New Mandala

29 responses so far ↓

• 1 Nganadeeleg // Jun 21, 2009 at 12:02 pm

  ….real estate and stocks owned via the Crown Property Bureau, the state investment vehicle of which he is a trustee.

  Seems a bit ambiguous to me because where I come from, being a trustee does not confer beneficial ownership.

  What are the alternatives?
  Allow politicians to squander it, or privatization to their mates?

• 2 Vichai N // Jun 21, 2009 at 12:08 pm

  The manager(s) in-charge of managing HMK’s assets and properties must be doing a very good fiduciary job. A 17% wealth depreciation ONLY is impressive! Sovereign Singapore’s and Middle-east investments had taken hits far far worse – - up to -45% in the case of Singapore because of the pervading economic gloom.

  Hep hep hurray!

• 3 Susie Wong // Jun 21, 2009 at 4:41 pm

  I have just read a well thought out article dated June 6th, 2009 in Prachatai News. Here’s the relevant content to this article.

  ศัตรูของเราในนามของความรัก “ชาติ ศาสน์ กษัตริย์”
  2009-06-20
  นักปรัชญาชายขอบ
  กษัตริย์เพื่อกษัตริย์หรือกษัตริย์เพื่อประชาชาติ? ในระบอบประชาธิปไตยสถาบันกษัตริย์ภายใต้รัฐธรรมนูญ ต้องไม่ใช่สถาบันที่อยู่เหนือหลักความเสมอภาคและความเป็นธรรมทางสังคม ต้องไม่อยู่เหนือหลักการที่ว่าทุกสถาบันต้องถูกวิพากษ์วิจารณ์ได้ด้วยข้อ เท็จจริงและเหตุผล และหลักการที่ว่าทุกสถาบันต้องโปร่งใสตรวจสอบได้

  เราใช้วาทกรรมชาติ ศาสน์ กษัตริย์ทำลายโอกาส และช่องทางในการเปลี่ยนแปลงสังคมให้เกิดความเป็นธรรมมากขึ้น แล้วใช้วาทกรรมดังกล่าวไปสนับสนุนโครงสร้างด้านต่างๆของสังคมที่อยุติธรรม อยู่แล้วให้ดำรงอยู่อย่างมั่นคงต่อไป
  _____________________________________________
  Translation:
  Our Enemy using in the name of loving “Nation, Religion, King”

  The king for the king himself or for the nation? In a democratic system where the monarchy institution is under the constitution, the monarchy institution must not be above the principle that every institutions must be transparent and allowed investigation.

  We used the nation, religion, and king ideology to destroy any opportunity or channel of changing the social structure that can create a better equality in the society. Indeed, we used that ideology to support various aspects of the structure that create an injustice society and made injustice society permanently maintained.
  _____________________________________________

  I agree with the article 100%.
  I would like to further add my point that Phumipon’s family and his cronies cannot continue to use the Cold War’s ideology of “nation, religion, king” to enrich himself to 30 billions dollars while tourism in Thailand is based on prostitution industry. Nor can he continues to use lese majeste to destroy the brainy and patriotic sons and daughters of the land. Liberty, equality, and freedom to pursue happiness is the inspiration of the majority of Siamese people since June 24th 1932.

• 4 sam-deedes // Jun 21, 2009 at 7:00 pm

  Some perspective here. The trustee thing is a red herring, it applies to all the monarchs in the list. From the Forbes article:

  “Royal wealth derives from inheritances or positions of power. It is often shared with extended families, and many times it represents money controlled by royal families in trust for their nations or territories. For these reasons, none of the 15 royals on this list would qualify for our annual ranking of the world’s billionaires, regardless of their net worths.

  For instance, we include the assets of Thailand’s Crown Property Bureau in King Bhumibol’s net worth, as he is a trustee. However, the Thai government disagrees and has publicly stated that the CPB’s assets are not part of the king’s personal wealth; rather, the CPB owns and manages the assets of the monarchy on behalf of the Thai people.”

  So it is a level playing field with number one way out in front at 30 billion with the rest clocking in at 20 billion and below.

• 5 Nganadeeleg // Jun 21, 2009 at 9:11 pm

  ‘The trustee thing is a red herring’

  But is it a red herring when comparing it to real, personal, beneficially owned wealth?

• 6 Another brick // Jun 21, 2009 at 9:22 pm

  Sufficiently rich is more likely. Congratulations to all Thais!!

• 7 Somsak Jeamteerasakul // Jun 21, 2009 at 11:14 pm

  Under the current law, put into effect by the royalist Khuang government in 1948, the King has FULL power of use, disposal, management of the CPB assets. NO RESTRICTION WHATSOEVER. He is TOTALLY FREE to do anything with them AS HE PLEASE. “ตามพระราชอัธยาศัย ไม่ว่ากรณีใดๆ” – this is the exact wording of the law. Moreover, there is, BY LAW, NO EXTERNAL CHECK on the CPB, i.e. no one, not the governement, not the Parliament, let alone the public, have any right to investigate, to submit it to scrutiny, to punish any wrongs, etc.

  Given all these conditions, should we regard the CPB assets as HMK’s PERSONAL wealth? ABSOLUTELY!

  (P.S. I am aware that the CPB always claims that it annually asks the Office of Auditor General (สำนักงานตรวจเงินแผ่นดิน) to check its book. But even this cannot truly be verified!)

• 8 Bystander // Jun 22, 2009 at 1:04 am

  It’s a pity that this much capital could have been used more effectively for the benefits of the people.

  In many developed economies, most private charity funds are required to spend a certain % of their wealth each year to retain the tax privilege.

  If CPB property is really held in trust for the people, where’s the dividend?

• 9 nganadeeleg // Jun 22, 2009 at 9:20 am

  He is TOTALLY FREE to do anything with them AS HE PLEASE

  It looks like one thing he is not prepared to do is to waste them (which seems in line with sound sufficiency economy principles:)

  Bystander: It is my understanding that for many years the CPB assets have been available for use at less than market rents, sometimes peppercorn amounts, so it may not be as clear cut as many here like to make out.
  also, perhaps the dividends are reinvesting, hence the size of the fund now?

  I ask again, please provide specific proposals for alternative uses of the fund?

• 10 sweenwalker // Jun 22, 2009 at 9:50 am

  Some how in some way, the royalists in Thailand still think that Thai people will believe anything they say. Wake up brothers!!! They know a lot more than you think. Please give it (power) back to the people. Admit it Thai king is rich.

• 11 Bystander // Jun 22, 2009 at 1:00 pm

  You want specific proposal for alternative use of the funds? How about filling in the investment gap where the traditional government and the private sectors aren’t ready to invest in? Invest in high-risk high-reward transformative technology, for example…venture capitalism, in other words.

  Thailand can’t rely on the trinity of cheap labor manufacturing for japanese companies, agricultural commodities, and tourism and service for much longer. The margin and return in all these are shrinking. But unfortunately there hasn’t been a coherent long term vision on what to do. Government has been mostly preoccupied with survival from election to election/coup. Ditto the Thai-owned business. If the CPB is an able trustee, they would have seen this coming and do something about it long ago.

  $30 billion is a lot of money. If it’s well managed they should make returns of several percentage points per annum, they can comfortably spend like 1 % each year to fund all sort of things. (I think in US, 3% is required to be spent by private charity funds) That’s like 10 billion baht already. That will support thousands of high-paying jobs for home-grown talent. Case in point, from my casual survey ten years after their graduation, more than half of the Computer Engineering graduates from Chula, which are basically the creme de la creme so to speak, are now working overseas. Most of the rest are working for either Thailand branch of foreign-owned company, or family business. None, nada, zero, zilch is working for public sector. I don’t think this example is atypical. And this trend of brain drain is definitely not healthy for the future of Thailand. Sadly, this is how it has been and will be.

• 12 nganadeeleg // Jun 22, 2009 at 2:05 pm

  I agree that new ways need to be found to invest, but look on the bright side: -at least the money is still seems to be there (-17%) which as Vichai N. pointed out, is comparatively good investment performance compared to many other such funds:)

  Regarding brain drains, public sector employees etc, it looks to me that there are already plenty on the public payroll, and whats required is meritocracy, instead of nepotism.

  Judging by the way the Puea Thai party is set up & run, such meritocracy looks a long way off, even IF the New Mandala ‘white knight’ makes the comeback many here seem to be hoping for:)

• 13 Susie Wong // Jun 22, 2009 at 3:42 pm

  There are two issues that I would like to raise:

  1. Why has any scholar initiate a serious studies about Phumipon’s political activities when he is the main actor in the past 60 years? Don’t you think many issues needed to be updated now that “the fact” is known. In 1948, Khuang government obviously didn’t have “the fact”, so Khuang assumed Phumipon would be like Ananda. In my opinion, Thai political studies literature reflects naivete, keeps focusing on the military, the politicians, when the main actor is Phumipon. So would it fair to say that when the axiom of assumption is wrong, we have problem not only with the approach, methodology but the epistemology as well. So how relevant are those writings in the past now that the new fact is present? With 17 coups and various turmoils, after the dust settled, only Phumipon standing there, how could Phumipon be neglected in the analysis?

  2. In relation to Phumipon’s richest in the world with 30 billions dollars, the Crown Property Bureau was broke when Phumipon was crowned. Can Phumipon alone in a third world developing country like Siam be able to make 30 billions on his own without external help? Who are those external connection? It is important to know because according to Bangkok Pundit yesterday news, the new symbol of PAD is similar to Swastika symbol of Nazi Germany.

• 14 Ralph Kramden // Jun 22, 2009 at 4:50 pm

  I agree with Somsak. Of course, this is a deliberate red herring. They want outsiders to believe that this is not the king’s property when it clearly is. Recall also that the figure listed is only for the CPB. The individual members of the royal family have individual holdings and wealth. In addition, no one has ever added up the money and land held by the Chai Pattana foundation. On the latter, it receives considerable donations as does the crown itself. These people are loaded. By the way, for the royal news watchers, this is giving season and Sirindhorn is the one who receives the loot.

• 15 love suzie wong // Jun 22, 2009 at 8:07 pm

  What a great comment by Suzie Wong!

• 16 Macky // Jun 23, 2009 at 3:04 am

  Hmmmm… and this is the gentleman pushing for ’sufficiency economics’ – “HM the King stresses that development is based on self support, reasonable consumption and living in moderation.” Ouch!

• 17 Naganadeeleg // Jun 23, 2009 at 9:48 am

  I agree, prima facie it does seem to be a very good example of how ‘reasonable consumption and living in moderation’ can reap great rewards (bearing in mind how some inherited fortunes do get squandered:)

  However, frugality can only go so far, and there are other factors also worth considering, many of which were covered by Handley:
  - not paying tax is a big help
  - having the state pay for ceremonies also helps
  - having business people fund charities to undertake proujects in your name
  - having ‘help’ in times of financial/economic crises

  Like LM laws, this is another area in need of reforms
  (or even just allowing for discussions & asking for more transparency would be a good start – presumably no politicians are yet calling for any reforms in this area?:)

• 18 Nudi Samsao // Jun 23, 2009 at 1:02 pm

  It seems a bit unfair for HM and members of his family to enjoy all the privileges and yet compete in business like any ordinary Thai. The other day I happened to see the information about the stock holdings of Amarain Printing Enterprise, and lo and behold, both HM and Princess Sirndhorn were listed as stockholders! Isn’t this a kind of conflict of interest?

• 19 Somsak Jeamteerasakul // Jun 23, 2009 at 1:39 pm

  Nudi Samsao:
  The other day I happened to see the information about the stock holdings of Amarain Printing Enterprise, and lo and behold, both HM and Princess Sirndhorn were listed as stockholders! Isn’t this a kind of conflict of interest?

  Actually, it’s not only ‘conflict of interest’, I believe it’s a VIOLATION of the Law! Yes, the 1948 law concerning the management of monarchy’s assets that the royalists themselves enacted. Article 5 paragraph 2 states:

  “…. ในกรณีทั้งปวงเกี่ยวกับทรัพย์สินส่วนพระองค์ ห้ามมิให้ระบุพระปรมาภิไธยหรือข้อความใดๆอันแสดงหรืออนุมานได้ว่าพระมหากษัตริย์เป็นคู่กรณีหรือคู่ความ ให้ระบุเพียงชื่อบุคคลผู้ได้รับการแต่งตั้งดังกล่าว แล้วต่อท้ายด้วยคำว่า “ผู้จัดการทรัพย์สินส่วนพระองค์” เท่าน้น”

  In other word, the law specifically forbids mentioning or even hinting HMK in any personal commercial transaction whatsoever I believe since Sarit evern this provision has been constantly ‘overlooked’. Nowsaday we can find HMK’s name in many Stock Exchange companies, or – to take the famous case a few years ago – the “Suwannachat Shop” which he jointly invested with the CP Group.

• 20 Somsak Jeamteerasakul // Jun 23, 2009 at 1:43 pm

  P.S. Suppose I’m right that it’s a violation of the law, I really have no idea who should be accountable/responsible. HMK’s “Personal Assets Manger”? Or someone else?

• 21 Nganadeeleg // Jun 23, 2009 at 2:49 pm

  Does that law prohibit the investment, or just the disclosure of such?
  It seems to be recommending the use of nominees – I wonder what the PAD think of that

• 22 Jeffrey // Jun 24, 2009 at 12:11 am

  To Suzy Wong;

  Thanks for the Thai translation.
  Love your responses, keep it up.

• 23 Ralph Kramden // Jun 24, 2009 at 12:16 pm

  Actually, personal royal holdings of SET-listed companies have been listed for several/many years in the SET documents and CDs.

  Amarin is interesting given its refusal to print a book said to be about the red shirts and their pressure on award-winning writer Wat Wallayangkur who was apparently forced to resign from a committee at Amarin Printing for being sympathetic to the red shirts (see http://thaipoliticalprisoners.wordpress.com/2009/06/02/new-essential-stories/ and the link to Prachatai there).

• 24 Nudi Samsao // Jun 24, 2009 at 3:33 pm

  Ralph Kramden: Thanks for pointing out the thing about Amarin. It’s putting your loyalty where it counts!

• 25 Sidh S // Jun 24, 2009 at 11:27 pm

  People, people before we get too overexcited about HMK’s riches and getting ideas on how it should be ‘properly invested’, let’s not forget that a huge majority of that wealth is in real estate:

  http://www.forbes.com/global/2008/0901/032.html
  “Aviruth says that, in all, the bureau owns 3,493 acres in central Bangkok. Today that land is worth $31 billion, based on land values compiled by a Bangkok consulting firm…”

  Any homeowner in Australia will understand what it means to be ‘assets rich but cash poor’ (with house prices in Oz capital cities rising between 200-300% between 1998-2008).

  From the same article above, Paul Handley stated that the Crown Property Bureau “… still has a below-market-rent mentality for long-term stability goals,” he says. “Or, look at it this way: They have no rate-of-return goals on some of their real estate, limited goals on others and nearly commercial on others.”

  A practice of ‘Sufficiency Economy’ at the large scale perhaps? Forbes noted a USD5billion decine in HMK’s fortune from 2008’s USD35billion. This translates to a ~14.3% decrease – compared to Vichai N’s #2 Singaporean (Temasek’s I assume, the regional benchmark) 45% loss.

  As Nganadeeleg stated in #17, I favor a more transparent management and disclosure of CBP – but let’s try to be a bit more objective here…

• 26 Ralph Kramden // Jun 25, 2009 at 11:14 am

  Sidh obviously hasn’t got an MBA. Comparing the value of a less than A$700,000 house in suburban Australia and US$30 billion in land and building assets, mostly in Bangkok, makes no sense at all. Having land and property assets in Thailand is highly significant in making money and in access to other resources.

• 27 Sidh S // Jun 25, 2009 at 4:57 pm

  No Ralph#26, I don’t have an MBA and I am interested to hear from someone with one on the matter.

  What I can offer here (apart from what the Forbes, a capitalist bible/magazine, reported upon which we basing our comments), is only an anecdotal experience as an architect working in Bangkok in the mid-90s. We had a client who wanted to renovate his house built on a 200wah2 (800m2) CPB plot in LangSuan, a prime location. What I was told by the client and my boss then was that owning a CPB lease was little different from owning the plot outright. The client was only paying a few hundred baht lease per month, a rate unchanged for the many decades he lived there.

  Another anecdote, an upperclassman involved in the SuanLum Night Bazaar project which sits on another CPB plot and has been used as a cadet training school for years told me, almost 10 years ago, that it is an army department who is benefiting from the land lease deal for the night bazaar more than the CPB. I’ve read recently that TycoonCharoen (of Chang Beer) has recently won the rights to redevelop that land and understand that the CPB was directly involved in negotiations and will directly benefit this time.

• 28 Ralph Kramden // Jun 26, 2009 at 2:16 am

  Sidh, you don’t have to rely entirely on old stories. Porphant Ouyyanont’s article in the Journal of Contemporary Asia (on which the Forbes article relies) goes into some detail on this. Asia Sentinel also carried an article or two a couple of years ago which included some notes on land (http://www.asiasentinel.com/index.php?option=com_content&task=view&id=402&Itemid=32and http://www.asiasentinel.com/index.php?Itemid=32&id=403&option=com_content&task=view
  Wikipedia has some short details. There are also Nation reports on 2004, which talk a bit about property booms.

  I can assure you that the CPB has changed its policies on how it deals with land (not all of it, but the valuable chunks) since the 1997 crisis, when they brought in new managers. Their job was to ensure better value and returns from the land.

  If you log on to the CPB’s website you’ll see both pop-ups on their latest clawbacks and you’ll see the CSR stuff on how they deal with increasingly worried tenants.

  You can also look at the current battle at the Fort to see real details of what they do.

• 29 Sidh S // Jun 26, 2009 at 3:58 pm

  Thanks Ralph#28 for beginning to introduce some objectivity into what is so far predominantly sensationalist comments. Let’s discuss CPB’s detailed historic practices and evolution if we can.

  We can now be clear that, like millions of Australian homeowners, the CPB is assets, not cash rich (and that is the point I wanted to make – MBAesque inaccurate according to Ralph, so be it). Much of those assets are still gaining below market returns – at least for it’s current assessed values, while some large plot holdings have been leased to be turned into multi-billion baht malls. Many still have ambiguous ownership claims – I dare say the majority of the small plots, which I do not know what proportion of all land assets may fall into this category. Please, anyone who knows more – especially those in Thailand who must know someone living in a CPB plot (must in the hundreds of thousands at least?), please tell us what you know.

  It is also worth investigating, comparing CPB with other public and private bodies with massive land bank holdings. The State Railway of Thailand comes to mind, or private corporations like CP or Land&House. Investigate their practices from the economical, social, political – even environmental aspects and see how they perform. Maybe take this into an international study and see what other monarchies and tycoons do with their vast land holdings (well compare their cash and stock holdings too to get a clearer picture)…

  For Ralph, I don’t have an MBA so I don’t qualify. I will assume he has one and will do the data mining and analysis for us. (I will also assume he is not one of the MBAs from top American institutions that bequeathed us the ‘Insufficiency Economy’ and the GFC!)

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