New Mandala

15 responses so far ↓

• 1 nganadeeleg // Dec 20, 2006 at 9:11 am

  Don’t be too concerned, Andrew, as the rural poor are not known as big investors in the SET.

  It seems foreign speculators care much more about their money than they do about democracy.

• 2 patiwat // Dec 20, 2006 at 9:51 am

  It’s not just foreign speculators, Nganadirek - Bangkokians care about their own pocket books much more than they care about democracy.

• 3 polo // Dec 20, 2006 at 10:41 am

  While it’s still not clear what happened here, there’s some questions this raises, foremost in my mind being about hte competence of the “technocrats” supposedly restored to authority after they helped make the case against thaksin for having savaged the bureaucracy with his political/business interests.

  Pridiyathorn was a leader of that group and he presided over what happened today. The fact that they had to pull back on the move suggests one of two things — that either they had this sly tactic to screw somebody for a moment, or that they very stupidly actually did not anticipate the effect it would have. I side with the latter explanation. Incredibly amateurish, undermining some of the criticism these people had for thaksin.

  (That said, I’m not opposed to some capital controls — especially seeing the whiplash of 1997. Little countries are vulnerable to massive quick capital flows and the bank of Thailand has reason to try to modulate the inflows, especially as the rising currency has hurt exporters.)

• 4 nganadeeleg // Dec 20, 2006 at 10:53 am

  Patiwat - I agree it is a universal trend - from the rural poor to the cities, and also in the west.
  It also explains why governments in western democracies usually only get removed when there is an economic downturn.

  Who do you think started the sell off?
  (Bangkokians or the foreign speculators).

  The BOT governor must not own shares - Is she allowed to own shares?

  I do concede that it does appear to have been a clumsy move that did not take into account how speculators can manipulate financial markets, however it is a bit simplistic to blame the junta.

• 5 Jon Fernquest // Dec 20, 2006 at 6:08 pm

  Short term capital controls might be a good idea, but the massive ignorance of economics in all the rhetoric flying around, especially from the, suddenly ultra-nationalist exporters, is laughable.

  IMHO If the baht is going down because of adjustments in US-China trade and investment imbalances, there’s not much the head of the Frozen Shrimp Export Association can do about it.

  One moment the government is worried about attracting investment, the next moment the head of the SEC is threatening foreign investors that if they pull out their money, they can’t come back. Moralising is quite beside the point. Without speculators there are no futures or option contracts for exporters to hedge against short term currency instabilities, and that is exactly the only kind that can be protected against.

  Luckily, Pridiyathorn is solid gold, so rest assured, everything will go alright. For updates see my:

  http://readbangkokpost.com/business/

• 6 Andrew Walker // Dec 20, 2006 at 9:11 pm

  For a useful overview and analysis see:

  http://www.economist.com/world/asia/displaystory.cfm?story_id=8459519

• 7 Bystander // Dec 21, 2006 at 5:12 am

  Wisdom, old age, virtue, royal blessing, all seem so powerless against the “invisible hand”.

• 8 patiwat // Dec 21, 2006 at 5:24 am

  Favorite comment so far:

  “The one thing worse than an incompetent central bank is an incompetent central bank that flip-flops.”

  - Bratin Sanyal, head of Asian equity investments at ING in Hong Kong.

• 9 polo // Dec 21, 2006 at 7:11 am

  Not the conventional \\\”Thailand bad boys\\\” view:

  http://www.asiasentinel.com/index.php?option=com_content&task=view&id=313&Itemid=32

• 10 Republican // Dec 21, 2006 at 1:28 pm

  Now will the king, who endorsed the coup, gave his blessing to the military junta, strongly supported his privy councilor as PM, and promoted his wacky self-sufficiency theory as the blue-print for the country’s economic policy, be courageous enough to take responsibility for this farce? Or will he, as usual, hide behind lese majeste and let his underlings take the rap? Or is the economy all going to plan: enforced self-sufficiency by royal decree?

• 11 nganadeeleg // Dec 21, 2006 at 7:57 pm

  Give it up Republican - that the king should take responsibilty for a BOT attempt to curtail currency speculation is just nonsense and further highlights your malice and one track mind.

• 12 Vichai N. // Dec 21, 2006 at 8:46 pm

  Will every market aberration, every wild Baht currency swing either direction, every economic blimp of next 12 months be attributed by Andrew Walker to ‘Sufficiency Economy’?

  The BOT was clearly trying to discourage surge of ‘hot foreign money’ that was distorting the Thai Baht currency, but overreached. But the remedial measures to stem the damage was at least very swift but of course Thailand’s credibility will suffer in the medium term.

  Republican on the other hand will continue to serve his malicious anti-Thai King posters however ill-timed or irrelevant.

• 13 Jon Fernquest // Dec 21, 2006 at 10:41 pm

  Thailand is justified trying to protect itself against the US-China giants. Chile provides a clear precedent for effective use of capital controls to prevent exchange rate appreciation:
  http://research.stlouisfed.org/publications/review/99/11/9911cn.pdf

  It’s better to take a calm cool-headed pragmatic approach to solving the problem like Pridiyathorn than the moralising tone of the Asia Sentinel article though.

  As for His Majesty the King’s sufficiency economy philosophy, Nobel prize winning economist Joseph Stiglitz has a similar approach.

• 14 polo // Dec 21, 2006 at 10:53 pm

  The last two comments illustrate the maxim that “everything good is credited to King Bhumibol, everything bad blamed on someone else”.

• 15 Republican // Dec 22, 2006 at 1:26 am

  For a forecast of the likely trend in Thailand’s economic management over the next 2 months see Comment 4 of http://www.prachatai.com/05web/th/board/showboard.php?QID=46488&TID=5

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