Slide 1

Slide 2 Thailand IMF: Sit down, youre rocking the baht Slide 3 Issue 1 Whether privatization of Thailands state owned enterprises should be included as part of the structural reforms Thailand undertakes as part of its IMF Program Slide 4 What is the IMF Program? Slide 5 IMF Argument The IMF seeks privatization of our countrys State Owned Enterprises (SOEs) Under their conditions this has to occur for the IMF to lend Thailand money Slide 6 Thailands Argument The appropriate thing for Thailand at this juncture would be for us NOT to include a privatization clause in the Letter of Intent Slide 7 Why an IMF Program? Slide 8 IMF Argument The IMF believes this is a long term problem that will not be fixed unless the actual structure of the economy is changed Slide 9 Thailand Argument We believe the problem is short term and therefore privatization is unnecessary The focus should be on correcting the current devaluation of the baht Slide 10 Privatization was unsuccessfully attempted in 1988 in the electricity and port sectors Protests from labor unions quickly halted the attempt to privatize Slide 11 Thailands continued opposition to privatization Large scale privatization would lead to job losses Danger of sparking labor unrest Privatizing utilities would make it harder for the poor to have access to them Who would Thailand sell to? Only wealthy Thai citizens could afford to buy, sparking speculation of political interference Only wealthy Thai citizens could afford to buy, sparking speculation of political interference Selling to Foreigners would provoke a backlash of national sentiments Selling to Foreigners would provoke a backlash of national sentiments Slide 12 What is program ownership? Slide 13 IMF Argument The IMFs role would be as an external financial cop IMF is seeking as much control as possible Slide 14 Thailand Argument The program should be our countrys own so that partnership will work better We know our country better than you do Slide 15 What is conditionalitys role? Slide 16 Conditionality can be a method of monitoring, or it can be the program itself. Slide 17 IMF Argument Privatization is a condition of lending us money To make sure the program is being carried out to their specifications Slide 18 Thailand Argument There should be some consideration of the IMF for us to run our own country The government had been running budget surpluses for nearly a decade Slide 19 Issue 2 Whether privatization should be extensive and include strategic sectors such as telecommunications, electricity and oil and gas Slide 20 Privatization should specifically not be in the strategic sectors such as electricity and gas Already attempted in 1988 unsuccessfully Private sectors will not look out for the citizens like the government does These are essential to the livelihood of the people, not just the economy Slide 21 Issue 3 The time frame over which to reach privatization goals Slide 22 IMF Argument Extensive privatization as soon as possible as a condition to obtaining a loan Slide 23 Thailand Argument Immediate privatization is unrealistic and would not address the current problems facing the economy Stabilization before privatization Slide 24 Thailands Optimal Outcome To leave out privatization as a condition to receive IMFs loans. Possible draft of joint statement to set up a committee to study implications of a long term privatization of the SOEs in Thailand