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Originally Posted by Up2U
http://asia.nikkei.com/Politics-Economy/Economy/Thailand-s-economy-tests-the-junta-s-steering-skills
It is a harrowing time to be in Thailand's farming business
I applaud up2u for the balance he includes in some of his posts from various media outlets. This is one. I do not know this particular site nor its political bias, but it lays out pretty clearly the disastrous rice pledging scheme - less the scheme itself and more the folly of both setting the price so high and the frivolous assumptions, contrary to the views of almost all the worldтАЩs experts in rice economics, that the world market would bear it. In 2012 ThailandтАЩs flagship crop of Hom Mali fragrant rice was priced at $1,000 per ton. Vietnam and India were selling their rice on to the world market at $400 a tonne. Thai rice exports fell 44% in the first year alone. For 30 years Thailand had been the worldтАЩs leading rice exporter. No longer!
That Yingluck was eventually going to get into trouble as a result must have been clear to her pretty quickly. In 2013 the IMF urged Thailand to abandon the scheme, a call earlier made by many independent economists. In its annual review with Thai authorities, the IMF reported that -
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Thai officials acknowledged concerns about the effectiveness and transparency of the program and тАЬsuggested that a reduction in the pledging prices or limits on the amount of purchase might be needed to ensure the sustainability of the policy,тАЭ according to a summary of Thai officialsтАЩ views included in the IMF report.
http://blogs.wsj.com/economics/2013/11/ ... subsidies/
A year earlier, the Asian Development Bank had said precisely the same тАУ
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Lourdes Adriano, the ADBтАЩs agricultural specialist, said the scheme was тАЬunsustainableтАЭ and that the government knows this.
http://blogs.ft.com/beyond-brics/2012/0 ... ice-trick/
Then there was the trumpeting that much of the rice would be bartered with China as part of the deal for that country building a high-speed rail network in Thailand. The memorandum of understanding was signed with great fanfare in October 2013 by Ms. Yingluck and the Chinese Prime Minster. This called for 1,400 kms of lines linking Kunming in Yunnan Province with Bangkok. One line was to pass through Vientiane; the other through the Shinawatra clanтАЩs stronghold of Chiang Mai.
The military government see-sawed on this until finally the barter deal was called off. Instead the building of rail links were to be thrown open to tender. But Thai economists for some time had been claiming the link through Vientiane made absolutely zero sense given the small size of the population in Laos and the backwardness of its economy. As Forbes magazine pointed out, Beijing chose the Vientiane route -
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as a favor to a small ally and in order to further hammer its wedge into ASEAN
The Forbes article adds that ChinaтАЩs ambitions for its rail plan had little to do with Thailand. Although it does not pose the question, it surely has to be asked: why should Thailand assist the Chinese in what gives Beijing a free reign to ensure the strengthening of its influence throughout the region?
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This train route will be a tool of free circulation for Chinese investments, goods and people. And it will not end up in Bangkok but in Singapore, 1425 km further south: it will be the first truly trans-Asia rail-link, and the most potent one . . . China is building its commercial and political empire for centuries to come.
http://www.forbes.com/sites/ericrmeyer/ ... and-right/
However well meaning the policy, its implementation was a disaster. Whether Ms. Yingluck will emerge form her trial unscathed only time will tell.