Thursday, December 21, 2006

Black Tuesday

Fears of the 1997 crises surely lingered in the minds of a few on Tuesday as Thailand was rocked by the biggest one day stock market drop in its history. Once again, foreign money played a major role, but this time was not to blame. In an attempt to do a sinicised pegging of currency value, the Bank of Thailand (BOT) under the supervision of M.R. Pridiyathorn Devakula, the finance minister and deputy prime minister, had the brainwave of introducing a thirty percent foreign capital rule. In simplified terms, it meant any foreign owned capital going out of Thailand was subject to 30% of that sum being withheld by the bank for three months, interest free.

No sooner did the ruling take effect the market plummeted. Needless to say, officials desperately tried to save face and absolve blame. Notably, the word "speculation" was used frequently, no doubt to subconsciously remind locals of the 1997 crises, where (justified) speculation of the BOT's reserves caused a huge crash and made Thai people far poorer overnight.

The interim government has made its first mistake, let's hope it's not the first of many.

The Tesco battle

One ongoing sideshow that offers an intriguing insight into Thai culture and psyche is the protests against Tesco.

Villagers in some northern cities have staged numerous demonstrations against Tesco Lotus' plans to open branches in the area. The villagers claim the stores will destroy local small shops. One group actually protested outside the British embassy, "demanding" Tony Blair order the trade to stop.

There's one little problem. Local shops already have their stiffest competition: the "Seven Eleven" stores. You'll be had pressed to find an area of Thailand without them. Likewise, the "Big C" stores (38% Thai owned) and other supermarkets have taken over Thai land a long time ago but no protests occurred.

One wonders of the real underlying cause of the protests, and why they never happened before. Call me cynical, but perhaps there is a touch of xenophobia as the small business look for an outlet to blame for their problems, perhaps the Thai owned businesses - all of which are owned by rich businessmen and politicians - had ways of "dealing" with any prospective complaints.

Don't get me wrong, I'm all for preservation of traditional values, I have no geat love of the big brands and I greatly admire the way Thais have kept their cultural integrity as their country develops, but I can't help thinking that that this not the root of the feigned indignation we see in this case. Besides, why stop at Tesco? Why not protest against Pepsi, McDonalds, Manchester United and Mr Bean too?

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