Thai Capital Controls

Tuesday, December 19, 2006 | | 1 comments »


In September Capital Chronicle posted about the Thai coup arguing that blind pursuit of returns by investors ignoring context would, sooner or later, prove dangerous.
So it has. Buoyed by an arbitrary military intervention last September, foreign direct investment (FDI) poured into Thailand in the hope that "stability" would boost economic prospects. The baht rose to its highest level since, ah, the 1997 Asian Crisis.
Key exporters lobbied for intervention. Arguably in the absence of those inconvenient fetters of balancing democratic interests they have swiftly got their wish. In one fell swoop Tarisa Watanagase, governor of the Thai central bank and a military appointee, has punished FDI with a severe wedgie and hit upon a potentially inflammatory beggar-thy-neighbour depreciation wheeze.
Competing Asian exporters will not be impressed; and if this subsequently proves the thin edge of the wedge of a round of regional tit-for-tat currency manipulation the previous YouTubed post on the vagaries of form may not look so flippant.

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1 comments

  1. RJH Adams // 12/19/2006 09:13:00 PM

    Apparently they were just pulling our legs. Hysterical.

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