Business

Thailand’s Economy and the Military Coup Trap

Published

10 years ago

January 2, 2015

Bchcomber

A Thai demonstrator holds a placard during a demonstration against the military coup at a shopping district in central Bangkok. Photo: EPA

A Thai demonstrator holds a placard during a demonstration against the military coup at a shopping district in central Bangkok May 2014. Photo: EPA

BANGKOK — Fifteen billion dollars. That’s roughly the price tag of the coup d’état to date. And it’s the difference between the Thai economy, Southeast Asia’s second-biggest, stagnating, as it is now, or its chugging along at 4 percent, its average growth rate since 2001.

When a group of generals led by Prayuth Chan-ocha toppled the democratically elected government of Prime Minister Yingluck Shinawatra last May, their political agenda was clear: They wanted to quell a mounting legitimacy crisis. For many weeks protesters had been taking to the streets to condemn Ms. Shinawatra’s management of the economy and a controversial amnesty bill that would have benefited her brother Thaksin, a former prime minister in self-exile whose political parties have dominated Thai politics since 2001.

Now the economic consequences of the military takeover have become plain. The protests that precipitated the coup had already slowed growth, partly because of blocks on government borrowing, stalled exports and a restrictive monetary policy. And the situation has hardly improved since.

The Bank of Thailand recently slashed its projections for G.D.P. growth for 2014 from 1.5 percent to 0.8 percent — compared with 2.9 percent in 2013, before the coup, according to the National Economic and Social Development Board (N.E.S.D.B.), Thailand’s state economic planning agency. Rather than achieve what the official propaganda claims — order, stability, growth — the return to old-fashioned autocracy threatens to bring economic near-stagnation and will likely increase income inequality.

The takeover in May was at least the 12th military coup in Thailand since 1932, the year constitutional monarchy was introduced. When generals have taken power in the past, they have used the opportunity to develop the country. There was rapid economic growth from 1983 until 1996, largely under Gen. Prem Tinsulanonda, who held office until 1988. Back then the economy got a jolt from a major devaluation of the currency (the baht) and a series of measures designed to promote rapid industrialization by encouraging foreign investment (mostly from Japan), infrastructure expansion and industrial exports.

In theory, the current junta could also make a big economic contribution. But in a bid to scour the system of Mr. Thaksin’s influence, the generals have been turning their backs on many policies favored by his government, including those that worked.

Mr. Thaksin’s signature economic achievement was to encourage consumption among lower-class people: His government provided access to affordable health care, gave out credits to rural communities, and created a transfer system benefiting poor students and old people. Today, the generals are reducing transfers to lower-income groups, concentrating on unfocused infrastructure expansion and taking no action to increase exports or tourism.

This will not do in the face of Thailand’s aging population and broken educational system, and of the global economic slowdown. Especially not when stagnation already threatens the social contract. The N.E.S.D.B. reckons that 0.1 percent of Thais own nearly half of the country’s assets. Capitalist America, where 0.1 percent of the population owns one-fifth of all assets, looks like a socialist paradise in comparison.

Some simple, well-known measures could do much immediate good. The central bank could spur stagnating exports and tourism by buying U.S. dollars to drive down the baht. The government could boost private consumption with a massive transfer program to farmers, students and the elderly. The Bank of Thailand could make credit more readily available by increasing the money supply, and it could stop using interests rate to manage monetary policy, which has not been effective.

Yet the chances of such policies being implemented are low. The Bank of Thailand seems crippled by conservatism and uncertainty. Fiscal policy is in the hands of bureaucrats who are fearful of spending public money. The generals’ own support base is too narrow for them to suggest, much less achieve, anything contentious. And some of their economic proposals so far have been essentially nationalistic and risk discouraging foreign investment.

Every rational path out of stagnation seems blocked by autocratic rule. Thailand is not, as many economists argue, in a middle-income trap; it is in a coup trap. And this is a self-inflicted condition.

To raise the economic welfare of all Thais, and reduce the economic inequalities that have underlain political conflicts, by our estimation Thailand’s G.D.P. growth rate would have to be brought up to at least 6 percent. For that, though, bold measures are needed.

Small and medium-sized investors need to be given greater access to credit. The financial sector must be made more competitive, including with the creation of new lending institutions, ideally more domestic commercial banks. The junta should also encourage more foreign direct investment in high technology, both to increase productivity in existing manufacturing (such as the automotive industry) and to spur higher-value manufacturing (such as for pharmaceuticals and telecommunication products).

In the 1980s and 1990s, Thailand developed its Eastern Seaboard by turning infrastructure built in the Gulf of Thailand during the Vietnam War into one of Asia’s greatest production and export platforms, especially for automobiles and petrochemical products. A similarly grand strategy today might be to revive this old idea: creating an alternative route to the Strait of Malacca, the world’s busiest shipping lane, by digging a canal through the Kra Isthmus, in southern Thailand. A diversified manufacturing belt could then be developed along the canal, with two new great ports on either end. Another option would be to build a vast economic zone in the north and northeast of Thailand to supply the Chinese market.

The generals claim to want to address all these issues urgently. They must adopt a bold approach to overcome bureaucratic inertia or else recovery will be slow. Reviving the economy is their single best chance of justifying the coup and stabilizing the country.

By Economist Forrest E. Cookson and Tom F. Joehnk who writes for The Economist

Business

PepsiCo Reduces Revenue Projections As North American Snacks And Key International Markets Underperform.

Published

2 months ago

October 8, 2024

Salman

(VOR News) – In the third quarter of this year, Pepsi’s net income was $2.93 billion, which is equivalent to $2.13 per share. This was attributed to the company.

This is in stark contrast to net income of $3.09 billion, which is equivalent to $2.24 per share, during the same period in the previous year. The company’s earnings per share were $2.31 when expenses were excluded.

Net sales decreased by 0.6%, totaling $23.32 billion. Organic sales increased by 1.3% during the quarter when the effects of acquisitions, divestitures, and currency changes are excluded.

Pepsi’s beverage sales fell this quarter.

The most recent report indicates that the beverage and food sectors of the organization experienced a 2% decline in volume. Consumers of all income levels are demonstrating a change in their purchasing habits, as indicated by CEOs’ statements from the previous quarter.

Pepsi’s entire volume was adversely affected by the lackluster demand they encountered in North America. An increasing number of Americans are becoming more frugal, reducing the number of snacks they ingest, and reducing the number of times they purchase at convenience stores.

Furthermore, Laguarta observed that the increase in sales was partially attributed to the election that occurred in Mexico during the month of June.

The most significant decrease in volume was experienced by Quaker Foods North America, which was 13%. In December, the company announced its initial recall in response to a potential salmonella infection.

Due to the probability of an illness, the recall was extended in January. Pepsi officially closed a plant that was implicated in the recalls in June, despite the fact that manufacturing had already been halted.

Jamie Caulfield, the Chief Financial Officer of Pepsi and Laguarta, has indicated that the recalls are beginning to have a lessening effect.

Frito-Lay experienced a 1.5% decline in volume in North America. The company has been striving to improve the value it offers to consumers and the accessibility of its snack line, which includes SunChips, Cheetos, and Stacy’s pita chips, in the retail establishments where it is sold.

Despite the fact that the category as a whole has slowed down in comparison to the results of previous years, the level of activity within the division is progressively increasing.

Pepsi executives issued a statement in which they stated that “Salty and savory snacks have underperformed year-to-date after outperforming packaged food categories in previous years.”

Pepsi will spend more on Doritos and Tostitos in the fall and winter before football season.

The company is currently promoting incentive packets for Tostitos and Ruffles, which contain twenty percent more chips than the standard package.

Pepsi is expanding its product line in order to more effectively target individuals who are health-conscious. The business announced its intention to acquire Siete Foods for a total of $1.2 billion approximately one week ago. The restaurant serves Mexican-American cuisine, which is typically modified to meet the dietary needs of a diverse clientele.

The beverage segment of Pepsi in North America experienced a three percent decrease in volume. Despite the fact that the demand for energy drinks, such as Pepsi’s Rockstar, has decreased as a result of consumers visiting convenience stores, the sales of well-known brands such as Gatorade and Pepsi have seen an increase throughout the quarter.

Laguarta expressed his opinion to the analysts during the company’s conference call, asserting, “I am of the opinion that it is a component of the economic cycle that we are currently experiencing, and that it will reverse itself in the future, once consumers feel better.”

Additionally, it has been noted that the food and beverage markets of South Asia, the Middle East, Latin America, and Africa have experienced a decline in sales volume. The company cut its forecast for organic revenue for the entire year on Tuesday due to the business’s second consecutive quarter of lower-than-anticipated sales.

The company’s performance during the quarter was adversely affected by the Quaker Foods North America recalls, the decrease in demand in the United States, and the interruptions that occurred in specific international markets, as per the statements made by Chief Executive Officer Ramon Laguarta.

Pepsi has revised its forecast for organic sales in 2024, shifting from a 4% growth rate to a low single-digit growth rate. The company reiterated its expectation that the core constant currency profitability per share will increase by a minimum of 8% in comparison to the previous year.

The company’s shares declined by less than one percent during premarket trading. The following discrepancies between the company’s report and the projections of Wall Street were identified by LSEG in a survey of analysts:

SOURCE: CNBC

Business

Old National Bank And Infosys Broaden Their Strategic Partnership.

Published

2 months ago

October 8, 2024

Salman

(VOR News) – Old National Bank, a commercial bank with its headquarters in the Midwest, and Infosys, a firm that specializes in information technology, have recently entered into a strategic expansion of their link, which has been in place for the past four years.

This expansion is more likely to take place sooner rather than later, with the likelihood being higher.

For the purpose of making it possible for Old National Bank to make use of the services, solutions, and platforms that are offered by Infosys, the objective of this expansion is to make it possible for the bank to transform its operations and processes through the application of automation and GenAI, as well as to change significant business areas.

This lets the bank leverage Infosys’ services, solutions, and platforms.

Old National Bank Chairman and CEO Jim Ryan said, “At Old National, we are committed to creating exceptional experiences for both our customers and our fellow employees.”

This statement is applicable to Old National Bank. Infosys is carefully managing the business process innovations that it is putting us through, putting a strong emphasis on efficiency and value growth throughout the process to ensure that it is carried out efficiently.

This is a routine occurrence throughout the entire operation. Because of Infosys’ dedication to our development and success, we are incredibly appreciative of the assistance they have provided.

Old National has been receiving assistance from Infosys in the process of updating its digital environment since the year 2020, according to the aforementioned company.

Ever since that time, the company has been providing assistance. The provision of this assistance has been accomplished through the utilization of a model that is not only powerful but also capable of functioning on its own power.

Infosys currently ranks Old National thirty-first out of the top thirty US banks.

This ranking is based on the fact that Old National is the nation’s largest banking corporation.

It is estimated that the total value of the company’s assets is approximately fifty-three billion dollars, while the assets that are currently being managed by the organization are valued at thirty billion dollars.

Dennis Gada, the Executive Vice President and Global Head of Banking and Financial Services, stated that “Old National Bank and Infosys possess a robust cultural and strategic alignment in the development, management, and enhancement of enterprise-scale solutions to transform the bank’s operations and facilitate growth.”

This remark referenced the exceptional cultural and strategic synergy between the two organizations. Dennis Gada is the one who asserted this claim. This was articulated explicitly concerning the exceptional cultural congruence and strategy alignment of the two organizations.

We are pleased to announce that the implementation of Infosys Topaz will substantially expedite the transformation of Old National Bank’s business processes and customer service protocols. We are exceedingly enthusiastic about this matter. We are quite thrilled about this specific component of the scenario.

Medium-sized banks operating regionally will continue to benefit from our substantial expertise in the sector, technology, and operations. This specific market segment of Infosys will persist in benefiting from our extensive experience. This phenomenon will enable this market sector to sustain substantial growth and efficiency benefits.

SOURCE: THBL

Business

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

Published

2 months ago

October 8, 2024

kiaragrace

The largest regulated water and wastewater utility company in the United States stated Monday that it had been the target of a cyberattack, forcing the company to halt invoicing to consumers.

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

American Water, based in New Jersey and serving over 14 million people in 14 states and 18 military facilities, said it learned of the unauthorized activity on Thursday and quickly took precautions, including shutting down certain systems. The business does not believe the attack had an impact on its facilities or operations and said employees were working “around the clock” to determine the origin and scale of the attack.

water

The corporation stated that it has alerted legal enforcement and is cooperating with them. It also stated that consumers will not be charged late fees while its systems are unavailable.

According to their website, American Water operates over 500 water and wastewater systems in around 1,700 communities across California, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia.

SOURCE | AP