World Bank predicts Thai growth at 4% this year, blames political impasse

Thailand’s economic growth this year is forecast at 4 percent thanks to the strengthened global economy which will contribute to a 6 percent export expansion, a Bangkok-based World Bank executive said.

Ulrich Zachau, World Bank country director for Thailand, said reimbursement for public investment will be delayed if a fully-authorized government is not formed in light of the political impasse, resulting in lower-than-projected economic growth.
He said the World Bank would continue to monitor the situation in Thailand for future assessment but believed that the chance of economic recession in Thailand is low despite the political vacuum.
Kirida Bhaopichitr, World Bank senior economist, said the Thai economy expanded only 3 percent last year, and 1.3 percent in the fourth quarter.
Exports, household consumption, investment and public spending have slowed down as a result of the political risk, she said, adding that the negative impacts, though not affecting the macro economy, will diminish tourism growth from 20 percent last year to only 10 percent this year.
She said political uncertainty has led to inconsistent public policy and delays in state projects.
The government’s decreased emphasis on long-term development will result in this year’s public investment at only 4.2 percent while private investment will increase by 5 percent, said Kirida.
She said Thailand, with a good public utility system and infrastructure, has remained attractive among foreign investors, based on high investment privileges granted by the Board of Investment.
The lesser consumption, due to the political stalemate, withdrawal of the government’s measures on economic stimulation and rapid expansion of household debts, has increased domestic consumption at only 2.1 percent.
Private consumption grew only 1.8 percent and public consumption at 3.5 percent.
Despite an export volume at US$238.9 billion or a 6 percent growth, Thailand has lagged behind other countries in the region which have enjoyed favorable growth from global economic recovery, she said. (MCOT)

Pattaya business leaders pin tourism hopes on busy Feb.-March calendar

(L to R) Auttaphol Wannakij, Deputy Mayor Verawat Khakhay, Sa-nga Kitsamret, PBTA President Sinchai Wattanasartsathorn, Banglamung District Chief Sakchai Taengho, and city council members Rattanachai Suthidechanai and Banjong Banthoonprayuk discuss ways to stimulate the economy.

Urasin Khantaraphan and Jetsada Homklin
Pattaya business leaders are hoping a packed calendar of public events will prop up tourism devastated by political protests in Bangkok.
City and regional tourism officials met with the Pattaya Business & Tourism Association Feb. 12 at the Grand Sole Hotel to brainstorm ideas to pump much-needed life into a tourism market that has seen a significant drop from last high season.
Pattaya, in February and March, is hosting the Burapha Bike Week, the 23rd Suphanahong Awards starting at 3pm on February 23 at Royal Cliff Beach Resort, and the Issan Festival 2014 March 7-9.

Tourism Authority of Thailand Pattaya Director Auttaphol Wannakij said that Thailand received about 6.5 million tourists from the three nations of China, Hong Kong, and Taiwan in the first quarter last year. However, this year the Tourism Industry Council of Thailand said that tourists arrivals from China, Hong Kong, and Taiwan have dropped 7%, about 500,000, in the first quarter of 2014, since anti-government street protests broke out in Bangkok in October. While Pattaya remains relatively unaffected by the demonstrations, the kingdom as a whole has seen a precipitous drop in tourist arrivals.
The PBTA is organizing meetings with Chonburi Province, TAT, Pattaya City Hall and private businesses to brainstorm ideas to restore tourism.
Narodom Sarikbut, advisor to the Burapha Motorcycle Club, which hosted Burapha Bike Week Feb. 14-15, suggested Pattaya organize similar events that attract a diverse group of both domestic and international tourists.

Farmers sue gov’t in Civil Court, seek Bt19m compensation

The first group of 50 farmers filed a lawsuit with the Civil Court last week against the government for failing to pay for the rice they delivered under the subsidy scheme and demanded Bt19 million compensation.
Ravee Rungruang, acting chairman of the Thai Farmers Network, produced farmers’ receipts for their delivered rice, charging the government with breaching the agreement under the rice pledging scheme.
Under the scheme, the government would buy rice from farmers at Bt15,000 per tonne. Upon delivering rice to millers, farmers were given receipts to be cashed with the Bank of Agriculture and Agricultural Cooperatives (BAAC).
Farmers in many provinces have not received payments since September.
Ravee said the second batch of 180 farmers would file similar lawsuit with the Civil Court soon after having waited for overdue payments since November.
The farmers are from several rice-planting provinces including Pichit, Nakhon Sawan, Ratchaburi and Petchaburi and the highest debt per household was about Bt300,000, he said.
He said farmers would also file fraud charges against the government in the Criminal Court.
Rut Netiwan, one of the lawyers who accompanied farmers to the court, said the lawsuits will be against caretaker Prime Minister Yingluck Shinawatra, Deputy Prime Minister/Finance Minister Kittiratt Na-Ranong, Agriculture Minister Yukol Limlaemthong, Deputy Commerce Ministers Nattawut Saikua and Yanyong Puangrach, the Commerce Ministry, BAAC and Public Warehouse Organisation. (MCOT)

Bank, agencies help protest-affected SMEs

Thailand’s leading commercial bank, Kasikorn Bank (KBank), is working with related agencies mapping out measures to assist tourism businesses negatively impacted by the current political protests.
The bank’s business alliances are with the Tourism Council of Thailand (TCT), the Thai Chamber of Commerce, and the Office of Small and Medium Enterprises Promotion (OSMEP).
Mainly small- and medium-sized enterprises such as hotels, restaurants, tour agents, spa, car and boat rental agencies as well as souvenir shops will be assisted.
KBank will provide flexible loans with 6-month interest payments. New investments will be given the maximum of 12 years for loan installments.
According to Piyaman Techapaiboon, TCT president, the number of foreign tourists entering Thailand this year was previously expected at 29.9 million, generating Bt1.35 trillion in revenue.
However, it is predicted that the first half of this year would see a drop of 1.8 million travelers, resulting in a lower forecast revenue of Bt82 billion.
Meanwhile, Ministry of Foreign Affairs announced that 48 countries are still listing travel warnings to Thailand, advising their nationals to be careful in their journeys to Thailand and to consider the necessity of their trips.
Many countries and territories continue to update their travel warnings. The latest updates were made at the beginning of February by the UK, Italy, Taiwan, South Korea and New Zealand, suggesting avoiding trips to Bangkok’s protest areas despite the Feb 2 general election having passed.
Hong Kong continues a ‘severe threat’ warning level where all travel to Bangkok must be avoided. (MCOT)

Corruption main cause of rice subsidy problems: NIDA survey

One-third of Thailand’s farmers pointed at corruption as the cause of the government’s failure to pay for the rice they sold under the state pledging scheme, according to an academic survey released last week.
The National Institute of Development Administration (NIDA) conducted the survey on “Farmers’ Perspectives on Rice Resolutions” among 1,250 sample respondents nationwide.
The Yingluck Shinawatra administration launched the rice subsidy programme two years ago and pledged to pay farmers Bt15,000 per tonne of rice.
Questioned on the reasons for the government’s failure to pay for their rice, nearly one of three (31.13 percent) farmers pinpointed corruption, 18.42 percent blamed money shortages due to losses in rice trading, 18.36 percent said the government lacked liquidity after its failure to sell the rice, 15.03 percent said the caretaker government was restricted from borrowing from financial institutions, and 12.89 percent cited other reasons such as protesters’ obstructing the government’s operations, the government’s administrative failure and its irresponsibility.
Who should be responsible for the government’s failure on overdue payments?
The highest percentage of 35.92 named the caretaker prime minister, followed by the Cabinet at 32.33 percent, the commerce minister at 16.58 percent, the anti-government People’s Democratic Reform Committee at 9.85 percent, the Bank of Agriculture and Agricultural Cooperatives at 3.50 percent, and other elements such as the Election Commission, the Agriculture Ministry and the new government at 0.14 percent.
The majority of farmers, 36.72 percent, asked the government to urgently sell rice from the state stockpiles to earn money to pay them; 28.88 percent said the government should borrow to pay them; 22.64 percent called on the government to resign; 3.60 percent asked that their rice be returned; and 4.08 percent offered other proposals including action against protesters who have obstructed the government’s administration and cooperation among all related agencies to assist farmers.
Regarding the rice pledging scheme, 43.04 percent said it should be suspended, 34.4 percent wanted the programme to continue with paddy price adjusted in accord with the global price, 18.24 percent preferred the scheme to continue without any change, and 1.12 percent said it should continue but the management and checking systems should be improved, or it could be replaced with a rice guarantee programme. (MCOT)