Thailand to Borrow Two Billion Dollars

Thailand has approved the start of negotiations to borrow up to 2 billion dollars from international financial institutions as the global economic slowdown starts to bite.
Lawmakers voted in favour of the Government's moves to talk to foreign financial bodies following an eight hour joint session of parliament that ended late on Tuesday, officials said.

Finance Minister Korn Chatikavanij told parliament that the loans were necessary to push forward with infrastructure projects because Thailand was feeling the effects of the world financial crisis.

'The Government needs to ask to borrow from financial institutions to push its planned policies and create efficiency,' Mr Korn said.

He said the Government planned to borrow the money from the World Bank, the Asian Development Bank and Japanese International Cooperation Agency, and repay it within seven to 10 years.

The parliamentary session was delayed by almost 3 hours while the government tried to find enough lawmakers to open the session. It was eventually approved with 307 lawmakers voting in favour.

Thailand's economy - the second biggest in Southeast Asia - is set to enter recession when figures for the first quarter are released, and Mr Korn warned on Monday that it could shrink by three percent in 2009.

The economy grew by 2.6 per cent in 2008, down from 4.9 per cent in 2007. It was the kingdom's lowest economic growth figure for seven years.

Thai exports fell 11.3 per cent year-on-year in February while January exports were down 26.5 per cent, due to weak demand as the global financial meltdown hits key markets in the United States, Europe and Japan.

Exports account for almost 70 per cent of the Thai economy.

Thai Premier Abhisit Vejjajiva recently questioned International Monetary Fund loan conditions, saying that increasing facilities would only benefit developing countries if conditions on borrowers were also relaxed. -- AFP

Source - Straits Times