Showing posts with label World Bank. Show all posts
Showing posts with label World Bank. Show all posts

Wednesday, 23 November 2011

Floods could reduce Thailand's economic growth by 1 percentage point: World Bank

People row a boat in the floodwaters in Bang Ramintra district in Bangkok, Thailand, Nov. 22, 2011. The situation has improved dramatically in recent days and cleanup has begun in many areas.

The devastating floods in Thailand could reduce the country's 2011 economic growth by around 1 percentage point, the World Bank said in a report released on Tuesday.

The Thai economy is projected to grow by 2.4 percent this year, the bank said in its latest East Asia and Pacific Economic Update.

This represents a downward revision from the bank's previous forecast of 3.7 percent released six months ago, mainly due to the impact of the floods and the weakening external demand from the developed markets.

"The impact of the floods will be most severely felt in the last quarter of 2011, coming mainly from production losses of the industrial estates in the vicinity of Bangkok," said the report.

The World Bank said the estimates of the losses from the floods in southeast Asian countries were not yet complete.

Thailand experienced rarely-seen floods over the past weeks, forcing the closing-down of many factories and quite a part of the capital Bangkok.

The World Bank also revised the growth forecast for Thailand in 2012 by 0.2 percentage point to 4 percent. Factors supporting growth include the reconstruction and rehabilitation by both the public and private sectors after the floods,

dissipation of supply chain disruptions, a momentum in household consumption and likely solid performance of private investment following the improved political stability.

The bank revised its growth forecast for developing East Asia excluding China downward from 5.3 percent to 4.7 percent. China is expected to grow by 9.1 percent this year and 8.4 percent next year, respectively.

Tuesday, 15 November 2011

Wading in Thailand’s Murky Waters

A woman in Bangkok praying before releasing a krathong, a floating receptacle, into the water during the annual festival of Loy Krathong, a tribute to the Thai goddess of rivers, streams and canals.

BANGKOK — In the industrial estate of Lat Krabang, a few kilometers from Bangkok’s international airport, Honda workers clad in ghost white are standing around the shuttered factory, like the idle employees of a suspended space program. 

The floodwaters are approaching from the north and the east, raising canal levels and bubbling up through drainage systems. One of the men says that the defenses  sandbags and plastic sheets  can withstand one meter of water, but no more.

So far, Bangkok has managed to keep the waters out of the city center, but the battle is far from over and a dozen of the city’s 50 districts are inundated. 

Losses in six industrial areas north of Bangkok — the heart of Thailand’s manufacturing base — are expected to be colossal. 

Some 600,000 people are out of work, and insured losses could reach $19 billion. Thailand’s central bank has cut this year’s forecast of economic growth from 4.1 percent to 2.6 percent. Private economists say the impact of the flood could be even greater.

The residents of Bangkok were effectively caught unawares by a foreseeable occurrence. The risks were well known. Large floods have hit Bangkok at least twice a decade over the past 30 years. 

A recent study by the World Bank, the Asian Development Bank and the Japan Bank for International Cooperation on Asian Coastal Cities found that the excessive extraction of groundwater is threatening to sink parts of the Venice of Asia. 

The study projects that the size of the area in Bangkok and the neighboring province of Samut Prakarn that is prone to floods will increase by 30 percent by the middle of the century, affecting almost one million people.

Yet most Thais are woefully unprepared. Termsak Techakanok, a middle-aged man with an endearing smile and an expanding waistline, owns a small company in Lat Krabang that gives imported trucks from Japan a facelift before selling them in Thailand. 

His factory remains dangerously exposed despite the crew of inmates that the government has temporarily pulled from prison and put to work fortifying earthen dykes along clogged-up canals. 

A Rolex around his wrist, Termsak says he’s never thought of purchasing flood insurance.

Few small and medium-sized companies take out flood insurance in Thailand. And only 1 percent of households do. Many Thais are simply too poor to afford coverage. But most remain unprotected from flood losses because of a false sense of security nurtured by official reassurances that Bangkok’s defenses can guarantee dry feet.

Especially to those in the northern part of the city who have had to move to higher floors or are wading neck-deep in murky waters, the government’s inability to protect Bangkok has come as a dirty surprise. The government’s emergency plan has been to spare the city by deliberately flooding the old capital of Ayutthaya, which lies some 70 kilometers north, and the surrounding province. The plan worked last year. This year, it has failed because there simply has been too much water. The government has no Plan B. Meanwhile, it has in turn instructed people to expect the worst and to not worry at all.

Thailand’s flood defenses and flood management are far superior to those of, say, Dhaka. But in Dhaka people accept flooding as a part of life, and even in a country as politically divided as Bangladesh, the battling begums stop fighting when a natural calamity hits. The prospect of a flood fills most people in Bangkok with anxiety, and to them, the politicians become part of the disaster. By keeping their home constituencies dry, Thai politicians have been getting in the way of letting enough water be safely redirected to the sea.

A Bangladeshi friend jokes that the mayor of Dhaka would probably be shot if he disobeyed the prime minister’s order. But in Thailand, the floods have exacerbated political differences: the governor and the prime minister have been debating who has the authority to operate sluice gates. Bemoaning the city’s fetid canals, and its officials’ failure to improve sanitation, the king of Thailand once reportedly said “Bangkok is a toilet without a flush.” These days, the toilet seems to be overflowing.

Last Thursday was Loy Krathong, the annual festival of Phra Mae Khongkha, the goddess of rivers, streams and canals. It’s a day that most Thais typically celebrate by setting lotus-shaped receptacles with votive candles to float down waterways all over the country. The Bangkok Metropolitan Administration had asked people to hold back this year for fear that these krathongs might clog the drains and the canals that are expected to channel the floodwaters out to the sea. Most Thais chose to ignore the order. With the failures of their government in plain sight, perhaps they thought it even wiser than usual this year to placate the spirits of the waters.