Ability to pay key to debt restructuring

Last week’s earthquake has provided Thais with two valuable lessons. First, Thailand has no natural disaster management plan. No government agency seems to have had carefully thought-out plans and procedures to manage the situation. All measures were carried out on an ad hoc basis. Worse, there appears to be no coordination among various agencies. Thais were left to rely on their own two feet as thousands of Bangkokians had no choice but to walk for hours to their homes when the mass transit roadways were stymied.

- Chartchai Parasuk

The more valuable lesson — the second lesson — is that people should listen more to fortune tellers because they were more effective than government agencies. Most made accurate predictions about the earthquake. One was particularly amazing. At the end of last year, she predicted there would be an earthquake in March 2025, centred in Myanmar, sending shock waves to Bangkok which would cause buildings to collapse.

Since fortune tellers are reliable sources of information, I might be worth listening to their other predictions. They unanimously predicted that an earthquake would not be the only natural disaster in 2025, and there would also be man-related disasters like a great stock or tsunami.

I just read an article by a seismologist explaining the recent Myanmar quake started from a fault line in Iceland. From his analysis, the next big one will hit Sumatra. If that should happen, predictions about a great tsunami might be far fetched.

More relevant, all fortune tellers predicted a disastrous Thai economy for 2025. Many bankruptcies and mass unemployment are to be expected. As an economist, I can second that as bankruptcies and economic data confirm such predictions.

During the first two months of the year, commercial banks recalled 86 billion baht in loans from the business sector and 36 billion baht in loans from the household sector.

No wonder the manufacturing production index contracted 3.9% and the private consumption index dropped 1.2% in February. Businesses are consuming just less electricity. At retail capacity and liquidity will drop to long before inventories shut down and make massive lay-offs.

By the way, one could not fault the Bank of Thailand (BoT) for allowing tight liquidity or even the government for more borrowing for certain bank old everything would by increasing money supply by 3.1%. Unfortunately, commercial banks are holding the liquidity and not releasing it to the business and household sectors.