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Thank you for subscribing to the Southeast Asia Insider, showcasing the best of Asia Times’ latest reporting, commentary and analysis from across Southeast Asia.
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Thai Finance Minister Arkhom
sits down with Asia Times
When Arkhom Termpittayapaisith took over as Thailand’s finance minister last October, the soft-spoken, seasoned bureaucrat took a hot-seat job that nobody else seemed to want.
Thailand’s economy has been especially hard hit by Covid-19, with gross domestic product (GDP) projected to have contracted 6.6% last year despite a widely seen as effective public health response to the virus.
Prime Minister Prayut Chan-ocha tapped Arkhom – a trusted lieutenant as transport minister in his 2014-19 coup-installed regime – as criticism rose his government hasn’t done enough to cushion the grassroots economy from the pandemic’s impact.
Now with a new, worst-yet outbreak spreading across the kingdom, the government is bracing for a new wave of economic fallout as it applies new economy-hitting containment measures to stop the spread.
Tellingly, the day after Arkhom spoke to Asia Times’ Southeast Asia editor Shawn W. Crispin and special correspondent Peter Janssen on January 27, his ministry slashed its GDP growth projection from 4.5% to 2.8%.
Crispin tells the Southeast Asia Insider what Arkhom did and didn’t reveal in the exclusive interview and elaborates on the risks that lie ahead for Thailand’s economy.
Does Thailand have a coherent plan to lift the economy amid its latest Covid-19 outbreak?
Arkhom told Asia Times the government has changed tack from its earlier response, which mainly entailed modest, time-limited cash handouts to poor and newly unemployed Thais.
The new so-called 50-50 policy aims to subsidize local level consumption in particular with small-scale, grassroots vendors and shops, the segment of the population that has been pinched hardest by the economic crisis.
But that arguably won’t spark the multiplier effect-driven growth Thailand needs to bounce back healthier from the pandemic and when asked if fiscal stimulus measures were being designed with an eye on structural reforms Arkhom punted.
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What is the risk that Thailand’s economic crisis becomes a financial crisis?
Most analysts believe Thailand’s underlying financial fundamentals are still strong and that the risk of a 1997-98-style meltdown is low. Arkhom said that rising non-performing loans (NPLs) were a worry, one shared by the central bank, but that for now the situation is still manageable.
Officially, financial system NPLs were 3.09% of total outstanding loans at the end of Q3. But that figure is arguably highly understated in sight of the fact banks were allowed to roll over loans as part of a debt moratorium and not classify them as NPLs despite several months of debtor non-repayment.
I really don’t think anyone truly knows how bad the NPL situation is due to this accounting fudge. Arkhom’s aides were keen to impress the debt moratorium officially ended in October but the reality is it was quietly extended until June 2021 for SMEs. Moral hazard risks are fast-rising across the whole financial system.
Will Thailand’s economic crisis likely deepen its already yawning wealth divide?
Prime Minister Prayut at the pandemic’s onset called on the kingdom’s top business families, including those who own the CP Group, ThaiBev and Central Group, to help the economy through the crisis.
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I asked Arkhom if he thought they had done enough and he said he thought they had, including through infrastructure investments. But that could be pre-emptive public relations for their buyouts to come.
The hard economic fact is that the crisis will cause massive consolidation across various industries, including tourism, and the big five families will be among the few with capital on hand to pick, choose and rehabilitate the distressed assets SMEs and small-scale entrepreneurs are forced to relinquish as collateral to their creditors.
That market-clearing scenario will concentrate even more wealth and economic power in the hands of the rich at the expense of the entrepreneurial masses.
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New Biden era of confrontation in the South China Sea
January 29, 2021
Richard Javad Heydarian lays out how China has wasted no time in testing the newly inaugurated Joe Biden administration’s resolve to remain the disputed maritime region's preeminent power, approving a new law allowing its coast guard forces to fire on foreign vessels in “waters claimed by China” in the South China Sea.
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Singapore set for an inauspicious Chinese New Year
January 29, 2020
Nile Bowie reports how Singapore has tightened its Covid-19 restrictions ahead of Chinese New Year festivities, putting the city-state on track for a safer, if less auspicious, celebratory period in a bid to stave off new clusters and outbreaks as preparations to host the World Economic Forum (WEF) summit in May get underway.
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Thailand’s Arkhom a steady hand in time of crisis
January 28, 2021
Shawn W. Crispin and Peter Janssen sit down with Thailand’s newly appointed Finance Minister Arkhom Termpittayapaisith for an exclusive interview touching on his strategy for maintaining financial stability and plans to steer the kingdom's economy through its worst yet Covid-19 outbreak as new stimulus needs rise.
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Vietnam proves communist-led capitalism can work
January 28, 2021
M K Bhadrakumar argues that Vietnam is on track to emerge as Southeast Asia’s economic next economic powerhouse as a new leadership team is selected at the ruling Communist Party’s national congress, where expectations are rising that 76-year-old President Nguyen Phu Trong will continue for a third term in a break with age-limit convention.
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Biden won’t quit Trump’s trade war on China
January 27, 2021
Nile Bowie offers up an outlook for US-China trade ties under the Joe Biden administration, which has inherited a damaging trade war that alienated US allies and trade-reliant partners in Southeast Asia. Though Biden’s approach is set to differ significantly from Donald Trump’s, signs point to significant near-term policy overlap as tariffs remain in place.
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No China-Iran sanctions-busting allowed in Indonesia
January 27, 2021
John McBeth tracks Indonesia’s much-improved maritime surveillance, demonstrated by the recent upending of a US sanctions-busting transfer of Iranian crude oil to a Chinese ship off the west coast of Kalimantan. Surveillance operations have heightened amid discoveries that Chinese research ships have violated rules governing passage of the country’s sea-lanes.
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How Vietnam can keep the good times rolling
January 27, 2021
William Pesek sees the Vietnamese economy as uniquely positioned to thrive in 2021. But to truly seize the breakout moment won by its nimble pandemic response, the Southeast Asian nation must prioritize a handful of crucial reforms to consolidate and sustain its recent economic gains and move beyond its lower-middle-income status.
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Kem Sokha suddenly holds all the cards in Cambodia
January 26, 2021
David Hutt reports how opposition leader Kem Sokha is under pressure to reconstitute his much-weakened Cambodia National Rescue Party (CNRP) into a token one that is beholden to Prime Minister Hun Sen’s autocratic rule, something he has thus far resisted while under house arrest awaiting the premier’s next move.
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Man of Contradictions: Joko Widodo and the struggle to remake Indonesia
By Ben Bland
Penguin, September 2020
From a riverside shack to the presidential palace, Joko Widodo surged to the top of Indonesian politics on a wave of hope for change. He has consistently defied both his sternest critics and his strongest supporters. A brilliant instinctive politician, Jokowi, as he is known, was resoundingly re-elected in 2019. However, six years into his presidency, the former furniture maker is struggling to deliver the reforms that Indonesia desperately needs.
Despite promising to build Indonesia into an Asian powerhouse with a strong economy and the heft to defend its international interests at a time of renewed US-China rivalry, Jokowi has faltered in the face of crises, from Covid-19 to an Islamist mass movement. He has struggled to turn success at the ballot box into the transformational change that Indonesia desperately needs.
Man of Contradictions, by Ben Bland of the Lowy Institute, is the first book-length English biography of Jokowi and an accessible introduction to the country’s most well-known and powerful politician. Bland argues that the president embodies the fundamental contradictions of modern Indonesia, a nation caught between democracy and authoritarianism, openness and protectionism, Islam and pluralism. Jokowi’s incredible story shows what is possible in Indonesia – and what is still beyond reach.
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WHAT WE’RE WORKING ON
Nile Bowie will zero in on Malaysia’s simultaneous public health, political and economic crises in a three-part series.
David Hutt will unpack the results of Vietnam’s national party congress and assess how the country’s leadership will steer the nation’s strategic and economic policies going forward.
Bertil Lintner will dig into what’s real and what’s not in new military coup rumors circulating in Myanmar.
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