Siamese twin crises, 200 years on

Last year and this, Thais have experienced several "twin" situations, including the global financial crisis paired with domestic political turmoil.

While the twin crises in today's situation have caused problems and worries, the twins back 200 years ago generated surprise and touching moments for Thais. The stories of the twins in the past and the twins in the present are interestingly coincidental.

In 1811, Thais were very curious about the births of In and Chan, the world famous Siamese twins, whose bodies were joined from the chest downward.

But in 2008 and 2009, Thais have encountered twin storms in politics and the economy. They have greatly retarded the development of an expansionary economy and a fullfledged democracy.

The political unrest has turned back the wheel due to apparent conflicts between two interest groups - the red shirts and yellow shirts - which have carved a deep division in society, a phenomenon unprecedented in this country.

The unusual physical attachment of In and Chan, which was also unprecedented, captured the world's attention. They became international celebrities as news of the twins spread throughout the world.

In the Siamese twins' case, the boy on the left was named Chan and the boy on the right was In. In the political twin's case, they are Baan Chan Song Lha, the residence of former prime minister Thaksin Shinawatra on one side, and Baan Pra Arthit, the office of antiThaksin protest leader Sonthi Limthongkul on the other side.

InChan were raised by their mother Nok, who was a Chinese Thai, and their father, who was a Chinese fisherman.

The two colours of yellow and red have been "raised" separately by two opponents to be the symbol for each group of people sharing a political ideology. Although a third group of people calling itself "white" later tried to jump into the field to make it a threesome, it could not turn the conflict around.

While growing up, In and Chan learned to move about and walk together as a conjoined pair. They were strong and healthy lads, and could play with normal children without any trouble.

The new government is trying to make our economy move forward, but the Kingdom is far from normal with trouble hitting both the banking and real sectors.

The real sector, particularly exports, is expected to be devastated by the global economic slowdown, particularly in the G3 countries. This will lead to production cutbacks and layoffs in the export and related sectors. Those companies' bottom lines will dip into the red or, in the worst case, they can go bankrupt.

The banking industry may find itself in a deep hole if the real sector is crippled by the global economy. Nonperforming loans can escalate if their customers lose their ability to service debts. The financial institutions' excess liquidity could be drained away because huge foreign capital flows will not return. The banks could compete fiercely to snatch deposits from each other.

Two centuries ago, two American sea captains came to Siam and were introduced to the twins. They saw the potential to print money from the twins and took the boys to America and England.

Today, the Kingdom cannot see any pot of gold but only risk for the economy in twin parts -growth and stability.

Economic stability is in danger from both external - currentaccount deficit - and internal - inflation - threats. The C/A deficit is likely to widen in the New Year when export and service income will not be able to rise like before. It can possibly be flat or fall.

The C/A deficit along with the budget deficit will cause the country to face twin deficits. This will provide ammunition for depreciation of the baht.

Inflation is not at all a problem. But deflation is, if prices of goods and services go into a tailspin.

Authorities are optimistic. They believe that the country will pass through "good" deflation - when productivity is high via advanced technology. But backpedalling inflation could be seen in some quarters.

However, the country could get caught up in ugly deflation, brought about by slackening demand. That condition is marked by a downward spiral, with companies shedding workers, and purchasing power dwindling.

In Boston, news of the Siamese twins' arrival spread rapidly. Americans flocked to see In and Chan at 50 cents a head, producing a handsome profit for Captain Coffin.

Profit is everything. If companies cannot generate a return on their assets, they will dump workers, dampening demand in another round.

In 1832, In and Chan decided to break off relations with Captain Coffin as they felt that they did not obtain a fair share of the earnings generated by their appearance.

The twins had saved enough money to settle down, buy a farm and build a home. They took the surname Bunker from those they had respected and trusted for many years.

In 2009, the economy is also at a critical juncture - to grow or to contract - after it retrogressed to the slowest pace of growth in the region for years. Some are optimistic that GDP will continue to expand but some, fearing that a global recession would knock exports for a loop, are pessimistic that it will drop.

But the authorities cannot grow complacent on policy management, as fiscal and monetary policies may not be efficient enough amid subdued confidence.

When the twins were 60 years old, they reached the conclusion that an operation would be attempted only to save the life of the remaining brother should one of them die.

The last domestic thorn in the economy's side that needs to be extracted is political instability. Political stability will reinflate confidence, which will eventually help lift the economy onto the prosperity trail.

Chan's health began to fail. He died on January 17, 1874. Suffering from shock and grief, In died within a few hours after his twin brother. The doctors could not separate the twins as they had hoped.

Fastforwarding to the present, the nation has been in shock and grief for three years. But Thais want the twin risk factors to disappear through reconciliation among all sides, not by a big operation to separate them.