Tuesday, November 16, 2010

From the Ashes

Only six months ago images of red-shirted protestors battling with green-clad soldiers and burning shopping malls in the commercial heart of Bangkok dominated the news coming out of Thailand. Many foreign countries, including the U.S., advised citizens to stay away. One would have thought that the deadly disturbances would set the country back years.

The amazing thing is that what amounted to an attempted revolution in tense months of April and May this year caused so little lasting damage, to the economy at least. “Thailand is very resilient,” said Prime Minister Abhisit Vejjajiva, speaking in Tokyo last week.

One could say that again. The Thai economy expects to record 8-9 percent growth in gross domestic product when the third quarter is tabulated. The fourth quarter may be down slightly but only because of the damage caused by the worst flooding throughout the country in decades. These figures put Thailand in the growth league of China.

Looking back it appears that the disturbances, the bloodiest in Thailand since 1991, had virtually no impact on the manufacturing economy, the supply chain or even tourism. Thailand is on track to attract 15 million tourists this year equal to the highest number from previous years.

Other economic indicators are looking impressive. Unemployment, never more than 4 percent even as the global financial crisis washed over the country two years ago is now at an astonishing 1 percent. In many parts of the economy there are labor shortages. The baht, the Thai currency, has been appreciating.

Like other countries in Asia, Thailand suffered from the onset of the global financial crisis, which many were afraid would plunge the country into a deep recession similar to the one in 1997-98. It met the challenge through a major stimulus program, with income support for elderly and rural sectors. It still raised the total debt to GDP ratio by less than a percentage point.

The Abhisit government is contemplating a second major stimulus aimed this time mainly at improving the country’s infrastructure, transportation and education sectors. Meanwhile, Toyota Motor Co. has expressed confidence in the country by announcing plans to build a new Prius hybrid automobile factory in Thailand.

The government has lifted the state-of-emergency it imposed during the spring riots in 21 provinces, although it is still in effect in Bangkok and three surrounding provinces. Abhisit said this was necessary for certain incidents such as a spate of mysterious postal bombings that have unnerved the capital but not caused casualties. He said he uses the special power sparingly to avoid unneeded detentions.

This is a sensitive time in Thailand as the six-month anniversaries of key events in the struggle last spring approach. Despite the state of emergency, Red shirted demonstrators paid tribute on Nov. 13 to one of their heroes, Khattoya Sawasdopol better known as She Doeng, a ex-general and red shirt leader killed by sniper on that date.

There was some concern whether the demonstrators would to move to Ratchaprasong Intersection Nov 19 for the anniversary of the bloody military crackdown. But it says something about security situation that the prime minister felt confident enough to travel to Japan for the annual APEC meeting.

Meanwhile, the government’s nemesis, former prime minister Thaksin Shinawatra, chimed in from exile, twitting the government for still holding what he termed “political prisoners” in contrast to the generals in Myanmar who released Aug San Suu Kyi from house arrest after 15 years detention.

Abhisit said that he had a “target” of holding a general election early next year. His party is doing well in the public opinion polls, he maintained, but added he wasn’t timing his call to take advantage of the polling data. “I’d rather have a peaceful election and lose than a violent one that I win,” he said..

One would think that the positive news on the economic front, allied with initiatives to help alleviate some of the grievances from poorer parts of the country would bode well for his coalition. It should be remembered, however that the opposition, under various political banners, have won the previous elections, only to face massive demonstrations from the folks now in the government.

“I want to prove that the events of the last three years [from the Sept. 2007 coup d ‘etat] were an aberration,” said the prime minister..


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