World Bank still optimistic on Thailand, but “Entrepreneurs Growth Engine” start to sputter (Up-Date 4)

The World Bank is still optimistic about the Thai economy growing at between 2.5% and 3%, but unfortunately, as many have noted, Thai SMEs are starting to feel the pain of the Thai political crisis. And as many noted, SMEs is where a great deal of a country’s entrepreneur activity is located. Entrepreneurs are, of course, a very important engine of growth, to most countries. In fact, in many of the past financial crisis, as big financial conglomerate and other faltered into the abyss, many countries was able to pull the economy, out of the crisis, by focusing, on “Empowering” entrepreneurs.

The following is from Bernama (Source)

World Bank Optimistic Thai Economy Could Grow Between 2.5 To 3 Per Cent In 2014

BANGKOK, May 12 (Bernama) – The World Bank says it is confident Thailand’s economy could sustain growth of between 2.5 to 3 percent in 2014 if a new government is formed before the end of the year, Thai News Agency (TNA) reported.
Kirida Bhaopichitr, senior economist at the World Bank’s office in Thailand, said that ongoing political turmoil is eroding investors and consumers’ confidence in the short-term.

“A growth of 2.5 to 3 percent is possible if a new government is formed by year’s end as the new administration would be able to disburse funds from the budget expenditure for spending,” she said.

The World Bank will review Thailand’s economy this October if a new government fails to be stablished before the end of the year.
Bhaopichitr said what was worrying the World Bank the most about the country’s economy in the long-term is the absence of a stable government.

“The current administration can only resolve immediate problems and cannot lay out national development plans for the next five or 10 years appropriately,” she said.

“Development in other countries could surpass Thailand if national development comes to a standstill,” she added.

The following is from Bernama (Source)

BANGKOK, May 15 (Bernama) — The ongoing political crisis in Thailand has already impacted its economy and could hit its businesses severely and even lead to closure of small and medium enterprises (SMEs) soon.

The slowing economy as a result of the crisis will hit hard 30 to 40 per cent of the two million SMEs in Thailand and the ones with less cashflow will be the first to be affected, said Aat Pisanwanich, Director of the Centre for International Trade Studies (CITS), University of the Thai Chamber of Commerce.

The political conflict has already hit consumer sentiments and with no political solution in sight, many SMEs have to close down their businesses after losing trading opportunities to other trade rivals.

Study by CITS showed five of Thailand’s main exports — rice, palm oil, garments, woods and electrical appliances — will continue to lose their market share under the Asean +3 (China, Japan and South Korea) market liberalisation, he said.

Aat said Thailand’s exporters of the products have lost their competitiveness under Asean +3 as other Asean countries, mainly Malaysia and Indonesia have a better competitive edge.

Thailand’s rice exports, particularly to China, have been hardest hit as compared with other products, losing competitiveness to Vietnam and Cambodia.

Aat said before Asean+3 market liberalisation, Thailand had 96.5 per cent market share of the rice that China imported from Asean countries, but in 2013, its market share dropped to 35 per cent, while Vietnam increased its share sharply from 3.5 per cent to 64 per cent.

Today, Cambodia has about one per cent share in China’s rice market, from zero over the past six years.

(Up-Date 1) A grenade and gun attack on Suthep’s gathering, late at night, killed 3 and injured about 20. Total number of killed since Suthep went active is about 25, on all sides. Thailand’s army chief, Prayuth, after the USA says, will likely not stage a coup, has come out, to say, if the Thai crisis, continues to be violent, the army may use force (What-ever that means). Also, Thailand’s care taker Prime Minister, is trying to come to an agreement, with the well known, anti-democracy, Thai election unit to set an election date. Today, at one of the meeting between the two, Suthep protesters disrupted the meeting. The care taker prime minister, latest statement to Reuters, is that he doubt, the July 20th “Tentative General Election Date” is still possible (End).

(Up-Date 2) New York Times reports BANGKOK — Thailand’s economy shrank more than expected in the first quarter, data showed on Monday, as exports remained weak and months of political unrest threatened to tip the economy into recession. The state planning agency, which compiles data on gross domestic product, said there had been a 2.1 percent contraction in the January-March quarter, compared with the previous three months. The first quarter recorded a contraction of 0.6 percent from a year earlier. The agency, the National Economic and Social Development Board, lowered its 2014 G.D.P. growth forecast to between 1.5 percent and 2.5 percent from between 3 percent to 4 percent. The country has been governed since December by a caretaker administration with limited fiscal powers, and the crisis seems likely to continue as protest groups seek to install an unelected government. The outlook for the April-June quarter and beyond is grim, analysts say. “Chances are, we are going to see another technical recession in the economy, given that the second-quarter G.D.P. number is likely to be rather poor as well,” said Gundy Cahyadi, an economist with DBS Bank in Singapore (End).

(Up-Date 3) Reuters reports Thailand’s acting prime minister on Monday ruled out resigning as a way out of a protracted political crisis that is stunting economic growth, as anti-government protesters stepped up pressure to remove him and install a new administration. Commerce Minister Niwatthamrong Boonsongphaisan has replaced Yingluck as caretaker prime minister, but the anti-government protesters say he has no legal standing and they want a “neutral” government to push through reforms. Niwatthamrong met members of the Senate, which is trying to come up with a way out of the deadlock, but he told them he would not resign. “The current cabinet is legal in every way … it must stay until a new cabinet of ministers is elected in. We cannot install another prime minister while we have an acting one in place,” Niwatthamrong said in statement following the meeting. Thailand has not had a functioning lower house of parliament since Yingluck dissolved parliament in December. Bangkok is the scene of a tense stand-off between government supporters loyal to Yingluck and her brother, ousted former Prime Minister Thaksin Shinawatra, and opposition demonstrators drawn from Bangkok’s middle class and royalist establishment. The upper house Senate, the country’s only remaining legislative body, says it could select an interim prime minister but it wants the caretaker government to step down first. That has incensed protest leader Suthep Thaugsuban, who wants the caretaker government removed right away. “We will take democratic power and hand it back to the people,” Suthep, a former deputy prime minister in a government run by the pro-establishment Democrat Party, told supporters late on Sunday (End).

(Up-Date 4) The Thai army invoked Martial Law, in what it said is to restore law and order, hiowever, where Thailand goes from here is anyone’s guess, as fundamentally, the struggle in Thailand is still between dictatorship and democracy.

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