lonelywombat
February 19th, 2009, 09:07
Thai job losses 'will worsen': finance minister
Claire Truscott
February 19, 2009 - 03.00 GMT
Thailand's new finance minister Korn Chatikavanij has warned that unemployment could worsen in the months ahead and force factory workers back to the kingdom's rural heartlands.
As weakening demand from the West and Japan hits Thailand's export sector hard, 45-year-old Korn told AFP that the jobs crisis would likely be worse than during the aftermath of the 1997 Asian financial crisis.
A decade ago the devaluation of the baht and the robust economies of key export partners allowed the kingdom to spring back from spiralling unemployment within two years, Korn said.
"It will be bad... This time we don't have the same cushion, virtually every sector is struggling," Korn said.
"The agricultural sector is relatively okay but it's not in a position to significantly absorb job losses from the industrial sector. Exports are looking particularly weak," he said.
But if factory workers lose jobs they are likely to return to the countryside, he said, which is where the two-month old government enjoys little support.
"If they lose their manufacturing jobs the natural instinct would be for them to help out on the family plot back home," he said.
Thailand's majority rural poor provide the support base for the current opposition, who were ousted from power in December after months of protests culminating in a week-long seizure of Bangkok's airports.
Accused by critics of governing on behalf of former prime minister Thakin Shinawatra, they were forced out by a court order.
Thaksin, who now lives in exile to escape corruption charges, wooed the farming poor during his tenure, partly with cash handouts that the then opposition Democrat Party said were simply vote-buying tactics.
But the new Democrat-led government recently announced a similar scheme, issuing 2,000 baht (58 dollar) grants to nine million Thais -- a move that has left Thaksin's allies crying foul.
Korn however, defended the new policy as a "quick and impactful" fiscal stimulus measure that puts money in the hands of those most likely to spend it and so boost domestic consumption.
"I would bet that the majority of the recipients will have spent that money within a week of receiving it," said Korn.
"There's logic and macroeconomic policy behind that... if there's positive political impact on the government as a result of the policy that meets the country's current economic needs then don't we deserve it?"
The 2,000 baht scheme is part of a raft of measures that make up a 116.7-billion-baht stimulus package the Thai government hopes will counter falling income from abroad.
On Wednesday prime minister Abhisit Vejjajiva announced another 1.9 trillion baht (54.28 billion US dollars) would be spent over the next four years.
And Korn said much of that money would go back to the farming sector, that currently brings in ten percent of Thailand's income but employs half the population.
"I think we can do a lot more with it in terms of wealth generation," he said, citing plans to begin growing tapioca for fuel and improve rice yields with mass irrigation schemes.
But while Thailand's focus is returning to its traditional economy, it is keeping an eye too on greater integration and trade within Southeast Asia, ahead of key regional bloc meetings this month, he said.
"Integration is important especially now that the Western world cannot be relied upon as a source of demand," Korn said as finance ministers of the Association of Southeast Asian Nations prepare for a meeting in Thailand this weekend.
"Over time the closer the integration the better. I'm a borderless kind of guy," he added.
┬й 2009 AFP
This story is sourced direct from an overseas news agency as an additional service to readers. Spelling follows North American usage, along with foreign currency and measurement units.
Claire Truscott
February 19, 2009 - 03.00 GMT
Thailand's new finance minister Korn Chatikavanij has warned that unemployment could worsen in the months ahead and force factory workers back to the kingdom's rural heartlands.
As weakening demand from the West and Japan hits Thailand's export sector hard, 45-year-old Korn told AFP that the jobs crisis would likely be worse than during the aftermath of the 1997 Asian financial crisis.
A decade ago the devaluation of the baht and the robust economies of key export partners allowed the kingdom to spring back from spiralling unemployment within two years, Korn said.
"It will be bad... This time we don't have the same cushion, virtually every sector is struggling," Korn said.
"The agricultural sector is relatively okay but it's not in a position to significantly absorb job losses from the industrial sector. Exports are looking particularly weak," he said.
But if factory workers lose jobs they are likely to return to the countryside, he said, which is where the two-month old government enjoys little support.
"If they lose their manufacturing jobs the natural instinct would be for them to help out on the family plot back home," he said.
Thailand's majority rural poor provide the support base for the current opposition, who were ousted from power in December after months of protests culminating in a week-long seizure of Bangkok's airports.
Accused by critics of governing on behalf of former prime minister Thakin Shinawatra, they were forced out by a court order.
Thaksin, who now lives in exile to escape corruption charges, wooed the farming poor during his tenure, partly with cash handouts that the then opposition Democrat Party said were simply vote-buying tactics.
But the new Democrat-led government recently announced a similar scheme, issuing 2,000 baht (58 dollar) grants to nine million Thais -- a move that has left Thaksin's allies crying foul.
Korn however, defended the new policy as a "quick and impactful" fiscal stimulus measure that puts money in the hands of those most likely to spend it and so boost domestic consumption.
"I would bet that the majority of the recipients will have spent that money within a week of receiving it," said Korn.
"There's logic and macroeconomic policy behind that... if there's positive political impact on the government as a result of the policy that meets the country's current economic needs then don't we deserve it?"
The 2,000 baht scheme is part of a raft of measures that make up a 116.7-billion-baht stimulus package the Thai government hopes will counter falling income from abroad.
On Wednesday prime minister Abhisit Vejjajiva announced another 1.9 trillion baht (54.28 billion US dollars) would be spent over the next four years.
And Korn said much of that money would go back to the farming sector, that currently brings in ten percent of Thailand's income but employs half the population.
"I think we can do a lot more with it in terms of wealth generation," he said, citing plans to begin growing tapioca for fuel and improve rice yields with mass irrigation schemes.
But while Thailand's focus is returning to its traditional economy, it is keeping an eye too on greater integration and trade within Southeast Asia, ahead of key regional bloc meetings this month, he said.
"Integration is important especially now that the Western world cannot be relied upon as a source of demand," Korn said as finance ministers of the Association of Southeast Asian Nations prepare for a meeting in Thailand this weekend.
"Over time the closer the integration the better. I'm a borderless kind of guy," he added.
┬й 2009 AFP
This story is sourced direct from an overseas news agency as an additional service to readers. Spelling follows North American usage, along with foreign currency and measurement units.