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Monday, November 03, 2003

Thaksinian Economics and the Second Track

Daniel Lian one more time on the virtues of Thaksinian economics. As he indicates, if Thailand can enter a virtuous circle of growth, the economy can turn out to be a lott more resilient than many were anticipating:

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.
Source: Morgan Stanley Global Economic Forum

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