World leaders will meet at the G-20 Summit with time running out to prevent the recession worsening
The G-20 Summit in Pittsburgh, which will begin today and end on Friday, opens up an opportunity for world leaders to find a way out of the current financial mess. Prime Minister Abhisit Vejjajiva is also participating in this summit, as chair of the Association of Southeast Asia Nations.
Five months ago, the world was reeling under unprecedented financial turmoil. Many were predicting that an economic depression was on the horizon, after decades of global imbalances and financial bubbles. A concerted action by the G-20 helped stave off the crisis, with some US$12 trillion having been poured into the global economy and financial system to prevent a systemic collapse.
High on the agenda of the G-20 - the member countries of which control about 85 per cent of the world's gross domestic product - is a joint economic programme to arrest the recession, coordination efforts on financial policy to prevent another crisis, how to curb bank executives' pay to prevent them from taking excessive risks, and an exit strategy from the government intervention into the economies.
There are dilemmas facing the G-20 leaders. The fiscal stimulus programmes may prevent economies from weakening any further, but they have created enormous burdens on public-sector debt. The loose monetary policy to assist banks and corporations in resuming their business might ignite fears of inflation. When is the appropriate time for the G-20 to exit from its heavy-handed involvement in the global economy and global financial system so that the private sector can take charge again?
There are signs that the global recession is fading. But most G-20 leaders, and the International Monetary Fund, are not rushing to bet on that. Gordon Brown, the UK prime minister, said it is premature to conclude that the recession is over, and it is still necessary for the UK to continue its fiscal stimulus programme. US President Barack Obama said unemployment in the US will continue to worsen over the next couple of months. Canada is pledging a fiscal stimulus package equivalent to about 4 per cent of its gross domestic product, just to keep the economy humming. It has called for the G-20 to continue the fiscal programmes to help lift the world out of the recession.
Most interesting will be how China plays its cards at the summit. China would like to have a greater say in the International Monetary Fund. It has said it is willing to subscribe to the tune of $50 billion in the IMF's $500 billion recapitalisation programme, to increase its lending capacity to needy countries facing balance of payments crises. The US and the European Union, however, are still cautious over China's attempt to exert its newfound influence in the international financial institutions.
Moreover, China also wants to reform the IMF away from its current make-up, which has been around since the end of World War II. Along with Brazil, India and Russia, China has called for the international monetary system to steer away from the US dollar as the predominant reserve currency. China is relying on a two-track strategy on this front. It would like the role of the Special Drawing Rights - a currency unit of the IMF - to play a greater role in global financial transactions. At the same time, it is boosting the role of its renminbi, gradually taking steps to liberalise its financial system to allow greater convertibility of the currency.
These are the big issues that the G-20 leaders will have to address to prevent this recession from deepening and the financial turmoil from getting any further out of control. If the global economy is to face a double dip, it will be difficult for them to pull it out of trouble a second time, given the massive resources they have already poured in to support it.
Moreover, if the G-20 leaders do not have the courage to rein in control over the financial services, which have gone out of control, financial turmoil will return to haunt us all again.
Friday, September 25, 2009
Leaders face economic trouble
Bolstering a global economy still wobbly from the worst recession in seven decades, restraining greedy bankers and plotting a future course for sustainable growth - the leaders of the world's major economies have no shortage of items on their to-do list when they meet today and tomorrow.
The problem is that with the global economy on the mend, they could encounter waning enthusiasm to launch bold intitatives, especially if those efforts would limit the leaders' political manoeuvring room back home.
OBAMA'S MAJOR GOAL MAY BE WATERED DOWN
President Barack Obama is already facing the likelihood that one of his major goals will be watered down. He wants the G-20 to agree to a new global compact to avoid the dangerous imbalances that many believe played a major contributing role in pushing the world into a severe and prolonged recession that has cost millions of lost jobs and wiped out trillions of dollars in wealth.
It is likely that the G-20 will endorse the US call for a new "framework for sustainable and balanced growth", but without any major way to enforce commitments made to rastrain imbalances such as China's massive trade surpluses and the United States' surging budget deficits.
The G-20 leaders are also vowing to adopt tougher rules of the road to keep banks from engaging in the kind of risky behaviour that brought on the current crisis, but they are pushing different approaches.
The problem is that with the global economy on the mend, they could encounter waning enthusiasm to launch bold intitatives, especially if those efforts would limit the leaders' political manoeuvring room back home.
OBAMA'S MAJOR GOAL MAY BE WATERED DOWN
President Barack Obama is already facing the likelihood that one of his major goals will be watered down. He wants the G-20 to agree to a new global compact to avoid the dangerous imbalances that many believe played a major contributing role in pushing the world into a severe and prolonged recession that has cost millions of lost jobs and wiped out trillions of dollars in wealth.
It is likely that the G-20 will endorse the US call for a new "framework for sustainable and balanced growth", but without any major way to enforce commitments made to rastrain imbalances such as China's massive trade surpluses and the United States' surging budget deficits.
The G-20 leaders are also vowing to adopt tougher rules of the road to keep banks from engaging in the kind of risky behaviour that brought on the current crisis, but they are pushing different approaches.
PEPSICO NAMED ON CHINESE BLACKLIST
Many foreign companies, including PepsiCo and Mead Johnson, from 25 countries have been blacklisted by a monthly report from the State Council watchdog in charge of product quality.
Among the firms blacklisted, the most prominent was PepsiCo, which has its international branch based in New York. Nearly 38 tonnes of frozen concentrated orange juice that the firm allegedly imported from Louis Dreyfus Citrus Trading in Brazil in July were found with excessive years, according to the website of the General Administration of Quality Supervision, Inspection and Quarantine. Excessive yeast causes foods to spoil faster.
The watchdog issues its report monthly and names unqualified imported goods. Though the listing has no economic impact on the firms listed, the banned products are either return-ed or destroyed.
Mead Johnson, the plarmaceutical manufacturer based in Illinois, allegedly imported 300 kilograms of baby formula in July with substandard protein.
Some 150 other batches of food, beverages and dosmetics from more than 20 countries were also deemed unqualified in July. A quarter of the substandard products came from the US.
Among the firms blacklisted, the most prominent was PepsiCo, which has its international branch based in New York. Nearly 38 tonnes of frozen concentrated orange juice that the firm allegedly imported from Louis Dreyfus Citrus Trading in Brazil in July were found with excessive years, according to the website of the General Administration of Quality Supervision, Inspection and Quarantine. Excessive yeast causes foods to spoil faster.
The watchdog issues its report monthly and names unqualified imported goods. Though the listing has no economic impact on the firms listed, the banned products are either return-ed or destroyed.
Mead Johnson, the plarmaceutical manufacturer based in Illinois, allegedly imported 300 kilograms of baby formula in July with substandard protein.
Some 150 other batches of food, beverages and dosmetics from more than 20 countries were also deemed unqualified in July. A quarter of the substandard products came from the US.
THAILAND PUSHES TO BE REGION'S SEED HUB
The Agriculture Department plans to encourage seed producers to focus more on research and development and international standards to promote the industry as a seed hub of Asean.
The department will accelerate the establishment of a lab to ensure the inspection system meets ISO/IEC standards for quality control of commercial seeds.
Vicha Thitiprasert, director of the Agricultural Regulations office, said yesterday the office would also ask for technicians from the International Seed Testing Association to certify Thai labs.
"The endorsement will strengthen the country's export competitiveness against rivals like Japan, China, Australia and New Zealand," he said.
The country's total seed exports have reached Bt2.22 billion or 11,995 tonnes during the first eight months of this year, compared to Bt2.54 billion or 20,934 tonnes for all of last year.
The major export markets are Vietnam, the Philippines and India.
However, imports of controlled seeds would reach 6,794 tonnes worth Bt647.44 million this year.
The import of 37 kinds of seeds needs the permission of the department. They include white paddy rice, sorghum, maize, green bean, soybean, cotton, chilli, tomato, long green bean, green egg plant, pumpkin, sunflower, onion, lettuce and palm oil seeds.
The department will accelerate the establishment of a lab to ensure the inspection system meets ISO/IEC standards for quality control of commercial seeds.
Vicha Thitiprasert, director of the Agricultural Regulations office, said yesterday the office would also ask for technicians from the International Seed Testing Association to certify Thai labs.
"The endorsement will strengthen the country's export competitiveness against rivals like Japan, China, Australia and New Zealand," he said.
The country's total seed exports have reached Bt2.22 billion or 11,995 tonnes during the first eight months of this year, compared to Bt2.54 billion or 20,934 tonnes for all of last year.
The major export markets are Vietnam, the Philippines and India.
However, imports of controlled seeds would reach 6,794 tonnes worth Bt647.44 million this year.
The import of 37 kinds of seeds needs the permission of the department. They include white paddy rice, sorghum, maize, green bean, soybean, cotton, chilli, tomato, long green bean, green egg plant, pumpkin, sunflower, onion, lettuce and palm oil seeds.
IMF SAYS CRISIS NOT OVER URGES SUSTAINED STIMULUS
Strauss-Kahn calls on G-20 leaders to maintain efforts to pull the world economy out of recession
International Monetary Fund managing director Dominique Strauss-Kahn called on leaders from the Group of 20 nations to maintain efforts to pull the world economy out of a recession, warning that the crisis isn't over.
"This recovery will be rather sluggish, at an average lower than growth we had before the crisis," Strauss-Kahn said in an interview in Washington before the G-20 summit begins today in Pittsburgh. "It's too early to say the crisis is behind us."
"ADDRESS TRADE IMBALANCES"
The IMF chief also urged policy makers to seize the opportunity to address imbalances in trade and investment flows blamed for contributing to the credit collapse. Giving China a bigger role in the fund will help bolster cooperation, he said, as policy makers seek agreement to pare US borrowing and buttress domestic demand in nations with trade surpluses.
"A failure to rebalance the global economy would cause any recovery to be ultimately doomed," said Gerard Lyons, chief economist at Standard Chartered in London. "Aiming for a balanced world economy is a win-win situation."
Leaders from the G-20, which groups the largest developed and developing nations, gather tomorrow for their two-day summit in Pittburgh. Formed out of the Asian financial crisis, G-20 meetings were elevated to the heads-of-government level in November.
Suddenly, we're in a better position to have this kind of cooperation and economic coordination than we were before," Strauss-Kahn said. The G-20 talks are a chance to "fix the way we work together governing globalisation, and it may work."
FIRST SIGNS OF GROWTH: GETIHNER
US Treasury Secretary Timothy Geithner said at a press conference on Tuesday that G-20 leaders will "take stock of where we are in putting the world on a path to stronger, more sustainable, more balanced growth". The goals include a stronger financial system that's better able to absorb shocks, he said.
"We're now seeing the first signs of growth" and "the financial markets have improved considerably," Giethner said. "We want to make sure we build on the progress that we've achieved."
UK Prime Minister Gordon Brown echoed Geithner's sentiment, telling reporters in London that "what we want to do is safeguard a recovery from a recession" and that "the stimulus that we have still got to give the world economy is greater than the stimulus we have already had."
Strauss-Kahn said the US can do its part by boosting the country's savings rate and reducing its budget deficit, and China can contribute by fostering domestic demand, which would have the effect of revaluing its currency, the yuan.
BIGGER ROLE FOR CHINA
China may be more willing to cooperate when it gets a bigger role at the IMF, which leaders are expected to announce by calling for a shift in voting rights that would favour emerging markets, he said.
"The Chinese know they're becoming a big player, they want to be considered a big player, and if they're considered a big player they will behave as a big player," Strauss-Khan said.
While the global economy is susceptible to a "double-dip" recession, Strauss-Khan said that isn't the "most probable" scenario.
Banks still have "a lot to do" to clean balance sheets, said Strauss-Kahn, 60.
Meanwhile, French Finance Minister Christine Lagarde said banks may need to cut their size or increase their capital reserves in response to regulatory changes being considered by the G-20.
International Monetary Fund managing director Dominique Strauss-Kahn called on leaders from the Group of 20 nations to maintain efforts to pull the world economy out of a recession, warning that the crisis isn't over.
"This recovery will be rather sluggish, at an average lower than growth we had before the crisis," Strauss-Kahn said in an interview in Washington before the G-20 summit begins today in Pittsburgh. "It's too early to say the crisis is behind us."
"ADDRESS TRADE IMBALANCES"
The IMF chief also urged policy makers to seize the opportunity to address imbalances in trade and investment flows blamed for contributing to the credit collapse. Giving China a bigger role in the fund will help bolster cooperation, he said, as policy makers seek agreement to pare US borrowing and buttress domestic demand in nations with trade surpluses.
"A failure to rebalance the global economy would cause any recovery to be ultimately doomed," said Gerard Lyons, chief economist at Standard Chartered in London. "Aiming for a balanced world economy is a win-win situation."
Leaders from the G-20, which groups the largest developed and developing nations, gather tomorrow for their two-day summit in Pittburgh. Formed out of the Asian financial crisis, G-20 meetings were elevated to the heads-of-government level in November.
Suddenly, we're in a better position to have this kind of cooperation and economic coordination than we were before," Strauss-Kahn said. The G-20 talks are a chance to "fix the way we work together governing globalisation, and it may work."
FIRST SIGNS OF GROWTH: GETIHNER
US Treasury Secretary Timothy Geithner said at a press conference on Tuesday that G-20 leaders will "take stock of where we are in putting the world on a path to stronger, more sustainable, more balanced growth". The goals include a stronger financial system that's better able to absorb shocks, he said.
"We're now seeing the first signs of growth" and "the financial markets have improved considerably," Giethner said. "We want to make sure we build on the progress that we've achieved."
UK Prime Minister Gordon Brown echoed Geithner's sentiment, telling reporters in London that "what we want to do is safeguard a recovery from a recession" and that "the stimulus that we have still got to give the world economy is greater than the stimulus we have already had."
Strauss-Kahn said the US can do its part by boosting the country's savings rate and reducing its budget deficit, and China can contribute by fostering domestic demand, which would have the effect of revaluing its currency, the yuan.
BIGGER ROLE FOR CHINA
China may be more willing to cooperate when it gets a bigger role at the IMF, which leaders are expected to announce by calling for a shift in voting rights that would favour emerging markets, he said.
"The Chinese know they're becoming a big player, they want to be considered a big player, and if they're considered a big player they will behave as a big player," Strauss-Khan said.
While the global economy is susceptible to a "double-dip" recession, Strauss-Khan said that isn't the "most probable" scenario.
Banks still have "a lot to do" to clean balance sheets, said Strauss-Kahn, 60.
Meanwhile, French Finance Minister Christine Lagarde said banks may need to cut their size or increase their capital reserves in response to regulatory changes being considered by the G-20.
ASEAN EXPORT ORDERS A BOON TO PRINTERS
The printing industry expects its exports to rise by up to 15 per cent this year mainly on advance orders from the Asean market.
Kriengkrai Thiennukul, chairman of the Printing and Paper Packaging Industry Club of the Federation of Thai Industries, said yesterday that the main factor encouraging the industry for next year is orders from Asean, which accounts for 60 per cent of total printing exports. Overseas importers have placed orders for three to six months in advance.
However, total printing sales this year were expected to be flat at US$1.45 billion or about Bt50 billion, he said.
If markets abroad could improve next year, exports are estimated to reach Bt55 billion-Bt60 billion. The industry shifted its focus to Asean a few years ago as it saw stronger performance in this region than in the US and Europe.
Printing exports in the first eight months of this year dropped by 9 per cent from the same period last year, but the export performances of other Southeast Asian countries were worse, declining 10-20 per cent.
The Printing and Paper Packaging Industry Club formerly targeted the country to be the printing hub of Asia.
Pornchai Rattanachaikanont, president of the Thai Printing Association, said manufacturers this year could export more kraft paper to Japan, and cardboard paper to India and Saudi Arabia.
The industry has also gained a positive outlook for this quarter, as there are promising orders for Christmas and New Year from both local and overseas markets.
Thailand is now hosting Pack Print International 2009 and the Thai Inter-national Plastic and Rubber Exhibition, which open today and continue to Saturday at the Bangkok International Trade and Exhibition Centre. Some 400 printing, packaging, plastic and rubber manufacturers from 20 countries are joining the exhibition.
Messe Dusseldorf Asia, the organiser, expects the event to attract about 20,000 visitors over its four-day run.
Kriengkrai Thiennukul, chairman of the Printing and Paper Packaging Industry Club of the Federation of Thai Industries, said yesterday that the main factor encouraging the industry for next year is orders from Asean, which accounts for 60 per cent of total printing exports. Overseas importers have placed orders for three to six months in advance.
However, total printing sales this year were expected to be flat at US$1.45 billion or about Bt50 billion, he said.
If markets abroad could improve next year, exports are estimated to reach Bt55 billion-Bt60 billion. The industry shifted its focus to Asean a few years ago as it saw stronger performance in this region than in the US and Europe.
Printing exports in the first eight months of this year dropped by 9 per cent from the same period last year, but the export performances of other Southeast Asian countries were worse, declining 10-20 per cent.
The Printing and Paper Packaging Industry Club formerly targeted the country to be the printing hub of Asia.
Pornchai Rattanachaikanont, president of the Thai Printing Association, said manufacturers this year could export more kraft paper to Japan, and cardboard paper to India and Saudi Arabia.
The industry has also gained a positive outlook for this quarter, as there are promising orders for Christmas and New Year from both local and overseas markets.
Thailand is now hosting Pack Print International 2009 and the Thai Inter-national Plastic and Rubber Exhibition, which open today and continue to Saturday at the Bangkok International Trade and Exhibition Centre. Some 400 printing, packaging, plastic and rubber manufacturers from 20 countries are joining the exhibition.
Messe Dusseldorf Asia, the organiser, expects the event to attract about 20,000 visitors over its four-day run.
EU watchdog aims to rely more on "moral authority"
The European Union's new financial watchdog plans to use "moral pressure" instead of regulatory authority to crack down on countries posing major risks to Europe's economy.
The European Commission yesterday laid out a new financial oversight structure that it wants governments to back to prevent a repeat of last year's banking crisis. Still, it is shying away from creating forceful new regulators who could unilaterally overrule member states.
The commission says it wants risks in the financial system to be identified and resolved at an earlier stage; EU countries to co-operate better in emergency situations and clearer rules set out for solving disputes between financial supervisors in different countries.
Despite Europe's shared market of 500 million people, financial oversight is fragmented and divided between 27 member states who do not always apply the same EU rules in the same way.
That became very clear last year when governments scrambled to rescue banks and shore up a financial system under threat of collapse.
Ireland's move to guarantee all bank deposits alarmed British banks who feared that savers would move funds there. France and Germany, meanwhile,complained loudly about Luxembourg's lax investor protection rules that led to many losing money after investing in funds linked to the massive US financial fraud run by Bernard Madoff.
The European Commission says it wants to plug those weaknesses in the EU's supervisory framework.
The new European Systemic Risk Board is also supposed to watch out for wider risks to the economy, such as the financial situation of banks, potential asset bubbles and how well markets are functioning. It would issue recommendations and warnings to national governments and supervisors which must take action or explain why they haven't done so.
The European Commission says the new risk board will flag warnings that have been ignored to all EU governments,which will increase "the moral pressure on the recipient to act or explain."Warnings won't always be made public to avoid spooking financial markets.
The European Central Bank, which governs monetary policy in the 16 nations that use the euro, will help run the risk board and its president will likely lead the watchdog - although EU officials have said that senior jobs are open to non-euro nations.
The new financial supervisory framework will create three new authorities to watch over banking, financial markets and both insurance and pensions.
They will have more power than the supervisory committees they are replacing because they will be able to resolve disputes between national supervisors and suggest new technical standards.The European Securities and Markets Authority will also supervise credit rating agencies. That means EU agencies will have more power to counter national supervisors - something Britain has fiercely resisted.
But the EU executive insists that the new system won't veto national supervisors and will only step in where necessary - such as on EU-wide technical standards and sorting out disputes.
The new authorities will not be allowed to make decisions that would force a government to spend money - such as telling it to bail out a bank.
"Our aim is to protect European taxpayers from a repeat of the dark days of autumn 2008, when governments had to pour billions of euros into the banks,"said commission president Jose Manuel Barroso.
The European Commission yesterday laid out a new financial oversight structure that it wants governments to back to prevent a repeat of last year's banking crisis. Still, it is shying away from creating forceful new regulators who could unilaterally overrule member states.
The commission says it wants risks in the financial system to be identified and resolved at an earlier stage; EU countries to co-operate better in emergency situations and clearer rules set out for solving disputes between financial supervisors in different countries.
Despite Europe's shared market of 500 million people, financial oversight is fragmented and divided between 27 member states who do not always apply the same EU rules in the same way.
That became very clear last year when governments scrambled to rescue banks and shore up a financial system under threat of collapse.
Ireland's move to guarantee all bank deposits alarmed British banks who feared that savers would move funds there. France and Germany, meanwhile,complained loudly about Luxembourg's lax investor protection rules that led to many losing money after investing in funds linked to the massive US financial fraud run by Bernard Madoff.
The European Commission says it wants to plug those weaknesses in the EU's supervisory framework.
The new European Systemic Risk Board is also supposed to watch out for wider risks to the economy, such as the financial situation of banks, potential asset bubbles and how well markets are functioning. It would issue recommendations and warnings to national governments and supervisors which must take action or explain why they haven't done so.
The European Commission says the new risk board will flag warnings that have been ignored to all EU governments,which will increase "the moral pressure on the recipient to act or explain."Warnings won't always be made public to avoid spooking financial markets.
The European Central Bank, which governs monetary policy in the 16 nations that use the euro, will help run the risk board and its president will likely lead the watchdog - although EU officials have said that senior jobs are open to non-euro nations.
The new financial supervisory framework will create three new authorities to watch over banking, financial markets and both insurance and pensions.
They will have more power than the supervisory committees they are replacing because they will be able to resolve disputes between national supervisors and suggest new technical standards.The European Securities and Markets Authority will also supervise credit rating agencies. That means EU agencies will have more power to counter national supervisors - something Britain has fiercely resisted.
But the EU executive insists that the new system won't veto national supervisors and will only step in where necessary - such as on EU-wide technical standards and sorting out disputes.
The new authorities will not be allowed to make decisions that would force a government to spend money - such as telling it to bail out a bank.
"Our aim is to protect European taxpayers from a repeat of the dark days of autumn 2008, when governments had to pour billions of euros into the banks,"said commission president Jose Manuel Barroso.
Vice Minister Veerasak's personal behaviour abroad questioned
Commerce Ministry officials appear to harbour deep concerns about the enormous cost of the frequent missions abroad led by Vice Commerce Minister Veerasak Jinarat.
The officials have said the trips appear designed more for his personal benefit than promoting Thai interests.
"For each trip abroad, the ministry must take a huge loss of Bt500,000 for each participant. The roadshows are aimed at opening markets for Thai exports and tightening cooperation with targeted importers and governments. However, it seems the road-shows led by this person have not helped the Kingdom at all," a senior ministry source said yesterday.
Many anonymous letters have been circulated to many agencies within the ministry criticising Veerasak's inappropriate behaviour during his foreign roadshows.
The letters claim that Veerasak has lavished huge sums on himself and his female escorts instead of focusing on the roadshows'outcome as part of the ministry's strategy to push exports.
Officials have become tired of Veerasak's behaviour, because he does not work for the country, but only satisfies himself, the letters say.
Since assuming the position in February, Veerasak has gone abroad two or three times each month. Each mission has covered several countries and lasted five to 14 days.
Veerasak was appointed vice minister to relieve some of Commerce Minister Porntiva Nakasai's workload, but his agenda appears to be leading foreign junkets.
Porntiva has been informed about Veerasak's habits, but since he is backed by an influential figure from Bhum Jai Thai Party, she can do nothing about the problem.
Ministry records show Veerasak has led more than 10 foreign missions. The ministry estimates each member of his entourage spends at least Bt500,000 on airfare, accommodation, transportation and meals, Veerasak normally requests a five-star hotel, saying his level is as high as the minister's.
Since April, he has jetted off to many places on a budget supported by the department of Export Promotion, the Permanent Secretary's Office and each regional hub of the ministry. His destinations have spanned the globe: China, Belgium, the Netherlands, France, Denmark, Russia, Poland, Indonesia, South Africa, Germany, Austria, Brazil, Chile, Argentina and the United States.
He is now in Italy and France on an eight-day journey and planning to go to Russia, the Ukraine and Uzbekistan between next Wednesday to October 7.After that, he will fly to the Middle East, stopping in Oman, Qatar and the UAE.
Officials have not complained only about the expense for his many roadshows, but also his personal conduct, saying he usually asks for "personal services".
He has allegedly ordered junior officials to find local women at each destination. The officials must take care of his companions and pay for their services or taxis.
Although facing grievances, Veerasak continues to instruct officials to plan more foreign visits for him. He allows reporters to meet him only when he likes during his jaunts and has hired a personal media consultant to report to the public, to ensure he receives sufficient press exposure.
The officials have said the trips appear designed more for his personal benefit than promoting Thai interests.
"For each trip abroad, the ministry must take a huge loss of Bt500,000 for each participant. The roadshows are aimed at opening markets for Thai exports and tightening cooperation with targeted importers and governments. However, it seems the road-shows led by this person have not helped the Kingdom at all," a senior ministry source said yesterday.
Many anonymous letters have been circulated to many agencies within the ministry criticising Veerasak's inappropriate behaviour during his foreign roadshows.
The letters claim that Veerasak has lavished huge sums on himself and his female escorts instead of focusing on the roadshows'outcome as part of the ministry's strategy to push exports.
Officials have become tired of Veerasak's behaviour, because he does not work for the country, but only satisfies himself, the letters say.
Since assuming the position in February, Veerasak has gone abroad two or three times each month. Each mission has covered several countries and lasted five to 14 days.
Veerasak was appointed vice minister to relieve some of Commerce Minister Porntiva Nakasai's workload, but his agenda appears to be leading foreign junkets.
Porntiva has been informed about Veerasak's habits, but since he is backed by an influential figure from Bhum Jai Thai Party, she can do nothing about the problem.
Ministry records show Veerasak has led more than 10 foreign missions. The ministry estimates each member of his entourage spends at least Bt500,000 on airfare, accommodation, transportation and meals, Veerasak normally requests a five-star hotel, saying his level is as high as the minister's.
Since April, he has jetted off to many places on a budget supported by the department of Export Promotion, the Permanent Secretary's Office and each regional hub of the ministry. His destinations have spanned the globe: China, Belgium, the Netherlands, France, Denmark, Russia, Poland, Indonesia, South Africa, Germany, Austria, Brazil, Chile, Argentina and the United States.
He is now in Italy and France on an eight-day journey and planning to go to Russia, the Ukraine and Uzbekistan between next Wednesday to October 7.After that, he will fly to the Middle East, stopping in Oman, Qatar and the UAE.
Officials have not complained only about the expense for his many roadshows, but also his personal conduct, saying he usually asks for "personal services".
He has allegedly ordered junior officials to find local women at each destination. The officials must take care of his companions and pay for their services or taxis.
Although facing grievances, Veerasak continues to instruct officials to plan more foreign visits for him. He allows reporters to meet him only when he likes during his jaunts and has hired a personal media consultant to report to the public, to ensure he receives sufficient press exposure.
PERU FTA TO BE INKED IN NOVEMBER
Leaders of Thailand and Peru will sign the long-awaited bilateral free-trade agreement when they meet in Singapore to attend the Asia-Pacific Economic Cooperation summit in mid-November.
The agreement is then expected to be implemented early next year.
The Cabinet on Tuesday approved the signing of the Thailand-Peru FTA to liberalise trade and increase trade facilitation between the countries.
Nuntawan Sakuntanaga, director-general of the Trade Negotiations Department, said two-way trade would rise significantly after the FTA comes into effect.
The countries have reached agreement on all details, including rules of origin and a harmonised system. It has also come up with an exchange system on aqua products and industrial goods to minimise the risk of arguments on rules of origin, said Nuntawan.
"Tightening trade cooperation with Peru will also pave the way for more products to be exported from Thailand to Latin America, as Peru will also be a gateway for penetrating South America," said Nuntawan.
Thailand and Peru started FTA talks in 2003. They have succeeded in their negotiations to reduce import duties for up to 70 per cent of the products traded between them, worth up to US$80 million (Bt2.68 billion).
For Thailand, products with potential are pickup trucks, electrical appliances, plastic and plastic products, washing machines, rubber, automotive parts and home appliances. Peru will focus on products such as fresh shrimp, fish oil and pesticides.
Once the FTA is implemented, Thai businessmen will be eligible for incentives to expand their investments in Peru. Peru has much potential for Thai investors, having abundant natural resources such as fisheries, forests, oil and natural gas.
In addition, Lima wants Thai investors to expand their business in the country, especially in the energy, construction, furniture and fishery sectors.
The agreement is then expected to be implemented early next year.
The Cabinet on Tuesday approved the signing of the Thailand-Peru FTA to liberalise trade and increase trade facilitation between the countries.
Nuntawan Sakuntanaga, director-general of the Trade Negotiations Department, said two-way trade would rise significantly after the FTA comes into effect.
The countries have reached agreement on all details, including rules of origin and a harmonised system. It has also come up with an exchange system on aqua products and industrial goods to minimise the risk of arguments on rules of origin, said Nuntawan.
"Tightening trade cooperation with Peru will also pave the way for more products to be exported from Thailand to Latin America, as Peru will also be a gateway for penetrating South America," said Nuntawan.
Thailand and Peru started FTA talks in 2003. They have succeeded in their negotiations to reduce import duties for up to 70 per cent of the products traded between them, worth up to US$80 million (Bt2.68 billion).
For Thailand, products with potential are pickup trucks, electrical appliances, plastic and plastic products, washing machines, rubber, automotive parts and home appliances. Peru will focus on products such as fresh shrimp, fish oil and pesticides.
Once the FTA is implemented, Thai businessmen will be eligible for incentives to expand their investments in Peru. Peru has much potential for Thai investors, having abundant natural resources such as fisheries, forests, oil and natural gas.
In addition, Lima wants Thai investors to expand their business in the country, especially in the energy, construction, furniture and fishery sectors.
FINANCE MINISTRY TO HIKE 2009 ECONOMIC FORECAST
The Finance Ministry will revise upward its 2009 economic forecast after several better-than-expected indicators have suggested a gradual recovery.
Ministry spokesman Ekniti Nitithanprapas yesterday said the Fiscal Policy Office would release its updated forecast next Monday.
He said several key indicators had recently suggested an improvement in economic conditions, such as exports rising month on month and the economic expansion of major trade partners China and India.
Consumption has also increased as a result of the government's stimulus package, he added.
The ministry previously predicted that the economy this year would shrink by about 3-3.5 per cent. The new projection could put the figure at between minus 2.5 per cent and minus 3 per cent, said Ekniti.
It is expected to expand by 4 per cent year on year in the fourth quarter, following a series of falls in the preceding quarters. The economy is expected to contract by about 3-4 per cent year on year in the current quarter.
The Asian Development Bank on Tuesday released its updated economic forecasts, which projected that China would grow by 8.2 per cent - up from the 7 per cent predicted in March.
The ADB now projects that the Thai economy will contract by 3.2 per cent, against its previous estimate of a 2-per-cent contraction.
The bank said that as Thai exports accounted for about 70 per cent of gross domestic product, a sharp fall in sales abroad had hit the economy particularly hard.
Indonesia, whose exports account for only 20-25 per cent of GDP, has been less impacted by the global downturn, resulting in the bank lifting its forecast for 2009 economic growth to 4.3 per cent, from the previous estimate of 3.6 per cent.
The ADB predicts the Thai economy will expand by 3 per cent next year.
Ekniti said the Thai economy would expand by an average of about 4 per cent each year from 2009-11, driven by public investment worth Bt1.43 trillion. The inflation rate is predicted to be 2 per cent.
Risks to growth, he added, were delays in the implementation of public projects and high oil prices.
Critics have said achieving growth next year would be no surprise, given the very low base this year.
Teerana Bhongmakapat, dean of Chulalongkorn University's Faculty of Economics, said the world economy would experience low growth in 2011 after expansion resumed next year. The recovery will, therefore, be W-shaped.
He said there was also a probability of further shocks in the next few years in some countries. If such shocks occurred in large economies such as China, then the global economy would experience another round of turbulence.
The risk of high inflation will also be a cause for concern after 2011 if the global economy recovers strongly.
However, for the time being, economic recession remains a threat. The Thai economy will likely move in line with the global economy, said Teerana.
Ministry spokesman Ekniti Nitithanprapas yesterday said the Fiscal Policy Office would release its updated forecast next Monday.
He said several key indicators had recently suggested an improvement in economic conditions, such as exports rising month on month and the economic expansion of major trade partners China and India.
Consumption has also increased as a result of the government's stimulus package, he added.
The ministry previously predicted that the economy this year would shrink by about 3-3.5 per cent. The new projection could put the figure at between minus 2.5 per cent and minus 3 per cent, said Ekniti.
It is expected to expand by 4 per cent year on year in the fourth quarter, following a series of falls in the preceding quarters. The economy is expected to contract by about 3-4 per cent year on year in the current quarter.
The Asian Development Bank on Tuesday released its updated economic forecasts, which projected that China would grow by 8.2 per cent - up from the 7 per cent predicted in March.
The ADB now projects that the Thai economy will contract by 3.2 per cent, against its previous estimate of a 2-per-cent contraction.
The bank said that as Thai exports accounted for about 70 per cent of gross domestic product, a sharp fall in sales abroad had hit the economy particularly hard.
Indonesia, whose exports account for only 20-25 per cent of GDP, has been less impacted by the global downturn, resulting in the bank lifting its forecast for 2009 economic growth to 4.3 per cent, from the previous estimate of 3.6 per cent.
The ADB predicts the Thai economy will expand by 3 per cent next year.
Ekniti said the Thai economy would expand by an average of about 4 per cent each year from 2009-11, driven by public investment worth Bt1.43 trillion. The inflation rate is predicted to be 2 per cent.
Risks to growth, he added, were delays in the implementation of public projects and high oil prices.
Critics have said achieving growth next year would be no surprise, given the very low base this year.
Teerana Bhongmakapat, dean of Chulalongkorn University's Faculty of Economics, said the world economy would experience low growth in 2011 after expansion resumed next year. The recovery will, therefore, be W-shaped.
He said there was also a probability of further shocks in the next few years in some countries. If such shocks occurred in large economies such as China, then the global economy would experience another round of turbulence.
The risk of high inflation will also be a cause for concern after 2011 if the global economy recovers strongly.
However, for the time being, economic recession remains a threat. The Thai economy will likely move in line with the global economy, said Teerana.
Shrimp exports withstand worldwide downturn
Thailand's shrimp industry remains in good shape despite the global downturn,with exports expected to grow both in volume and value this year.
Local shrimp production is projected to increase by 5% this year to 520,000 tonnes, with exports also up 5% to between 380,000 and 390,000 tonnes, said Somsak Paneetatyasai, president of the Thai Shrimp Association.
"Thailand's shrimp industry has been left unscathed by the global economic crisis, even though about 90% of production relies on exports," said Mr Somsak.
"Earlier in the year, we planned to cut local production by 20% to only 396,000 tonnes to cope with expected shrinking demand due to the world crisis,but until now the world's shrimp consumption has remained strong."
Shrimp exports are expected to earn Thailand about 89.25 billion baht this year, up 5% from 85 billion baht last year, said Mr Somsak. The United States is expected to remain the largest export market, accounting for about 50-55% of exports followed by Japan and Europe,which would each claim about 10-15%.
Strong shrimp exports are attributed mainly to the efficiency and quality of Thailand's shrimp production. Shrimp is the only agricultural product to record export growth in the first eight months of this year, with frozen and processed shipments up 6.5% to $1.53 billion.
To ensure sustainable export growth,the government is being urged to help address the industry's challenges, particularly trade barriers such as current anti-dumping measures by the US government targeting Thai shrimp and allegations by the US about child labour,said Mr Somsak.
"The government should continue negotiating with US counterparts to remove Thai shrimp from anti-dumping,while it's imperative for authorities to accelerate clearing the US accusations over the child-labour issues, as this may affect the sentiment of US consumers,"he said.
The government is also being asked to manage baht exchange rate to improve exports, and to open new markets for shrimp exports to diversify risk.
Pinyo Kiatpinyo, president of the Federation of Shrimp Farmers Co-operatives of Thailand, also urged the government to ensure fair competition between smallscale and larger farmers and to develop a shrimp fund to improve access to finance by small and medium-scale farmers.
Currently, Thailand has about 22,000 shrimpers with 110,000 shrimp ponds covering 480,000 rai. Their production last year was 495,000 tonnes of shrimp.
Local shrimp production is projected to increase by 5% this year to 520,000 tonnes, with exports also up 5% to between 380,000 and 390,000 tonnes, said Somsak Paneetatyasai, president of the Thai Shrimp Association.
"Thailand's shrimp industry has been left unscathed by the global economic crisis, even though about 90% of production relies on exports," said Mr Somsak.
"Earlier in the year, we planned to cut local production by 20% to only 396,000 tonnes to cope with expected shrinking demand due to the world crisis,but until now the world's shrimp consumption has remained strong."
Shrimp exports are expected to earn Thailand about 89.25 billion baht this year, up 5% from 85 billion baht last year, said Mr Somsak. The United States is expected to remain the largest export market, accounting for about 50-55% of exports followed by Japan and Europe,which would each claim about 10-15%.
Strong shrimp exports are attributed mainly to the efficiency and quality of Thailand's shrimp production. Shrimp is the only agricultural product to record export growth in the first eight months of this year, with frozen and processed shipments up 6.5% to $1.53 billion.
To ensure sustainable export growth,the government is being urged to help address the industry's challenges, particularly trade barriers such as current anti-dumping measures by the US government targeting Thai shrimp and allegations by the US about child labour,said Mr Somsak.
"The government should continue negotiating with US counterparts to remove Thai shrimp from anti-dumping,while it's imperative for authorities to accelerate clearing the US accusations over the child-labour issues, as this may affect the sentiment of US consumers,"he said.
The government is also being asked to manage baht exchange rate to improve exports, and to open new markets for shrimp exports to diversify risk.
Pinyo Kiatpinyo, president of the Federation of Shrimp Farmers Co-operatives of Thailand, also urged the government to ensure fair competition between smallscale and larger farmers and to develop a shrimp fund to improve access to finance by small and medium-scale farmers.
Currently, Thailand has about 22,000 shrimpers with 110,000 shrimp ponds covering 480,000 rai. Their production last year was 495,000 tonnes of shrimp.
Our spending outlays paid off, Abhisit tells investors
In a bid to woo US investors, Prime Minister Abhisit Vejjajiva told leading businessmen in that country the Thai economy had started down the path of recovery with credible positive indicators.
At a Tuesday luncheon in New York's St Regis Hotel, the premier said his administration was faced with challenges on both economic and domestic political fronts since it came into office early this year.
However, he said Thailand would be economically stronger in the wake of the global financial crisis, because of timely actions taken by his government in the early stages of the turmoil.
First, he said, short-term measures were introduced quickly earlier this year to minimise the impact of global turmoil caused by the collapse of major US investment bank Lehman Brothers last September.
Second, Abhisit said his government had recently followed up on the US$45-billion (Bt1.51 trillion) stimulus package aimed at boosting economic growth at a time when the private sector was weak.
The massive stimulus package is equivalent to 16 per cent of Thailand's gross domestic product (GDP), he said, adding that the agriculture, transport, public-health and education sectors would benefit the most.
Overall, the scheme will create 1.5 million jobs over a three-year period and should lead to new investment by the private sector, which will become a more sustainable engine for growth later.
He said the government would disburse about $9 billion in the first batch of stimulus money towards the end of the year, to boost the economy.
He cited a reduction in unemployment and recovery in the export sector, which accounts for more than 60 per cent of Thailand's GDP growth, as positive factors supporting the recovery.
At a Tuesday luncheon in New York's St Regis Hotel, the premier said his administration was faced with challenges on both economic and domestic political fronts since it came into office early this year.
However, he said Thailand would be economically stronger in the wake of the global financial crisis, because of timely actions taken by his government in the early stages of the turmoil.
First, he said, short-term measures were introduced quickly earlier this year to minimise the impact of global turmoil caused by the collapse of major US investment bank Lehman Brothers last September.
Second, Abhisit said his government had recently followed up on the US$45-billion (Bt1.51 trillion) stimulus package aimed at boosting economic growth at a time when the private sector was weak.
The massive stimulus package is equivalent to 16 per cent of Thailand's gross domestic product (GDP), he said, adding that the agriculture, transport, public-health and education sectors would benefit the most.
Overall, the scheme will create 1.5 million jobs over a three-year period and should lead to new investment by the private sector, which will become a more sustainable engine for growth later.
He said the government would disburse about $9 billion in the first batch of stimulus money towards the end of the year, to boost the economy.
He cited a reduction in unemployment and recovery in the export sector, which accounts for more than 60 per cent of Thailand's GDP growth, as positive factors supporting the recovery.
CRISIS NOT BEHIND US, SAYS IMF
The G-20 summit will kick off today in Pittsburgh with the leaders pledging to hold on to government stimulus measures to avoid interrupting the economic recovery because the cirsis is not over yet.
The agenda at the September 24-25 summit includes possible curbs on financial industry pay, joint economic policies anad whether to start winding down stimulus spending.
However, British Prime Minister Cordon Brown indicated that the global economy had yet to ffel the biggest impact of the government-led spending programmes to stimulate demand and reiterated concerns about removing them too early.
"The stimulus that we have still got to give the world economy is greater than the stimulus we have already thad," Brpwm said. "What we want to do is safefuard a recovery from a recession we feared would develop into a depression."
Politicians in Britain are calling for the government to put the brakes on spending and to fucus on curbing the budget deficit that next year will exceed 12 per cent of gross domestic product, the most in the Group of 20.
But International Monetary Fund Manageing Director Dominique Strauss-Kahn called on leaders from the G-20 nations to maintain efforts to pull the world economy out of a recession, warning that the crisis is not over yet.
"This recovery will be rather sluggish, at an average lower than growth we had befor the crisis," Strauss-Kahn said in an interview in Washington. "It's too early to say the crisis is behind us."
The IMF chief also urged policy-makers to seize the opportunity to address imbalances in trade and investment flows blamed for contributing to the credit collapse.
Giving China a bigger role in the fund will help bolster cooperation, he said, as policy-mamers seek agreement to pare US borrowing and buttress domestic demand in nations with trade surpluses.
Brown is seeking support for a formal series of meetings among world leaders to coordinate economic policies and tackle problems ranging from trade imblances to bonus pay earned by bankers.
Brown said economic recovery was not yet guaranteed, addomg tp cp,,emts from IS President Barack Obama, who this week said the unemployment rate "could even get a little bit worse, over the next couple of months".
French Finance Minister Christine Lagarde, who will also be in the Pennsylvania city along with President Nicolas Sarkozy, echoed those sentiments.
The G-20 needs to "give a very strong signal that they will continue the stimulus plans", Largarde said on France Inter radio. "We've stopped the free-fall, but we must continue to underpin the economy."
The UK and the US are proposing similar measures to get national governments to steer economic policy so that futhure imbalances can be worked out before they damage the system.
At the same time, Beijing is pressing for a bigger voice in the IMF and says G-20 leaders should start making good on promises to give developing countries more IMF votes.
A deputy governor of China's central bank proposed the creation of a multinational sovereign wealth fund to help developing countries, in a report released ahead of the G-20 summit.
"Considerations can be [given] to setting up a "suprasovereign wealth investment fund' to help channel captital inflow into the developing would so that these countries can serve as new engines in global recovery," said the official.
The agenda at the September 24-25 summit includes possible curbs on financial industry pay, joint economic policies anad whether to start winding down stimulus spending.
However, British Prime Minister Cordon Brown indicated that the global economy had yet to ffel the biggest impact of the government-led spending programmes to stimulate demand and reiterated concerns about removing them too early.
"The stimulus that we have still got to give the world economy is greater than the stimulus we have already thad," Brpwm said. "What we want to do is safefuard a recovery from a recession we feared would develop into a depression."
Politicians in Britain are calling for the government to put the brakes on spending and to fucus on curbing the budget deficit that next year will exceed 12 per cent of gross domestic product, the most in the Group of 20.
But International Monetary Fund Manageing Director Dominique Strauss-Kahn called on leaders from the G-20 nations to maintain efforts to pull the world economy out of a recession, warning that the crisis is not over yet.
"This recovery will be rather sluggish, at an average lower than growth we had befor the crisis," Strauss-Kahn said in an interview in Washington. "It's too early to say the crisis is behind us."
The IMF chief also urged policy-makers to seize the opportunity to address imbalances in trade and investment flows blamed for contributing to the credit collapse.
Giving China a bigger role in the fund will help bolster cooperation, he said, as policy-mamers seek agreement to pare US borrowing and buttress domestic demand in nations with trade surpluses.
Brown is seeking support for a formal series of meetings among world leaders to coordinate economic policies and tackle problems ranging from trade imblances to bonus pay earned by bankers.
Brown said economic recovery was not yet guaranteed, addomg tp cp,,emts from IS President Barack Obama, who this week said the unemployment rate "could even get a little bit worse, over the next couple of months".
French Finance Minister Christine Lagarde, who will also be in the Pennsylvania city along with President Nicolas Sarkozy, echoed those sentiments.
The G-20 needs to "give a very strong signal that they will continue the stimulus plans", Largarde said on France Inter radio. "We've stopped the free-fall, but we must continue to underpin the economy."
The UK and the US are proposing similar measures to get national governments to steer economic policy so that futhure imbalances can be worked out before they damage the system.
At the same time, Beijing is pressing for a bigger voice in the IMF and says G-20 leaders should start making good on promises to give developing countries more IMF votes.
A deputy governor of China's central bank proposed the creation of a multinational sovereign wealth fund to help developing countries, in a report released ahead of the G-20 summit.
"Considerations can be [given] to setting up a "suprasovereign wealth investment fund' to help channel captital inflow into the developing would so that these countries can serve as new engines in global recovery," said the official.
Asian rice prices flat on declining African orders
THAI RICE EXPORTS YEAR-TO-DATE 2009 vs 2008 6.2m tonnes 8.1m tonnes
Asian rice prices were supported by government intervention policies this week but lacked the momentum to rise higher as African buyers scaled back purchases,causing a decline in demand, traders said yesterday.
Thailand's benchmark 100% B-grade white rice was unchanged from last week,at $530 per tonne, exporters said.
"Prices remained supported as the intervention scheme is still in place,"one exporter said."However, I don't see any chance of prices rising significantly as demand is thin."
The Thai government has extended its intervention scheme until the end of this month after protests from farmers - unhappy that the state would no longer be buying rice directly from them to support prices under a proposed new insurance scheme.
The government is estimated to be holding the equivalent of 7 million tonnes of rice in its stocks - the largest amount since it started stockpiling the grain and has still not come up with a clear plan to reduce them.
Demand for parboiled rice in Africa,which had generally supported Thai rice prices over the past few months, has subsided as buyers now have enough to meet domestic demand, exporters said.
In the past few months, African buyers were believed to have bought up to 600,000 tonnes of Thai parboiled rice to build stocks in anticipation of strong demand at the end of the Muslim holy fasting month of Ramadan.
Thailand has exported 6.2 million tonnes so far this year, down 23% from the same period last year, when it had sold 8.1 million tonnes.
In Vietnam, the second biggest exporter, prices were also steady after jumping this month in response to a govern-ment order to exporters to keep buying rice from farmers to prevent prices falling.
Yesterday, the Vietnamese government said the country's largest rice exporter, Vinafood 2, would stockpile 500,000 tonnes of milled rice over the next four months to support paddy prices.
Vietnam's 25% broken rice was at $340 to $350 a tonne, free on board Saigon Port, while the higher-quality 5% broken rice stood at $390 to $400 a tonne, unchanged from last week.
"Buyers are waiting for prices to drop after the Thai government ends its intervention scheme," a trader in Ho Chi Minh City said. Other traders said the return of the buyers should limit the drop in prices.
Asian rice prices were supported by government intervention policies this week but lacked the momentum to rise higher as African buyers scaled back purchases,causing a decline in demand, traders said yesterday.
Thailand's benchmark 100% B-grade white rice was unchanged from last week,at $530 per tonne, exporters said.
"Prices remained supported as the intervention scheme is still in place,"one exporter said."However, I don't see any chance of prices rising significantly as demand is thin."
The Thai government has extended its intervention scheme until the end of this month after protests from farmers - unhappy that the state would no longer be buying rice directly from them to support prices under a proposed new insurance scheme.
The government is estimated to be holding the equivalent of 7 million tonnes of rice in its stocks - the largest amount since it started stockpiling the grain and has still not come up with a clear plan to reduce them.
Demand for parboiled rice in Africa,which had generally supported Thai rice prices over the past few months, has subsided as buyers now have enough to meet domestic demand, exporters said.
In the past few months, African buyers were believed to have bought up to 600,000 tonnes of Thai parboiled rice to build stocks in anticipation of strong demand at the end of the Muslim holy fasting month of Ramadan.
Thailand has exported 6.2 million tonnes so far this year, down 23% from the same period last year, when it had sold 8.1 million tonnes.
In Vietnam, the second biggest exporter, prices were also steady after jumping this month in response to a govern-ment order to exporters to keep buying rice from farmers to prevent prices falling.
Yesterday, the Vietnamese government said the country's largest rice exporter, Vinafood 2, would stockpile 500,000 tonnes of milled rice over the next four months to support paddy prices.
Vietnam's 25% broken rice was at $340 to $350 a tonne, free on board Saigon Port, while the higher-quality 5% broken rice stood at $390 to $400 a tonne, unchanged from last week.
"Buyers are waiting for prices to drop after the Thai government ends its intervention scheme," a trader in Ho Chi Minh City said. Other traders said the return of the buyers should limit the drop in prices.
Thai firm's Congo tin exit seen as setback
The decision by the Thai unit of Amalgamated Metals Corp to halt tin purchases from the Democratic Republic of Congo may wreck a plan to limit revenue reaching armed groups, according to the tin industry group ITRI.
Thailand Smelting & Refining, the top buyer of tin from Congo, announced the suspension of tin ore purchases last week, citing the threat of misleading and bad publicity for any company that participates in the trade.
That decision may jeopardise an ITRI initiative to certify the origin of tin shipments from Africa's top producer.
"With the withdrawal of AMC, we're not sure we can implement the project,"ITRI sustainability manager Kay Nimmo said yesterday from St Albans, England.
UN reports say profits from tin,columbo-tantalite and gold production in the eastern provinces of North and South Kivu help stoke the armed violence in Congo, where conflict has killed more than 5 million people since 1998. The tin is excavated by hand-diggers and mostly shipped to Asian smelters, before it is used in consumer electronics.
Congo produced 15,500 tonnes of tin,or about 6% of world output, last year.
Thailand Smelting & Refining, which said it would honour existing commit-ments, buys about half of Congo's tin exports, spokesman James MacFarlane said last week.
AMC's exit follows the pullout of another major buyer, Traxys SA, in June.
"The Congolese state lives fromminerals. The economy will be practically paralysed," North Kivu Mines Minister Juvenal Ndabereye said.
A report by Global Witness, which accused companies of buying tin from traders with links to armed groups, spotlighted the need for initiatives such as ITRI's, said Ms Nimmo, who acknowledged there had been threats of sanctions against companies.
Thailand Smelting & Refining, the top buyer of tin from Congo, announced the suspension of tin ore purchases last week, citing the threat of misleading and bad publicity for any company that participates in the trade.
That decision may jeopardise an ITRI initiative to certify the origin of tin shipments from Africa's top producer.
"With the withdrawal of AMC, we're not sure we can implement the project,"ITRI sustainability manager Kay Nimmo said yesterday from St Albans, England.
UN reports say profits from tin,columbo-tantalite and gold production in the eastern provinces of North and South Kivu help stoke the armed violence in Congo, where conflict has killed more than 5 million people since 1998. The tin is excavated by hand-diggers and mostly shipped to Asian smelters, before it is used in consumer electronics.
Congo produced 15,500 tonnes of tin,or about 6% of world output, last year.
Thailand Smelting & Refining, which said it would honour existing commit-ments, buys about half of Congo's tin exports, spokesman James MacFarlane said last week.
AMC's exit follows the pullout of another major buyer, Traxys SA, in June.
"The Congolese state lives fromminerals. The economy will be practically paralysed," North Kivu Mines Minister Juvenal Ndabereye said.
A report by Global Witness, which accused companies of buying tin from traders with links to armed groups, spotlighted the need for initiatives such as ITRI's, said Ms Nimmo, who acknowledged there had been threats of sanctions against companies.
Tuesday, September 22, 2009
Scenario precarious for women migrants
As clandestine migrant labour is an enormous issue in Thailand, a key challenge is how to address the issue effectively and humanely.
Globalisation implies a greater integration of the international system from the angle of faster communications and information, and greater liberalisation of trade in goods, services, capital and investment flows.
However, a recurrent question is to what extent globalisation enables migration to take place in an orderly and balanced manner, with due regard to the rights of migrant workers, especially women who now constitute a large part of the work force?
Currently, the answer is somewhat ambiguous in that today's global system seems more ready to liberalise the flows of goods, services, capital and investment,rather than migration itself which is often seen as a challenge to national sovereignty and ethnic sensibility. The rules and agreements which have been evolved under the World Trade Organisation (WTO), an organisation closely linked with globalisation, have confirmed that trend.
In this context, it is necessary to see the migration issue from three angles:white collar workers (skilled labour), blue collar workers (unskilled labour) and "no collar workers," namely those who cross borders clandestinely and who often land up in exploitative situations.
White collar workers can cross borders to work in other countries quite easily,and under the WTO, this often takes place under the umbrella of opening up markets to services, thus enabling women executives and skilled workers to provide services in other countries.
With regard to blue collar workers,there are large numbers working outside their country of origin, such as maids.The arrangements are at times bilateral,at times regional. Multilaterally, while a comprehensive agreement is lacking on the liberalisation of migration flows, there are some international standards in the form of treaties which offer protection to those on the move by safeguarding their rights; these have been propelled particularly by the United Nations, in particular through the International Labour Organisation (ILO) as a specialised agency.
Yet the scenario facing women migrants is precarious for a number of reasons. First, increasingly it is evident there is a feminisation of thelabour flows,with women landing up in many jobs which exemplify the 3 D's of work dirty, dangerous and degrading. The Progress of the World's Women Report 2008-09 observes that over the last decade, more than 200 million women have joined the global labour force, and they often land up in labour-intensive and low-paying activities such as subsistence agriculture, domestic work and the clothing industry. Employers see women workers as free from the "fixed costs" of an organised labour force, such as basic minimum wages - particularly equal pay for equal work and social security guarantees. Women are thus more susceptible to discrimination and exploitation.
Second, many countries have shied away from becoming parties to international treaties for the protection of migrant labour, thus preferring to retain their discretion in dealing with migration issues without international scrutiny.In particular, there have been few accessions to the 1990 UN Convention on the Rights of Migrant Workers and their families. This treaty guarantees the basic rights of all migrant workers whether they are documented or undocumented.While documented workers are guaranteed more rights than undocumented workers, the latter still enjoy key rights under the treaty such as the right to life and humane treatment and their right to seek redress, such as payment for their work even if they are part of the illegal migrant labour. The lack of accessions to this treaty testifies to the lack of political will globally to liberalise migration flows with safeguards for migrant welfare, even though many countries are short of workers and have to import foreign labour.
Third, in the debate concerning whether to open up to migration, the environment behind the migration should not be overlooked. Often it is the lack of choice in their homesteads lack of opportunities, lack of income,lack of access to jobs and other productive activities which push people to leave and to seek opportunities elsewhere.This is particularly poignant for women who, more often than not, trail behind men in the availability of choices and accessibility to livelihood.
Fourth, regionally many Free Trade Areas (FTAs) have come into existence,opening up markets to trade in goods,services and capital. While white collar workers have benefited from this, blue collar and no collar workers are in a more tenuous situation.
Several export processing zones (EPZ)have grown which offer the benefits of easier trade, but without concurrent guarantees of labour rights. This has meant the lowering of labour standards on minimum wages for work and respect for worker rights, particularly women. More-over, there has been little assessment of how FTAs impact on women in the localities in general and women migrant workers in particular. In one Caribbean country noted by the Progress of the World's Women Report, it has been shown that job losses outweighed the benefits from the FTA, with women losing out in the process.
Fifth, Thailand has faced the migration issue particularly by opting for the registration of foreign migrant labour and concluding bilateral a Memorandum of Understanding (MOU) with all of its immediate neighbours. These MOUs are based on the premise that migrants can enter Thailand to work if there is a labour shortage in relation to relevant sectors and there is an official channel for them to come into the country through official channels in neighbouring countries. If they enter legally and pay the relevant contributions, they have access to medical and other benefits as part of the social security programme offered by the destination country. However, as clandestine migrant labour is an enormous issue in the country, a key challenge is how to address the issue effectively and humanely.
In addition to the prescription of registration of migrant labour introduced by Thailand several years ago, there is now a new law on the employment of alien workers. In 2008, this new law came into effect, with the innovation that unlike previous national laws which listed various types of work in which foreign labour could not be engaged, the new law will list the types of activities open to foreign labour. Employers and foreign employees must also make contributions into a fund which will be used to assist foreign migrant workers to return to their country of origin. However, one anomaly is that law enforcers will be able to arrest foreign migrant workers without a court warrant.
On another front, it should be noted that the Labour Protection Act which was updated also in 2008, does not discriminate between Thais and foreigners in terms of labour rights protection. They all have a right to equal wages. Women and adolescent workers are protected from various types of harmful work. The minimum age of employment is set at 15, while there is protection of those under 18 years of age from certain kinds of dangerous work.
To counter the exploitation and abuse which may affect workers, there are also special laws and policies, such as the law against human trafficking which came into force last year, and the antiprostitution law. The country's new National Health Act also opens the door to covering migrant workers in relation to healthcare access. Yet, in spite of these legislative changes, implementation often leaves much to be desired and there is a considerable gap between law and practice, legislation and enforcement.
For the future, various orientations deserve to be highlighted with particular emphasis on the protection of women migrant workers. At the multilateral level,the WTO should be encouraged to promote a sense of responsiveness to labour standards. This can be done, in part, by requesting states which send in their reports under the Trade Policy Review mechanism to include information on labour rights.
Countries should also sign up to the 1990 Migrant Workers' Convention as well as ILO Conventions, while ensuring that EPZs do not lower labour standards.Various anti-crime treaties such as the Palermo Protocol against human trafficking also voice the need for more global cooperation against transnational crimes.
At the regional level, the Association of Southeast Asian Nations (Asean) itself should underline more effectively the need to protect migrant labour. On a welcome front, recently Asean adopted the Declaration on the Rights of Migrant Workers. Next month, the Asean Intergovernmental Human Rights Commission will also be set up as the overarching body on human rights in Asean. A related issue is to ensure that the Asean FTA is assessed from the angle of its impact on the situation of local and migrant labourers, with relevant remedies.
Likewise, bilateral agreements on migrant labour in Asean need to abide by international labour standards. Various practices such as the caning of labourers and the expulsion of women migrant labourers who wish to marry the residents of the destination country, are unacceptable practices.
With regard to Thailand, the country should accede to the 1990 Migrant Workers' Convention and relevant ILO treaties and implement them well.Undocumented migrant labourers should be assisted to access the remuneration to which they are entitled as part of access to justice.
The new law on the employment of alien workers should also be applied to uphold human rights standards, such as the general principle that arrests should only by undertaken with court warrants. Legal and other measures in the anti-crime field, such as those against human trafficking, should abide by the need for gender sensibility and the protection of victims and witnesses from intimidation.
In effect, a key message from the phenomenon of women migrant workers is that "Justice based on Women's Rights"should be increasingly resonant both locally and globally.
Vitit Muntarbhorn is a Professor of Law at Chulalongkorn University. He has helped the UN in a variety of capacities, including as an expert, consultant and Special Rapporteur. This article is derived from his speech at the National Platform for Women,Bangkok, Sept 17,2009.
Globalisation implies a greater integration of the international system from the angle of faster communications and information, and greater liberalisation of trade in goods, services, capital and investment flows.
However, a recurrent question is to what extent globalisation enables migration to take place in an orderly and balanced manner, with due regard to the rights of migrant workers, especially women who now constitute a large part of the work force?
Currently, the answer is somewhat ambiguous in that today's global system seems more ready to liberalise the flows of goods, services, capital and investment,rather than migration itself which is often seen as a challenge to national sovereignty and ethnic sensibility. The rules and agreements which have been evolved under the World Trade Organisation (WTO), an organisation closely linked with globalisation, have confirmed that trend.
In this context, it is necessary to see the migration issue from three angles:white collar workers (skilled labour), blue collar workers (unskilled labour) and "no collar workers," namely those who cross borders clandestinely and who often land up in exploitative situations.
White collar workers can cross borders to work in other countries quite easily,and under the WTO, this often takes place under the umbrella of opening up markets to services, thus enabling women executives and skilled workers to provide services in other countries.
With regard to blue collar workers,there are large numbers working outside their country of origin, such as maids.The arrangements are at times bilateral,at times regional. Multilaterally, while a comprehensive agreement is lacking on the liberalisation of migration flows, there are some international standards in the form of treaties which offer protection to those on the move by safeguarding their rights; these have been propelled particularly by the United Nations, in particular through the International Labour Organisation (ILO) as a specialised agency.
Yet the scenario facing women migrants is precarious for a number of reasons. First, increasingly it is evident there is a feminisation of thelabour flows,with women landing up in many jobs which exemplify the 3 D's of work dirty, dangerous and degrading. The Progress of the World's Women Report 2008-09 observes that over the last decade, more than 200 million women have joined the global labour force, and they often land up in labour-intensive and low-paying activities such as subsistence agriculture, domestic work and the clothing industry. Employers see women workers as free from the "fixed costs" of an organised labour force, such as basic minimum wages - particularly equal pay for equal work and social security guarantees. Women are thus more susceptible to discrimination and exploitation.
Second, many countries have shied away from becoming parties to international treaties for the protection of migrant labour, thus preferring to retain their discretion in dealing with migration issues without international scrutiny.In particular, there have been few accessions to the 1990 UN Convention on the Rights of Migrant Workers and their families. This treaty guarantees the basic rights of all migrant workers whether they are documented or undocumented.While documented workers are guaranteed more rights than undocumented workers, the latter still enjoy key rights under the treaty such as the right to life and humane treatment and their right to seek redress, such as payment for their work even if they are part of the illegal migrant labour. The lack of accessions to this treaty testifies to the lack of political will globally to liberalise migration flows with safeguards for migrant welfare, even though many countries are short of workers and have to import foreign labour.
Third, in the debate concerning whether to open up to migration, the environment behind the migration should not be overlooked. Often it is the lack of choice in their homesteads lack of opportunities, lack of income,lack of access to jobs and other productive activities which push people to leave and to seek opportunities elsewhere.This is particularly poignant for women who, more often than not, trail behind men in the availability of choices and accessibility to livelihood.
Fourth, regionally many Free Trade Areas (FTAs) have come into existence,opening up markets to trade in goods,services and capital. While white collar workers have benefited from this, blue collar and no collar workers are in a more tenuous situation.
Several export processing zones (EPZ)have grown which offer the benefits of easier trade, but without concurrent guarantees of labour rights. This has meant the lowering of labour standards on minimum wages for work and respect for worker rights, particularly women. More-over, there has been little assessment of how FTAs impact on women in the localities in general and women migrant workers in particular. In one Caribbean country noted by the Progress of the World's Women Report, it has been shown that job losses outweighed the benefits from the FTA, with women losing out in the process.
Fifth, Thailand has faced the migration issue particularly by opting for the registration of foreign migrant labour and concluding bilateral a Memorandum of Understanding (MOU) with all of its immediate neighbours. These MOUs are based on the premise that migrants can enter Thailand to work if there is a labour shortage in relation to relevant sectors and there is an official channel for them to come into the country through official channels in neighbouring countries. If they enter legally and pay the relevant contributions, they have access to medical and other benefits as part of the social security programme offered by the destination country. However, as clandestine migrant labour is an enormous issue in the country, a key challenge is how to address the issue effectively and humanely.
In addition to the prescription of registration of migrant labour introduced by Thailand several years ago, there is now a new law on the employment of alien workers. In 2008, this new law came into effect, with the innovation that unlike previous national laws which listed various types of work in which foreign labour could not be engaged, the new law will list the types of activities open to foreign labour. Employers and foreign employees must also make contributions into a fund which will be used to assist foreign migrant workers to return to their country of origin. However, one anomaly is that law enforcers will be able to arrest foreign migrant workers without a court warrant.
On another front, it should be noted that the Labour Protection Act which was updated also in 2008, does not discriminate between Thais and foreigners in terms of labour rights protection. They all have a right to equal wages. Women and adolescent workers are protected from various types of harmful work. The minimum age of employment is set at 15, while there is protection of those under 18 years of age from certain kinds of dangerous work.
To counter the exploitation and abuse which may affect workers, there are also special laws and policies, such as the law against human trafficking which came into force last year, and the antiprostitution law. The country's new National Health Act also opens the door to covering migrant workers in relation to healthcare access. Yet, in spite of these legislative changes, implementation often leaves much to be desired and there is a considerable gap between law and practice, legislation and enforcement.
For the future, various orientations deserve to be highlighted with particular emphasis on the protection of women migrant workers. At the multilateral level,the WTO should be encouraged to promote a sense of responsiveness to labour standards. This can be done, in part, by requesting states which send in their reports under the Trade Policy Review mechanism to include information on labour rights.
Countries should also sign up to the 1990 Migrant Workers' Convention as well as ILO Conventions, while ensuring that EPZs do not lower labour standards.Various anti-crime treaties such as the Palermo Protocol against human trafficking also voice the need for more global cooperation against transnational crimes.
At the regional level, the Association of Southeast Asian Nations (Asean) itself should underline more effectively the need to protect migrant labour. On a welcome front, recently Asean adopted the Declaration on the Rights of Migrant Workers. Next month, the Asean Intergovernmental Human Rights Commission will also be set up as the overarching body on human rights in Asean. A related issue is to ensure that the Asean FTA is assessed from the angle of its impact on the situation of local and migrant labourers, with relevant remedies.
Likewise, bilateral agreements on migrant labour in Asean need to abide by international labour standards. Various practices such as the caning of labourers and the expulsion of women migrant labourers who wish to marry the residents of the destination country, are unacceptable practices.
With regard to Thailand, the country should accede to the 1990 Migrant Workers' Convention and relevant ILO treaties and implement them well.Undocumented migrant labourers should be assisted to access the remuneration to which they are entitled as part of access to justice.
The new law on the employment of alien workers should also be applied to uphold human rights standards, such as the general principle that arrests should only by undertaken with court warrants. Legal and other measures in the anti-crime field, such as those against human trafficking, should abide by the need for gender sensibility and the protection of victims and witnesses from intimidation.
In effect, a key message from the phenomenon of women migrant workers is that "Justice based on Women's Rights"should be increasingly resonant both locally and globally.
Vitit Muntarbhorn is a Professor of Law at Chulalongkorn University. He has helped the UN in a variety of capacities, including as an expert, consultant and Special Rapporteur. This article is derived from his speech at the National Platform for Women,Bangkok, Sept 17,2009.
LOANS LIKELY TO GROW IN SECOND HALF
Lending by banks would likely pick up in the second half after a Bt212-billion drop in the first seven months of the year, Bank of Thailand (BOT) deputy governor Bandid Nijathaworn said.
The loan market would possibly improve in the second half of the year in keeping with economic recovery, as the export and agricultural sector would expand seaฌsonally in the fourth quarter.
Manufacturers would expand investment to accuฌmulate stock while the govฌernment's spending would help drive demand for loans of the real sector particularly in construction, he said after a quarterly meeting with the Thai Bankers' Association.
"If the economy picks up in the second half, demand for loans will also pick up, especially working capital," said the deputy governor.
He said the improved loan marฌket would be beneficial to the entire economy as well as the real sector, particularly smallandmediumsized enterprises (SMEs), which have seen a sharp decline in lending over the past seven months.
The banking system's loans fell Bt212 billion or 3.68 per cent over the past seven months compared with the end of last year. It was the result of a drop in demand for credit folฌlowing the economic slowdown and commercial banks' tightening of loan approvals.
Bandid said month-on-month lending has contracted at a slower pace, primarily marking the neutral pace in August, which indicated rising demand for loans.
The loans have contracted on a yearonyear basis. Whether they would expand in the rest of the year would depend on how the economy would pick up.
"The economic recovery and improving business confidence would be positive factors for the loan market as liquidity and regulation are not obstacles," he said.
Many banks have projected that the demand for loans would increase largely in the fourth quarter of the year. The demand would be from the export sector as it would benefit from the global economฌic recovery, and from the agricultural sector.
Meanwhile, the central bank has asked the banks to encourage SMEs to join the government's creditinsurance scheme worth Bt30 billion after the government approved to relax rules such as fee reduction.
The central bank has played the role of intermediary between crediฌtors and debtors to expand debt maturity.
It has encouraged banks to provide information, such as domestic and global economic data to SMEs to enable them make business decisions.
"SMEs give importance to the market and industry outlook. If the banks provide information, it will be beneficial to SMEs," said Bandid.
The loan market would possibly improve in the second half of the year in keeping with economic recovery, as the export and agricultural sector would expand seaฌsonally in the fourth quarter.
Manufacturers would expand investment to accuฌmulate stock while the govฌernment's spending would help drive demand for loans of the real sector particularly in construction, he said after a quarterly meeting with the Thai Bankers' Association.
"If the economy picks up in the second half, demand for loans will also pick up, especially working capital," said the deputy governor.
He said the improved loan marฌket would be beneficial to the entire economy as well as the real sector, particularly smallandmediumsized enterprises (SMEs), which have seen a sharp decline in lending over the past seven months.
The banking system's loans fell Bt212 billion or 3.68 per cent over the past seven months compared with the end of last year. It was the result of a drop in demand for credit folฌlowing the economic slowdown and commercial banks' tightening of loan approvals.
Bandid said month-on-month lending has contracted at a slower pace, primarily marking the neutral pace in August, which indicated rising demand for loans.
The loans have contracted on a yearonyear basis. Whether they would expand in the rest of the year would depend on how the economy would pick up.
"The economic recovery and improving business confidence would be positive factors for the loan market as liquidity and regulation are not obstacles," he said.
Many banks have projected that the demand for loans would increase largely in the fourth quarter of the year. The demand would be from the export sector as it would benefit from the global economฌic recovery, and from the agricultural sector.
Meanwhile, the central bank has asked the banks to encourage SMEs to join the government's creditinsurance scheme worth Bt30 billion after the government approved to relax rules such as fee reduction.
The central bank has played the role of intermediary between crediฌtors and debtors to expand debt maturity.
It has encouraged banks to provide information, such as domestic and global economic data to SMEs to enable them make business decisions.
"SMEs give importance to the market and industry outlook. If the banks provide information, it will be beneficial to SMEs," said Bandid.
Thai companies eye Italy's luxury market
Italy's appetite for luxury has continued to grow despite the downturn and offers an opportunity for Thai producers, says Ekkamon Hutasingh, president of the Thai-Italian Chamber of Commerce.
The continuing health of its tourism sector and of global demand for its upscale products has partially cushioned Italy from the slowdown, he said.
Italy's gross domestic product fell 0.5%in the second quarter from the end of March, compared with a 2.7% decline in the first three months of the year.
Mr Ekkamon said Thai products can compete in Italy in sectors such as high-end furniture, which has seen a recent surge in orders.
High-priced teak furniture from Thailand has never entered the Italian market,but the last three months have seen several orders, each of between 2 million and 3 million, he said.The figure is doubling, he added."Those [Thai manufacturers] who sold cheap products were in a price competition. They ended up not being able to survive. But there were 2-3 factories that were manufacturing expensive products who adapted themselves and received an increase in orders," he said.
Very few Thai companies have succeeded in Italy's high-end market and most are original equipment manufacturers but Thais should introduce new designs, said Mr Ekkamon.
Thai products could penetrate Italy's high-end market but they are yet to become widely known, he said.
Guido Traverso Guicciardi, the operator of a marketing consulting firm, suggested that Thailand should create a centre in Milan to promote Thai brands and act as a business negotiating centre.
"The leading concept should be heritage and Thai characteristics. The issue with Asia is that they try to copy European brands," said Mr Guicciardi.
Italian designer Massimo Zucchi who has designed products for brands such as Gucci, Herme's, Swatch and Rolex - agrees with Mr Ekkamon that Thailand could penetrate the Italian market.
"The strength of Thai products is quality.You have high quality and should hold on to this and look for other factors for support as well," he said."Thai products should seek their own uniqueness.... Introducing products into the world market is done through branding, not just developing products."
Wimonkan Kosumas, director of the International Co-operation Office of Small and Medium Enterprises Promotion, said promoting Thai products in Italy would also raise their brand image elsewhere in Europe.
The continuing health of its tourism sector and of global demand for its upscale products has partially cushioned Italy from the slowdown, he said.
Italy's gross domestic product fell 0.5%in the second quarter from the end of March, compared with a 2.7% decline in the first three months of the year.
Mr Ekkamon said Thai products can compete in Italy in sectors such as high-end furniture, which has seen a recent surge in orders.
High-priced teak furniture from Thailand has never entered the Italian market,but the last three months have seen several orders, each of between 2 million and 3 million, he said.The figure is doubling, he added."Those [Thai manufacturers] who sold cheap products were in a price competition. They ended up not being able to survive. But there were 2-3 factories that were manufacturing expensive products who adapted themselves and received an increase in orders," he said.
Very few Thai companies have succeeded in Italy's high-end market and most are original equipment manufacturers but Thais should introduce new designs, said Mr Ekkamon.
Thai products could penetrate Italy's high-end market but they are yet to become widely known, he said.
Guido Traverso Guicciardi, the operator of a marketing consulting firm, suggested that Thailand should create a centre in Milan to promote Thai brands and act as a business negotiating centre.
"The leading concept should be heritage and Thai characteristics. The issue with Asia is that they try to copy European brands," said Mr Guicciardi.
Italian designer Massimo Zucchi who has designed products for brands such as Gucci, Herme's, Swatch and Rolex - agrees with Mr Ekkamon that Thailand could penetrate the Italian market.
"The strength of Thai products is quality.You have high quality and should hold on to this and look for other factors for support as well," he said."Thai products should seek their own uniqueness.... Introducing products into the world market is done through branding, not just developing products."
Wimonkan Kosumas, director of the International Co-operation Office of Small and Medium Enterprises Promotion, said promoting Thai products in Italy would also raise their brand image elsewhere in Europe.
BIDDING TO OPEN FOR WHITE RICE
The Commerce Ministry would soon open bidding for white rice to relieve rising pressure on rice prices and free up warehouse space for the upcoming harvest.
"The ministry will soon call for a meeting with agencies, including the Foreign Trade Department and the Public Warehouse Organisation, to fix the volume and time for the new tender," Commerce Minister Porntiva Nakasai said yesterday.
The government's National Rice Policy Committee recently agreed that it was time to release rice stocks to the market, she said.
The government has about 6 million tonnes of the grain in its inventory, which it tried twice to sell to the market, but the bids were too low.
Paddy rice will not be made available, even though exporters have been clamouring for a supply of unhusked rice, as the procedures for releasing paddy rice is more complicated than for polished rice, she added.
Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said the government must consider disposing of its huge rice stocks, to address the shortage in the domestic and export markets.
"Releasing stocks to rice exporters and domestic packers via bidding would be an efficient way of easing rising prices, particularly domestic prices," he said. The rice should be released in small lots to prevent the rice price from dropping, he said.
Consumers have been forced to shoulder higher retail rice prices because domestic traders and exporters have had to compete to purchase rice from the market.
In the past week, the domestic price for 5-per-cent white rice jumped from Bt1,500 to Bt1,600 per 100-kilogram sack.
Yangyong Phuangrach, director-general of the Internal Trade Department, said his department will soon call an urgent meeting with millers, exporters and agencies to prepare for the kick-off of the rice guarantee project next month.
The department will also discuss issues relating to rice liberalisation under the Asean Free Trade Area.
"Consumers have been forced to shoulder higher retail rice prices because domestic traders and exporters have had to compete to purchase rice"
"The ministry will soon call for a meeting with agencies, including the Foreign Trade Department and the Public Warehouse Organisation, to fix the volume and time for the new tender," Commerce Minister Porntiva Nakasai said yesterday.
The government's National Rice Policy Committee recently agreed that it was time to release rice stocks to the market, she said.
The government has about 6 million tonnes of the grain in its inventory, which it tried twice to sell to the market, but the bids were too low.
Paddy rice will not be made available, even though exporters have been clamouring for a supply of unhusked rice, as the procedures for releasing paddy rice is more complicated than for polished rice, she added.
Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said the government must consider disposing of its huge rice stocks, to address the shortage in the domestic and export markets.
"Releasing stocks to rice exporters and domestic packers via bidding would be an efficient way of easing rising prices, particularly domestic prices," he said. The rice should be released in small lots to prevent the rice price from dropping, he said.
Consumers have been forced to shoulder higher retail rice prices because domestic traders and exporters have had to compete to purchase rice from the market.
In the past week, the domestic price for 5-per-cent white rice jumped from Bt1,500 to Bt1,600 per 100-kilogram sack.
Yangyong Phuangrach, director-general of the Internal Trade Department, said his department will soon call an urgent meeting with millers, exporters and agencies to prepare for the kick-off of the rice guarantee project next month.
The department will also discuss issues relating to rice liberalisation under the Asean Free Trade Area.
"Consumers have been forced to shoulder higher retail rice prices because domestic traders and exporters have had to compete to purchase rice"
ZOELLICK URGES BALANCED GROWTH
World Bank president Robert Zoellick yesterday urged the Group of 20 leaders to set an ambitious agenda of "responsible globalisation" at this week's summit.
Zoellick said the summit should include efforts to promote more balanced growth with financial stability, development and climate change, rather than the narrow focus set at the last G-20 summit in London in April.
"The challenge for the G-20 iss how do you sustain the momentum and cooperation they were able to achieve cooperation they were able to achieve when staring into the abyss at the time of the London summit as the crisis wanes?" Zoellick told the Financial Times.
US President Barack Obama hosts G-20 leaders in Pittsburgh starting Thursday for two days of talks aimed at tightening regulations to ensure that a similar global financial crisis never happens again.
"The core message of Pittsburgh needs to be more than implementing the agenda set in London, which was mostly about financial stability or reforming bankers' bonuses," Zoellick said.
"I would like the G-20 to talk about responsibly globalisation. That would capture balanced global growth, financial stability, climate change, help for the poorest including our proposal for a new facility to help countries cope with economic shocks not of their own making," he added.
Zoellick also warned of rising protectionism and called for a robust G-20 response. "We have a low-grade fever of trade tensions and the temperature is starting to rise," he told the Financial Times. he urged the United States and China to settle their dispute over imports. The United States last week imposed punitive tariffs of 35 per cent on Chinese-made tyre imports - a move that prompted Beijing to lodge a complaint at the World Trade Organisation.
The World Bank last week urged the G-20 nations to step up aid to the poorest countries, saying they lack billions of dollars for critical spending to weather the global economic crisis.
A year after the collapse of Lehman Brothers plunged global finance into chaos, G-20 leaders will try to force banks to build bigger capital safety cushions, while avoiding a clash over bonuses.
Nearly six months have passed since the last G-20 summit in London and the top world economies have since edged closer to agreeing new regulations to prevent or mitigate future bank failures, but some hard bargaining remains.
Bonuses looked likely to be the hot issue, with European capitals seeking to force London and New York to cap the massive payouts they feel encourage excessive risk-taking. But signs of consensus have emerged ahead of the summit Thursday-Friday in the American city of Pittsburgh, with leaders anxious to avoid an embarrassing row on the issue - a highly symbolic one for angry taxpayers.
The US Federal Reserve agreed to tie compensation more closely to risk and to defer payments, while French President Nicolas Sarkozy appears to have stepped back from his earlier demand for mandatory caps.
A deal therefore looks possible on bonuses and checking bankers' enormous salaries, but G-20 chiefs are keen to reach a wider accord on a package of measures to strengthen banks. On the table will be recommendations from the "Basel Committee on Banking Supervision" aimed at drawing lessons from the collapse of Lehman and the crises that hit European groups Fortis and Dexia and Iceland's Kaupthing.
The committee, representing central bankers and regulators from leading G-20 states and other nations, wants banks to simplify their structures to make it easier to wind down their international operations in the event of a crisis.
These "Basel II measures" have been welcomed by European governments, which would now like to see the G-20 as a whole adopt them as the foundations of a new, more stable international financial system.
Washington, however, would like to move past Basel and - within three years - strike a broader deal to increase the amount of capital each bank needs to hold as a back-up in case its liabilities threaten to overwhelm it. US Treasury Secretary Timothy Geithner came to a meeting of G-20 finance ministers in London this month to urge "greater urgency" in making banks increase their capital reserves as a buffer against hard times.
France and Germany, among others, believe Basel II goes for enough, and are resistant to the idea of renegotiating minimum capital levels, fearing that US banks - which thye see as having lax accountancy standards - will benefit.
Part of the US plan would be for banks to hold fewer assets in complex securities, a mixture of debt and equity, and more in liquid assets. Such a rule would hit European banks harder than American ones.
The subject "obsesses the Americans", according to one source involved in the pre-summit negotiations, and some observers predict it will become the main sticking point.
"If the way the rules are applied is such that it puts European institutions at a disadvantage, it won't be acceptable," wanred Thomas Philippon, a French professor at the Stern Business School in New York.
While differences remain on bonuses and bank liquidity, there are other areas on which the G-20 leaders are closer to agreement.
They could approve new rules on leverage, a bank's ratio of capital to liabilities, and the need for so-called "living wills", plans to allow dead banks to continue trading while their partners disentangle their business.
Basel II would also ensure banks make more detailed disclosures of their exposure to complex products such as asset-backed securities, and seek means to discourage them from becoming too big or too complex to be allowed to fail.
Zoellick said the summit should include efforts to promote more balanced growth with financial stability, development and climate change, rather than the narrow focus set at the last G-20 summit in London in April.
"The challenge for the G-20 iss how do you sustain the momentum and cooperation they were able to achieve cooperation they were able to achieve when staring into the abyss at the time of the London summit as the crisis wanes?" Zoellick told the Financial Times.
US President Barack Obama hosts G-20 leaders in Pittsburgh starting Thursday for two days of talks aimed at tightening regulations to ensure that a similar global financial crisis never happens again.
"The core message of Pittsburgh needs to be more than implementing the agenda set in London, which was mostly about financial stability or reforming bankers' bonuses," Zoellick said.
"I would like the G-20 to talk about responsibly globalisation. That would capture balanced global growth, financial stability, climate change, help for the poorest including our proposal for a new facility to help countries cope with economic shocks not of their own making," he added.
Zoellick also warned of rising protectionism and called for a robust G-20 response. "We have a low-grade fever of trade tensions and the temperature is starting to rise," he told the Financial Times. he urged the United States and China to settle their dispute over imports. The United States last week imposed punitive tariffs of 35 per cent on Chinese-made tyre imports - a move that prompted Beijing to lodge a complaint at the World Trade Organisation.
The World Bank last week urged the G-20 nations to step up aid to the poorest countries, saying they lack billions of dollars for critical spending to weather the global economic crisis.
A year after the collapse of Lehman Brothers plunged global finance into chaos, G-20 leaders will try to force banks to build bigger capital safety cushions, while avoiding a clash over bonuses.
Nearly six months have passed since the last G-20 summit in London and the top world economies have since edged closer to agreeing new regulations to prevent or mitigate future bank failures, but some hard bargaining remains.
Bonuses looked likely to be the hot issue, with European capitals seeking to force London and New York to cap the massive payouts they feel encourage excessive risk-taking. But signs of consensus have emerged ahead of the summit Thursday-Friday in the American city of Pittsburgh, with leaders anxious to avoid an embarrassing row on the issue - a highly symbolic one for angry taxpayers.
The US Federal Reserve agreed to tie compensation more closely to risk and to defer payments, while French President Nicolas Sarkozy appears to have stepped back from his earlier demand for mandatory caps.
A deal therefore looks possible on bonuses and checking bankers' enormous salaries, but G-20 chiefs are keen to reach a wider accord on a package of measures to strengthen banks. On the table will be recommendations from the "Basel Committee on Banking Supervision" aimed at drawing lessons from the collapse of Lehman and the crises that hit European groups Fortis and Dexia and Iceland's Kaupthing.
The committee, representing central bankers and regulators from leading G-20 states and other nations, wants banks to simplify their structures to make it easier to wind down their international operations in the event of a crisis.
These "Basel II measures" have been welcomed by European governments, which would now like to see the G-20 as a whole adopt them as the foundations of a new, more stable international financial system.
Washington, however, would like to move past Basel and - within three years - strike a broader deal to increase the amount of capital each bank needs to hold as a back-up in case its liabilities threaten to overwhelm it. US Treasury Secretary Timothy Geithner came to a meeting of G-20 finance ministers in London this month to urge "greater urgency" in making banks increase their capital reserves as a buffer against hard times.
France and Germany, among others, believe Basel II goes for enough, and are resistant to the idea of renegotiating minimum capital levels, fearing that US banks - which thye see as having lax accountancy standards - will benefit.
Part of the US plan would be for banks to hold fewer assets in complex securities, a mixture of debt and equity, and more in liquid assets. Such a rule would hit European banks harder than American ones.
The subject "obsesses the Americans", according to one source involved in the pre-summit negotiations, and some observers predict it will become the main sticking point.
"If the way the rules are applied is such that it puts European institutions at a disadvantage, it won't be acceptable," wanred Thomas Philippon, a French professor at the Stern Business School in New York.
While differences remain on bonuses and bank liquidity, there are other areas on which the G-20 leaders are closer to agreement.
They could approve new rules on leverage, a bank's ratio of capital to liabilities, and the need for so-called "living wills", plans to allow dead banks to continue trading while their partners disentangle their business.
Basel II would also ensure banks make more detailed disclosures of their exposure to complex products such as asset-backed securities, and seek means to discourage them from becoming too big or too complex to be allowed to fail.
Carlyle buys into China's dairy firm
The Carlyle Group said on Sunday that the US private equity giant had bought a minority stake in Yashili to help the leading Chinese infant formula maker improve its research and production.
Washington-based Carlyle obtained a 17.3% stake in Yashili, headquartered in the southern Chinese province of Guangdong, according to an e-mailed statement from Carlyle, which disclosed no further financial details of the deal.
Carlyle's deal came after rivals including Kohlberg Kravis Roberts & Co (KKR), Sequoia Capital and other funds invested more than $1 billion combined in China's domestic dairy industry, which was badly hit by a food safety scandal last year.
The deal signified the growing interest of global private equity funds in China's consumer sector despite the international financial crisis.
More than a dozen Chinese dairy firms including market leader China Mengniu Dairy Co were found to have sold milk containing melamine during last year's tainted milk scandal, putting the Chinese government under pressure as families questioned poor quality controls.
With foreign investors buying stakes in Chinese dairy makers in the past few months, Chinese officials said the domestic dairy industry had shown opportunities for growth again.
"China's dairy industry presents a great opportunity for investment. We are pleased to see a value-adding partnership of this kind that draws on international resources to raise product standards," said Song Kungang, chairman of the China Diary Association, commenting on the Carlyle-Yashili deal.
In August, US venture capital firm Sequoia Capital said it invested $63 million in China-focused American Dairy Inc, a strong and direct competitor of Yashili in China's fast growing baby formula market.
In July, Hopu, a $2.5 billion fund set up by influential China dealmaker Fang Fenglei, teamed up with a domestic firm to buy 20% of Mengniu for $800 million.
In June, KKR said it completed a series of investments in Ma Anshan Modern Farming Co Ltd, a leading dairy company headquartered in central China.
"We see great scope to contribute to China's rapidly growing infant formula industry through this investment," said Patrick Siewert, senior director of Carlyle Asia Partners."The infant formula market in China is undergoing a positive transformation and is set to continue its strong growth trend."
"After the deal, Carlyle will help Yashili hire an industry veteran as chief quality officer for the dairy maker and it also plans to strengthen quality control of dairy production through measures under international standards," Carlyle said in the statement.
In June, Carlyle said it raised $1.04 billion for its fourth Asian growth capital fund, a 46% increase from the previous fund size, to focus on investments in high-growth private companies in China,India and other Asian markets.
Washington-based Carlyle obtained a 17.3% stake in Yashili, headquartered in the southern Chinese province of Guangdong, according to an e-mailed statement from Carlyle, which disclosed no further financial details of the deal.
Carlyle's deal came after rivals including Kohlberg Kravis Roberts & Co (KKR), Sequoia Capital and other funds invested more than $1 billion combined in China's domestic dairy industry, which was badly hit by a food safety scandal last year.
The deal signified the growing interest of global private equity funds in China's consumer sector despite the international financial crisis.
More than a dozen Chinese dairy firms including market leader China Mengniu Dairy Co were found to have sold milk containing melamine during last year's tainted milk scandal, putting the Chinese government under pressure as families questioned poor quality controls.
With foreign investors buying stakes in Chinese dairy makers in the past few months, Chinese officials said the domestic dairy industry had shown opportunities for growth again.
"China's dairy industry presents a great opportunity for investment. We are pleased to see a value-adding partnership of this kind that draws on international resources to raise product standards," said Song Kungang, chairman of the China Diary Association, commenting on the Carlyle-Yashili deal.
In August, US venture capital firm Sequoia Capital said it invested $63 million in China-focused American Dairy Inc, a strong and direct competitor of Yashili in China's fast growing baby formula market.
In July, Hopu, a $2.5 billion fund set up by influential China dealmaker Fang Fenglei, teamed up with a domestic firm to buy 20% of Mengniu for $800 million.
In June, KKR said it completed a series of investments in Ma Anshan Modern Farming Co Ltd, a leading dairy company headquartered in central China.
"We see great scope to contribute to China's rapidly growing infant formula industry through this investment," said Patrick Siewert, senior director of Carlyle Asia Partners."The infant formula market in China is undergoing a positive transformation and is set to continue its strong growth trend."
"After the deal, Carlyle will help Yashili hire an industry veteran as chief quality officer for the dairy maker and it also plans to strengthen quality control of dairy production through measures under international standards," Carlyle said in the statement.
In June, Carlyle said it raised $1.04 billion for its fourth Asian growth capital fund, a 46% increase from the previous fund size, to focus on investments in high-growth private companies in China,India and other Asian markets.
TATA STEEL EXPECTS GROWTH IN DOMESTIC DEMAND AND ACTIVITY
The government's Thai Khemkhaeng (Invest for Strength) stimulus package has given steelmakers hope in a gloomy scenario, even encouraging major manufacturer Tata Steel (Thailand) to sell only in the domestic market next year.
Tata Steel president Santi Chankolrawee said the company will next year sell its steel only in the local market thanks to the stimulus plan, which will increase demand for steel in the country.
"The economic stimulus package of the government has boosted the confidence of steelmakers," he said.
He said steel manufacturers are banking on the Thai Khemkhaeng project, especially the water resource development, which is part of the package.
Most of Tata Steel's revenue comes from the domestic market, accounting for about 90 per cent and the rest from exports, he said. The company prefers domestic sales to exports because of higher margin. However, the country's economic slowdown had forced the company to diversify risk by exporting to overseas markets.
He said the steel industry in Thailand is expected to recover soon, which is reflected in the stable price of steel compared with the plunging price in 2008 after the financial crisis fully hit the global economy.
He said steel used to record its highest price at Bt36,000 per tonne before the global economy was hit by the financial crisis, after which it dropped steeply to Bt15,000 to Bt16,000. All steelmakers suffered inventory losses.
"However, the steel price currently is Bt20,000 per tonnes. We expect this trend for the next one to two years," he said.
The company expressed confidence in its revenue for fiscal year April 2009 to March 2010, with expectations of a net profit even though it recorded a net loss of Bt167.89 million in its first quarter ended June 2009.
Tata Steel (Thailand) predicts revenue for the fiscal year 2009 will reach Bt20 billion. Santi said the expected revenue was reflected by the increased capacity utilisation to 80 per cent, or 100,000 tonnes, a month from 60 per cent early. The figure is expected to reach 90 per cent, or 120,000 tonnes, a month, he added.
Although things are looking up for the steel industry, the company still has concerns about the price war among manufacturers due to oversupply.
Its parent company - Tata Steel Group - has set a policy that the operation in Thailand should not lose money this year.
Tata Steel Thailand is the market leader with a 30-per-cent share.
Santi said the company would resume its investment plan once the world economy recovers. It has cash flow of Bt3 billion, while its debt-to-equity ratio is 0.5 times. Because of its strong financial standing, it believes banks are willing to lend for the future investment.
Tata Steel president Santi Chankolrawee said the company will next year sell its steel only in the local market thanks to the stimulus plan, which will increase demand for steel in the country.
"The economic stimulus package of the government has boosted the confidence of steelmakers," he said.
He said steel manufacturers are banking on the Thai Khemkhaeng project, especially the water resource development, which is part of the package.
Most of Tata Steel's revenue comes from the domestic market, accounting for about 90 per cent and the rest from exports, he said. The company prefers domestic sales to exports because of higher margin. However, the country's economic slowdown had forced the company to diversify risk by exporting to overseas markets.
He said the steel industry in Thailand is expected to recover soon, which is reflected in the stable price of steel compared with the plunging price in 2008 after the financial crisis fully hit the global economy.
He said steel used to record its highest price at Bt36,000 per tonne before the global economy was hit by the financial crisis, after which it dropped steeply to Bt15,000 to Bt16,000. All steelmakers suffered inventory losses.
"However, the steel price currently is Bt20,000 per tonnes. We expect this trend for the next one to two years," he said.
The company expressed confidence in its revenue for fiscal year April 2009 to March 2010, with expectations of a net profit even though it recorded a net loss of Bt167.89 million in its first quarter ended June 2009.
Tata Steel (Thailand) predicts revenue for the fiscal year 2009 will reach Bt20 billion. Santi said the expected revenue was reflected by the increased capacity utilisation to 80 per cent, or 100,000 tonnes, a month from 60 per cent early. The figure is expected to reach 90 per cent, or 120,000 tonnes, a month, he added.
Although things are looking up for the steel industry, the company still has concerns about the price war among manufacturers due to oversupply.
Its parent company - Tata Steel Group - has set a policy that the operation in Thailand should not lose money this year.
Tata Steel Thailand is the market leader with a 30-per-cent share.
Santi said the company would resume its investment plan once the world economy recovers. It has cash flow of Bt3 billion, while its debt-to-equity ratio is 0.5 times. Because of its strong financial standing, it believes banks are willing to lend for the future investment.
SCG UPBEAT ON CONSUMPTION SURGE
Thailand's cement consumption is poised to see a slight positive growth in the second half of this year, driven by the government's stimulus package through infrastructure projects.
"This has helped restore the private sector's confidence," said the country's leading cement-maker, SCG Cement.
This is the first sign of growth for the industry in three years since the country was hit by political unrest and the global financial meltdown.
"Demand for cement has improved step by step. We saw it drop by 10 per cent and 4 per cent respectively in the first two quarters, and we believe that it would show a small growth in the second half of this year," said SCG Cement's president, Pramote Techasupatkul.
However, total cement consumption in 2009 is estimated to be around 24 million tonnes, slightly dropping from nearly 25 million tonnes last year.
He said SCG planned to sell 17 million tonnes of cement this year, 9 million on the domestic market and the rest through exports. He said it has focused on boosting its exports to South Africa, the Middle East, and Asean.
Meanwhile, the company yesterday launched "Elephant Marine Cement", a special formula of cement blending with slag that has double the strength of Portland cement. The new product will serve construction projects such as hotels and resorts near the sea or constructions in brackish water areas.
Pramote said SCG planned to achieve the sales of Bt100 million in the first year after this new product enters the market.
Presently, SCG Cement generates 12-13 per cent of sales revenue from high-value products, which would account for 20 per cent in the next five years.
"We allocated the budget of Bt180 million this year for R&D programme to develop eco-friendly products, confirming our continuous commitment to environment preservation. The budget would be increased to Bt200 million in the coming year," he said.
SCG Cement has invested Bt5.8 billion to create the Waste Heat Generator system, which will be completely installed in all cement plants by this year end. This project will not only save energy cost in the production process but also reduce emission of 300,000 tonnes of greenhouse gases per year.
"This has helped restore the private sector's confidence," said the country's leading cement-maker, SCG Cement.
This is the first sign of growth for the industry in three years since the country was hit by political unrest and the global financial meltdown.
"Demand for cement has improved step by step. We saw it drop by 10 per cent and 4 per cent respectively in the first two quarters, and we believe that it would show a small growth in the second half of this year," said SCG Cement's president, Pramote Techasupatkul.
However, total cement consumption in 2009 is estimated to be around 24 million tonnes, slightly dropping from nearly 25 million tonnes last year.
He said SCG planned to sell 17 million tonnes of cement this year, 9 million on the domestic market and the rest through exports. He said it has focused on boosting its exports to South Africa, the Middle East, and Asean.
Meanwhile, the company yesterday launched "Elephant Marine Cement", a special formula of cement blending with slag that has double the strength of Portland cement. The new product will serve construction projects such as hotels and resorts near the sea or constructions in brackish water areas.
Pramote said SCG planned to achieve the sales of Bt100 million in the first year after this new product enters the market.
Presently, SCG Cement generates 12-13 per cent of sales revenue from high-value products, which would account for 20 per cent in the next five years.
"We allocated the budget of Bt180 million this year for R&D programme to develop eco-friendly products, confirming our continuous commitment to environment preservation. The budget would be increased to Bt200 million in the coming year," he said.
SCG Cement has invested Bt5.8 billion to create the Waste Heat Generator system, which will be completely installed in all cement plants by this year end. This project will not only save energy cost in the production process but also reduce emission of 300,000 tonnes of greenhouse gases per year.
CHANGES WILL DETER INVESTORS, JETRO WARNS
Japanese investors would shift their investment to other attractive countries if the Thai government amends the heavy industrial development plan, the head of the Japan External Trade Organisation (Jetro) in Bangkok, said.
Jetro president Munenori Yamada said Japanese investors, particularly steelmakers, will consider other potential countries for their investment instead of Thailand.
Last week, the government ordered the National Economic and Social and Development Board to revise the Kingdom's industrial development master plan, to clarify its long-term direction, concerning the Southern Seaboard.
The possibility of revision has created doubts among foreign investors.
Two giant steelmakers from Japan - Nippon Steel and JFE - have shown strong interest to invest in the Kingdom.
Yamada suggested that under the revision plan, Thailand should shift its focus to value-added or knowledge-based development to compete with other countries, particularly those in the neighbourhood.
The revised industrial development plan should be based on high technology sophisticated to serve as integrated industrial base for large companies, he added.
Santi Vilassakdanont, chairman of the Federation of Thai Industries, said that investors have been worried about the unstable policies of the government. The government must have clear measures for promoting industrial development so that foreign investors can decide whether they would want to invest in the Kingdom.
To ensure that the government's industrial development policy is not changed by each cabinet, the development plan should be approved by Parliament for long-term implementation, Santi said.
In addition, he said the industrial development plans in many areas such as the Southern Seaboard, the Eastern Seaboard, and the Northeast are still needed for the long-term development. The industrial sector is one of the key sectors, employing a million workers in the country.
Jetro president Munenori Yamada said Japanese investors, particularly steelmakers, will consider other potential countries for their investment instead of Thailand.
Last week, the government ordered the National Economic and Social and Development Board to revise the Kingdom's industrial development master plan, to clarify its long-term direction, concerning the Southern Seaboard.
The possibility of revision has created doubts among foreign investors.
Two giant steelmakers from Japan - Nippon Steel and JFE - have shown strong interest to invest in the Kingdom.
Yamada suggested that under the revision plan, Thailand should shift its focus to value-added or knowledge-based development to compete with other countries, particularly those in the neighbourhood.
The revised industrial development plan should be based on high technology sophisticated to serve as integrated industrial base for large companies, he added.
Santi Vilassakdanont, chairman of the Federation of Thai Industries, said that investors have been worried about the unstable policies of the government. The government must have clear measures for promoting industrial development so that foreign investors can decide whether they would want to invest in the Kingdom.
To ensure that the government's industrial development policy is not changed by each cabinet, the development plan should be approved by Parliament for long-term implementation, Santi said.
In addition, he said the industrial development plans in many areas such as the Southern Seaboard, the Eastern Seaboard, and the Northeast are still needed for the long-term development. The industrial sector is one of the key sectors, employing a million workers in the country.
KINGDOM SEES BT11.4 BILLION IN FDI FROM 5 PARTNERS
Thailand gained Bt11.4 billion in foreign direct investment from Australia, New Zealand, India, China and Japan thanks to free-trade agreements.
Due to the global economic slump, combined FDI under Thailand's investment-promotion privileges from those five countries was Bt11.4 billion in the first half of the year, down 25.39 per cent from Bt15.28 billion in the same period last year.
In addition, the number of projects was slashed 40.7 per cent to 64 projects in the same period.
The Commerce Ministry today will submit for the Cabinet's acknowledgement the Kingdom's export and import value with those five trading partners under FTAs.
A Government House source said officials should step forward with trade talks to extend market liberalisation. For instance, FTAs that Thailand signed with Australia and New Zealand should be aimed at opening the market more to services, competition and government procurement and revising measures for sensitive products.
In addition, the Thailand-India FTA should concentrate on extending cooperation on the trade in services and investment, plus tariff elimination for remaining goods. So far, the two countries have signed an FTA focused on the early-harvest programme, covering 82 items for tariff reduction.
The source said China preferred to hold trade talks with Asean as a whole rather than bilateral talks with each member. As a result, Asean should focus more on opening more market trade in services and the revision of trade in goods.
The Japan Thailand Economic Partnership Agreement should place greater consideration on import restrictions and other import barriers and open up more to service and human-resource exports.
The Kingdom's total export value to those five countries jumped 33.5 per cent to US$6.02 billion (Bt203 billion) in the first half of the year, while import value increased 8.4 per cent to $1.61 billion.
The source said Thailand was gradually obtaining benefits from those trading partners, as tariffs in some countries gradually declined. However, the FTA's low tariffs will boost investment, particularly from Japan, and see a shift of some heavy industries, such as autos, electrical appliances, electronics, steel and steel products, to Thailand.
Due to the global economic slump, combined FDI under Thailand's investment-promotion privileges from those five countries was Bt11.4 billion in the first half of the year, down 25.39 per cent from Bt15.28 billion in the same period last year.
In addition, the number of projects was slashed 40.7 per cent to 64 projects in the same period.
The Commerce Ministry today will submit for the Cabinet's acknowledgement the Kingdom's export and import value with those five trading partners under FTAs.
A Government House source said officials should step forward with trade talks to extend market liberalisation. For instance, FTAs that Thailand signed with Australia and New Zealand should be aimed at opening the market more to services, competition and government procurement and revising measures for sensitive products.
In addition, the Thailand-India FTA should concentrate on extending cooperation on the trade in services and investment, plus tariff elimination for remaining goods. So far, the two countries have signed an FTA focused on the early-harvest programme, covering 82 items for tariff reduction.
The source said China preferred to hold trade talks with Asean as a whole rather than bilateral talks with each member. As a result, Asean should focus more on opening more market trade in services and the revision of trade in goods.
The Japan Thailand Economic Partnership Agreement should place greater consideration on import restrictions and other import barriers and open up more to service and human-resource exports.
The Kingdom's total export value to those five countries jumped 33.5 per cent to US$6.02 billion (Bt203 billion) in the first half of the year, while import value increased 8.4 per cent to $1.61 billion.
The source said Thailand was gradually obtaining benefits from those trading partners, as tariffs in some countries gradually declined. However, the FTA's low tariffs will boost investment, particularly from Japan, and see a shift of some heavy industries, such as autos, electrical appliances, electronics, steel and steel products, to Thailand.
Financial aid sought for firms investing abroad
Business operators are calling for the establishment of an investment fund or credit guarantee system to help local operators seeking overseas business opportunities.
In a seminar organised by the Board of Investment (BoI), Vallop Vitanakorn,deputy secretary-general of the Federation of Thai Industries (FTI) said financial tools were the main concern.
"If the BoI cannot offer tax incentives,the Finance Ministry should consider other incentives such as venture capital to promote overseas investment or a credit guarantee scheme to promote loan accessibility," he said.
Mr Vallop, who is in the textile busi-ness, said more local textile manufacturers were likely to relocate to countries such as Burma or Bangladesh to use their abundant cheap labour.
He said labour-intensive industries in Thailand were likely to face worker shortages in five years. Other industries will invest overseas to expand their markets or gain access to resources.
The government should also consider revamping its double-taxation rules.
"It should study incentives offered by other countries such as Singapore or Malaysia that have higher investment value overseas than us," he said.
Data from the United Nations Conference on Trade and Development (Unctad) reveal that Thailand invests only 2.9% of its GDP overseas, compared with 92.7% and 31.2% respectively for Singapore and Malaysia.
Somsak Rinruengsin, president of a Thai business association in Cambodia,said a separate body to oversee overseas investment may be needed if the government wants to promote such activity.
Atchaka Brimble, the BoI secretarygeneral, said the prime minister had asked the BoI to study incentives and draft policies to promote local businesses that invest overseas.
"We do not have any body that oversees this issue in particular but the government realises that local operators need support," she said."The first subcommittee on this will meet next month to discuss what should be formed."
She admits Thailand is behind many countries in promoting overseas investment.
asana Mututanont, executive director of the BoI's International Affairs bureau,said the sub-committee on overseas investment promotion would study incentives offered by China and Singapore, two countries that successfully support their business sector investing abroad.
In a seminar organised by the Board of Investment (BoI), Vallop Vitanakorn,deputy secretary-general of the Federation of Thai Industries (FTI) said financial tools were the main concern.
"If the BoI cannot offer tax incentives,the Finance Ministry should consider other incentives such as venture capital to promote overseas investment or a credit guarantee scheme to promote loan accessibility," he said.
Mr Vallop, who is in the textile busi-ness, said more local textile manufacturers were likely to relocate to countries such as Burma or Bangladesh to use their abundant cheap labour.
He said labour-intensive industries in Thailand were likely to face worker shortages in five years. Other industries will invest overseas to expand their markets or gain access to resources.
The government should also consider revamping its double-taxation rules.
"It should study incentives offered by other countries such as Singapore or Malaysia that have higher investment value overseas than us," he said.
Data from the United Nations Conference on Trade and Development (Unctad) reveal that Thailand invests only 2.9% of its GDP overseas, compared with 92.7% and 31.2% respectively for Singapore and Malaysia.
Somsak Rinruengsin, president of a Thai business association in Cambodia,said a separate body to oversee overseas investment may be needed if the government wants to promote such activity.
Atchaka Brimble, the BoI secretarygeneral, said the prime minister had asked the BoI to study incentives and draft policies to promote local businesses that invest overseas.
"We do not have any body that oversees this issue in particular but the government realises that local operators need support," she said."The first subcommittee on this will meet next month to discuss what should be formed."
She admits Thailand is behind many countries in promoting overseas investment.
asana Mututanont, executive director of the BoI's International Affairs bureau,said the sub-committee on overseas investment promotion would study incentives offered by China and Singapore, two countries that successfully support their business sector investing abroad.
G20 sees progress, more to do
Six months after their last crisis summit, the leaders of the world's major economies can at least point to progress in their battle to prevent wealthy taxdodgers spiriting money away to tax havens.
While still far apart in many areas of financial regulation, the G20 group will meet this week in Pittsburgh after successfully convincing some formerly secretive jurisdictions to share information on offshore accounts.
"The world has completely changed,"said Alain Maillot, a French tax lawyer,perhaps overstating the case, but reflecting the mood in a sector surprised by the speed of recent reforms in once stubborn financial centres.
The last time the G20 met, in April in London, the leaders agreed to block the "black holes" in the financial system,arguing that the ease with which some market players hide their profits contributes to instability.
New lists of "non-cooperative"countries were published, sanctions were threatened and several places - including large financial centres such as Belgium and Luxembourg - did what was needed to get off the "grey list".
Top tier banking destinations like Switzerland and Singapore are now also working to put themselves in the clear,further narrowing the number of places that firms and individuals can go to hide their cash from the tax man.
"Sometimes decisions taken by leaders are not followed up in practice, but in this case the results have been fairly extraordinary," Pascal Saint-Amans of the Organisation for Economic Cooperation and Development (OECD)said.
If countries want to stay off OECD black and grey lists of tax havens, they can no longer hide behind their own banking secrecy laws in order to deny tax investigators access to account records.
This principle has already partly lifted the veil on Switzerland's banks: The United States has managed to get the names of 4,450 of its citizens with deposits in UBS and France boasts of having tracked down 3,000.
So will the leaders meeting this week in Pittsburgh be able to claim that the era of banking secrecy is over? Not quite, analysts warn.
While many jurisdictions have signalled their willingness to cooperate with specific inquiries, systems for the automatic exchange of information between national authorities have yet to be put in place.
Investigators seeking information on citizens' accounts abroad still have to provide prima facie evidence of tax evasion in individual cases. Switzerland, for example, insists on knowing the name of the bank involved.
"The tax information exchange agreements are not very effective," said Richard Murphy of Tax Research, a British accountancy firm that advises governments, charities and groups.
"We want to know data will really be exchanged... and we must be sure that automatic information exchange is created to provide the data that is the 'smoking gun' to make these agreements work."
Global automatic systems to share account information would make it harder to evade tax or launder illgotten gains, even if national tax officials don't have enough evidence to launch a legal bid for information.
"Information exchange only after a request leaves too much leeway to tax havens," said Maylis Labusquiere,of the development charity Oxfam,which will lobby the G20 for a tougher crackdown.
Campaigners accuse some jurisdictions of paying lip service to the new rules while seeking ways around them.
For example, governments are supposed to demonstrate good intent by signing bilateral information sharing deals with at least 12 others.Monaco has done so, but seven of its 12 partners are fellow tax havens.
To oversee the campaign, 30 countries have come together to form a task force to identify noncooperative tax havens and punish them. The head of the group, France's chief offshore tax hunter Francois d'Aubert, says he hopes the G20 summit will confirm that backsliders could face sanctions from as early as March next year."It's a question of credibility," he said.
Others, including Raymond Baker of Global Financial Integrity Program,a US-based pressure group, would like governments to turn the screws on multinational firms that hold accounts in offshore centres.
While still far apart in many areas of financial regulation, the G20 group will meet this week in Pittsburgh after successfully convincing some formerly secretive jurisdictions to share information on offshore accounts.
"The world has completely changed,"said Alain Maillot, a French tax lawyer,perhaps overstating the case, but reflecting the mood in a sector surprised by the speed of recent reforms in once stubborn financial centres.
The last time the G20 met, in April in London, the leaders agreed to block the "black holes" in the financial system,arguing that the ease with which some market players hide their profits contributes to instability.
New lists of "non-cooperative"countries were published, sanctions were threatened and several places - including large financial centres such as Belgium and Luxembourg - did what was needed to get off the "grey list".
Top tier banking destinations like Switzerland and Singapore are now also working to put themselves in the clear,further narrowing the number of places that firms and individuals can go to hide their cash from the tax man.
"Sometimes decisions taken by leaders are not followed up in practice, but in this case the results have been fairly extraordinary," Pascal Saint-Amans of the Organisation for Economic Cooperation and Development (OECD)said.
If countries want to stay off OECD black and grey lists of tax havens, they can no longer hide behind their own banking secrecy laws in order to deny tax investigators access to account records.
This principle has already partly lifted the veil on Switzerland's banks: The United States has managed to get the names of 4,450 of its citizens with deposits in UBS and France boasts of having tracked down 3,000.
So will the leaders meeting this week in Pittsburgh be able to claim that the era of banking secrecy is over? Not quite, analysts warn.
While many jurisdictions have signalled their willingness to cooperate with specific inquiries, systems for the automatic exchange of information between national authorities have yet to be put in place.
Investigators seeking information on citizens' accounts abroad still have to provide prima facie evidence of tax evasion in individual cases. Switzerland, for example, insists on knowing the name of the bank involved.
"The tax information exchange agreements are not very effective," said Richard Murphy of Tax Research, a British accountancy firm that advises governments, charities and groups.
"We want to know data will really be exchanged... and we must be sure that automatic information exchange is created to provide the data that is the 'smoking gun' to make these agreements work."
Global automatic systems to share account information would make it harder to evade tax or launder illgotten gains, even if national tax officials don't have enough evidence to launch a legal bid for information.
"Information exchange only after a request leaves too much leeway to tax havens," said Maylis Labusquiere,of the development charity Oxfam,which will lobby the G20 for a tougher crackdown.
Campaigners accuse some jurisdictions of paying lip service to the new rules while seeking ways around them.
For example, governments are supposed to demonstrate good intent by signing bilateral information sharing deals with at least 12 others.Monaco has done so, but seven of its 12 partners are fellow tax havens.
To oversee the campaign, 30 countries have come together to form a task force to identify noncooperative tax havens and punish them. The head of the group, France's chief offshore tax hunter Francois d'Aubert, says he hopes the G20 summit will confirm that backsliders could face sanctions from as early as March next year."It's a question of credibility," he said.
Others, including Raymond Baker of Global Financial Integrity Program,a US-based pressure group, would like governments to turn the screws on multinational firms that hold accounts in offshore centres.
Trade tsars to declare assets
The three members of Thailand's Trade Representative are among state officials required to declare their assets after taking office under a new ruling from the National Anti-Corruption Commission.
NACC member Somluck Jadkrabuanpol said the requirement came into effect on Sept 17, when the regulation was published in the Royal Gazette .She said the law allowed the NACC to determine which state officials were subject to the asset declaration requirement.
The NACC decided that as Thailand's Trade Representative was an important post and involved protection of the public interest, the members should be required to declare their assets on taking office as well as leaving.
The three serving TTR members are Kiat Sittheeamorn, the team leader,Suthad Setboonsarng and Vachara Phanchet.
The office, which can negotiate trade deals with overseas governments, was created by the Thaksin Shinawatra government to increase international trade and improve coordination between ministries on trade matters.
NACC member Somluck Jadkrabuanpol said the requirement came into effect on Sept 17, when the regulation was published in the Royal Gazette .She said the law allowed the NACC to determine which state officials were subject to the asset declaration requirement.
The NACC decided that as Thailand's Trade Representative was an important post and involved protection of the public interest, the members should be required to declare their assets on taking office as well as leaving.
The three serving TTR members are Kiat Sittheeamorn, the team leader,Suthad Setboonsarng and Vachara Phanchet.
The office, which can negotiate trade deals with overseas governments, was created by the Thaksin Shinawatra government to increase international trade and improve coordination between ministries on trade matters.
THAILAND MUST "TRY TO CAPITALISE" ON JAPAN'S ASIA FOCUS
Thailand needs to present a better investment story to take advantage of the new Japanese government's focus on Asean and emerging Asian countries like India and China in a bid to reduce the country's economic dependence on the United States, the Board of Investment said last week.
"I believe Japan will not leave Thailand where it has already invested heavily. But it is necessary for Thailand to develop the workforce's skills and promote upstream industries to serve the future trend of ecological and high-valued production," said Chokedee Kaewsang, the BoI's economic and investment adviser.
Since the Democratic Party of Japan (DPJ) defeated the Liberal Democratic Party in the general election last month, the world has been watching its policies to cope with the economic slowdown.
"Even though the economic policies of the two parties are not much different, I think the DPJ will give more priority to balancing its economic dependence on the United States and other countries particularly in Asia where the economy keeps up constant growth," he said.
About 70 per cent of Japan's economy has been tied to the US.
It can be clearly seen that Asia, particularly India and China, are recovering from the economic crisis sooner than other parts of the world.
However, Japan will not move all its investment to those two countries because of counterfeiting problems in China and poor infrastructure in India.
Foreign direct investment (FDI) by Japan plunged 60 per cent this year, but Japanese investment in Thailand declined only 30 per cent, less than the drop of FDI from other countries, he said. According to the BoI's statistics, total applications for investment privileges submitted by Japan in the first eight months were worth Bt33.3 billion, down 35.8 per cent from the same period last year.
The political instability here had shaken the confidence of Japanese investors, but it was not so serious that they would allocate their investment to other countries, he said.
"Both Japan and Thailand have similar politics. Most Japanese investors understand what is going on in Thailand. Instead, they pay more attention to the country's free trade policies. But the political unrest definitely concerns the newcomers," he said. "Japanese firms show strong interest in the free trade agreement between Thailand and India.
Auto-makers, for example, would like to use Thailand as their base to penetrate India's market as well as to outsource parts to reduce costs and serve markets with high potential to grow," he said.
Suzuki, one of Japan's leading small vehicle makers, became the largest carmaker in India after it decided to establish plants there.
During Industry Minister Charnchai Chairungruang's visit to Japan this month, it was obvious that Japanese auto-makers were moving forward to develop "green" technologies, for example, Toyota's hybrid vehicles, Mitsubishi's electric vehicles and Nissan's eco cars produced in Thailand.
Santi Leelawong, a BOI director and investment consul, said more Japanese firms are keen to invest in the service as well as environmental business, such as water management.
About 90 per cent of Japanese businesses here are SMEs, so the government will provide financial assistance directly to them and also promote activities to boost their competitiveness, he said.
"I believe Japan will not leave Thailand where it has already invested heavily. But it is necessary for Thailand to develop the workforce's skills and promote upstream industries to serve the future trend of ecological and high-valued production," said Chokedee Kaewsang, the BoI's economic and investment adviser.
Since the Democratic Party of Japan (DPJ) defeated the Liberal Democratic Party in the general election last month, the world has been watching its policies to cope with the economic slowdown.
"Even though the economic policies of the two parties are not much different, I think the DPJ will give more priority to balancing its economic dependence on the United States and other countries particularly in Asia where the economy keeps up constant growth," he said.
About 70 per cent of Japan's economy has been tied to the US.
It can be clearly seen that Asia, particularly India and China, are recovering from the economic crisis sooner than other parts of the world.
However, Japan will not move all its investment to those two countries because of counterfeiting problems in China and poor infrastructure in India.
Foreign direct investment (FDI) by Japan plunged 60 per cent this year, but Japanese investment in Thailand declined only 30 per cent, less than the drop of FDI from other countries, he said. According to the BoI's statistics, total applications for investment privileges submitted by Japan in the first eight months were worth Bt33.3 billion, down 35.8 per cent from the same period last year.
The political instability here had shaken the confidence of Japanese investors, but it was not so serious that they would allocate their investment to other countries, he said.
"Both Japan and Thailand have similar politics. Most Japanese investors understand what is going on in Thailand. Instead, they pay more attention to the country's free trade policies. But the political unrest definitely concerns the newcomers," he said. "Japanese firms show strong interest in the free trade agreement between Thailand and India.
Auto-makers, for example, would like to use Thailand as their base to penetrate India's market as well as to outsource parts to reduce costs and serve markets with high potential to grow," he said.
Suzuki, one of Japan's leading small vehicle makers, became the largest carmaker in India after it decided to establish plants there.
During Industry Minister Charnchai Chairungruang's visit to Japan this month, it was obvious that Japanese auto-makers were moving forward to develop "green" technologies, for example, Toyota's hybrid vehicles, Mitsubishi's electric vehicles and Nissan's eco cars produced in Thailand.
Santi Leelawong, a BOI director and investment consul, said more Japanese firms are keen to invest in the service as well as environmental business, such as water management.
About 90 per cent of Japanese businesses here are SMEs, so the government will provide financial assistance directly to them and also promote activities to boost their competitiveness, he said.
Sunday, September 20, 2009
CHINA'S ECONOMY IS BACK, WHILE THE US STILL FLAILS
Only eight months ago, thousands of Chinese workers rioted outside factories closed by the global economic downturn. Now many of those plants have been reopened and are hiring again. Some executives are even struggling to find enough temporary staff to meet Christmas orders.
The image of laid-off Chinese workers returning to jobs is in sharp contrast to the US, where even as the economy shows signs of improvement, the unemployment rate continues to march toward double digits.
The Chinese government says unemployment is falling, and even the hardest-hit factories - those depending on exports to the US and Europe - are starting to rehire workers. No one is talking about a jobless recovery.
Even the property market is picking up.For instance, in the industrial town of Wuxi,145km from Shanghai, prospective investors queued on one recent Saturday to buy apartments in the still-unfinished Rose Avenue complex. Many of them slept outside the sales office all night.
"The whole country's economy is back on track," said Shi Yingyi, a 34-year-old housewife who joined the throng."I feel more confident now."
The confidence stems from China's threepronged effort - a combination of stimulus,liberal bank lending and broad government support for exports.
The Chinese central bank said the country's economy surged at an annual-equivalent rate of 14.9% in the second quarter. The US economy shrank at an annual rate of 1% in the same period.
"So often China and the US are mixed together as being in the same situation, and that is totally wrong," said Xu Xiaonian, an economist in Beijing with the China Europe International Business School.
That does not mean the two nations are not connected, of course. China's rebound in growth may slow if the US economy does not pick up. China needs the US to buy its goods, and the US needs China to continue to buy its debt.
This mutual dependence makes it harder for either country to let the current dispute over Chinese tyres and US chicken and car parts to grow into a trade war.
China has been able to disburse its stimulus much faster, turning it into new railways and roads.
China's Finance Ministry announced in late June that half the US$173 billion in central government spending had already been allocated to specific projects.
The White House said in early July that a quarter of the spending authority and tax cuts in its $789 billion stimulus package had been allocated or used.
But even more of an impetus to China's recovery, economists say, are two other government efforts that are paying big dividends - looser bank lending and government support for exports.
The state-controlled banking system in China - which breezed through the global financial crisis with minimal losses as US financial institutions reeled - unleashed $1.2 trillion in extra lending to Chinese consumers and businesses in the first seven months of this year.
That money is financing everything from a boom in car sales, up 82% in August from
a year earlier, to frenzied factory building.
Beijing also has given huge tax breaks and other assistance to exporters. They include placing broad restrictions on imports and intervening heavily in currency markets to hold down the value of the currency to keep Chinese exports competitive, even in a weakened global economy.
Indeed, subsidies abound at all levels of government. The Wuxi municipal government just offered up to 100,000 yuan (4.95 million baht) to each local business that increases exports in the last three months of this year.
Still, while China's recovery seems well under way, not all the laid-off throughout China have been hired back.
"Some plants reduced worker numbers by 20% to 30%, now they hire back 10%,"said Stanley Lau, deputy chairman of the Federation of Hong Kong Industries, which represents export-oriented factories employing 10 million Chinese workers.
Even so, US trade data shows that imports from China only eroded 14.2% in the first seven months of this year while imports from the rest of the world plunged 32.6%. China's trade surplus, already the world's largest,was $108 billion for the first seven months of this year.
"We definitely see an upswing in sales orders in the second half of this year when compared to the first half," said Gu Fung,the sales manager at the Wuxi Baolai Batteries Company.
China's well-capitalised banking system allowed for rapid investment.
Chinese banks came into the crisis with enormous excess reserves, the result of three years of tight regulatory limits on lending to prevent the economy from overheating. When those limits were removed, and authorities urged bank executives to lend, the total value of loans outstanding shot up more in the first seven months of this year than in the previous 24 months.
By contrast, total loans and leases outstanding at financial institutions insured by the Federal Deposit Insurance Corporation actually fell $249 billion, or 3.2%, in the first half of this year.
Though Washington has used taxpayer money to bail out US banks, it does not have Beijing's power to force banks to lend that money to businesses and consumers.
As much as a third of the extra bank lending in China appears to have gone into real estate and stock market speculation. But the bulk has gone into investments by companies and local governments, with tangible results.
China's currency and trade policies, though highly effective, would be hard for the US to emulate.
For instance, government intervention in currency markets has prevented the yuan from moving appreciably against the dollar in more than 14 months, and has pushed the yuan down by 18% against the euro since March.
Government agencies have been told not to buy imported goods with money from economic stimulus programmes unless no domestic alternative is available.
Washington has imposed a less restrictive rule, misleadingly known as "Buy American",that says building materials for the stimulus programme must be bought from any of the 39 countries that have agreed to free trade in government procurement - which China has not.
The image of laid-off Chinese workers returning to jobs is in sharp contrast to the US, where even as the economy shows signs of improvement, the unemployment rate continues to march toward double digits.
The Chinese government says unemployment is falling, and even the hardest-hit factories - those depending on exports to the US and Europe - are starting to rehire workers. No one is talking about a jobless recovery.
Even the property market is picking up.For instance, in the industrial town of Wuxi,145km from Shanghai, prospective investors queued on one recent Saturday to buy apartments in the still-unfinished Rose Avenue complex. Many of them slept outside the sales office all night.
"The whole country's economy is back on track," said Shi Yingyi, a 34-year-old housewife who joined the throng."I feel more confident now."
The confidence stems from China's threepronged effort - a combination of stimulus,liberal bank lending and broad government support for exports.
The Chinese central bank said the country's economy surged at an annual-equivalent rate of 14.9% in the second quarter. The US economy shrank at an annual rate of 1% in the same period.
"So often China and the US are mixed together as being in the same situation, and that is totally wrong," said Xu Xiaonian, an economist in Beijing with the China Europe International Business School.
That does not mean the two nations are not connected, of course. China's rebound in growth may slow if the US economy does not pick up. China needs the US to buy its goods, and the US needs China to continue to buy its debt.
This mutual dependence makes it harder for either country to let the current dispute over Chinese tyres and US chicken and car parts to grow into a trade war.
China has been able to disburse its stimulus much faster, turning it into new railways and roads.
China's Finance Ministry announced in late June that half the US$173 billion in central government spending had already been allocated to specific projects.
The White House said in early July that a quarter of the spending authority and tax cuts in its $789 billion stimulus package had been allocated or used.
But even more of an impetus to China's recovery, economists say, are two other government efforts that are paying big dividends - looser bank lending and government support for exports.
The state-controlled banking system in China - which breezed through the global financial crisis with minimal losses as US financial institutions reeled - unleashed $1.2 trillion in extra lending to Chinese consumers and businesses in the first seven months of this year.
That money is financing everything from a boom in car sales, up 82% in August from
a year earlier, to frenzied factory building.
Beijing also has given huge tax breaks and other assistance to exporters. They include placing broad restrictions on imports and intervening heavily in currency markets to hold down the value of the currency to keep Chinese exports competitive, even in a weakened global economy.
Indeed, subsidies abound at all levels of government. The Wuxi municipal government just offered up to 100,000 yuan (4.95 million baht) to each local business that increases exports in the last three months of this year.
Still, while China's recovery seems well under way, not all the laid-off throughout China have been hired back.
"Some plants reduced worker numbers by 20% to 30%, now they hire back 10%,"said Stanley Lau, deputy chairman of the Federation of Hong Kong Industries, which represents export-oriented factories employing 10 million Chinese workers.
Even so, US trade data shows that imports from China only eroded 14.2% in the first seven months of this year while imports from the rest of the world plunged 32.6%. China's trade surplus, already the world's largest,was $108 billion for the first seven months of this year.
"We definitely see an upswing in sales orders in the second half of this year when compared to the first half," said Gu Fung,the sales manager at the Wuxi Baolai Batteries Company.
China's well-capitalised banking system allowed for rapid investment.
Chinese banks came into the crisis with enormous excess reserves, the result of three years of tight regulatory limits on lending to prevent the economy from overheating. When those limits were removed, and authorities urged bank executives to lend, the total value of loans outstanding shot up more in the first seven months of this year than in the previous 24 months.
By contrast, total loans and leases outstanding at financial institutions insured by the Federal Deposit Insurance Corporation actually fell $249 billion, or 3.2%, in the first half of this year.
Though Washington has used taxpayer money to bail out US banks, it does not have Beijing's power to force banks to lend that money to businesses and consumers.
As much as a third of the extra bank lending in China appears to have gone into real estate and stock market speculation. But the bulk has gone into investments by companies and local governments, with tangible results.
China's currency and trade policies, though highly effective, would be hard for the US to emulate.
For instance, government intervention in currency markets has prevented the yuan from moving appreciably against the dollar in more than 14 months, and has pushed the yuan down by 18% against the euro since March.
Government agencies have been told not to buy imported goods with money from economic stimulus programmes unless no domestic alternative is available.
Washington has imposed a less restrictive rule, misleadingly known as "Buy American",that says building materials for the stimulus programme must be bought from any of the 39 countries that have agreed to free trade in government procurement - which China has not.
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