The FY 2009 military budget was actually set by the Somchai government in 2008 – and it showed a large jump relative to GDP.
Whereas the FY 2010 military budget set by the Abhisit government was set in 2009 – and showed a relative decline. Note that the economy didn’t do very well in 2009, which means that the Abhisit government actually did a fairly good job of reigning in the military.
Now the FY 2011 budget shows a fairly large gain, however in relative terms it’s not higher than the Somchai government’s military budget. Also consider the fact that some significant military expenditures, like periodic maintenance, can’t be deferred indefinitely.
Say what you will about the overall trend in post-coup spending, but it’s tough to make a truthful generalization about how the Abhisit government has paid off the brass.
The government may claim that the sharp rise since 2006 is attributed to by the breakout of unrest in the Deep South, too. Disaggregated data might be more useful in this regard, i.e., singling out data of the Deep South from the rest.
As usual, this is excellent stuff from Chris Baker.
It would be nice to see an occasional article or two in the Australian press by Baker and Pasuk (she is after all, MA from Monash). But unfortunately all we get currently is re-cycled
extracts from European or American reports of Thailand.
Just by the way , the real Not The Nation piece (Exhibit B) was very closely based, almost word for word in parts , on a profile run at the same time in The Nation or the Post of a certain very blue-blooded fashion designer.
Yes this is getting no where but my aim here is not to convince you to believe me but to informed people that happened to read our posts. However, I disagree with you about people who got shot at as simply being bad luck, you can confirm that with Nick I’m sure. However, if that’s the case, and those casualties were simply bad luck then its further solidify the evidence that the Thai Army has a really poor standard.
Anyway with Chamlong I suspect he is a braver man than me to be in the road while bullets were being fired.
Well, I’ve made my case about why he has nothing to be afraid of so I guess we can put that to rest.
Now Seh Daeng and Chamlong were friends weren’t they? Were they together in Laos I wonder?
Chamlong is Jor Por Ror class of 7 while Sae Dang is class 11 so no way they are friend by any chance, furthermore, Sae Dang operation base is mostly in Thailand as an conter-insurgent (communist) unite or the hunter ranger unite and he remained so for several years while Chamlong was in the field for 2 years and then we got an admin job most of the time. I’m sure they have cross path sometime during their career.
From the author:
I thank Charles Keith for his extremely generous review. His criticism is well-founded. My original manuscript included many more passages that were to be italicized or set in different types. The Press editors thought that in most cases, it was easy to distinguish which was my voice and which was Bao Luong’s.
For those interested, I have scanned Bao Luong’s handwritten manuscript. The police file is available from the Archives Nationales de France (ANOM).
My understanding is that the concession system has been one of the major methodologies for enabling middlemen to profit from the agricultural value chain in Thailand.
Sugar, is an interesting example. Farmer receive a fixed price for their product and producers are required to provide a set portion of production to domestic markets at fixed prices, giving them something like a regulated return or margin.
At first pass, this appears to be a system designed to provide farmers with a level of protection from commodity price fluctuations. However, when you consider the immense wealth created by the sugar industry, it is apparent that there is more too it.
Just consider that when Khon Kaen Sugar (KSL) listed on the stock market, several members of two of the three founder families suddenly appeared on the list of richest Thais, despite the fact that it was only the 4th or 5th largest company.
It is only logical to think that the owners of the 3-4 larger sugar companies are even richer (and, yes, Jonny, maybe all of them are richer than Thaksin).
There is usually quite a lot of data on sugar and details on regulation in the KSL annual reports, although I haven’t seen one since around 2007. As a public company they have to disclose a lot. I think Maboonkrong has a listed rice mill, which would also be a good source of data.
I did a quick skim and didn’t see the info on regulations. I bet it is in there though because it looks just like this 2005 version, which definitely had it:
My understanding is that through the concession/licensing system, the Thai government limited the ability of middlemen to compete with each other, giving favored players a share in an oligopoly.
The bureaucrats are easily able to conspire with middlemen (millers, refiners, etc.) to provide unusually high prices by various tricks involving inventories, taxes, and export quotas – as well as setting prices.
I also understand that the reason the Thai rice milling industry is so centralized is because the bureaucrats were able to restrict licenses, to a privileged few Chinese families – and were thus able to split the spoils with them. I don’t know the the rice sector as well, so this could be wrong.
The key point here is that in the context of a low valued added product that required a relatively capital intensive processing equipment and loses value very quickly when moved to far away facilities, it is very easy for a high regulated government bureaucracy to extract wealth.
I don’t have comparative data adequate to say how much this has happened. I think it is worthy field to investigate.
One final point, the Thai bureaucracy has a monopoly on the extraction of wealth by power. They do this in partnership with various concessionaires (tax farmers). Other free agents may at some time seek to compete with this and sometimes get away with it. But the preponderance of wealth extracted from the country was done in conspiracy with the state.
Back in the day, the NGOs used to think that the CP Group got rich by controlling the two ends of the value chain. Selling farmers input, buying outputs, and having the power to squeeze farmer margins to survival levels. I have much less data on this, but smart people 20 years ago seemed pretty convinced. Take that for what it is worth.
I think the focus on middlemen is a distraction harmful to your analysis here. This is Thailand. It is patronage system not individual profiteers of great skill.
Dickie S #14 – since you’re talking about my favorite topic, FOOD, I have a request. Some time ago, you mentioned that you know the best Pad Thai shop or stall in Bangkok. You said it was, I seem to remember, somewhere near Pan Fah. Can you give more specific directions, please.
In return, I will give you the address of the best purveyor of another noodle dish. (Here is a clue: wide slimey noodles, with pork & veg leaves, swimming in gravy…) It’s a street stall with tables, & Beamers & Mercs pull up all the time for ‘gup bahn’. 45Baht heaven!
That’s why on the fateful night, Chamlong had nothing to fear of since he knows that no military man dare to shoot at him.
Although it’s getting a bit pointless continuing the argument Tarrin because we are not getting any closer to resolving it, let me just add from my very limited experience of flying bullets in civil disturbances, most seem not to be particularly well aimed. I’m sure for a lot of those hit by bullets this year it was probably bad luck rather than an aimed bullet. I wonder what would be the percentage fired against those that hit someone.
Anyway with Chamlong I suspect he is a braver man than me to be in the road while bullets were being fired. And yes there were many brave people among the red shirts that did it too. Then again there were some…
Now Seh Daeng and Chamlong were friends weren’t they? Were they together in Laos I wonder?
BN (UMNO) is in uncharted territory. Never in its history has the BN faced challenges of this nature i.e. where the opposition is viable and they are in disarray.
I’m also sure you know that authoritarian governments (such as the BN) organises elections not as a means for citizens to select their representatives but merely to legitimise their regime. BN had always been confident of achieving 2/3 majority. This is not certain any more – in fact, if certain factors change – they could be in opposition.
Furthermore, when it was challenged in the past (the Perak case being the most recent, and the death of Teoh Beng Hock is related to the attempt to overthrow the current Selangor state government) – it has resorted to unconstitutional methods to overthrow the opposition (declaring emergency, changing the constitution/law, buying off elected representatives, putting them in jail, etc).
I am not suggesting that Malaysia is Pakistan or Afghanistan. I am arguing that Najib will behave like Musharaff and Karzai if he thinks he has no chance of winning by 2/3 majority – which is most likely the case.
And that the United States will support Najib for the same reasons they support Musharaff and Karzai – to have a “moderate, progressive, US friendly Muslim leader” on its side – never mind what the leader does at home.
Well in reality no farmers (in Thailand at least) is selling their goods at international market price. The way the middleman manipulate price here is a very shady business and involve many parties from state authority, politician, the people that cannot be name, to even some big farmer themselves. Like Andrew point out, its not all the middle man fault, its a total system of price manipulation.
If you noticed what I wrote earlier, I also mentioned politician and state authority as well.
However, from my experience, the biggest part of the problem is the government because without them the collusion is almost impossible.
You can also access PPT by using Firefox and the “https everywhere” extension, which is easy to install. Automatically encrypts Wikipedia, Facebook, WordPress, Google Search, and more added every month.
Can anyone point us to some good research on the price-setting power of middlemen in Thai agriculture? I had a very quick look on Google Scholar and found this 1989 article (extract) on rubber. The author is rather sceptical about claims that middlemen have a high degree of market power (see pages 20-22). He has a nice quote from Siamwallah (from 1978):
…middlemen are made into scapegoats used to explain all the ills that ail Thai agriculture. This scapegoat role of the middleman was useful for the political elite for the additional reason they they were predominantly Chinese and thus form a convenient target for the critics.
Just like the “middle man”, farmers are also trying to get the highest possible price. For the “middle man” to control the price, as you claim, he or she must be in a monopoly situation.
Are the not many “middle men”, or other channels to whom farmers can sell their rubber to?
The explanation given by Tarrin may sound a bit strange re international pricing because one is looking at “pricing”. The easier way is perhaps to look at “profits” and the middleman.
The “middleman” works to get as low a price from the farmers as possible (which they can control), and then try to sell at the highest possible price to the international community (which they usually could not control), thus maximising profits for themselves.
I will always remember a story told about rice middlemen who got chaufeurred around in mercedes trying to explain why farmers could not get more than 4K baht for a ton of rice, and lauding the expertise of the rice traders(himself) for getting the best possible price on the international market. I remember TRT govt tried to set a price floor of 6K – but thats quite unrelated to here.
@Larsson
Rubber actually is a very interesting case which I also could not quite understand how Thaksin did it or get credited for perhaps something he did not do. However, there seem to be rumours claiming that somehow Thaksin helped set higher prices, which from my perspective is not very directly possible since Thailand is not the biggest rubber producer, nor a top quality rubber producer. My view on a more positive base would be: Perhaps Thaksin and/or his allies had some understanding of the rubber trade and somehow manage to give good advice to the rubber board that they could actually set a higher price that is still “acceptable”. Perhaps whatever price he or his team suggested actually works and hence the start of that rumour. But I can’t say,
One often cannot tell, for example, if Bс║гo L╞░╞бng remembered and decided to include a particular point in what she wrote, or if the author of this new book found credible evidence of said point in the newspaper Thс║зn Chung or in French police files and chose to include it herself. This aspect of Passion, Betrayal, and Revolution in Colonial Saigon is likely to provoke criticism from some historians… it’s an historical novel. Sounds like a good one though.
I think your graph make sense. Manufactured goods in Thailand are down due to several reasons; free trade deals, a stronger baht, more goods being manufactured in Thailand avoiding import tax, and for e.g. car companies customizing cheaper models targeting the Asian market.
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Not Not the Nation
I knew B was Not the Nation because it was written in much better English!
Thailand’s hungry military – an update
This isn’t that straight forward.
The FY 2009 military budget was actually set by the Somchai government in 2008 – and it showed a large jump relative to GDP.
Whereas the FY 2010 military budget set by the Abhisit government was set in 2009 – and showed a relative decline. Note that the economy didn’t do very well in 2009, which means that the Abhisit government actually did a fairly good job of reigning in the military.
Now the FY 2011 budget shows a fairly large gain, however in relative terms it’s not higher than the Somchai government’s military budget. Also consider the fact that some significant military expenditures, like periodic maintenance, can’t be deferred indefinitely.
Say what you will about the overall trend in post-coup spending, but it’s tough to make a truthful generalization about how the Abhisit government has paid off the brass.
Thailand’s hungry military – an update
The government may claim that the sharp rise since 2006 is attributed to by the breakout of unrest in the Deep South, too. Disaggregated data might be more useful in this regard, i.e., singling out data of the Deep South from the rest.
Thailand’s hungry military – an update
As usual, this is excellent stuff from Chris Baker.
It would be nice to see an occasional article or two in the Australian press by Baker and Pasuk (she is after all, MA from Monash). But unfortunately all we get currently is re-cycled
extracts from European or American reports of Thailand.
Not Not the Nation
Just by the way , the real Not The Nation piece (Exhibit B) was very closely based, almost word for word in parts , on a profile run at the same time in The Nation or the Post of a certain very blue-blooded fashion designer.
Sanitising Thai political history
LesAbbey – 38
Yes this is getting no where but my aim here is not to convince you to believe me but to informed people that happened to read our posts. However, I disagree with you about people who got shot at as simply being bad luck, you can confirm that with Nick I’m sure. However, if that’s the case, and those casualties were simply bad luck then its further solidify the evidence that the Thai Army has a really poor standard.
Anyway with Chamlong I suspect he is a braver man than me to be in the road while bullets were being fired.
Well, I’ve made my case about why he has nothing to be afraid of so I guess we can put that to rest.
Now Seh Daeng and Chamlong were friends weren’t they? Were they together in Laos I wonder?
Chamlong is Jor Por Ror class of 7 while Sae Dang is class 11 so no way they are friend by any chance, furthermore, Sae Dang operation base is mostly in Thailand as an conter-insurgent (communist) unite or the hunter ranger unite and he remained so for several years while Chamlong was in the field for 2 years and then we got an admin job most of the time. I’m sure they have cross path sometime during their career.
Review of Passion, Betrayal, and Revolution
From the author:
I thank Charles Keith for his extremely generous review. His criticism is well-founded. My original manuscript included many more passages that were to be italicized or set in different types. The Press editors thought that in most cases, it was easy to distinguish which was my voice and which was Bao Luong’s.
For those interested, I have scanned Bao Luong’s handwritten manuscript. The police file is available from the Archives Nationales de France (ANOM).
Producer prices and Thaksin’s economic good fortune
My understanding is that the concession system has been one of the major methodologies for enabling middlemen to profit from the agricultural value chain in Thailand.
Sugar, is an interesting example. Farmer receive a fixed price for their product and producers are required to provide a set portion of production to domestic markets at fixed prices, giving them something like a regulated return or margin.
At first pass, this appears to be a system designed to provide farmers with a level of protection from commodity price fluctuations. However, when you consider the immense wealth created by the sugar industry, it is apparent that there is more too it.
Just consider that when Khon Kaen Sugar (KSL) listed on the stock market, several members of two of the three founder families suddenly appeared on the list of richest Thais, despite the fact that it was only the 4th or 5th largest company.
It is only logical to think that the owners of the 3-4 larger sugar companies are even richer (and, yes, Jonny, maybe all of them are richer than Thaksin).
There is usually quite a lot of data on sugar and details on regulation in the KSL annual reports, although I haven’t seen one since around 2007. As a public company they have to disclose a lot. I think Maboonkrong has a listed rice mill, which would also be a good source of data.
Here is the 2009 KSL AR
http://www.kslsugar.com/contents/files/annualreport/annualreport-en-23022010-103056-482876.pdf
I did a quick skim and didn’t see the info on regulations. I bet it is in there though because it looks just like this 2005 version, which definitely had it:
http://www.kslsugar.com/contents/files/annualreport/annualreport-en-09022010-175117-453499.pdf
My understanding is that through the concession/licensing system, the Thai government limited the ability of middlemen to compete with each other, giving favored players a share in an oligopoly.
The bureaucrats are easily able to conspire with middlemen (millers, refiners, etc.) to provide unusually high prices by various tricks involving inventories, taxes, and export quotas – as well as setting prices.
I also understand that the reason the Thai rice milling industry is so centralized is because the bureaucrats were able to restrict licenses, to a privileged few Chinese families – and were thus able to split the spoils with them. I don’t know the the rice sector as well, so this could be wrong.
The key point here is that in the context of a low valued added product that required a relatively capital intensive processing equipment and loses value very quickly when moved to far away facilities, it is very easy for a high regulated government bureaucracy to extract wealth.
I don’t have comparative data adequate to say how much this has happened. I think it is worthy field to investigate.
One final point, the Thai bureaucracy has a monopoly on the extraction of wealth by power. They do this in partnership with various concessionaires (tax farmers). Other free agents may at some time seek to compete with this and sometimes get away with it. But the preponderance of wealth extracted from the country was done in conspiracy with the state.
Back in the day, the NGOs used to think that the CP Group got rich by controlling the two ends of the value chain. Selling farmers input, buying outputs, and having the power to squeeze farmer margins to survival levels. I have much less data on this, but smart people 20 years ago seemed pretty convinced. Take that for what it is worth.
I think the focus on middlemen is a distraction harmful to your analysis here. This is Thailand. It is patronage system not individual profiteers of great skill.
Not Not the Nation
Dickie S #14 – since you’re talking about my favorite topic, FOOD, I have a request. Some time ago, you mentioned that you know the best Pad Thai shop or stall in Bangkok. You said it was, I seem to remember, somewhere near Pan Fah. Can you give more specific directions, please.
In return, I will give you the address of the best purveyor of another noodle dish. (Here is a clue: wide slimey noodles, with pork & veg leaves, swimming in gravy…) It’s a street stall with tables, & Beamers & Mercs pull up all the time for ‘gup bahn’. 45Baht heaven!
Producer prices and Thaksin’s economic good fortune
@Andrew
Here is an assessment on the rubber industry in Indonesia by USAid from 2007:
http://pdf.usaid.gov/pdf_docs/PNADL492.pdf
The flow of pricing down the value chain looks like this (page. 40):
Tapper – $0.26 to 0.30/kg
Producer – $0.38 to 0.45/kg
Village Collector – $0.78 to 0.90/kg
Trader – $1.2 to 1.5/kg
Processor – $1.5 to 2.0/kg
There must be similar assessments done for the value chain in Thailand.
Sanitising Thai political history
That’s why on the fateful night, Chamlong had nothing to fear of since he knows that no military man dare to shoot at him.
Although it’s getting a bit pointless continuing the argument Tarrin because we are not getting any closer to resolving it, let me just add from my very limited experience of flying bullets in civil disturbances, most seem not to be particularly well aimed. I’m sure for a lot of those hit by bullets this year it was probably bad luck rather than an aimed bullet. I wonder what would be the percentage fired against those that hit someone.
Anyway with Chamlong I suspect he is a braver man than me to be in the road while bullets were being fired. And yes there were many brave people among the red shirts that did it too. Then again there were some…
Now Seh Daeng and Chamlong were friends weren’t they? Were they together in Laos I wonder?
Can Malaysia trust Najib?
Hi Chris,
BN (UMNO) is in uncharted territory. Never in its history has the BN faced challenges of this nature i.e. where the opposition is viable and they are in disarray.
I’m also sure you know that authoritarian governments (such as the BN) organises elections not as a means for citizens to select their representatives but merely to legitimise their regime. BN had always been confident of achieving 2/3 majority. This is not certain any more – in fact, if certain factors change – they could be in opposition.
Furthermore, when it was challenged in the past (the Perak case being the most recent, and the death of Teoh Beng Hock is related to the attempt to overthrow the current Selangor state government) – it has resorted to unconstitutional methods to overthrow the opposition (declaring emergency, changing the constitution/law, buying off elected representatives, putting them in jail, etc).
I am not suggesting that Malaysia is Pakistan or Afghanistan. I am arguing that Najib will behave like Musharaff and Karzai if he thinks he has no chance of winning by 2/3 majority – which is most likely the case.
And that the United States will support Najib for the same reasons they support Musharaff and Karzai – to have a “moderate, progressive, US friendly Muslim leader” on its side – never mind what the leader does at home.
Cheers.
Producer prices and Thaksin’s economic good fortune
Christoffer Larsson – 11
Well in reality no farmers (in Thailand at least) is selling their goods at international market price. The way the middleman manipulate price here is a very shady business and involve many parties from state authority, politician, the people that cannot be name, to even some big farmer themselves. Like Andrew point out, its not all the middle man fault, its a total system of price manipulation.
If you noticed what I wrote earlier, I also mentioned politician and state authority as well.
However, from my experience, the biggest part of the problem is the government because without them the collusion is almost impossible.
Join Kasit for breakfast in New York – online
You can also access PPT by using Firefox and the “https everywhere” extension, which is easy to install. Automatically encrypts Wikipedia, Facebook, WordPress, Google Search, and more added every month.
Open Source rocks.
Producer prices and Thaksin’s economic good fortune
Can anyone point us to some good research on the price-setting power of middlemen in Thai agriculture? I had a very quick look on Google Scholar and found this 1989 article (extract) on rubber. The author is rather sceptical about claims that middlemen have a high degree of market power (see pages 20-22). He has a nice quote from Siamwallah (from 1978):
Thailand’s hungry military
[…] mal gegoogelt: Thailand’s hungry military Thailand’s hungry military Mit Zitat antworten + Auf Thema […]
Producer prices and Thaksin’s economic good fortune
@Nuomi
Just like the “middle man”, farmers are also trying to get the highest possible price. For the “middle man” to control the price, as you claim, he or she must be in a monopoly situation.
Are the not many “middle men”, or other channels to whom farmers can sell their rubber to?
Producer prices and Thaksin’s economic good fortune
Re Larrson and Tarrin:
The explanation given by Tarrin may sound a bit strange re international pricing because one is looking at “pricing”. The easier way is perhaps to look at “profits” and the middleman.
The “middleman” works to get as low a price from the farmers as possible (which they can control), and then try to sell at the highest possible price to the international community (which they usually could not control), thus maximising profits for themselves.
I will always remember a story told about rice middlemen who got chaufeurred around in mercedes trying to explain why farmers could not get more than 4K baht for a ton of rice, and lauding the expertise of the rice traders(himself) for getting the best possible price on the international market. I remember TRT govt tried to set a price floor of 6K – but thats quite unrelated to here.
@Larsson
Rubber actually is a very interesting case which I also could not quite understand how Thaksin did it or get credited for perhaps something he did not do. However, there seem to be rumours claiming that somehow Thaksin helped set higher prices, which from my perspective is not very directly possible since Thailand is not the biggest rubber producer, nor a top quality rubber producer. My view on a more positive base would be: Perhaps Thaksin and/or his allies had some understanding of the rubber trade and somehow manage to give good advice to the rubber board that they could actually set a higher price that is still “acceptable”. Perhaps whatever price he or his team suggested actually works and hence the start of that rumour. But I can’t say,
Review of Passion, Betrayal, and Revolution
One often cannot tell, for example, if Bс║гo L╞░╞бng remembered and decided to include a particular point in what she wrote, or if the author of this new book found credible evidence of said point in the newspaper Thс║зn Chung or in French police files and chose to include it herself. This aspect of Passion, Betrayal, and Revolution in Colonial Saigon is likely to provoke criticism from some historians… it’s an historical novel. Sounds like a good one though.
Producer prices and Thaksin’s economic good fortune
@Andrew
I think your graph make sense. Manufactured goods in Thailand are down due to several reasons; free trade deals, a stronger baht, more goods being manufactured in Thailand avoiding import tax, and for e.g. car companies customizing cheaper models targeting the Asian market.
@Tarrin
How does this scheme work considering that international prices of rubber are publicly available?
http://www.rubberboard.org.in/internationalrubberprice.asp