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| Ian 10/03/2007 14:25 IP: 124.121.73.137 Danuj, this is my whole point, as you say, "consumer demand from the United States is still the primary source of income for Thailand". Therefore in order to diversify your consumer base your manufacturers should be investing in products aimed at a wider target. Thailand cannot compete with China and India on quantity but it definitely can on quality. The EU is flooded with cheap garments and shoes from these two countries, when I take similar Thai goods back home everyone is impressed by their superior quality. I do not claim to be a marketing or sales expert, but I feel there are many unexplored markets which Thailand could exploit. The unique Thai language has always been a big trade barrier, America has many Thai expats who expedite this. However, this is now true of the EU from Sweden to Spain and the UK to Austria, there are thousands of bilingual expat Thais. |
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| Danuj Kamolvathin 10/03/2007 13:39 IP: 24.111.229.228 Ian: I agree that Thailand should not be totally reliant on any one economic power, but the fact of the matter is Thailand’s economy is very dependent on U.S. consumption. You write: “ America can afford to be a "high risk" country, Thailand is too small and weak to afford such a luxury.” It is because we are too small and weak to have any significant bargaining strength that places us in the position of being at the mercy of other economies. I do not believe it is a matter of choice but rather a matter of necessity. We do have other trading partners, within ASEAN, Europe, Africa, Latin America and the Middle East but the consumer demand from the United States is still the primary source of income for Thailand. |
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| Ian 10/03/2007 13:00 IP: 124.121.73.10 Danuj, you write, "Thailand and the United States have always enjoyed a mutually beneficial relationship diplomatically as well as economically". This is fine but it is NOT mutual, Thailand has come to depend upon it as a financial, economic crutch. America is not the only trading partner in the world and the dollar is not the only currency, to stay permanently tied to mother's apron strings is not the path to success. Thailand needs to diversify in investments, trading partners, and reserve currencies, if not it will be for ever at the mercy of the fluctuating fortunes of America. America can afford to be a "high risk" country, Thailand is too small and weak to afford such a luxury. |
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| Danuj Kamolvathin 10/03/2007 10:26 IP: 24.111.229.228 Ian: Thailand and the United States have always enjoyed a mutually beneficial relationship diplomatically as well as economically. I think it may be a bit harsh to sever all relations with the United States. : ) On the issue of the baht, it is a mess and our leaders do not have a clue as to how they should handle the existing crisis. So far, all I have seen is a tremendous amount of reinvention. The monetary policy changes have been weak and lack substantial thought. What the administration is failing to consider as it attempts to protect the baht, is that in the open market the baht is so insignificant that it is a non factor. Protecting the currency is a defensive gesture to the world. Instead Thailand should be focusing on stimulating the economy and allow the natural process of market cycles to develop thus resulting in a stable currency. The administration needs to stop interfering with the economic cycle. |
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| Ian 10/03/2007 09:03 IP: 124.121.72.170 Danuj, I am aware of this principle of spreading risk, we call it not "having all your eggs in one basket" :-) I have a Sterling account both in the UK and "off shore", also a Euro account and now a Baht account. I would not have a dollar account, I don't trust the dollar. My non fluid assets are all in the form of property, land and buildings, as long as populations grow this will always be safe investments. Many non European countries are shifting their dollar reserves into Euros, Russia being the biggest example. Thailand has a dollar fixation, hotels etc list prices in dollars, yet according to TAT figures the British are the highest percentage of tourists. Thailands love/hate relationship with America annoys me, it is time Thailand grew up and cut it's umbilical cord:-) |
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| Danuj Kamolvathin 10/03/2007 00:20 IP: 146.82.36.102 Ian: The problem you have is common to most of the expatriates that live in Thailand. Many of the expatriates that reside in Thailand are in retirement and draw some form of pension or other retirement funds from other currencies. To answer your question, no one really knows what will happen a year from now. There is no way to forecast the exchange rate, if you need cash now make the conversion. The Thai baht is not a currency to arbitrage, there are too many internal mechanisms that do not follow international standards. An idea I have been thinking about that may help the volatility of the baht. There is Nobel prize concept called asset allocation. The concept is a basic approach to spreading risk through diversification of assets. I wonder if the same concept can be used to diversify our currency. Spreading the risk among several currencies as compared to pegging it on one currency. |
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| Ian 09/03/2007 12:18 IP: 124.121.73.195 I am not an economic expert, not many scientists are:-) So my problem is simple, in the last month the British Pound has lost about 9 baht from 70+ to 63 today, 62 yesterday. Now I wish to spend more money on my home here, is it better to spend now or wait till next year and hope the exchange rate has returned to what I have regarded until now as normal, about 72 Baht to the Pound. Is the present exchange rate being artificially created? |
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| Danuj Kamolvathin 09/03/2007 01:22 IP: 146.82.36.102 * Update: According to The Bank of Thailand (BOT) there was an intervention in the foreign exchange market on March 7, 2007 as the baht rose to 35.13 to the US dollar. Although it is in the frame work of the Monetary Policy Board, I feel that this action contradicts the accepted Inflation targeting initiative of May 2000 which the BOT made an extensive reappraisal of both domestic and external environment and concluded that the targeting of the money supply would be less effective than the targeting of inflation. |
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| Danuj Kamolvathin 15/01/2007 23:16 IP: 146.82.36.102 Ian: In answer to your questions, indirect investment is a form of raising funds from other sources outside of Thailand. The funds can come from mutual funds chartered broadly for Southeast Asia or specifically for Thailand. These fund managers seek opportunities for growth within some of our sectors that have strong long term profit potential. The fund manager would have to consider several issues prior to participation: political stability, competitive capacity, integration process, policy of state owned enterprises, banking and financial structure, legal frame work, international credit ratings, and many other things that would assure that there is a good balance between risk and reward. The inflation factor affects everyone in a different way, inflation is the sustained increase in the price of goods and services, an increase in inflation reduces your purchasing power. For example: If the inflation rate is 3% annually in theory a 100bt bag of rice will cost you 103bt in a year. So depending on what you want to accomplish inflation can be a good thing or a bad thing. On the issue of controlled spending: Monetary policy has to be a balanced and it has to also be very fluid. Tax or interest rare increases are just tools of economic leaders to adjust to the economic conditions. Both raise funds for the government but the funds are distributed and budgeted for different things. Foreign investment is a very sensitive topic when it relates to Thailand. I think it is because Thailand is very unique in its political climate and internal administration. Some leaders believe that it is acceptable to try and move forward while still living in the past resulting in what I call hamster economics. A hamster will run on its wheel and exhaust itself but never go anywhere. People fear change so they hang on to what they can. |
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| Ian 23/12/2006 12:11 IP: 124.121.72.168 I thought I would add a bit of light relief to a serious topic:-).........................TRADITIONAL ECONOMICS -------------------------- You have two cows. You sell one and buy a bull. Your herd multiplies and the economy grows. You retire on the income. INDIAN ECONOMICS -------------------------- You have two cows. You worship them. PAKISTAN ECONOMICS -------------------------- You don’t have any cows. You claim that the Indian cows belong to you. You ask the US for financial aid, China for military aid, British for Warplanes, Italy for machines, Germany for technology, French for submarines, Switzerland for loans, Russia for drugs and Japan for equipment. You buy the cows with all this and claim you are exploited by the world. AMERICAN ECONOMICS -------------------------- You have two cows. You sell one and force the other to produce the milk of four cows. You profess surprise when the cow drops dead. You put the blame on some nation with cows & naturally that nation will be a danger to mankind. You wage a war to save the world and grab the cows. FRENCH ECONOMICS -------------------------- You have two cows. You go on strike because you want three cows. GERMAN ECONOMICS -------------------------- You have two cows. You reengineer them so that they live for 100 years, eat once a month and milk themselves. BRITISH ECONOMICS -------------------------- You have two cows. They are both mad cows. ITALIAN ECONOMICS -------------------------- You have two cows. You don't know where they are. You break for lunch. SPANISH ECONOMICS --------------------------------- You have two cows, you will milk them tomorrow. SWISS ECONOMICS -------------------------- You have 5000 cows, none of which belong to you. You charge others for storing them. JAPANESE ECONOMICS -------------------------- You have two cows. You redesign them so that they are one-tenth the size of an ordinary cow and produce twenty times the milk. You then create cute cartoon cow images called Cowkimon and market them worldwide. RUSSIAN ECONOMICS -------------------------- You have two cows. You count them and learn you have five cows. You count them again and learn you have 42 cows. You count them again and learn you have 17 cows. You give up counting and open another bottle of vodka. CHINESE ECONOMICS -------------------------- You have two cows. You have 300 people milking them. You claim full employment, high bovine productivity and arrest anyone reporting the actual numbers. |
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