Riding on Macro Tigers
Daniel Lian (Singapore)
A Real and Virtuous Super Upswing
It has been our long-held view that the Thai economy has entered a sustained period of economic upswing. This upswing should last at least a few more years -- ‘a super economic cycle’. The primary forces behind Prime Minister Thaksin Shinawatra’s ‘super cycle’ have been initial creative macro policies to reverse cyclical doldrums and asset deflation, followed by well-thought-out policy initiatives to create structural resilience in domestic demand. Capital creation projects to create structural domestic demand resilience are at the core of such initiatives.
This exercise has been strengthened by two efforts: first, growing non-mass-manufacturing winners to position Thailand as a niche economy; and second, an intensive effort by the government to squeeze efficiency out of the Thai public sector and the economy in general. Putting the timetable of these capital creation projects together and assuming a continued rise in other ‘second track’ economic activities, we believe the Thai economy -- which barely started to accelerate in 2002 -- will continue to grow rapidly until at least 2007 or 2008. This upswing should feature an acceleration of GDP growth from 1.9% in 2001, when Mr. Thaksin assumed office, to 6-8% in the next few years, on our forecasts.
Two Macro Tigers
Mr. Thaksin’s economic program in a sense has successfully bred two macro tigers, one the real economy, and the other the asset markets. During the first two-and-a-half years of his tenure, these tigers reinforced each other and forged a healthy symbiotic relationship. While the revival of asset markets and credit demand has featured prominently over this period, both have kept the same healthy pace and have supported each other. ...Article Continued
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Friday, October 31, 2003
Thaksinomics On Track
Continuing evidence Thaksinomics is not just a fluke. I'll be keeping my eye on this little country more than any other. This is the world's only real experiment in FDR-TVA style macroeconomics. It bears watching. I'm hoping it lasts to serve as a workable model for the rest of the world's real macroeconomic solutions.