King urges Thailand to heal its political rifts

5 December 2007

BANGKOK (Reuters) - Revered King Bhumibol Adulyadej told Thailand's 65 million people on Tuesday to heal the nation's deep political rifts in this month's general election or risk sinking the country.

"Without unity, the country will meet with disaster," King Bhumibol, the world's longest-reigning monarch, said in a radio address on the eve of his 80th birthday, a major national celebration.

His comments echoed those he made at a trooping of the colour ceremony at the weekend showing the King's clear unease at the political instability that has reigned since last year's coup against Prime Minister Thaksin Shinawatra.

Many analysts say the Dec. 23 election is likely to lead only to further polarisation between Thaksin supporters in the countryside and the royalist military establishment and Bangkok middle class that ousted him.

In the worst-case scenario, some analysts see Thaksin's friends and foes facing off in the streets, making further military intervention inevitable.

King Bhumibol enjoys almost universal respect as a champion of the poor and the environment.
However, his detractors -- most of whom live outside Thailand -- say draconian lese majeste laws under which insulting the monarchy can be punished by 15 years in jail have stifled any criticism of his role in society.

Despite being a constitutional monarch, he has made several forays into politics during 61 years on the throne that have witnessed 18 military coups. He has variously come out in support of democratic and military governments.

Thaksin, now living in exile in London, won landslide election victories in 2001 and 2005 and is still hugely popular in the countryside where the majority of Thais live.

He faces corruption charges, which he denies, brought by a special investigation launched by the generals who accused him of presiding over rampant graft.

Thaksin's party was dissolved and 111 of its leading officials, including him, barred from politics for five years for election fraud.

The People Power Party, which his supporters took over, is likely to win the most seats in the election but fall short of an absolute majority, analysts say.

Viet Nam-Thailand relations to further develop

MCOT (5 December 2007)

Ha Noi, Dec 4 (VNA) - Given the two countries' time-honoured relations and similarities, Viet Nam-Thailand cooperative ties will develop strongly in all areas in the future, Thai ambassador to Viet Nam Kittiphong Na Ranong said on December 3.

The Thai diplomat made the remark at a ceremony to mark the 80 th birthday of King Bhumibol Adulyadej and Thailand 's National Day (Dec. 5) in Ha Noi.

Speaking at the event, Ta Quang Ngoc, President of the Viet Nam-Thailand Friendship Association, highly appreciated the Thai embassy's assistance to the association.

He reviewed the two countries' relations over the past 31 years since they established diplomatic ties in 1976, highlighting nearly 30 agreements on bilateral cooperation in all areas from economy, trade and investment to culture tourism and environment.

Viet Nam-Thailand bilateral trade has developed rapidly over the past years, reaching 2.1 billion USD in the first half of 2007. Of the figure, Viet Nam 's exports to Thailand reached 468 million USD and imported from the country nearly 1.6 billion USD. Thailand isnow Viet Nam's 6 th largest import market.

Viet Nam mainly exports to Thailand computers and accessories, crude oil, seafood, coal, electronics, groundnut and plastic products; and imports petrol, plastic materials and motorbike parts.

By the end of October, Thailand had invested in 160 projects in Viet Nam, with a total registered capital of 1.56 billion USD, ranking 12 th among foreign investors in Viet Nam and 3 rd among southeast Asian investors.

As two members of the Association of Southeast Asian Nations (ASEAN), Viet Nam and Thailand have also effectively coordinated in implementing regional and international cooperation projects such as the East-West Corridor, the Greater Mekong Sub region (GMS) and the Ayeyawady-Chao Phraya- Mekong Economic Cooperation Strategy (ACMECS).
Other activities marking Thailand 's 80 th National Day will be also held in Ha Noi on December 3 and 5. (VNA)

INSTANT VIEW 1-Thailand holds key rate steady at 3.25 pct

Reuters Tuesday December 4 2007

BANGKOK, Dec 4 (Reuters) - The Bank of Thailand held its policy rate steady at 3.25 percent on Tuesday, as expected, trying to balance the need to promote economic growth while combatting the threat of inflation.

KEY POINTS:

- All 12 analysts polled by Reuters last week had forecast the central bank would hold the one-day rate unchanged.
- Six of the analysts expected the rate to remain unchanged until the end of 2008. Five predicted rises of up to 50 basis points during the second half of next year.

COMMENTARY: SETHAPUT SUTHIWART-NARUEPUT, ECONOMIST, SCB SECURITIES
"The rate was unchanged as we expected and I think the interest rate is going to stay unchanged until late in the second quarter or early third quarter of next year.

"We see rising inflation, but domestic demand has not risen as fast as it should. The headline inflation we saw yesterday might look good, but the overall demand remains weak."

USARA WILAIPICH, ECONOMIST, STANDARD CHARTERED BANK

"The decision to hold rates unchanged at 3.25 percent affirmed that the BoT's easing rate cycle has finished. Looking forward, the risk to monetary policy is on the upward bias.

"However, we believe there is no rush for the BoT to hike rates anytime soon. We believe that core inflation will remain well contained within the BoT's target in the next twelve months".

MARKET REACTION:

- Thai stocks <.SETI> were down 0.64 percent at midday before the announcement and moved down slightly afterwards. The baht remained stable at around 33.83 against the dollar in onshore trade and was around 30.55 offshore .

BACKGROUND:

-- The central bank has cut rates five times this year following two years of aggressive tightening to combat oil-fuelled inflation.

-- Analysts polled by Reuters expect average inflation to fall to 2.4 percent in 2007 and 2.7 percent in 2008 from 4.7 percent in 2006.

-- The National Economic and Social Development Board (NESDB), the state planning agency, and the Commerce Ministry forecast on Monday that inflation would average 3.0-3.5 percent in 2008, up from a projected 2.3 percent in 2007.

-- The central bank predicted in October that headline inflation would average 1.8-2.3 percent in 2007, and 1.5-2.8 percent in 2008.