Gadfly Posted January 16, 2007 Author Report Share Posted January 16, 2007 One quick request: if anyone does a cut & paste, make sure to correct the typos. Link to comment Share on other sites More sharing options...
Nervous_Dog Posted January 17, 2007 Report Share Posted January 17, 2007 <<5. Pay back time? There are some Thais, influential people, who seriously argue that the 1997 financial crisis was engineered by a cabal of evil financial predators solely to buy up Thai assets on the cheap. And now its time to get those assets back in the hands of Thai? Do policy makers here really buy into this fairy tale? Possible, I guess, but obviously misguided and very disturbing if true?>> They already WON agrs ago, look at SAMART, Jasmine, TRUE, etc, they all STILL have companies in "rehabilitation", i.e. bankrupt but trading away happily long after the bail out after 97 was over. As per the theme of your arguement, the THAIS have never let anyone control their shit DOG Link to comment Share on other sites More sharing options...
ThaiHome Posted January 17, 2007 Report Share Posted January 17, 2007 Without any links to back up my analysis here is what I think. Existing manufacturing, by far the largest FDI sector, is unaffected by the revision to the FBA. Manufacturing, by both Thai corporations and foreign owned, make up by far the largest contributors to Thailand exports. The 30% withholding is going to hurt foreign companies that need to bring in operating funds, but not enough to cause them to close shop. It will affect future investment decisions, but nobody expects this rule to last very long. Direct investment in property (not property funds) is still allowed without the 30% withholding. That means that Capital Land can still bring in funds to keep their huge investments going, which are aimed at Chinese Singaporeans who take the very long view and are looking to diversify from the even more over inflated Singapore property market. So, it seems to me that though the environment may seem hostile to an outsider, or someone who is looking to speculate on the baht with a short term investment, those who are here for the long term are unaffected. Don't get me wrong, I think both of these rules are adversely affecting the Perceived economic climate in Thailand, I just think the actual impact is going to be a lot less than what some chicken littles are going on about. TH Link to comment Share on other sites More sharing options...
Gadfly Posted January 20, 2007 Author Report Share Posted January 20, 2007 Existing manufacturing, by far the largest FDI sector, is unaffected by the revision to the FBA. Manufacturing, by both Thai corporations and foreign owned, make up by far the largest contributors to Thailand exports. The 30% withholding is going to hurt foreign companies that need to bring in operating funds, but not enough to cause them to close shop. It will affect future investment decisions, but nobody expects this rule to last very long. I have to disagree. When a country forces foreigners to divest their holdings â?? which are perfectly legal under existing law â?? it has a chilling affect on future investment. Think about it: you make an investment that is indisputably legal in Thailand (the government doesnâ??t dispute that itâ??s changing the laws), and after you have invested millions, the government says, sorry, but you are no longer allowed to own or control your business, a business into which you invested, perhaps, millions. That will have a chilling affect on future investment of any kind. Even if your particular sector was spared this time (and manufacturing was not really spared â?? the affects are just not as bad as other sectors), you have to look over your shoulders and wonder â??am I nextâ?Â. If the government here can essentially expropriate the legal holdings of foreigners , what is to prevent them from doing that to my business at some future time? These thoughts are going to pass through the mind of any rational person investing serious money in Thailand. The wording in your statement is very careful â?? kudos for that: â??existing manufacturingâ?¦is unaffected by the revision to the FBAâ?Â. But doesnâ??t Thailand need future investment? If it stands still, it will fall behind. It's neighbours are opening up. Take a look at Vietnam. The foreign business community itself â?? the people who actually make investments here â?? also and very obviously donâ??t share your view. The Joint Foreign Chambers of Commerce in Thailand, representing 28 foreign chambers of commerce here, came out against the law saying all of its members are against the new law. The Australian, British, Japanese and American Chambers of Commerce all issued statements against the new law. The EU Commission opposes it. The Japanese Embassy said it will discourage further investment. These are pretty sober minded organizations. I would not call them â??chicken littlesâ?Â. The EU Commission also says it violates WTO and, a few days ago, several anonymous officials in the Thai Ministry of Commerce, were quoted in the papers as saying the EU might be right. What is going on here? That is really my question. And all of these changes happens in the context of other anti foreign changes in Thai law. You mention the Bank of Thailandâ??s decision. This is classic. The Bank of Thailand, in an abrupt move, caused the Thai stock market to crash. A 30% withholding requirements on funds flowing into Thailand; what were they thinking? And then the government partially, but not completely, changes policy in less 24 hours. But instead of acknowledging their earlier decision was a mistake (it clearly was), the government made two very disturbing responses. First, it lashes out at foreign investors, blaming them for the crash. They even went so far as to claim that it wasnâ??t their rule change that caused the market to crash, but the machinations of speculators. No serious business person believes this, and to hear this from a central banker is disturbing. Second, Bloomberg quotes the Gov of the Bank of Thailand as now saying she was trying to create uncertainty in the markets here. Not only has the story changed, but it is now more bizzare. A central banker saying she wants to make the environment here unclear? That cannot be good for investment. The government can put all the spin on this they want. They can say foreign investors are unconcerned, but when foreign investors respond the next day saying they are concerned, the government spin is not convincing. You would expect the government to at least pause and listen. But they aren't. And that is worrying. Link to comment Share on other sites More sharing options...
Khun004 Posted January 20, 2007 Report Share Posted January 20, 2007 [color:brown] When a country forces foreigners to divest their holdings â?? which are perfectly legal under existing law â?? it has a chilling affect on future investment. ... [snip] ... A central banker saying she wants to make the environment here unclear? That cannot be good for investment ...[snip]... You would expect the government to at least pause and listen. But they aren't. And that is worrying. [/color]Excellent briefing. Helps my understanding of the situation. Thank you, Gadfly, for writing and posting that. Link to comment Share on other sites More sharing options...
Lord Toad Posted January 20, 2007 Report Share Posted January 20, 2007 I was talking to the Financial director of an international company about this and the way he put it was like this. International companies are unlikely to commit to Thailand in the current environment. However there will be companies already committed to Thailand who already have a five year plan and will probably stick to it. However because new investors do not come in that will effect inward investment over the next five years as Thailand will not be in the five year plan. The longer this goes on more long tem damage will be done. Just this year may see inward investment reduced by 20% for this year and the next 5 years, if it goes into next year add another 20% to make 40%. And etc etc. Link to comment Share on other sites More sharing options...
ThaiHome Posted January 20, 2007 Report Share Posted January 20, 2007 I would have been amazed if you had agreed with me. I do note that you have carefully quoted only part of my post and then went on about forced divesture and failed to address my point which is the largest foreign investment in Thailand is unaffected by the revision. Nor did you acknowledge that I said that the future investment climate was going to adversely affected. I think Lord Toadâ??s post sums up what the reaction will be. TH Link to comment Share on other sites More sharing options...
BaronTT Posted January 21, 2007 Report Share Posted January 21, 2007 No directed at you but yours is the last post. Has anyone checked Hotel Occupancy rates, especially of the 5 star hotels which foreign businessmen use? I wouldn't be surprised if they are way down, as foreign businesses are being cautious and want to see how things will develop. I talked to someone at one of the 5 star hotels, and their occupancy rate was down to 35% from close to capacity before. Who knows what the causes are, but I am sure that the uncertain business climate has some impact. Link to comment Share on other sites More sharing options...
Nervous_Dog Posted January 21, 2007 Report Share Posted January 21, 2007 tried to get a business class seat back to Australia for a friend (rich cunts) Thai was bookedd solid from 14th through to 25th! not 5 star hotel DOG Link to comment Share on other sites More sharing options...
Khun004 Posted January 21, 2007 Report Share Posted January 21, 2007 Has anyone checked Hotel Occupancy rates, especially of the 5 star hotels which foreign businessmen use? I wouldn't be surprised if they are way down, as foreign businesses are being cautious and want to see how things will develop. I talked to someone at one of the 5 star hotels, and their occupancy rate was down to 35% from close to capacity before. Who knows what the causes are, but I am sure that the uncertain business climate has some impact. My first inclination is to agree with BaronTT, but my eyes and ears are telling me something different: I live in one of the large, business, hotels in Bangkok. The lobby is chock-a-block with guests. Even the bell boys have complained to me -- with pained looks on their faces -- that they have to work too hard transferring all the luggage. I have a Thai friend who works at a medium-size, business hotel over in the Sukhumvit area. He tells me they are full up and turning away many reservations. Another Thai friend works at a 5-star in Hua Hin. At staff meetings there is always a report on occupancy rate. She reports occupancy there is now 90-98 percent, and some days they have problems of over booking. Yes, it's a surprise to me, too. And I don't understand it. But, let's wait a little while longer, say, a year. I would be even more surprised if anywhere near these occupancy rates will be seen this time next year. Link to comment Share on other sites More sharing options...
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