Sacrifices Have To Be Made When Disaster Strikes: Thai Editorial
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Posted 2012-07-13 06:29:11
Sacrifices have to be made when disaster strikes
BANGKOK: -- IMF chief Christine Lagarde is in Asia this week; the message she can take back to Europe is that recovery is possible after taking a very bitter pill
International Monetary Fund chief Christine Lagarde was travelling in Southeast Asia this week and had the opportunity to observe the buoyant economic performance in the region compared to the lacklustre performance of economies in the US and the European Union, which are still dealing with a severe economic and financial crisis.
During her visits to Indonesia and Thailand, the first female head of the IMF urged countries in the region to further enhance the economic environment by embracing investment friendly policies, eliminating protectionism and maintaining prudent monetary policies.
Lagarde's words will be well heeded indeed. After all, Thailand and Indonesia were among the countries that sought IMF bailout packages during the Asian financial crisis of 1997. At that time, the IMF lectured Asian countries about embracing austerity policies with high interest rates in order to restore the confidence of international investors.
Thailand and other Asian countries seeking the IMF bailout obediently swallowed the bitter pill and went through painful reforms to finally emerge from one of the worst economic crises in modern history.
Fifteen years have passed and the sacrifices have paid off. Once seen as teetering on the brink of disaster - so much so that even some major Western economies did not want to take the lead in offering rescue packages - affected Asian countries such as Indonesia and Thailand are enjoying the benefits of their turnaround economic performance.
Lagarde's 10-day trip to Asia, to gain firsthand experience of the region's economic and financial conditions, takes in Japan as well as Indonesia and Thailand. Lagarde - once dubbed the best finance minister in the euro zone - praised Asia's overall economic performance as "vibrant" and "buoyant". At a meeting in Bangkok, Haruhiko Kuroda, president of the Asia Development Bank, said the continent's projected growth this year would be 6.5 per cent compared to 7.2 per cent last year.
The buoyant economic outlook predicted for Asia is not shared by some observers in the US and Europe. In fact Lagarde, who has held various portfolios in the French government including minister of economic affairs, finance and industry, acknowledged that global growth projections could be lowered due to the ongoing downside risks in the US and the EU.
Already some countries in the EU have sought IMF bailout packages, most notably Greece. Portugal, Ireland and Italy have also been subject to IMF-EU intervention in an attempt to fix their economic woes. The fear remains that their economic troubles will become contagious and spread across the continent. If that happens, no one will be immune from the repercussions of the EU sovereign-debt crisis.
Lagarde's high-profile visit to Asia this week should serve as a reminder of the necessity of painful reforms that countries have to undertake to survive the current economic turmoil. No country will be able to enjoy easy growth without hard work and fiscal discipline.
The economic crisis cannot be fixed simply by bailout money. Communication with the public is necessary to help people understand that certain reforms are essential. Recovery in Europe and the US, and prosperity worldwide, will not be possible if politicians and the public refuse to take part in the structural reforms needed to fix the economic problems.
Lagarde should take back to Europe the message that, when you are facing tough economic times, it is necessary to make sacrifices.
-- The Nation 2012-07-13
IMF chief hails Thai resilience
Posted 2012-07-13 09:06:40
Exactly what sacrifices did the Thaksin family make during this time??
The poor became poorer by making the biggest cuts in everyday life, while the rich made off with all the profits that should have gone to the people of Thailand, not the just the pockets of the elite.
Posted 2012-07-13 09:19:03
Business as usual then.
Posted 2012-07-13 10:08:30
Nothing here has changed and nothing will as long as the politicians and
the rich elite keep stuffing their pockets and ignoring the poor and down trodden.
Posted 2012-07-13 10:14:41
I'm interested to see what happens to Thailand's economy over the next decade as the Asean agreement comes into play and all the protective tariffs fall away allowing foreign goods to flood into the country. Should be fun.
Posted 2012-07-13 12:26:12
Fun? Somehow I think not, although I am sure you were being sarcastic.Unless the Thai people can really tackle corruption, then I think very sad times ahead, and some very hard lessons to be learned.On the plus side, perhaps the baht will become worthless and the exchange rate will go through the roof.
Posted 2012-07-13 14:32:44
What in the name of God did the article have to do with Thaksin et al ?
Posted 2012-07-13 14:45:53
protectionism = 307% tax on import of cars and luxery goods they mean
or little farang cannot buy 1 raw of land to put a house in his name
or have to spend 2 million baht to start his own company that he can only own for 49% max ?
that can of protectionism ?
Posted 2012-07-13 15:38:33
my understanding is that foreigners can own 100% of their businesses, but that there are some protected industries such as agriculture.
Posted 2012-07-13 15:47:41
regarding the economic crisis, Paul Krugman released a book this spring which takes a practical look at the crisis in his home country (USA) and in Europe as well.
a review : http://www.winningpr...-depression-now
a youtube report :
What this shows is that the knee-jerk austerity reaction in an economic crisis like the one in Europe / USA is not good economic policy.
So, in other words, when disaster strikes, it depends on what the disaster is as to how it should be handled and a blanket statement about "sacrifices needed" might sound great but be horrible policy.
Posted 2012-07-13 16:09:23
Be like in Mexico. I was buying token gifts from Mexico for the kids. Found out most of them were being made in Guatemala.
Posted 2012-07-13 16:13:53
Wish to point out the obvious to people that look at it. But the corruption in Thailand is not as bad as most of the other countries. It is in the least corrupt half.
What is going to kill Thailand is the people coming in from other countries willing to work for less than 300 baht a day. And I mean work for it.
Posted 2012-07-13 16:20:21
I think you are rite but I believe that they have to employ 4 Thai for every Foreigner. Be interesting to see how that plays out when the ASEAN comes in to effect and the Cambodians and Burmese start flooding the work market. Can they hire four Burmese.
Posted 2012-07-13 16:24:59
Books are like the internet choose what you want to believe and there will be a book to prove it.
How good is the Thai economy. The government just dumped billions of baht in debts left over from the 1997 crises so they could afford to bring in a lot of promises that do not seem to be happening.
Posted 2012-07-13 17:00:41
The poor are always sacrificed. That is how it works all over the world.
Posted 2012-07-13 17:03:13
It is not about the elite stuffing their pockets - this is endemic across the whole damned lot. From the motor bike taxis in Cowboy lending shark funds to hookers at 10% per day to the civil engineering contracts for the airports. And ever since tea money was introduced to grease a few palms in some political day which time forgot, it simply has expanded from that. And as long as wealthy politicians with little or no business experience try to run a third world country it is they who propagate the continued corruption and steal. It is so far embedded into the Thai psyche, it cannot operate any other way. And it certainly will not change any time soon.
Posted 2012-07-13 18:33:49
while your point might well be true - that you can find a book to support your chosen belief, that is not true of the arguments made in economics by people like Krugman.
There is hard evidence regarding the results of austerity in the face of an economic depression (it is a bad thing to do) and there is hard evidence regarding the results of increased spending in the face of an economic recession (it will get the economy out of depression / recession).
As he himself points out, the economics part is easy. It is the politics which is hard.
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