State enterprises milked

Bloomberg has a useful report on what looks like the military junta’s use of “state-run enterprises to support economic expansion by speeding up investment, as risks loom from fizzling exports and tourism.” This use will support the junta’s “election” efforts.

The junta is pressuring these state enterprises to spend big by the end of the year: “Outlays by state enterprises jumped almost by half to 310.9 billion baht ($9.4 billion) in January through September, government data shows.” Profits have fallen at the same time. And, they have steadily declined since 2013. As an indication of the junta’s milking, “an index of listed government firms compiled by Bloomberg fell over the past five years while the wider stock market climbed.”

Prapas Kong-led, director-general of the Finance Ministry’s State Enterprise Policy Office, said: “These are huge companies that can drive the economy…. We’re trying to boost investment by state enterprises for the rest of 2018.”

2019 is an election year, maybe. One of the problems for the junta is that growth is easing.

State firms are big, with assets of “14.3 trillion baht last year. That’s almost equivalent to the value of Thai annual gross domestic product.”

The report states that “[c]riticism of the military administration’s policies and project choices is intensifying…”. Perhaps, but attention needs to be given to state firms in the junta’s election campaigning.

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