The 1997 "Tom Yum Koong" financial crisis taught banks the very costly lesson that lending must be based on ability to repay - with no crony loans permitted.
Yet, UDD chairperson Thida Thavornseth insists that banks do just that, by lending so the government can pay those who participated in Yingluck’s rice plan.
The rice plan was a loss-maker from the start, with everyone – including Dr Virabongsa Ramangkura, whom Yingluck had just appointed Bank of Thailand chair for his macro-economic expertise, and the Thailand Development Research Institute (TDRI) – warning that the huge losses could destabilise the government. Worse, the TDRI analysed that only 29 per cent of the plan’s pay-out went to the poor, with 71 per cent going to millers, exporters, politicians and large farms.
With silos bulging and rice rotting, there is no way that the plan can ever turn a profit, but Yingluck seeks to continue it. So, the government and UDD are pressuring banks for a crony loan. But the bank owners are either taxpayers and/or investors – neither of whom should be held accountable or pay for bailing a spendthrift government out of the mess it made.