Bank run continues; prime minister charged with negligence
The run on the Government Savings Bank (GSB) also continued yesterday. The net run is now 48 billion baht. GSB director Worawit Chailimpamontri tendered his resignation yesterday afternoon.
One man's death is another man's bread, which also appears to apply in this case, because three banks, Bangkok Bank, Siam Commercial Bank and Kasikorn Bank, report that a striking number of new accounts were opened and money was deposited on Monday.
Savers, particularly in Bangkok and the South, have withdrawn their money from the GSB over the past two days in protest against the GSB's interbank loan to the Bank for Agriculture and Agricultural Cooperatives (BAAC), which pre-finances the mortgage system for rice. That loan was requested by the BAAC, ostensibly to supplement its liquidity, but it is believed that the money was intended to pay farmers, who have been waiting months for money for their surrendered rice.
Since October, only a handful of farmers have been paid. One million peasants have not yet seen Satan. The budget is exhausted, the bought-up rice, which is difficult to sell, is piling up. The government has tried to borrow money from the commercial banks, but they refuse for fear of legal complications. A caretaker government may not enter into new obligations. The interbank loan would be a devious trick to get around the law.
GSB staff came to the bank dressed in black yesterday and demanded the director's resignation. Khun Worawit, but I also feel sorry for the bank," one of them said. 'In the 20 years that I have worked here, I have never experienced anything like this. Worawit's dismissal is justified. In this way he shows his responsibility.'
The bank run has now prompted a counter-action. Pheu Thai politicians, sympathizers and business groups [?] contributed money to support the interbank loan and the farmers. A businesswoman says she has confidence in the stability of the GSB. She is eager to help the desperate farmers and points out that some farmers have already committed suicide because they could no longer handle the stress. “Farmers have contributed a lot to the country,” said the woman who considers her support to be merit making.
The Department of Mental Health points out that not all (nine) suicides this year can be attributed to the delayed payments. Some farmers already had psychological problems and debt problems. The service has sent psychologists to the families of the farmers to provide assistance.
Opposition Democrats see the bank run as a vote of no confidence in the Yingluck government. “The government is now rushing to use people's money to pay the farmers. The money helps the government continue to defraud the farmers.'
Prime Minister Yingluck in the dock
More happened on the rice front yesterday. The National Anti-Corruption Commission (NACC) decided to prosecute Prime Minister Yingluck. Yingluck is chairman of the National Rice Policy Committee. She is charged with negligence. The NACC has previously brought charges of fraud against 15 people, including two ministers. This concerns a private rice deal that would have taken place under the guise of a G2G (government to government) deal.
Before the NACC announced its decision, Yingluck defended the rice mortgage system in a televised speech as it "benefits farmers and the economy." She accused anti-government groups of holding farmers hostage and preventing the government from effectively implementing the system.
All this took place on a day full of violence at the Phan Fah bridge (photo). See above Breaking News of February 18. As announced, the police have started to evacuate protest locations. This was successful at the Ministry of Energy, but only partially at the bridge. Part of the Chaeng Wattana site (where monk Luang Pu Buddha Issara is in charge) has also been evacuated. Negotiations sufficed here.
(Source: Bangkok Post, February 19, 2014)
Prime Minister Yingluck is of course right that the money paid out to farmers through the rice subsidy has helped farmers' families and the local economy (through farmers' spending). But it's only part of the truth. A small addition to her speech could have been:
– there are indications that the subsidy system was very sensitive to corruption;
– a large number of small farmers did not meet the conditions to participate in the system, so the money did not always reach the farmers who needed it most;
– the government was terribly mistaken in assuming that the price of rice on the world market would rise and that storage of the rice was therefore a good idea. It would have been better to sell the rice directly on the world market and take the loss. In that case, the farmers would simply have received their money and the state would now have a (I think understandable for everyone, but manageable and more limited) loss;
– the government has not been open about the various rice deals (amounts sold, price sold; to whom and at what price) and has thereby at least raised the suspicion that this was not the case. The future will show how many hooks………………….