Thais Remain Upbeat Despite Downturn
Sirivat Voravetvuthikun has been on the streets for two hours peddling his homemade sandwiches. The morning is heavy with a steamy heat, and he mops his brow as he heads toward a new corner with more foot traffic, doing some mental calculations on the way.
Let’s see. So far 30 tuna salads, 26 or 27 ham-and-cheeses, probably 40 crab meats. “I should do 200 sandwiches today despite the heat,” he finally notes. “Customers come looking for me now. They say, ‘If it’s not a Sirivat sandwich, I don’t want it.’ ”
There are hundreds of vendors like Sirivat on Bangkok’s narrow, congested streets, selling everything from watches to noodles, but what makes Sirivat different is that the 49-year-old has a business degree from the University of Texas and at this time last year was a multimillionaire developer and stockbroker.
It is a familiar story in a Southeast Asia racked by economic crisis.
He was the CEO of one of Thailand’s top brokerages. The economy was booming, and everyone was buying on margin. He started developing luxury residential condos, and whatever he wanted, the banks obliged. Even when interest rates shot up to 17%, then 30%, he kept borrowing, developing, dreaming, living as if good times would last forever.
“Big was beautiful. Small was ugly,” he said, taking a customer’s 30 baht (80 cents) for a crab meat sandwich. “Everyone was bullish on Thailand. We all lived beyond our means. Then the sky fell to Earth. So, looking back, I’d have to admit frankly that, yes, I was part of the problem.”
Sirivat still owes millions on his failed businesses. But the sandwiches put food on the table and give him breathing room while he tries to figure out how to salvage at least part of his empire. Hard times for Thailand aren’t over, he said, but he predicted: “Our country will recover and survive and eventually prosper. Of that I am confident.”
As Thailand takes its first steps toward economic recovery--with a currency that has stabilized, a prime minister who is honest and popular, and a bruised ego that is on the mend--people such as Sirivat have come to symbolize the changes in attitude and behavior that are shaping a new Thai society.
With the majority of Asia’s economies seemingly disintegrating--most alarmingly, Japan’s--Thailand serves as evidence that there is a bottom. Although the economy here is small, it symbolizes both Asia’s problems and its potential. Indeed, it was the devaluation of Thailand’s currency nearly a year ago that started the unraveling of the region’s economy.
And today, if perception is almost as important as reality in influencing a country’s economic vicissitudes, then Thailand has, as Michel Camdessus, chief of the International Monetary Fund, said, “distinctly turned the corner” toward recovery.
Foreign investors perceive that Thailand is no longer in a free fall and that its government is serious about reform. Some are sniffing around for bargains. And Thailand’s 65 million people perceive that the threat of total collapse is over. The panic they felt six months ago has been replaced by an acceptance of the fact that the freewheeling times are gone. Instead of despairing, Thais are cutting back.
They are driving less, and for the first time in a decade Bangkok is not crippled by traffic jams. Telecommunications tycoon Adiasai Bodharamik has sold his private jet. Military units grow their own food. Bureaucrats turn off unneeded office lights. And thousands of educated Thais like Sirivat have taken menial jobs to see them through until the wobbly economy finds its legs.
“Thais . . . adjust themselves easily, and that’s helped a lot,” said Satit Uthaisri, vice president of Bangkok Bank. “So has having a prime minister who is a man of integrity. I don’t think we’re at the corner yet, but maybe we’re close. People at least have the time now to think about the future again.”
In a country where political corruption has been a perk of office, Prime Minister Chuan Leekpai, referred to by many as “Mr. Clean,” is something of a revolutionary.
Chuan has maintained popularity ratings above 70%, and Thais, who seldom say a favorable word about any politician, find themselves heaping praise on the career public servant.
More a detail man than a visionary, Chuan put together a respected team of technocrats and educated economic advisors. His net worth, as disclosed by Thai law, is $138,000 (compared with $48 million for the wealthiest member of his Cabinet). For 20 years, he has rented a simple house owned by a law school classmate.
Elected in November with an overwhelming public mandate to do what was necessary to fix Thailand’s economy, Chuan closed 56 shaky financial firms, some linked to well-connected businessmen. He slashed state spending and presented parliament with a balanced budget for fiscal 1999; raised gas taxes; met President Clinton in Washington and came home with a $1.7-billion aid package; and purged the leadership of the Central Bank, whose attempt to defend the baht last year drained foreign reserves from $36.6 billion to $2.5 billion.
Last month, Chuan and his finance minister turned over the governorship of the Central Bank to Chatumongkol Sonakul, a longtime critic of the bank. The elegant mansion that houses the Central Bank where Chatumongkol now works was once the home of the king of Siam, his great-grandfather.
A few Western countries have accepted Chuan’s invitation to help revitalize the economy. In March, the Dutch banking giant Abnamro announced that it will assume majority control of Bank of Asia, Thailand’s 11th-largest bank, and financier George Soros and a consortium of other investors agreed to put $650 million into the Nakornthai Strip Mill, a steel plant. Citicorp and ING Group of the Netherlands have been scouting for opportunities.
All this hardly means that Thailand is out of the woods, and Finance Minister Tarrin Nimmanahaeminda warned in May: “If you think things have already gotten better, that is completely the wrong signal.”
Indeed, the stock market hit a 10-year low May 27, and by year’s end, 2 million Thais--6% of the work force--could be looking for jobs. To overcome its liquidity crunch, Thailand needs to attract more foreign capital and prevent private money from being parked abroad. Thailand’s growth forecast for this year is minus 4%.
But in trying to reinvent itself, Thailand has some safety nets: The country is a food exporter, so people will not starve. Inflation has remained relatively low at 10%. The IMF is implementing a $17- billion bailout. And, significantly, Thailand--unlike Indonesia under former President Suharto--is a democracy with built-in vents that enable people to let off the steam of anger and frustration.
“You know, people say to me: ‘You’re bankrupt. Isn’t that awful?’ ” said Sirivat, exchanging his last sandwich--a ham-and-cheese--for 30 baht. “And you know what I tell them? I say: ‘Well, I’m alive. And any day of the week, I’d rather be a bankrupt sandwich seller than a dead rich person.’ ”
