Koh Chang

Greenpeace urges South-East Asian leaders to discuss climate change

Friday February 27th 2009, 3:23 pm
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Source: Deutsche Presse Agentur

Greenpeace activists on Friday urged South-East Asian leaders to put global warming on the agenda of a summit being held this weekend in Thailand when discussing the region’s efforts to deal with the global economic crisis.

Activists unfurled a banner reading, “Ten Nations – One Vision, Climate Action Now,” on the back of a billboard across the street from the hotel in Cha-am, 130 kilometres south-west of Bangkok, where the 14th summit of the 10-nation Association of South-East Asian Nations (Asean) is being held.

“We urge Asean member states to use stimulus packages to prioritize and support green investments which help put South-East Asian economies on a low carbon-growth pathway instead of maintaining and carrying on with investments which propagate climate-changing emissions and contribute to global insecurity,” Greenpeace South-East Asia executive director Von Hernandez said in a letter to Asean leaders.

The environmental group noted that South-East Asia was among the most vulnerable and least prepared to cope with the impacts of global warming.

“Greenpeace is calling on your excellencies to represent the interests of South-East Asian communities and future generations by pushing the international community to take immediate responsibility and help avert climate catastrophe,” Hernandez said.

The Asean leaders are to meet Saturday and Sunday to discuss regional issues, including the global economic crisis, food security and the establishment of an Asean human rights body.

Under the new Asean charter, leaders may raise any issue for discussion at such summits.

Asean’s members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Burma, the Philippines, Singapore, Thailand and Vietnam.

Greenpeace urges South-East Asian leaders to discuss climate change

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Thai economy battered

Thursday February 26th 2009, 2:00 pm
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Source: Agencies

Thailand’s economy has shrunk for the first time in nearly a decade, with its tourism industry affected by political unrest and the global slowdown takes its toll.

Gross domestic product in the fourth quarter contracted 4.3 per cent from a year earlier in the last three months of 2008, the government’s National Economic and Social Development Board said.

Southeast Asia’s second largest economy grew just 2.6 per cent in 2008 and the department said it may contract as much as one per cent in 2009. The last time Thailand’s economy shrank was in the first quarter of 1999. The government had previously forecast growth of as much as four per cent this year.

Last week, the government said exports, which account for 65 per cent of the country’s GDP, posted their steepest fall – 26.5 per cent – in 12 years in January as demand for the country’s cars, hard drives and electrical goods evaporated amid the global slump.

US car giant GM announced last week that 790 of its 3,000 Thai workers would be laid off and Japanese car maker Toyota’s Thai operations have dropped more than 1,000 temporary workers since late last year.

Tourism, which makes up about six per cent of the economy, was hard hit by anti-government protesters shutting down Bangkok’s two main airports for a week just as the high season began late last year, resulting in a 19.4 per cent decline in tourist arrivals in the fourth quarter.

As many as 80,000 workers in the tourism industry may lose their jobs, excluding those in hotels, Apichart Sankary, president of the Association of Thai Travel Agents, has said.

The government of Abhisit Vejjajiva, the prime minister, has introduced measures including cash handouts to the poor, and long-term infrastructure projects to stimulate the economy.

Earlier this month, the Thai parliament approved a $3.3bn package to stimulate domestic demand and create jobs but Abhisit warned this week that the economy could contract until June despite the government spending.

Thai economy battered

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Thailand’s anti-airport seizure draft is a joke

Wednesday February 25th 2009, 12:42 pm
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Source: Bangkok Post

Is the Abhisit Vejjajiva administration really serious about preventing the airports from being seized again, as the prime minister himself strongly pledged to the world recently?

Probably not – if one looks at how the authorities are pursuing charges against leaders of the People’s Alliance for Democracy (PAD) for their siege of Suvarnabhumi and Don Mueang airports during Nov 25-Dec 4 last year.

Investigations into the case have been painfully slow, as police remain confused, intentionally or not, as to what charges they would press against the PAD leaders, despite the abundant evidence.

The draft bill on anti-airport seizure which was recently approved by the Cabinet appears to be more proof of the lack of any serious intention to keep airports off-limits to political rallies.

The draft contains a ridiculously light penalty for any attempt to seize Suvarnabhumi Airport, the heart and soul of Thailand’s air transport hub around which much of the Thai economy is built. It is highly offending that the proposed punishment for a crime that causes the national economy a massive heart attack and ruins the country’s international image carries a measly fine of between 500 and 10,000 baht!

Why on earth is serious criminal punishment conspicuously absent from the draft? The fine print in the five-step measures laid down recently by a Transport Ministry-appointed committee set up to restore Thailand’s air transportation, is equally laughable and a reflection of the intent.

First, it calls for the dispatch of officials to negotiate with protesters before they reach the airport. Second, if the demonstration shows signs of being prolonged, the Airports of Thailand Plc (AoT) should set aside an area within Suvarnabhumi Airport but outside the passenger terminal, for them to congregate. Third, find spare channels for passengers to enter and exit the airport.

Fourth, step up security checks along passages to the airside, including aprons and air traffic control tower. Fifth, the AoT needs to conduct anti-airport seizure drills every year.

In the event that demonstrators are in great numbers, the AoT should coordinate with the police and military for support in crowd control.

Both the draft law and the measures are clearly superficial and aimed only at pacifying anxious members of the public and the international community that there would not be a recurrence of airport seizures.

It also raises the suspicion that the Abhisit government came up with such a draft bill only to dissuade the red-shirted opposition protesters from following in the footsteps of the yellow-shirted dissidents by taking over Bangkok’s airports and creating another disaster for the whole country.

Unfortunately, the contents of the draft law and the five-step action plan are undoubtedly ineffective, if not openly inviting demonstrators to hold the country hostage to fulfil their political ambitions.

One question springs to mind: Is the anti-airport seizure draft bill and action plan needed in the first place?

There exists a penal code (sections 135/1 and 132/2 amended in 2003) which classifies the seizure of airports as an act of terrorism, a crime subject to a fine of between 60,000 and 1 million baht, as well as the death penalty.

The penalty is harsh enough to deter any more crime – but only if the authorities enforce the rule of law.

In fact, the five-step action plan was “practised” by the AoT during the last airport blockage, and it proved completely futile. When the AoT sent out an SOS to army Commander-in-Chief Gen Anupong Paojinda and the National Police Commission to dispatch reinforcements as the situation at Suvarnabhumi was getting out of hand, it simply fell on deaf ears. The previous government, the PAD and the armed forces were too busy playing their own game and were insincere about unlocking the political stalemate that was devastating the country.

The Abhisit government needs to do a better job to convince us that it is dead serious about preventing history from repeating itself, and must indiscriminately allow existing laws to take their course.

Thailand has paid dearly for the PAD’s senseless and embarrassing action: 210 billion baht in losses and causing the country’s GDP to contract for the first time in nearly a decade in the fourth quarter to minus 4.3% year-on-year.

The blockade left some 350,000 visitors stranded and prevented 3.4 million tourists from visiting Thailand, severely denting the kingdom’s tourist-friendly image.

Thailand’s anti-airport seizure draft a joke

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NESDB: Thai recession likely

Tuesday February 24th 2009, 12:50 pm
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Source: Bangkok Post

[While some of the world's largest banks are in danger of being nationalised, with soverign debt collpapse in the Ukraine, Iceland an economic wilderness, interest rates at historically low rates, the banks not lending to businesses and individuals and bailouts the world over have systematically failed, how the NESDB board's secretary-general Ampon Kittiampon can predict "the final quarter of 2009 would be a 'turning point' for the Thai economy, as the government's 117-billion-baht supplementary budget for fiscal 2009 starts taking effect," is a dark mystery to me ED KCI]. Anyway, back to the story…

The country’s economy shrank more than expected in the fourth quarter last year, as exports and tourism slumped, with growth this year forecast between -1% and 0% due to the lingering global recession.

The National Economic and Social Development Board revealed yesterday Thailand’s economy in the last three months of 2008 contracted by 4.3%. It is the first contraction in 10 years since the aftershocks of the 1997 crisis. The Thai economy grew 2.6% in 2008, a substantial drop from 4.9% in 2007.

The agency said the economy may contract as much as 1% in 2009 due to sharp drops in exports and tourism falloff with global recession. It previously forecast growth of as much as 4%. “The global economy is moving into a recession and Thailand, like other countries, has been hard hit and the situation is worse than expected,” the board’s secretary-general Ampon Kittiampon said yesterday. The decline was due to declines in exports, tourism and production.

“The Thai economy is likely to slip further in the first quarter of this year. We may see the worst figure in the second quarter before it climbs in the second half,” Mr Ampon said. The final quarter of 2009 would be a “turning point” for the Thai economy, as the government’s 117-billion-baht supplementary budget for fiscal 2009 starts taking effect, he said.

“The budget injection in May should boost the Thai economy slightly at the end of the second quarter or early in the third quarter,” he said. “The economy needs to grow by 4-5% in the final quarter if we want to see zero growth in GDP in 2009.”

Dr Ampon said despite sluggish export and tourism sectors, the agency still projects greater domestic consumption will help the Thai economy. Overall consumption was projected to grow 3.1%, with private consumption up 2% and government consumption increasing 8.3%. According to the government’s planning agency, Thai exports were likely to contract by 13.1% this year, with imports dipping by 14%.

NESDB projected the trade balance was estimated at US$1.8 billion with inflation projected at 0.5% to minus 0.5%, down from 2.5-3.5% in the previous projection. The unemployment rate was projected at 2.5-3.5% of the total workforce, or 950,000-1.3 million, an increase from 1.5-2.5% in an earlier projection.

Sompob Manarungsan, an economist at Chulalongkorn University, said the Thai economy this year is likely to contract by more than the NESDB projection because of export slowdown and a reduction in asset values. He said the government’s plans to stimulate domestic consumption and government spending would deliver only a slight impact to the Thai economy, as government expenditure accounts for just 20% of the economy.

NESDB: Thai recession likely

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Finance ministers agree to expand currency pool

Monday February 23rd 2009, 12:55 pm
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Source: The Nation

East Asian finance ministers will finalise the upgrading of the region’s bilateral currency-swap arrangement into a US$120 billion (Bt4.34 trillion) multilateral facility at their next meeting in May.

“In order to ensure regional market stability and to foster confidence in the markets, we stress the importance of operationalising the multilateralisation of the Chiang Mai Initiative,” Finance Minister Korn Chatikavanij said at the close of a special Asean plus Three Finance Ministers’ Meeting here.

The move is aimed at deepening cooperation among the 10 Asean member countries and the grouping’s partners – China, Japan and South Korea – amid the global financial crisis.

Finance ministers from Asean and the three partner countries agreed to expand their currency pool from $80 billion to $120 billion.

The agreement, which is an extended version of the Chiang Mai Initiative, which was set up in the wake of the 1997 financial crisis, will be effective after Asean governments give their official endorsement.

Korn chaired the meeting of the Asean plus Three finance ministers to discuss economic collaboration under the threat of global recession.

Asean will contribute 20 per cent of the proposed $120-billion facility while China, Japan and Korea will be responsible for the remaining 80 per cent, he said.

The ministers will finalise key elements of the agreement, including each country’s contribution, at their next meeting in May in Bali, Indonesia.

An independent regional surveillance unit will also be established to promote objective economic monitoring.

In the first phase, the fund will be coupled with International Monetary Fund (IMF).

When a country asks for help due to capital flight during a financial crisis, 80 per cent of the financial aid will be tied to the IMF’s reform prescription while only 20 per cent will not be subject to the stringent conditions.

When the surveillance system of the Chiang Mai Initiative becomes fully effective, the regional fund would be de-linked from the IMF, he said.

The ministers also agreed to expand the Asian bond market by promoting the issuance of local currency bonds, he said.

A source said that Laos would next year raise funds via baht-denominated bonds to finance infrastructure projects in that country.

The East Asian finance ministers also agreed to increase substantially the capital of the Asian Development Bank (ADB) as the countries in the region need more funds to invest.

The source said ADB wants to increase its capital base by 200 per cent from the current $56 billion.

Finance ministers agree to expand currency pool

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Exports plunged 26.47% in January

Friday February 20th 2009, 1:55 pm
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Sources: The Nation / Bangkok Post

Thailand’s exports in January totalled only US$14 billion, a 26.47 per cent drop from the same period last year.

“It’s solely because of the global economic recession. This hit Thailand’s three main export categories – auto, electronic and home appliances,” said Permanent Secretary Siripol Yodmuangcharoen at the press conference on Thursday. In terms of value, it is the lowest in two years, he said.

Imports in the month also dropped 37.6 per cent, leading to the trade surplus of $1.38 billion. Thailand’s exports have plunged for three consecutive months. Meanwhile, Bangkok Bank Research estimated that Thailand’s exports may expand less than 1 per cent or contract as much as 10 per cent this year.

Any move to weaken the baht to help exports would ultimately prove futile, according to Tarisa Watanagase, the governor of the Bank of Thailand. The government this week suggested current exchange rates may be hurting Thailand’s export competitiveness. Exports in January recorded their biggest decline in a decade with a 26.5% year-on-year contraction to $10.49 billion.

But Dr Tarisa said exchange rates had been less of a factor in export performance than the decline in demand from the United States, Japan and Europe.

A central bank study found that Thai exports would fall 1.6% for a 1% decline in economic growth for key trading partners. Every 1% decline in the value of the baht would only lift exports by 0.2%.

The baht has remained relatively stable in recent months, closing yesterday at 35.50 to the dollar. For the year to date, it has fallen 0.7%, and by 3% from 2008.

Dr Tarisa said the baht was ”in the middle of the range comparing to regional currencies”, and added that export competitiveness should not be considered only in terms of exchange rates.

The baht’s competitiveness in real terms had actually improved, with the real effective exchange rate falling to 87.16 in December from 89.91 in November when indexed against 20 currencies of trade partners and competitors.

Dr Tarisa, speaking at a forum held by the Sasin Graduate Institute of Business Administration, said the rapid decline in inflation in the second half of 2008 had significantly cut business costs.

In any case, the impact of the global downturn was affecting the entire region.

”Many other countries have already experienced [steep] declines in exports. Now, we are recording a worse decline than others,” she said. ”As a matter of fact, [the export declines] are a surprise for the region, as there was the thought that the rise in intra-regional trade could save exports. Now we know that this hope has dimmed. Our exports to China have dropped quickly in recent months.”

Exports plunged 26.47% in January

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Baht value faces scrutiny

Thursday February 19th 2009, 2:57 pm
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Source: Bangkok Post

The Thai baht fell to a two-month low on Thursday as traders cited dollar buying by the the central bank to weaken the local currency in order to help the country’s struggling exporters.

Cabinet ministers on Wednesday will consider whether current exchange rates are affecting Thailand’s export competitiveness.

However, Finance Minister Korn Chatikavanij played down any conflicts or interference with the Bank of Thailand’s handling of exchange-rate policy: “We are not intending to reduce the governance of the central bank over exchange rates, but only to assess what impact rates are having on the export sector,” he said yesterday.

The baht, which slipped yesterday to 35.12 from 35.02, has remained relatively stable this year even as other regional currencies have weakened.

The central bank has stated that its policy was to smooth volatility in the market, rather than intervene to try to push rates in any one direction.

But some business groups have argued for more forceful intervention in the markets to help boost the flagging export sector, which has dipped sharply in recent months due to the global economic crisis.

Meanwhile, Mr Korn welcomed comments by central bank governor Tarisa Watanagase that regulators could permit greater foreign participation in the Thai banking sector.

“I agree in principle. We opened up the banking sector to greater foreign shareholdings during the [1997] crisis, and it has helped lead to greater competition and efficiency today,” he said.

Dr Tarisa told Bloomberg News in an interview that Thailand would ease restrictions on foreign ownership of local banks and may offer new banking licenses to attract overseas investment.

Deputy Prime Minister overseeing national economy Kobsak Sabhavasu on Wednesday insisted the government has no policy to intervene in the value of baht to help exporters, citing that it is the Bank of Thailand’s responsibility to prevent the fluctuation of its value.

The baht value should move in line with the market mechanisms, according to Mr Kobsak, and the central bank is responsible for preventing the baht value from disrupting the economy.

Baht value faces scrutiny

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Exporters face barriers as protectionism intensifies

Wednesday February 18th 2009, 3:39 pm
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Source: The Nation

Thailand’s exporters should pay more attention to growing trade protectionism in the light of the global crisis, as the trend will not only damage their business, but also raise operating costs, businessmen said yesterday.

There are increasing signs of protectionism, including non-tariff barriers in the European Union, which has imposed a tighter standard for Thai rice, said Charoen Laothamatas, managing director of Uthai Produce, one of the country’s leading exporters of jasmine rice.

He said Thai rice exports were also facing tighter environmental standards in the United States, as well as tougher international standards elsewhere.

For sales to the UK market, all food products, including rice, are required to show the place of origin and provide traceability.

“Keeping up with regulatory controls will raise the costs of Thai exporters,” Charoen said.

Earlier, the US passed a farm bill requiring the traceability of major products like furniture, products made by small operators and toys. In the US rescue-package bill, a clause stipulates steel used in economic-stimulus projects must be locally sourced.

Wallop Witanakorn, secretary-general of the Thai Garment Manufacturers Association, said Thai textile exporters also had to comply with labour and environmental standards, which include limits on waste created in the manufacturing process.

“Protectionism is one of three factors that all food and other exporters must be concerned about, aside from the global economic downturn and the financial crisis,” Wallop said.

Bangkok Rice managing director Suwimol Jungpanich said the number of non-tariff barriers was expected to multiply during the economic downturn, as each country wanted to protect its market from a trade deficit and business shutdowns.

Examples of other non-tariff barriers imposed by importing countries are labour standards prohibiting the hiring of child or female labour and environmental standards under which manufacturers and exporters must declare how much waste they produce each year.

Rice exporters in particular have complained they faced difficulties with their foreign sales, especially in the United Kingdom. Charoen of Uthai Produce said firms were facing higher operating costs, as retailers had added to the requirements for imported food.

“This is one kind of non-tariff barrier for exporters, as the requirement is beyond the normal standard requested by the European Union. It will lead to a major burden for rice exporters, as we must invest a huge budget to adapt ourselves to meet the requirements of each importing country,” said Charoen.

The British Retail Consortium, meanwhile, has introduced the BRC food technical standard, which stipulates a traceability system. In this process, rice suppliers must provide more information about their goods, such as origin details, to retailers. As a result, retailers can guarantee product quality to consumers and trace back to the point of origin whenever a problem occurs.

“The BRC requirement is a private safety demand. In addition, it forces Thai exporters to face a double standard, as we must meet the requirements of importers to ensure our products can sell in retail shops,” said Charoen.

In order to meet the BRC standard, rice exporters must shoulder a higher cost by spending several hundred thousand baht each on hiring technicians and more staff to set up a traceability system.

Exporters must also pay for a rice surveyor to inspect the firm and issue a certificate for their exports to the United Kingdom.

Suwimol said due to compliance with such requirements, operating costs would rise, particularly for smaller orders.

Exporters face barriers as protectionism intensifies

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America has a newfound interest in Asia

Tuesday February 17th 2009, 1:12 pm
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Source: The Nation

Hillary Clinton’s visit to China, Japan, South Korea and Indonesia bodes well for future stability and development

The weeklong visit to four Asian countries by US Secretary of State Hillary Rodham Clinton is testimony to the Obama administration’s sincerity about making a difference in its Asian policy. In the past the US talked a lot about Asia but with little tangible action, but it seems now that the US will match every commitment with deed. That is a good beginning. Secretary of State Clinton has made the right decision to come to Asia before making the usual trip across the Atlantic to Europe. Her visit will generate much confidence and engender a forward-looking attitude among Asian countries about engaging with the US in the most constructive ways.

Clinton’s itinerary reflects both the old and new reality in this part of the world. Japan, China and South Korea remain the prime movers and shakers in East Asia. It has been that way since the end of the Second World War, and their economic imperatives have made these three Asian powers formidable. The level of friendship or adversity among them can affect the region’s economic development and stability.

During her visit, Clinton must find ways to ensure that these three countries – with different historical baggage and experiences, not to mention different levels of mutual trust – continue their cooperation and strengthen their relations further.

For the US strategic interest, the region’s solid economic development will derive from the cooperation and trust between these countries. Their common prosperity will have ripple effects for the whole region. In the post-Cold War period the US was used to the strategy of divide and rule between China and the two freer economies of Japan and South Korea. However, the growing importance of China and its integration with the global economy, particularly with the US, has made rapprochement and further cooperation between the US and China possible.

The issue is: Can Washington consolidate its China relations while maintaining the same relationship with Japan and South Korea, which are staunch allies? The answer will have much to do with the US’s attitude towards China and its engagement with the rest of the region.

Obviously, the global financial crisis has made the trio more willing to cooperate with one another. The least the US can do is to ensure that this cooperation is not obstructed.

It would be wise for the US’s new Asian policy to promote cooperation and stability within the region. Therefore it is crucial that the US finds ways to encourage and support the emerging East Asian community, which is still in the making.

In the past decade, the idea of such a community was, to some extent, hindered by the US’s unwillingness to yield. Washington’s view was that any new regional organisation in this part of the world would be an attempt at isolating the US. Now, with new leaders in the White House and at the State Department, the US can make history by encouraging Asian community building. This eventually will benefit the US global strategy as a whole.

What is new in the Asian policy of President Barack Obama is the recognition of Indonesia as a fresh player in the US global strategy. The young democratic nation with the world’s largest Muslim population is increasingly a factor to be reckoned with and will play a crucial role in the continued stability and prosperity of the Asean region. Credit has to be given to the Indonesian leaders who were forward-looking and recy in bringing peace to Aceh and East Timor. This is an Indonesian quality that Thai leaders need to emulate.

Indonesia’s political stability and rapid democratisation has increased its strategic value many-fold. It has the world’s fourth largest population and is no longer the sick man of the region. A decade ago, it used to be the lowest common denominator within Asean. If Jakarta said no to any scheme, no to any cooperation, no progress within the grouping could be made. Now the opposite is true; Indonesia has become a liberal driving force within Asean, in making it more open, transparent and more people-oriented. Both Indonesia and Thailand are strong supporters of the liberal Asean Charter and the proposed Asean human rights body. This is a good outlook that Thailand should be happy with.

It is fortunate that the Abhisit government has accorded top priority to working closely with Indonesia and its leaders. For instance, with Thailand as the current Asean chair, Abhisit knows that he must seek advice from Indonesian President Susilo Bambang Yudhoyono in preparation for his participation at the G20 Summit in London.

Secretary of State Clinton has made the right choice with her first overseas visit, and there should be more trips in the future. With the increased presence of the US Secretary State in the region, we can genuinely say that the US is really interested in Asia.

America has a newfound interest in Asia

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Suvarnabhumi Airport Rail Link to open in August

Monday February 16th 2009, 5:32 pm
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Source: Bangkok Airport Online

The airport link from the Phaya Thai and Makkasan areas of downtown Bangkok to Suvarnabhumi airport is set to open for passengers on August 12, the birthday of Her Majesty the Queen, deputy Transport Minister Sopon Zarum has said.

He conceded some facilities, including the baggage carousel system, would not be ready on the opening day, but he said he needed to speed up its launch.

The luggage-loading service at Makkasan station would not be operational, so there might be some inconvenience for passengers with heavy bags.

The construction of the 28-km route is 96 per cent complete. There have been delays to the works at some stations and route sections due to hold-ups in land acquisitions, said SRT deputy governor Prasert Attanan.

The SRT plans to collect a fare of 150 baht from passengers taking non-stop trains while those travelling on trains that stop at every station will pay between 15 and 45 baht.

Suvarnabhumi Airport Rail Link to open in August

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