entirely from her own personal observations.
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