Economist Model Aplicado A Tailandia

GF-5703-A1 COUNTRY RISK MANAGEMENT

ASSIGNMENT Nº 2:

THE ECONOMIST
MODEL (’86)
FOR THAILAND

Professor: Linda Wetzel
Student: Ignacio Maturana
Date: June 9th 2011

Summary Table

| Assigned | Max | Summary |
Political factors | 30 | 50 | |
Bad Neighbors | 2 | 3 | Thailand is doing efforts to integrate to the region. Current confrontations with Cambodia for the PreahVihear Temple. Great problems inside Myanmar |
Authoritarian Government | 4 | 7 | The Thailand history is full of authoritarian governments since they have had an absolute monarchy in the past and several military governments. |
Staleness | 3 | 5 | There have been many democratic processes which have finishing in abrupt coups. In the next elections there is a risk of civil insurrection. |Illegitimacy of Regime | 3 | 9 | Now there is an interim government. Therefore the new government will have legitimacy in the next elections in July. |
Generals in Power | 4 | 6 | There have been 20 coups since 1932 and multiples generals in power. However, the country is improving its democratization process |
War/Armed Insurrection | 14 | 20 | Permanent risk of coup. There is also a risk of civilwar if the King died. The society is strongly polarized. |
Societal factors | 8 | 17 | |
Urbanization | 1 | 3 | The population is concentrated mainly in rural areas and there is a growing number of people who are emigrating to the city areas, mainly to Bangkok. |
Religious Fundamentalism | 1 | 4 | There is a Muslim fundamentalist group, which has radical ideas and it is very violent, howeverthis is composed by a minority of the population and in a local region |
Corruption | 4 | 6 | It has now high level of corruption and there is a risk to be higher. The ex first minister was accused of corruption acts. Besides, Thailand is Nº 78 in transparency ranking |
Ethnic Tension | 1 | 4 | The tension is mainly politic and there is no important ethnic tension |
Economic factors | 9 |33 | |
Falling GDP per person | 2 | 8 | Economic growth is increasing from -2.3% in 2009 to 8% in 2011,about 4% in 2011. The population growth is about 0,5%, therefore the GDP per person should increase. |
High inflation | 2 | 5 | Inflation has been about 3% in the past 5 years, now is close to 4%, and it is expected that it will be under 5% in the next years. |
Capital flight | 1 | 4 |There is an important amounts for the capital and financial account for the next two years, doing low the risk of capital flight at least in the short term. |
High and rising foreign debt as proportion of GDP | 2 | 6 | 26.02% ( low risk) |
Decline in food production | 1 | 4 | The food production has worked well along time, however some falls in prices have done a litle lost in agricultura in thepast |
Raw materials as high % of exports | 1 | 6 | Thailand's increasingly diversified manufacturing sector is the largest contributor to growth. Raw materials are currently only 4.8% of exports |
TOTAL | 47 | 100 | |

Political factors
Bad Neighbor:
Thailand's foreign policy includes a strongly supports ASEAN's efforts to promote economic development, social integration, andstability throughout the region. Relations with China are steadily increasing across the board. Thailand served as the chair of ASEAN from July 2008 to December 2009 and served as host to the ASEAN Summit (heads of government meeting) in February 2009, as well as the ASEAN Ministerial Meeting, Post Ministerial Conference, and Regional Forum in July 2009. [1]
Thailand participates fully ininternational and regional organizations. It has developed increasingly close ties with other ASEAN members--Indonesia, Malaysia, the Philippines, Singapore, Brunei, Laos, Cambodia, Burma, and Vietnam whose foreign and economic ministers hold annual meetings. Regional cooperation is progressing in economic, trade, banking, political, and cultural matters. [1]
Despite of Thailand efforts to integrate to...