Hiatus, over

As of today, BP will be blogging on a more regular basis - well more regular than once a week anyway. Blogging should be more frequent from next week.

BP would like to thank the guest bloggers, namely Saksith (blog and twitter), James Harriman (twitter), Newley (blog and twitter), Thorn Pitidol, Ricefield Radio (blog and twitter), Prach Panchakunathorn, Pokpong Lawansiri (blog and twitter), and some others using pseudonyms, who have been contributing to the blog during my hiatus.

All of these guest bloggers, and some more, will be contributing to a new blog collective that will be launching here on Asian Correspondent soon. Stay tuned.

2			Bangkok, local elections, thailand

The Democrats comprehensively defeated Puea Thai in the local elections held on Sunday. For the district council elections, the Democrats won 210 seats, Puea Thai 39 seats, and independent candidates seven. For the city council elections, the Democrats won 45 seats, Puea Thai 15 and an independent won the other seat.

Will focus on the city council elections as can't find complete data for the district council elections,* but can for the city council elections so will focus on them. The data for the city council elections is derived from Nation Channel. They do not appear to be the final figures and there will probably be absentee ballots etc. They were compiled by Federico Ferrara and kindly passed onto BP (if it matters BP checked the vote counts of four random districts on the Nation Channel website with the spreadsheet from Federico and all the vote counts were correct). A copy of the spreadsheet with various calculations is here. Vote counts for the 2007 general election constituency votes are available as a spreadsheet here.

NOTE: These spreadsheets are provided as a resource for others and to help fact check BP.

The key points:

1. In the 2007 general election, the Democrats won 27 seats to PPP's 9 (PPP being the predecessor to Puea Thai before it was dissolved). In the 2010 city council elections, the Democrats won 45 seats to Puea Thai's 15.

BP: Observant readers will notice a pattern of the Democrats winning exactly three times the number of seats in both elections. In the 2007 city council elections, the Democrats won 40 seats. PPP won 20 seats in 2006, but later five councilors defected to to the Democrats leaving PPP/Puea Thai with 15 which they retained.

2. In the 2007 general election, the Democrats received 3,748,067 votes or 48.88% of the vote; PPP won 3,083,118 votes or 40.21% of the vote. In the 2010 city council elections, the Democrats received 750,313 votes or 50.65% of the vote; Puea Thai won 581,617 votes or 39.25% of the vote. The major third party was New Politics Party who won 105,416 votes or 7.11% of the vote.

NOTE: Vote counts are skewed in the general election as each voter voted three times while only once in the city council elections so don't be mistaken as thinking turn-out was five times higher.

Puea Thai lost 1% compared with PPP's 2007 general election performance; the Democrats won just under 2% more than their 2007 general election performance. It shows you how little has changed for  the vote counts of the two major parties since 2007. However, NPP are a bit of a wildcard as in theory their voters would have voted Democrat if the NPP was not contesting, but for the foreseeable future they are. It is certainly possible they will not contest all Bangkok seats at the next general election so their votes will likely go to the Democrats (although one shouldn't discount some voters not voting because of their unhappiness with the Democrats turning a blind eye to the corruption by the Democrats and their coalition partners). Also, in in a general election the Democrat's coalition partners would been competing so they would take away votes from the Democrats (and also Puea Thai).

3. Did NPP hurt the Democrats? Well, assuming that all NPP voters would have voted for the Democrats, by BP's calculations the Democrats would have two more seats (Thonburi and Saphan Suung) if the NPP had not contested the elections - so a 47 to 13 split.

4. The reason why the NPP didn't cause the Democrats to lose even more seats was that in the eight closest races (i.e with the margin being 184, 386, 433, 523, 727, 738, 794, and 875 votes respectively), they were all won by the Democrats. This has been BP's thesis all along. The NPP won't win that many seats - they are more likely to pick up list seats in the general election than electorate seats - but they will cost the Democrats the chance of victory in a number of seats. This is more likely to be the case in urban areas in Central, Northern, and Northeastern Thailand. It should be said that 7% is nothing to be sneezed at for their first effort (well, BP never thought they would get than many votes in the first place so am not surprised). BP views they could get potentially get 3-5% of the party list vote in a general election giving them anywhere between 3-7 party lists seats depending on what electoral system we have in place at the next election.

5. It should be also noted in 13 seats the candidate of the Democrats received at least twice the number of votes of  the Puea Thai candidate. In no seats though did the  Puea Thai candidate receive double the number of votes of the the Democrat candidate.

6. For talk of Bangkokians suddenly becoming bored of politics, well in the last local elections in 2006 turnout was only 0.8% more so it hardly suggests any groundswell of dissatisfaction because of recent political events.

The reality is that the local politicians have little power and there is very little focus on what happens at the city council level as national politics dominate.

*In case you think that the Democrats domination in the District Council elections of winning 210 seats is surprising and may suggest a fundamental move to the Democrats in the Bangkok electorate, well it doesn't. The Democrats won 203 seats in 2006.

		2

By Thierry Henry,

 

Newin Chidchob and the Army have developed a kind of love-hate relationship over the years. In 1992, Newin worked with the Army’s political party — Samakkitham — helping propel coup leader Gen. Suchinda Kraprayoon to the premiership. A year earlier Suchinda and the Army had overthrown the Chatchai Choonhavan government. After assuming the premiership (something Suchinda promised he would never do), a popular street protest ensued, culminating in the bloody Black May crackdown. The Army's violent crackdown on protesters spelled the end for the Suchinda-led government as well as Newin's participation in the Samakkitham Party. Newin quickly jumped to the Chart Thai Party, winning a seat in the September 1992 general election.  

  

In 2006, Newin crossed paths with the Army again — this time as its political opponent. On September 19, the military overthrew the democratically elected government of Thaksin Shinawatra, a government Newin played a leading role in. At the time of the coup, Newin served as one of Thaksin's closest aides, holding the post of Prime Minister's Office Minister. In the coup aftermath, the Army arrested Newin and several other top-ranking members of the former government. After his release, Newin took to the stage at a political rally and accused the Army of stripping him down to his underwear and dumping him in the middle of the road without any money. Gen. Sonthi Boonyaratklin, the Army chief and coup leader, denied Newin's story, while some officers admitted to strip searching him for a special Khmer amulet. The Bangkok Post (September 27, 2007) reported the story: 

Newin Chidchob's appearance at the People's Power party's (PPP) campaign rally in Buri Ram on Monday drew a huge crowd of 50,000. But more interesting than his appearance were his revelations about his experiences after the Sept 19 coup. He said a group of soldiers raided his Chaeng Wattana residence, intimidating his family and servants into telling them where his hideout was. The key PPP member told the audience he was detained for 10 days at a guesthouse in the air force compound. He was held there alone while other former key members of the Thai Rak Thai party such as Pol Gen Chidchai Wannasathit, Prommin Lertsuridej and Yongyuth Tiyapairat were detained separately at military bases.

Mr Newin also claimed that on the day he was released, soldiers escorting him ordered him strip searched. He was wearing nothing but his underwear when he was later set free on a street without a baht on him. He then flagged down a taxi to take him home, he said.

Council for National Security chairman Sonthi Boonyaratkalin, who led the coup, reacted by saying: ``Pretending to pull a sad face and telling a lie is normal for politicians wanting to draw sympathy for political gain.''

One of the soldiers who escorted Mr Newin that day insisted his team had taken the politician back to his house on Chaeng Wattana road and the whole episode was photographed. They had to take photos as they were aware the politician might one day distort the facts about the search.

``But we admit we conducted a body search by asking Mr Newin to take off his clothes. We wanted to find a Khmer amulet that he often carried. One respected figure told us that if we wanted Mr Newin to lose his power, we must take his amulet,'' said the soldier. However, no amulet was found. The politician was later told to put his clothes back on before being sent back home. ``We didn't forcefully strip him. We just asked him to take his clothes off. We searched his body and found nothing. During the search, we drove our vehicle around the area near his house several times. As the search found nothing, we let him put his clothes back on and drove him home.  

After the post-coup mayhem, the odds of Newin and the Army ever coming together again seemed remote, but never discount the cardinal rule of Thai politics — there are no permanent friends or enemies, only “interests”. Indeed, just two years after the coup, Newin and the Army found their interests aligning once again. This time Newin and Gen. Anupong Paochinda, the commander-in-chief, met in the Army barracks to finalize what would become the "ultimate betrayal”. At the time, Newin and his political faction remained aligned with Thaksin, but in December 2008, Newin betrayed Thaksin by joining other coalition parties in forming a new government under the Democrat Party. According to the Bangkok Post (December 11, 2008),  

 

“Then the PPP clique was resurrected under the newly-founded PueaThai party and tried to form a new government with its former coalition partners, Gen Anupong reportedly tried another trick.

 

During this power vacuum the army chief was reported to have become the key man seeking an agreement from the former PPP's coalition partners to switch their support to the opposition Democrat party and form the next coalition government. Amid intense lobbying by both Puea Thai and Democrat camps, many key members of the coalition parties and key factions within them were seen visiting Gen Anupong at his official residence in the compound of the First Infantry Regiment off Vibhavadi RangsitRoad, both in small and large groups.

 

Among these special visitors were reportedly Newin Chidchob and Sora-at Klinprathum, two faction leaders in the now dissolved PPP. The two men were seen at Gen Anupong'sresidence on Dec 4 along with Gen Prayuth Chan-ocha, the army's chief-of-staff. Later, Pradit Phataraprasit, secretary-general of Ruam Jai Thai Chart Pattana party reportedly called on Gen Prayuth at his residence, also in the regiment compound.

 

In the meantime, Democrat secretary-general Suthep Thaugsubankept in touch with Gen Anupong by phone. Mr Suthep and Gen Anupong became acquaintances when the Council for National Security was in power.

 

On Dec 6, shortly before the Democrat's plan to form a new coalition government was announced, Mr Suthep reportedly led a group of key members of the Democrats' prospective coalition partners to meet Gen Anupong at the residence of former army chief Gen Prawit Wongsuwan, who is well respected by Gen Anupong. Even though the meetings were supposed to be secret events, they ended up in the open because of the unusual manner of the visits. Suddenly, Gen Anupong was viewed by the media as the "coalition formation manager".

And so it happened, Newin and the coalition parties betrayed Thaksin, taking the side of the Democrats (and the Army). According to Newin and Anupong, the meetings did not entail any negotiations or bargaining — they did everything selflessly — acting only to restore peace, tranquility, and honor to Suvarnabhumi. As reported by the Bangkok Post (December 9, 2008),

“Gen Anupong accepted that meetings between him and politicians from the Democrats and other smaller parties at his residence at the First Infantry Regiment on Vibhavadi Rangsit road paved the way for the Democrats to eventually form a new coalition government.

 

The Dec 3, 4 and 6 meetings were attended by key figures of the former coalition parties of the previous government and influential Buri Ram politician Newin Chidchob, the leader of the breakaway faction of the dissolved People Power party. ''They phoned me for my advice. Some asked to meet me. But I was not involved in setting up the government. I only suggested that they do what is good for the country,'' Gen Anupong said. Gen Anupong denied there was intense lobbying or hard bargaining during the meetings. ''The press reports were totally untrue,'' he said.

Critics, however, took a different position — they argued that the Army, Newin, and the others struck a deal to advance their own interests. The Army and the establishment did not want a pro-Thaksin party in power for numerous reasons, while Newin simply wanted to expand his political power and influence—if the incentives were right of course. From Newin’s perspective, it would be difficult to draw “political benefits” if the establishment continued intervening and disrupting the functioning of pro-Thaksin governments (PAD, Courts, etc.). Newin also had a major corruption case hanging over his head, which may have influenced his decision to ally with the establishment over Thaksin. The Supreme Court later acquitted Newin of the corruption charges. Lastly, media rumors suggested a possible payoff of 40 million baht to each MP for switching sides.

 

Newin's latest encounter with the Army came not in the political arena, but out on the pitch. A few days back, Newin's football team — Buriram PEA — faced off against the Army Football Club. With Newin and the Army on presumably good terms, the match should have featured gentlemenly play and good sportsmanship, but such was not the case. Similar to a Buriram election and an Army power-play, the match featured all the dirty tricks and tactics. In the end, Newin's team suffered a heartbreaking defeat in overtime, losing 1-0. The Army, as it always does, came out on top.

 

After the match, Not the Nation (spoof Thai news website) asked Newin how it feels to be humiliated once again by the Army. In his normal tears, Newin responded, "I've been double-crossed. The refs knew what the outcome was supposed to be — that's what I pay them for damn it! I can assure you that you won't see those refs on the pitch ever again. In fact, you may never see those refs ever again period." In other post-game comments, Gen. Anupong was asked if Buriram's loss might lead Newin back into the arms of Thaksin. To this Anupong responded, "Newin who? I'm retiring in a month — don't ask me anymore questions—that's Prayuth's job now."

 

Prayuth could not be reached for comment, but a gaggle of young female reporters did catch up with the dashing Army spokesman Col. Sansern Kaewkamnerd. One reporter fawningly asked, "What do you think Newin will do now? Oh, and are you single?" The colonel responded emphatically, "I think from the final result it's pretty evident Newin's Khmer amulets no longer have the power they once did. Moreover, we had to remind Newin where his place is in the cosmological order. Indeed, while Newin is a master at rigging elections and government procurement contracts, at the end of the day, he knows who his master is—us. Politicians and pretty voters like yourself sometimes need reminding that political supremacy in this country lies not in constitutions or elections, but guns. And on your second question, I'm always single for a cute young thing like yourself, do pretty faces ever lie?"  

1		11	Sondhi, More, corruption, under, Abhisit, than, Thaksin

The Bangkok Post quotes PAD leader Sondhi L as stating:

 

When Thaksin was running the government he was the centre of corruption, but in the Abhisit administration corruption had spread to to all ministries, he said.

"I believe there is more corruption now than during the Thaksin administration," Mr Sondhi said.

BP: Can hardly disagree because back in 2008 BP blogged that corruption was more centralized under Thaksin because power was centralized under Thaksin. Now, with a weaker PM and more power for the factions, more people have fingers in the pie.

So what was the coup about again? Will we have calls that another coup is necessary?

 

 

		8	Why, did, the, Thai, PM\'s, aide, meet, with, Viktor, Bout?

First, some background. BP has blogged many times about the arrest in Thailand of suspected arms dealer Viktor Bout in Thailand in 2008 (see here, here and here) and the unusual decision by the lower court in Thailand in August 2009 not to extradite Bout. That lower court decision was overturned by the Appeals Court last week. Bout will now be extradited to the US.

The situation regarding Bout has been subject to claim and counter-claim. Before the lower court decision last year the Americans took mostly a hands-off approach whereas the Russians were lobbying furiously. The Americans were surprised by the lower court ruling and then went on  the offensive - as an example of this lobbying by the US they summoned the Thai Ambassador in Washington to emphasize that the case was "of the highest priority to the United States". BP also understands that behind the scenes the Americans have been lobbying like-minded countries to raise the extradition of Bout during bilateral discussions with Thailand. Then, you had the extraordinarily bizarre letter (PDF) signed by: 

Reps. Howard Berman, D-Calif., and Ileana Ros-Lehtinen, R-Fla., the chairman and ranking Republican, respectively, on the House Foreign Affairs Committee; Reps. Brad Sherman, D-Calif., and Ed Royce, R-Calif., the chairman and ranking Republican, respectively, on the House Subcommittee on Terrorism, Nonproliferation and Trade; Sen. Russ Feingold, D-Wis., chairman of the Senate Subcommittee on African Affairs; and Rep. Frank Wolf, R-Va., the ranking Republican on the House Appropriations Subcommittee on Commerce, Justice and Science

BP: Don't want to get to sidetracked, but have a read of the letter. It complains that the legal proceedings have not been fair and legal and describes the Thai appeals process as "extremely opaque". It then states they only learned of the decision through "Viktor Bout's lawyer and the Russian press" although Philip J. Crowley, Assistant Secretary, in a State Department briefing then contradicts the US lawmakers:

QUESTION: Congressman Royce says that he was distressed to learn that the State Department found out about this hearing tomorrow only by reading Russian media accounts that cited Mr. Bout’s lawyers. Is that correct?

MR. CROWLEY: No.

QUESTION: How did you find out?

MR. CROWLEY: As I said, we have maintained regular contact with the Thai Government, and obviously, we’ve been supporting the Department of Justice effort to present the necessary evidence to justify his extradition.

BP: The Americans have not been shy about their lobbying either. Newsweek with the headline "Obama Administration Wins One in Thailand":

The Obama administration is being so heavily hammered politically—with declining poll numbers and out-of-control debates on Manhattan mosques—that officials appeared stunned when the administration scored a foreign policy coup early Friday.
...
Over a period of months, numerous senior U.S. officials including Secretary of State Hillary Clinton and Attorney General Eric Holder personally lobbied Thai authorities on the matter, and their efforts appear to have produced a major diplomatic success. 
...
An Obama staffer confirmed that administration officials had been putting their own high-level pressure on the Thais to move ahead with the extradition. “Senior administration officials have been actively engaged with their counterparts in Thailand on this issue for many many months,” the official said. Both State Department and Justice Department officials were involved in discussions with the Thais, including Secretary of State Clinton and  Attorney General Holder. At the White House, National Security Adviser James Jones and counterterrorism czar John Brennan also appear to have taken a close interest in the case.

UPI on the Russian response:

Russian Foreign Minister Sergei Lavrov condemned the "illegal, political decision" against Viktor Bout -- subject of a book titled "Merchant of Death" -- and said Moscow would still seek his return to Russia, The New York Times reported Friday.

"Based on the information we have at our disposal, the decision was made under very strong outside pressure," Lavrov said. "This is lamentable."

BP: Fancy that thinking a Thai court could come under pressure to decide a case in a particular way..... However, then you have the royal connection to the case which added another level to show it was not an ordinary extradition case. Just before you thought that this case could not get more unusual, well you are wrong.

The latest is that Puea Thai MP and red shirt leader Jatuporn claimed that Sirichoke, a Democrat MP and a close aide to Prime Minister Abhisit Vejjajiva, had gone to visit Viktor Bout in prison to ask him whether Thaksin was the person behind ordering the weapons from North Korea to Thailand for use with the red shirts (the plane with North Korean weapons is another unusual case with supposed Bout links - see posts about it  here and here).

BP: BP's first thought that was just more bluster by Jatuporn, who often makes extravagant claims. The thought of an aide of the PM visiting Bout in prison just sounded so ridiculous.

Then, Abhisit denied this - the headline of the official statement from the PM's office is "Prime Minister affirms that no close aide went to to visit Viktor Bout as Jatuporn claims" ( นายกรัฐมนตรียันไม่มีคนใกล้ชิดไปพบนายวิคเตอร์ บูท ตามที่นายจตุพรฯ กล่าวอ้าง).

BP: So an official denial,  but then....

Matichon reported Sirichoke wants Viktor Bout to state the truth to prove that Jautporn was lying that he went to visit Bout to malign Thaksin, but then states "I visited the prison in accordance with the regulations of the Department of Corrections in order to carry my duties as a legislator to look into claims and not for the purpose of defaming or negotiating with anyone" ("ผมเข้าไปในเรือนจำเป็นไปตามกฎระเบียบของกรมราชฑัณฑ์ เพื่อทำหน้าที่ในฐานะฝ่ายนิติบัญญัติ ตรวจสอบข้อมูลข้อเท็จจริง ไม่ได้มีการใส่ร้ายป้ายสีหรือต่อรองกันเลย") 

In regards to the claim by Jatuporn that once he could no longer negotiate with Bout anymore then the Appeals Court decision was handed down and Bout was to be extradited to the US, Sirichoke then responded "This is a lie by Jatuporn and Bout's lawyer is my witness affirming that there was no negotiation" (เมื่อถามว่า นายจตุพรกล่าวอ้างว่าการพูดคุยไม่สามารถต่อรองได้ จึงเป็นที่มาของคำพิพากษาของศาลอุธรณ์ ให้ส่งตัวไปดำเนินคดีที่ประเทศสหรัฐ นายศิริโชค กล่าวว่า "นี่คือการโกหกของคุณจตุพร และวันนี้มีทนายของนายวิคเตอร์ บูท เป็นพยาน ยืนยันว่าไม่ได้มีการต่อรองอะไร"). When Sirichoke was asked whether there was any connection with Bout's case and Sri Lanka, Sirichoke responded "Viktor Bout is believed by the US to be a large smuggler of weapons and the plane that came to Thailand had a connection with Viktor Bout's company. The destination of the plane was Sri Lanka and there is a connection with Thaksin because on the same day Thaksin was in Sri Lanka according to [ Sri Lankan?] opposition MPs" ("นายวิคเตอร์ บูท ได้รับการเชื่อจากประเทศสหรัฐ ว่าเป็นผู้ค้าอาวุธรายใหญ่ ซึ่งเครื่องบินที่มายังประเทศไทย มีความเกี่ยวพันกับบริษัทของนายวิคเตอร์ บูท ซึ่งเป้าหมายของเครื่องบินอยู่ที่ประเทศศรีลังกา และยังเกี่ยวโยงกับพ.ต.ท.ทักษิณ เพราะวันเดียวกันพ.ต.ท.ทักษิณ อยู่ประเทศศรีลังกา ด้วยความที่เป็นส.ส.ฝ่ายรัฐบาล"). I then had to check out this information.

When asked if Bout had referred to his relationship between Bout and Thaksin, Sirichoke responded stating that Bold told he knows Thaksin well (เมื่อถามว่า นายวิคเตอร์ บูท ได้ระบุว่าความสัมพันธ์กับพ.ต.ท.ทักษิณหรือไม่ นายศิริโชค กล่าวว่า เขาไม่ได้บอกว่ามีความสัมพันธ์ บอกเพียงว่าเขารู้จัก พ.ต.ท.ทักษิณ ดี).

Sirichoke then states that Bout told him that the seized plane was connected with another country who was trying to capture him. When he was asked whether Abhisit knew of his visit he said "no" stating that while he a personal aide to Abhisit, he was also legislator. He said he told Abhisit that he had found some interesting information, but that Abhisit didn't pay much attention to this.

BP:  So we have confirmation that Sirichoke visited Bout although he stated he did it in his capacity as a legislator and not as an aide to the PM although he admits he discussed what he found out with the PM. By Sirichoke's own words Thaksin was discussed, but he doesn't provide any more details.

In addition, well-known Thai Rath columnist Nitipoom blogs stating he spoke to Viktor Bout directly. He states that Bout told him that a person went to visit him and told him that he would be safe if he testified in court that Thaksin as an expert witness stating was the person behind the red shirt operation to import weapons from North Korea to Thailand. ( มีผู้มาพบบูทที่เรือนจำพิเศษกรุงเทพ และบอกว่าถ้ายูจะรอดปลอดภัย ยูจะต้องเป็นผู้เชี่ยวชาญ expert ไปให้การในศาล ว่าพันตำรวจโท ดร. ทักษิณ ชินวัตร เป็นผู้ทำ operation ดำเนินการทั้งหมดทั้งปวงในการขนอาวุธจากเกาหลีเหนือมายังประเทศไทย และอาวุธดังกล่าว จะมาใช้กับพวกเสื้อแดง). Nitipoom states that Bout expressed confusion about who the "red shirts" were and denied the story (นายวิคเตอร์ บูทแกก็งง ว่าอะไรคือ เสื้อแดง แกก็ปฏิเสธ).

BP: It should be noted that Nitipoom is not a Thaksin fan (in the words of The Nation he was a "anti-Thaksin columnist") and it was widely viewed he was elected to the Senate in 2006 with the support of the PAD for his anti-Thaksin stance.

So was Sirichoke the person who visited Bout that Nitipoom was referring too? If not, then who? And with all these new revelations, do many still believe there is no political connection to the case?

h/t to many on twitter for some of the links.

		3	Thailand\'s, GDP, Statistics, Game

By James Harriman,

Update [08/26/10]: WSJ has published the second-quarter (seasonally adjusted) GDP growth figure along with a nice graphic showing quarterly growth changes.  The figures in yesterday's chart were not seasonally adjusted, so this is a nice addition. Here is an excerpt from the article, plus the chart:

BANGKOK -- Thailand's economy grew at a modest pace in the second quarter, beating expectations for a decline, as exports helped counter the impact of deadly protests that rocked the country in April and May. Robust expansion in the January-June period also prompted the National Economic and Social Development Board, the government's economic planning agency, to raise its full-year gross domestic product growth forecast. It also bolsters expectations the central bank will lift its benchmark policy rate 25 basis points Wednesday to 1.75%.

Thailand's second-quarter GDP expanded a seasonally adjusted 0.2% from the January-March period. The median forecast of a Dow Jones Newswires poll of 11 economists was a contraction of 1.3% from the first quarter...

Mr. Ampon said Thailand's economy is expected to grow 6% to 7% in the third quarter from a year earlier, but should then slow in the final three months of 2010 to post growth of 1% to 2%. Expansion should be in the range of 4% to 5% both in the second half of this year and for the full year of 2011.

Thailand is expected to post a trade surplus of $14.9 billion in 2010, and a current account surplus of $15.1 billion, he said. Earlier, the agency projected a trade surplus of $11.3 billion and a current account surplus of $12.2 billion.

[08/25/2010]

Governments the world over are experts at taking GDP figures and spinning them to their political advantage--Thailand is no different. A recent article in Roubini Global Economics entitled, "Thailand's GDP Release: Bad English or Intentional Cover-Up?", highlights this point,

The Thai government's PR department released a sanguine report on Thailand's Q2 GDP data yesterday, glossing over the economic impact of the violent protests that flared up in April and May:

Thailand’s gross domestic product (GDP) in the second quarter of this year has expanded by 9.1%, setting the highest record of half-year figure in 13 years, according to the National Economic and Social Development Board (NESDB).

Source: “Half-year GDP hits 13-yrs highest“, National News Bureau of Thailand

A look at the data reveals however that real GDP actually contracted in Q2 2010 by 5.6%, not seasonally adjusted. The 9.1% growth reported by the National News Bureau refers to year-over-year growth. By this metric, Thailand's expansion is really nothing surprising considering GDP rose from a very low base formed after the deepest contraction since the 1997-98 financial crisis. When the bar is set low, it's quite easy to jump the bar. What's more striking is, Thailand failed to even meet that bar in some respects:

The Roubini article is right to point out that the government's PR department is making a year-on-year (second-quarter) comparison, which because of the low base in 2009, makes the GDP growth rate look phenomenal. Is there an intentional cover-up as the title suggests? Well, cover-up or not, should we be surprised the government's PR department is cherry picking figures to make media headlines and boost its own popularity? Probably not--that's politics. And as Mark Twain once said, "There are three kinds of lies: lies, damned lies, and statistics."

In a way, the Roubini article is also slightly off the mark because it neglects to mention that second-quarter GDP is traditionally lower than the first-quarter. Indeed, looking at quarterly GDP figures for every year going back to 1993 (NESDB oldest record), second-quarter GDP has always been lower than the first. The writer does say "not seasonally adjusted", but the importance of this point is not elaborated on. As such, the writer encounters the same issue as the government's PR department--selectively picking a reference point to reach a particular conclusion. 

The chart below shows quarterly Thai GDP from 2000 to 2010 as well as quarter-on-quarter percentage changes. You can see the 5.6% quarter-on-quarter drop in GDP as mentioned in the Roubini article. You can also see how second-quarter GDP (denoted by red bars) is lower than the first-quarter GDP every year.

 

The figures below further show how GDP statistics can paint completely different pictures depending on which reference points are used.

For another interesting take on Thailand's GDP and what the numbers mean, the Bangkok Post recently posted this article by an analyst at Siam Commercial Bank. Here is an excerpt,

Why doesn't it really feel like we are growing at 10%? Like many analysts, we have been revising our GDP forecasts for this year upwards. GDP growth for the first half of the year is probably going to come in at about 10% year-on-year.

The question I often get asked by clients is: "If the numbers look so good, why doesn't it feel like we are growing 10%?"

The really short answer is that the growth looks good because it is being compared to such a low base or level in 2009.

The level of real GDP for the first half of 2010 is 10 higher than what it was in the first half of 2009, but only 3% higher than the first half of 2008.

We are just back to where we were two years ago.

The longer and more interesting answer is that it doesn't feel like we are growing at 10% because much of the growth in the headline GDP figures is being driven by exports, and most of that export growth is being driven by a few sectors which do not employ that many people.

Exports of electrical and mechanical machinery and parts, auto parts and the like have been growing sharply, registering growth of over 45%.

These three sectors account for over 40% of our total exports and exports account for well over half of our GDP. It is therefore not surprising that when these sectors pick up, our GDP figures shoot up accordingly. But while these sectors account for the bulk of our exports, they employ less than 2% of our labour force. Therefore, not that many people benefit.

Numbers can create misleading first impressions. Exports of electrical machinery and equipment (which include things like integrated circuits) alone accounts for about 9% of GDP. At first glance, this looks roughly similar to tourism spending at 8% of GDP. But the import content of electrical machinery is very high. Correspondingly, its total domestic value-added and employment are relatively low: 0.5 trillion baht and 0.5 million workers, respectively. By contrast, value added and employment in sectors related to tourism is on the order of about 1.2 trillion baht and over 6 million workers.

While there are clear signs that growth will slow during the second half, growth for the full year will still probably come in somewhere around a nice looking 7%. In 2003, GDP also grew at about 7%. But more of that growth came from domestic demand. As a result, growth probably felt better for most in 2003 than in 2010, even though the GDP growth rates are the same. The composition of growth also matters.

James Harriman

harrimanjay@yahoo.com

@Thai_Tweet