The Incomplete Investor Guide.
Part 3 of the "Your investment Guide to Thailand". A book which could have been far more.
On pages 185 to 188 and beyond, author BB explains at length all the well published and publicized data around Thai corruption. Surely hardly missing a beat or any number on that, as he says: “Regrettably, a high level of corruption remains as a stubbornly enduring feature of life in Thailand”.
BB says how curiosity prompted him to search the word “corruption” in the local newspaper and how this word came up 7504 times, since year January 1, 2000. For pages he goes on and on around this so warning even the most resilient determined investor. Of course he fails to mention that many stocks here trade at huge discounts to other “less corrupt” stock markets -and so falls into the classic trap of wanting to see the negative, without balancing the positive. Like comparing two cars and then without comparing their retail prices.
The positives here being very low equity valuations, along with high dividend income, growth rates and the stable currency. Far less mega bucks dominant political lobbies which the West so practices twisting it so into a corporate welfare state.
Rightly so, corruption sends shivers over us, especially investors. Yet, I wonder how many times the word lobby or lobbies’ comes up in the New York times? As mega bucks lobbying has surely been one of the grave offender of many western societies, to say the least.
Here yet again a proper balance in perspective is just not shown. If Thailand ranks high on corruption, surely USA ranks even higher on ill favored corporate lobbying. There is no mention of the Western induced financial crisis and how this came about, mostly through mis-alingement of interests as nurtured through high level lobbying to the tune of huge sums of money.
We all just endured how the US and EU financial system just about imploded itself -and the world. I say just about, as if their governments had not rescued these would have bankrupted the entire system. Data from the Federal Election Commission, compiled by the Center for Responsive politics, revealed that political action committees and employees of securities and investment firms gave 156 million US$ in political contributions, just in the 2008 election year. This was 3 times more then the next biggest contributor! At the time, as is now, the big banks just about ran the whole place, and then would have bellied it all up, if their governments did not rescue these, yes from the grave.
Wall Street so writes its own self serving rules, which put at risk the entire global economy. And then, when the day of reckoning came, Washington turned to those from Wall Street and their cronies to manage the recovery, in ways that gave Wall Street an amount of money that would be beyond the wildest dreams of the most corrupt in the developing world. Lobby promoted American style capitalism is perhaps more sophisticated as bundles of cash don’t change hands in dark corners, but its just as nefarious.
At least in Thailand we don’t have a dysfunctional banking system which needs government rescues -more then once. Or Airline or rail strikes which cripple the economy.
I for one find it completely imbalanced to speak about petty (or not) corruption in Thailand and other developing countries, while during the same investor review, not address the horrific affects of misaligned company welfare practices in the West. This, as is practiced through political lobbying which is not even mentioned once in that book. The word "corruption" has obviously a negative investor implication, but not to most people, the word lobby. Yet, in the past years it has done far more global damage than anything else and by a long shot.
A few years ago Switzerland lost its national airline, Swissair, because the government did not agree to lend them 2 Bill Swiss Francs, but not long ago this same government agreed to hand/lend their biggest bank, 67 Bill. Swiss Francs, because.. well, don’t we all know: they are too big to fail, too big to manage and too big to regulate. Not the least, through their gigantic sums of political lobbying.
Investing, like life, is all a matter of choices and alternatives. To go on and on about third world corruption and then in the same pages not even mention the evils of Western corporate welfare lobbying, and its global damages just orchestrated through the misalignement of interests, only shows yet again, the western reported biases. All to their own peril and smack against an objective balance review. I guess that would have been too much to ask for.
Best Regards,
Paul Renaud.
* The US and other developed country's banking industries are full of misalignments of interests, where their own interests comes first. What is good for the banks is not good for their customers and they collude together on this. Here so is the very devil of corporate lobbying. For an broad review of this and its many horrific consequences, see the excellent book "FreeFall" by Joseph Stiglitz. (2010).
