Thailand-What if the Global Economy Won't Recover?

[Bruce551]

Besieged Abhisit faces danger on all fronts

Published on August 7, 2009

The Nation

AFTER six months in office, Prime Minister Abhisit Vejjajiva's popularity appears to have overtaken that of his Democrat Party. He is probably the most popular Democrat leader ever. But popular sentiment should not be equated with leadership quality. Abhisit's leadership remains an open question.

The prime minister bragged yesterday that his government has made more than 100 achievements over the past six months. When he came to office, the Thai house was on fire. He has put out the fire. From now on, he says, he will work harder to overcome social divisions and rebuild the country.

"From the start, I realised it was my duty to overcome a crisis of unprecedented proportions. Hence I have pledged my government will work harder than ever before in order to serve the public and to bring happiness to Thai citizens," he said.

But is Abhisit really up to the task? Based on his tackling of the economic problems, the political crisis and the social divisions so far, I don't think that his performance is up to par yet.

On the economic front, Abhisit and his policymakers are still trying to find their way in the dark. Korn Chatikavanij, the finance minister, comes from the financial sector and does not pay enough attention to the real macro picture.

They all hold on to the belief that global capitalism remains sound. Sometime in the near future, the global economy will recover. This will help pull Thailand out of its negative growth of 3 to 5 per cent this year.

Based on this optimism, the Abhisit government has devised economic stimulus policies that support the industrial and export sectors. For instance, the Finance Ministry announced the other day that it would ask specialised financial institutions to boost credit extended specifically to the tourism, export and automotive sectors from Bt625 billion to Bt925 billion.

This instinct for spending has gone overboard to the extent that the government plans to create further public debt of Bt800 billion. This will be part of a Bt1.5 trillion stimulus package earmarked for spending over the next three years to bring the economy back on track.

You can see that most of the stimulus spending is targeted toward the modern sector of the economy, which has benefited enormously over the past five decades at the expense of the farming sector. We still have 40 million Thais living in the farming sector, which accounts for only 10 per cent of the gross domestic product.

The prime minister and his team have forgotten to ask themselves hard questions: "What if the global economy won't recover for long years to come? How will we survive or manage the country to stay afloat?" This assumption is justified.

If the government adopts this assumption, it will use this world crisis as an opportunity to lay the foundation to reform the entire Thai economy.

The priorities should be given to the farming sector and alternative energy so that in the worst-case scenario, Thailand will still survive because we have food surplus and we are self-sufficient in energy.

HMS the King of Thailand has said this in his sufficiency economics plan for Thailand and nobody listens.

That means, Renewable Energy, Wind, Solar, Geothermal, Bio-mass investment framework that not made up of baby steps and policies designed to not offend the Thai elite.

 If we reform the farming sector by getting rid of the middlemen and the monopoly structure, higher incomes will benefit 40 million Thais. If they have a better standard of living, the country as a whole will enjoy political stability. Vested interest is so tightly knitted that it is virtually impossible to tackle this problem unless the prime minister exerts the political will to break up the monopoly.

 Investment in the alternative energy sector will create jobs and provide a long-term foundation for the country so that we do not have to import more crude oil. Over the past two days there have been important announcements. First, Taiwan-based Topco Scientific expressed interest in investing Bt10 billion to start up an integrated solar-cell plant in Thailand, most probably in Rachaburi. Second, Wind Energy Holding, a Thai firm, is emerging as a major wind power generator, with four or five projects on the cards that will require a combined investment of Bt10 billion.

These are the types of investments that will strengthen Thailand's future, not to mention other bio-fuel projects which have yet to get off the ground

On the political front, Abhisit still has a lot to prove. He must handle the assassination attempt against Sondhi Limthongkul carefully. After initial hesitation, he succeeded in removing Pol Chief Patcharawat Wongsuwan.

This allows Pol Gen Thanee Somboonsap a freer hand to bring charges against the suspects, who include five generals and one middle-level police officer. If the arrest warrants are issued, we'll see the masterminds behind the Sondhi case. A military intervention is on the cards if the case were to develop to that point. If Abhisit moves forward with the Sondhi case, his premiership will be in danger. If he drags his feet, the yellow shirts will go after him.

Abhisit is also muddling through the social divide, most recently arising from a campaign by the red-shirted supporters of Thaksin to sign up seven million people to petition to His Majesty the King for Thaksin's pardon. Abhisit, the military, the police and other social networks have been slow to react to this campaign, which is wrong both morally and legally. We can't morally offer a pardon to a fugitive. The Thai system does not give room to a fugitive who does not repent. The red shirts plan to submit the petition on August 17.

There is a danger that the petition drive might converge with the release of the investigation results into the Sondhi case - to create an explosive incident to justify a military intervention.

The Thai house is still on fire. Abhisit has yet to put it out.

:!:

[eagle]

it won't be what it was .......

[Bruce551]

More info on Thailand Wind Projects,

Wind Energy Holding homes in on projects

Published on August 7, 2009

Wind Energy Holding is emerging as a major wind-power generator, with four or five projects on the cards that will require a combined investment of tens of billions of baht.

"We have spent up to two years on feasibility studies. There's huge potential in terms of wind energy, but the government's 'adder' is the key incentive for this investment," said Watcharapong Khemkaew, project development manager of the Thai-owned company.

The adder tariff is a special purchasing rate that is higher than that for conventional fuels.

He said the company also hopes to expand into other renewable-energy areas, but in the initial stage will emphasise wind energy.

Details of the projects will be unveiled soon, he added.

Thanks to the government's policy to promote wind and other renewable energy, the company sees no problem in securing financial support for the projects. While the feasibility studies are supported by equity, the company is seeking support on a project-by-project basis.

One of the projects is conducted through its 60 per cent-owned subsidiary, Sustainable Energy Corp.

The subsidiary, which is owned 30 per cent by listed Ratchaburi Electricity Generating Holding, will invest in the Bt4-billion 60-megawatt wind-power project in Phetchabun. It is under negotiation for loans from Kasikornbank.

Yesterday, the company signed a contract to award the construction work of more projects to Demco.

The construction company earlier won a Bt1.3-billion contract for the plant in Phetchabun. Construction work on the plant will start late this year.

Pradej Kitti-itsaranon, managing director of Demco, expects the construction work under the new contract to start in mid-2010 and the value of the contract should exceed Bt10 billion.

The contract covers projects to generate 600MW-700MW and will require an investment of between Bt40 billion and Bt50 billion, he said.

"Demco will be the co-developer and contractor of the projects, in charge of land clearing, wind-turbine installation, power-plant construction and the transmission grid. The value of the three-year contract is expected to exceed Bt10 billion," Pradej said.

Thailand Gov. wants Wind Developers to install Wind Gens in Pattani, but wind developers don't want to go, because of political problems. Actually, the average wind speed is higher in Pattani than in Phetchabun.

Good to see some serious money behind Renewable Energy development in Thailand